Troubleshooter: More Peak Fitness closings

June 19, 2009 6:30:07 AM PDT
Popular health club chain Peak Fitness continues to have problems. Within the next few days and weeks, it will close the majority of its gyms in the Triangle area. The closures are just the latest setback for the company. In the past few months, several gyms filed for bankruptcy, a judge issued a restraining order against Peak to stop selling pre-paid memberships, and several gyms closed without notice.

On Monday, the Peak Fitness location in downtown Raleigh on 509 West North Street was served an eviction notice by the Wake County Sherriff's Department.

Peak's owner, Jeff Stec was on location and was served the notice.

"Unfortunately, we made some bad decisions in the Raleigh market," Stec said.

Peak has already shutdown gyms in Garner, Knightdale, Raleigh, Winston-Salem and Charlotte without notice. Now, the downtown Raleigh location off Glenwood, the Falls of Neuse location, and Peak's Cary location all have the same fate.

On Monday, Peak struck a deal with Lifestyle Family Fitness to take over the Peak memberships.

"Due to the economy and things happening here and also rental rates being well over market in this area, it's just best interest to relocate members to their facility," Stec said.

Several employees of Lifestyle Family Fitness were on site at the downtown Peak location handing out flyers and talking to members about their options.

Many of Peak's members have pre-paid contracts, and Lifestyle has no long term contracts, just month to month memberships. The President of Lifestyle Family Fitness Kevin Laferriere says they will work with Peak members.

"We'll get a chance to sit down with those members and identify what those memberships are and what terms they have with their memberships and produce a solution for them," he said.

As for all the Peak employees left with no jobs, Lifestyle Family Fitness representatives said they're working diligently to find job placement for Peak employees.

"We realize the major concern is not the loss of the location, but the relationship the members had with one another and the Peak employees," Laferriere said. "We hope to maintain those bonds."

But some downtown Peak members aren't happy with that solution.

"I'm disappointed, but I will say the quality of the gym membership has decreased over the last couple of months," member Dan Hirschman said. "The lockers rooms were dirty, machinery broken and you noticed things not going well.

"I already filed for a refund. It was a pre-paid membership. I hoping to get my money back, but I'm not holding my breath," he continued.

Besides the Peak locations in Cary and two in Raleigh, Stec told Eyewitness News all other Triangle Peak locations, except the Durham and Chapel Hill locations, will close their doors by July 1.

Stec told Troubleshooter Diane Wilson that any member who requests a refund for services not being provided at their facility will be refunded within 30 days of their request.

To request a refund, contact Peak Fitness at (704) 896-5521 or e-mail them at customerservice@peakfitnessus.com.

As for Peak's money problems, Stec said the gyms that are closing are closing due to the fact that they owe back rent and other expenses, which are all included in their most recent bankruptcy filing.

As for the other Peak locations, they may close their doors anytime now up until July 1, according to Stec.

The North Carolina Attorney General's Office has been investigating Peak Fitness for more than two years. Early this year, the AG's Office ordered the company to make changes to its customer service, contract, and billing practices.

Just a few weeks ago, Peak had to stop selling pre-paid gym memberships and collecting fees other than monthly payments until it could secure bonds.

Those bonds are required by state law to reimburse consumers if the health club closes and the company doesn't have money to refund consumers who paid in advance.

"We've been concerned about whether this company can make good on its obligations which is why we have had to take action," Attorney General Roy Cooper said. "We are following the latest developments closely and consumers are encouraged to contact us for help."

Consumers can call the Consumer Protection Division toll-free in NC at (877) 5-NOSCAM or they can file a complaint online at www.ncdoj.gov.

For more tips on Health Clubs click on these links:

http://www.ncdoj.com/Consumer/Health/Health-Club-Closings.aspx

http://www.ncdoj.com/Consumer/Health/Health-Clubs-and-Gyms.aspx


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