The sudden closure of an Ottawa fitness club has left members scrambling to stop monthly payments as they try to sort out how they’ll get back some of their already-paid membership dues.
Florida Fitness – with a location at the St. Laurent Shopping Centre and another at 530 West Hunt Club Rd. – closed its doors Feb. 9 without notice, as was reported on obj.ca on Feb. 11.
Members heading to the St. Laurent location were met with a locked door and a notice posted by mall management indicating the company, 1633635 Ontario Inc., is in default of its lease for arrears in payment of minimum rent and additional rent in the amount of $190,371.77.
A similar notice was posted at the West Hunt Club Road location that stated the accumulated sum of $101,320.34 has not been paid for the months of December, January and February. A sign for a new gym expected to open in the next few weeks was posted beside the notice.
The leaseholders listed on both notices are Dr. Bruce Lister and Dr. Ian Milne. When contacted by OBJ, a woman at Dr. Lister’s office indicated she was instructed to tell callers the club was taken over in May 2009 by Duncan Seko, who owns Club Seko in Trenton, Ont. Calls to Dr. Milne’s office were not returned by press time.
The number provided for Mr. Seko was temporarily disconnected. A woman at Club Seko, identified only as Lisa, confirmed he owns the gym but said he was not at the facility. When asked if there was another way to contact him or if she could relay a message, she said, “We have no contact with him. He contacts here.”
A message was nonetheless left, however the call was not returned by press time.
As questions of ownership abound, members of the fitness club who arrived to find the doors locked stood around quietly talking to one another, wondering how they’d get their money back.
Florida Fitness member Tanya Powell said her personal trainer, who works for the company, sent her a text message telling her the club had closed permanently.
“He had no details,” she said, adding that she had asked about reimbursements.
Ms. Powell signed up for a membership in September and paid for the full year upfront as well as multiple sessions with a personal trainer. She said the membership fee was about $470 and the training sessions cost an additional $1,800.
Three of her friends also each paid about $470 upfront at the same time she signed up because “it was such a great deal,” although the other three didn’t pay for personal training sessions.
“I have no idea what to do,” Ms. Powell said of the money she fears she’s now lost. “No one answers the phone.”
Calls made to the St. Laurent location are met with an automated attendant, but once customer service is selected it states an operator is unavailable. Calls to the Hunt Club location just ring continuously.
“Everything was fine when they took my deposit.” Dany Hernandez, Florida Fitness member
The only silver lining for Ms. Powell is that her personal trainer has indicated he’ll honour the contract privately, which still has nine sessions left, she said.
Dany Hernandez, assistant manager at The Source in St. Laurent Shopping Centre, said he became a Florida Fitness member at the end of January. He said he paid a deposit of $226. Just a couple of days ago, he added, he also paid for his girlfriend’s membership deposit.
“Everything was fine when they took my deposit,” Mr. Hernandez said, but the doors were closed when he arrived Tuesday, Feb. 9 for his training session.
“I need to see how I can get my money back – it’s kind of hard to just let go of that,” he continued, noting he plans to contact his bank.
Mall management was handing out notices to members who need to put a stop payment on their monthly fees. The short letter states Florida Fitness is no longer in operation at the St. Laurent Shopping Centre effective Feb. 9, 2010.
One reader, however, indicated he had to cancel his Visa to stop his monthly payments because the credit card company needs to hear from the business before it cancels the charges.
“It turns out that once you authorize a company to charge your card on a regular basis, only that company or your credit card provider can cancel the charge,” he wrote.
This isn’t the first time the local chain of fitness clubs has run into financial difficulties. Florida Fitness restructured into a new company after filing for bankruptcy protection in August 2004 due to mounting debts.
In Dec. 2004 a restructuring plan was approved by a majority of creditors at the time. The plan, which had the endorsement of the judge overseeing the case, saw the new company continue to operate the chain’s locations at St. Laurent, Queen Street and Merivale at Hunt Club.
A fourth location on Morrison Drive near Pinecrest was shut down.
The 2004 restructuring plan was approved by all of the company’s landlords and three quarters of its secured creditors. Landlords owed a total of more than $1 million worked out new lease deals with the company. Secured creditors CIBC, Equirex Leasing, Hawtin PLC and Powersport International and Bank of Montreal were owed about $3.4 million.
Under terms of the deal, CIBC and BMO received partial payments of $25,000 and $10,000. Owners Dr. Milne and Dr. Lister, who made shareholder loans to the company of $3 million and $1 million, wrote off the debts as losses.
BMO was the only secured creditor to oppose the plan.