Prepayment model can deliver knockout punch to gyms in long term: industry observers

WHEN gyms close abruptly, customers often cannot recover prepaid sums – and such prepayments themselves may have made the collapses more likely, said industry watchers and players.

With upfront payments, the trade-off is between short-term cash flow and “long-term viability”, said Lee Ee Yang, managing director of law firm Covenant Chambers.

Two recent casualties in Singapore are UFC Gym, the franchise of US-based Ultimate Fighting Championship (UFC), and boutique fitness studio Haus Athletics. Customers were left with prepaid memberships and packages that could neither be used nor refunded.