24 Hour Fitness Strengthens Position for Long-Term Success

In June 2020, 24 Hour Fitness announced an important step to strengthen our business for the long-term through a voluntary chapter 11 filing. Now, we have entered into a restructuring support agreement (RSA) with approximately 70% of our lenders, which will allow 24 Hour Fitness to work toward reducing outstanding debt and strengthening our financial position. We now have a clear path forward with financial partners who are committed to our vision for the future.

We have already made tremendous progress repositioning 24 Hour Fitness for long-term success. We have reopened a large portion of our clubs, welcomed back many team members, club members, and guests, and taken steps to right-size our cost structure and club real estate footprint.

We are pleased to have the support of our lenders as we move forward to implement our transformation plan. This includes continuing to invest in the technologies and experiences that create our strong and vibrant club communities.

We are deeply grateful to our club members, team members, and stakeholders for their continued loyalty to 24 Hour Fitness. You provide the inspiration for what we do, and we are excited to continue supporting you along your fitness journey well into the future.

Frequently Asked Questions

General Information

What are you announcing?

• 24 Hour Fitness announced that, due to the disproportionate impact of the COVID-19 pandemic, it has voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
• In conjunction with the Chapter 11 filing, the company expects to secure approximately $250 million in debtor-in-possession (DIP) financing. Subject to Court approval, the DIP financing, combined with the company's cash from operations, is expected to provide sufficient liquidity and allow the company to continue operations, including club reopenings, without interruption during the Chapter 11 process.

Is 24 Hour Fitness going out of business?

• No, 24 Hour Fitness is not going out of business. Our Chapter 11 filing is expected to facilitate our financial and operational restructuring so that we can reinvest in our existing clubs and offer great fitness experiences to our club members, team members and guests for many years to come.
• In fact, 24 Hour Fitness is continuing to reopen clubs in a phased approach and welcome members in select locations nationwide, carefully following state and local government and public health agency guidelines. During the time of phased club reopenings, all club members will have access to any available 24 Hour Fitness club through the end of 2020, regardless of membership level.

Did COVID-19 accelerate the decision or was this already predetermined?

• COVID-19 and its disproportionate impact have significantly affected both our industry and our company operations.
• If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11.
• During this time, we are taking the opportunity to transform for the better as well as accelerate our operational improvements that were in process before the COVID-19 pandemic.

Club Members

What does this mean for my club membership?

• We are working carefully to ensure the least amount of disruption to members as our restructuring plans take effect. We have begun and will continue to reopen clubs in a phased approach for the safety of team and club members, carefully following state and local governments, and public health agency guidelines.
• During the time of phased club reopenings, all club members will have access to any available 24 Hour Fitness club regardless of membership level through the end of 2020.
• Please know that we will also continue to invest in innovative technologies to enhance your fitness experience—both inside and outside the club—with 24GO® and 24GO LIVE through the 24 Hour Fitness® YouTube channel, among other virtual fitness offerings.

Does this mean all 24 Hour Fitness locations are closing?

• No. 24 Hour Fitness has begun reopening clubs and welcoming members in select locations nationwide. More details are online at https://www.24hourfitness.com/health_clubs/gyms-open-near-me.
• As part of the restructuring process, we’ve made the difficult decision to close more than 100 clubs that were either out-of-date or in close proximity to other 24 Hour Fitness locations.

Which 24 Hour Fitness clubs have reopened or will soon reopen?

• 24 Hour Fitness has begun reopening clubs and welcoming members in select locations. More details are online at https://www.24hourfitness.com/health_clubs/gyms-open-near-me.
• Note that as we are operationally prepared to reopen our clubs, we are carefully following state and local government and public health agency guidelines.

If my club has not reopened, can I use another location?

• During the time of phased club reopenings, all club members will have access to any available 24 Hour Fitness club through the end of 2020, regardless of membership level.

Are there any incentives for 24 Hour Fitness members to maintain their membership through the restructuring process?

• 24 Hour Fitness has given all its members a choice of “Thank You Offers” that take effect upon club reopenings. These include options of a one-month dues credit, a Buddy Pass for a year (valued at $120), or a 90-day Gift of Fitness for a friend or family member (valued at over $100).

What if I want to change my membership status?

• Please visit the Contact Us portion of our website to submit your request.

Team Members

What does this mean for me?

• Our intent is to minimize any impact to team members’ day-to-day work. We are committed to continuing to make 24 Hour Fitness a great place to work for our employees. In fact, we intend to use this restructuring to strengthen the long-term future of 24 Hour Fitness.
• The capital we have secured from our lenders will ensure we are able to continue to operate the business with minimal interruption throughout the Chapter 11 proceedings and into the future. We anticipate very few additional changes beyond our initial announcement. However, since the process requires court review and approval, there is some degree of uncertainty as to how it will unfold.
• We will communicate with you openly and honestly throughout the Chapter 11 filing, especially around major milestones in the process.

Will I continue to be paid salary and benefits?

• Yes, the company expects to pay all wages and benefits in the ordinary course of business. The company has filed a Motion with the Court for approval to pay all wages and benefits and as a result you should see no interruption in your pay or benefits.

When will the furloughed team members be brought back to work in the clubs?

• We can't predict when our furloughed team members will be brought back to work.
• As we reopen clubs, furloughed team members will be brought back.

Where can I get more team member information about this process?

• The company is committed to keeping team members informed throughout this process. We will continue to host town hall meetings and provide updates via email. You may also refer to the employee intranet for any updated information.
• Court filings and other information related to the restructuring proceedings are all publicly available at a website administered by the company’s claims agent, Prime Clerk, at https://restructuring.primeclerk.com/24hourfitness.

Vendor Partners

Will vendors be paid for goods and services provided before the filing date?

• Under U.S. bankruptcy law, unpaid debts for goods and services provided to the company prior to the filing date of June 15, 2020, also known as "prepetition claims," generally cannot be paid without specific Bankruptcy Court approval.
• Claims will be addressed as part of the bankruptcy process and the treatment of claims will be set forth in the company’s plan of reorganization and disclosure statement, which when filed will be available at https://restructuring.primeclerk.com/24hourfitness.
• If you believe you have a pre-petition claim for goods and services provided to the company prior to the filing date, you may need to file a proof of claim with the bankruptcy court to be eligible for payment on your claim. Information about the claims process, which will be updated on an ongoing basis, is available at htps://restructuring.primeclerk.com/24hourfitness.

Will vendors have the same contact at 24 Hour Fitness?

• Yes. We expect to continue normal, day-to-day business operations throughout the restructuring process, which includes the same individuals being your point of contact.

Who can I speak with to get more information?

• The company’s claims agent has an information line to answer questions about this announcement. The information line can be reached by calling (877) 606-3612 (toll free in the U.S. and Canada) or +1 (949) 635-4482 (international). Or you may email questions to: 24hourfitnessinfo@PrimeClerk.com.
• Court filings and other information related to the restructuring proceedings are available at a website administered by the company’s claims agent, Prime Clerk, at https://restructuring.primeclerk.com/24hourfitness.

More Information

How can I locate and follow the Court proceedings?

• Information on the Court proceedings can be found at https://restructuring.primeclerk.com/24hourfitness.

Media

Inquiries?

• Media seeking more information should contact our Media Hotline at (866) 819-7414