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Gold's on Reynolda to honor memberships

Robinhood fitness center closes

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Robinhood fitness center closes

Rental trucks were picking up equipment at Peak Fitness yesterday.

Peak Fitness Centers' presence in Forsyth County has been reduced to one gym after the closing of its Robinhood site over the weekend.

But unlike many situations where members lose their fees in an abrupt closing, customers at the Peak gym at 3474 Robinhood Road have been offered two places to work out.

Fitness Management Group Inc., the bankrupt parent company of Peak, arranged a transfer-membership agreement for all of the Robinhood gym members with Salem Creek Holdings LLC, the holding company for the Gold's Gym franchise in Winston-Salem.

That means Peak members at Robinhood will be able to work out at the Gold's Gym site at 3300 Reynolda Road -- about three miles away -- through their pre-paid fees to Peak.

The Peak gym at 6221 Ramada Drive in Clemmons also remains open.

"It's a way to give members value from their memberships with Peak," said John Bates, the managing member of Salem Creek.

Bates said that his group will get a percentage of the fees paid by Peak members.

Today, a second local fitness club, 24/7 Fitness and Martial Arts, offered to accept members. It is at 1850 Healy Drive.

Greg Wood, the general manager of 24/7 Fitness, said that prepaid memberships to the Peak gym on Robinhood will be honored for the full remainder of their unexpired contracts with no payment required to his gym. Rates for monthly-paid memberships also will be honored for the remainder of their unexpired contract period. Peak members who pay monthly will receive their first month at 24/7 Fitness free.

Fitness Management, based in Huntersville, filed for Chapter 11 bankruptcy protection on July 10. It said that Fuzion Investment Capital LLC would buy Peak's assets.

Bates said that the Gold Gym's site has about 1,100 members. He said that it could gain between 500 and 2,000 members from Peak.

"We're hopeful that by making this effort, we will gain memberships over time," Bates said. "Given that Fitness is in Chapter 11, I don't know if members would have had another option for their membership fees."

Tom Macon said he had no idea that the Robinhood gym was in trouble before getting a phone call yesterday from a trainer to tell him it had closed.

"Considering I have six months left on a two-year, pre-paid membership, I guess I'll be going to Gold's Gym," Macon said. "Hopefully they'll have the room to accommodate all the Peak members."

Fitness Management said that its bankruptcy filing was prompted primarily by high lease fees negotiated at the height of the real-estate market. It also was affected by the recession's impact on consumers' disposable income and its purchase of underperforming sites from Capital Health Club chain of Raleigh.

Peak recently closed sites on Yadkinville and Jonestown roads in Forsyth. It also closed several sites in the Triangle in recent months.

Unlike the other sites, Peak owns the building for the Clemmons gym.

David Buzo, a public-relations director for Peak, said that the landlord for the Robinhood site has been given permission to evict them from the site.

"Despite our desire to continue operations at this location, we have been unsuccessful in negotiating with the landlord," Buzo said.

"Effective immediately, we have been ordered to move out and close this facility."

Harris Teeter confirmed it is the landlord of the former Peak site. It declined further comment.

"They really wanted to keep the club center open, but could not make it work out," Bates said.

"The Robinhood location was definitely a profitable location. We're going to expand our classes and our equipment as appropriate and try to add some of the Peak fitness instructors."

Peak has been the subject of several inquiries into its business practices by the state Attorney General's Office. In January, the company was compelled to change its customer-service, contract and billing practices statewide to settle a lawsuit filed by the office.

In May, the office forced the company to stop selling prepaid gym memberships and collecting fees other than monthly payments until the company can secure bonds for each health club. Bonds are required by state law to reimburse consumers if the health club closes and the company doesn't have money to refund advance payments.

In the past five years, Cooper's office has received more than 500 complaints regarding Peak-related health clubs. The Better Business Bureau of Northwest N.C. has received 50 complaints in the past 12 months, of which six were resolved and the company didn't respond to 40. The others are listed as unresolved.

■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.

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