F45 co-founder and CEO Adam J Gilchrist (not the cricketer) has stepped down from his role but retains a board seat and will be paid more than $US7 million ($10 million) in cash under the terms of his role change. Another 110 employees – about 45 per cent of the company’s workforce – will be cut.

“We are taking the necessary steps to right-size our business in light of shifting macroeconomic and business conditions,” F45 chief financial officer Chris Payne, said.

While the company expects growth to continue, Payne said franchisees were having more trouble than expected obtaining funding for new F45 locations.

“In addition, recent share price performance has made it challenging for franchisees to utilise financing facilities announced earlier this year,” he said.

According to F45, Payne is due to receive a $US2.4 million retention payment from F45 on October 15 this year. The company received a waiver from its financiers the day before this update.

F45 is expecting revenue will be just half of what it previously forecast for the year ending December 31, 2022, and could be as low as $US120 million.

Underlying earnings, which it reports as adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) could be as low as $US25 million, compared to the prior forecast of up to $US100 million.

The company is no longer offering any free cash flow guidance.

F45’s initial public offering (IPO) last year was marketed on the basis that its gyms would bounce back from COVID lockdowns.

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The fitness chain, which has 1555 outlets around the world, was expected to list on the US Nasdaq exchange via a special purpose acquisition company (SPAC) last year. However, it shelved those plans as the pandemic hit.

Investors who were big beneficiaries from the listing include Gilchrist (not the cricketer), whose 25.4 per cent stake is worth an estimated $US357 million.

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