Sydney franchise of UFC Gym Australia chain collapses into liquidation owing $1.2m
- UFC Macarthur Square in south-west Sydney collapsed
- Seventh branch to go under in the last six months
A Sydney franchise of UFC Gym Australia has collapsed into liquidation, owing $1.2million.
UFC Macarthur Square, based in Sydney’s south-west, went into liquidation a month ago, with all employees sacked a few days later.
It comes after the parent companies behind the UFC Gym Australia brand collapsed in May, following a damning court judgement which ordered the owners to pay over $5million back to disgruntled franchisees.
A trio of parent companies for UFC Gym Australia, a mixed martial arts gym franchise founded in 2009 with fitness centres in Sydney, Melbourne, Perth and the Gold Coast, went into voluntary administration on May 23.
UFC Macarthur Square (pictured), based in Sydney’s south-west, went into liquidation a month ago, with all employees sacked a few days later
It is the seventh branch to go under or leave the embattled UFC Gym brand in the past six months
The collapse of the Macarthur Square gym marks the seventh branch to go under or leave the UFC Gym brand in the past six months.
Ian Niccol of insolvency firm Aston Chace Group was appointed liquidator for UFC Macarthur Square, according to news.com.au.
Mr Niccol reportedly lodged a document with ASIC which shows that the business has debts of $1.2million.
However, around $1million of that figure is owed to the gym’s director, Elvis Sinosic, a retired Australian professional mixed martial artist.
Mr Sinosic blamed the demise of his business on a lack of government support.
‘(It failed) as a direct result of the government’s mishandling of Covid over the last couple of years and their lack of any support for small businesses,’ he told news.com.au.
He added that the collapse of UFC Gym Australia’s parent companies also led to a ‘lack of customer confidence’ in the brand.
A UFC Gym Australia spokesperson said Mr Sinosic had agreed to relinquish the Macarthur franchise. It has since been taken back by head office.
‘The franchisor continues to operate the MacArthur gym uninterrupted and customers have experienced uninterrupted service levels throughout,’ the spokesperson said.
A judge found that the co-directors of UFC Gym Australia, Mazen Hagemrad (pictured) and Samer Husseini, had misrepresented the gym’s financial position in order to sell franchises
It comes at a trying time for the UFC Gym Australia brand after the gym’s parent company was ordered to pay over $5million to three franchise owners following a messy four-year legal battle.
A court found the company and its directors had ‘engaged in misleading and deceptive conduct’ during the process of selling the franchises.
The judge found that the co-directors of UFC Gym Australia, Mazen Hagemrad and Samer Husseini, had claimed two of the franchises were profitable and provided profit forecasts, when in reality they were losing money.
A former franchise owner — one of the three franchises that took the company to court and won — said he feels ‘quite dirty’ about the saga.
One of the directors is reportedly appealing the court judgement.