Town Sports International Holdings is an operator of fitness centers in the Eastern United States, California and in Switzerland. Its brands include New YorkSports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs, Lucille Roberts, TMPL Gym and Total Woman Gym and Spa. Founded in 1973 and based in New York City, the firm went public on June 6 of 2006 on NASDAQ. As of 2007 TSI Holdings operated over 155 clubs with approximately 483,000 members. Patrick Walsh was appointed CEO on September 30, 2016. New York City is home to the majority of the clubs under the banner of NYSC or New York Sports Clubs. There are over 120 NYSC clubs in New York, New Jersey and Connecticut. Boston is home to the second largest majority of clubs under the banner of BSC or Boston Sports Clubs with over 25 locations in Metro Boston and Rhode Island. PSC, Philadelphia Sports clubs has over 8 locations in Philadelphia and New Jersey, WSC, Washington Sports Clubs, has over 17 locations in D.C., Maryland and Virginia. Corporate Regional offices are located in Boston and Philadelphia. TSI, the parent company, has its corporate offices in New York City.
Legal Proceedings
TSI has had multiple legal issues regarding its cancellation policies. In 2016, the Attorney General of the District of Columbia investigated TSI for violations of the District's consumer protection laws. TSI and the Attorney General settled this dispute in November, 2016, with TSI agreeing "to clearly disclose its cancellation policies, cease misleading consumers about how they can cancel, and not bill consumers who canceled their memberships." In January 2019, the Attorney General of DC filed a new lawsuit against TSI, alleging that the company had violated the terms of its 2016 settlement and again violated the District's consumer protection laws. In May 2019, a separate class action lawsuit was filed in New York against TSI, further alleging that the chain ignored members' cancellation requests and collects fees after closing members' accounts. Forbes magazine reported that the company had a history of mishandling customer memberships, and that as of April 2020 had at least 24 membership-related federal lawsuits filed against it in a five-year span; a number disproportionately higher than TSI's competitors. The company also had an F rating from the Better Business Bureau for failure to respond to 54 complaints and failure to resolve 22 more. A former employee told Forbes that while no gym company was "100% ethical" there was "maybe a little too much" unethical behavior at the company. Several employees stated that many of the company's current issues came to a head after the appointment of Walsh as CEO.
On March 16, all gyms were temporarily closed due to the COVID-19 crisis, and all non-executive staff subsequently terminated. Town Sports International continued to charge member dues, resulting in widespread outrage. On March 26, 2020, Mary Namorato filed suit against Town Sports International, alleging that the company was “defrauding and stealing from gym members” by continuing to charge the chain's approximately 605,000 members. The complaint stated that the company had made “it virtually impossible for members to cancel their memberships and has even refused to honor many members’ cancellation requests”. Namorato's representative stated that competitors Equinox, Planet Fitness and Blink Fitness had automatically suspended membership charges due to the closures." On April 3, 2020, the Attorneys General of the states of New York, Pennsylvania and the District of Columbia sent a letter to CEO Patrick Walsh demanding he immediately cease charging monthly membership fees. Five days later the company consented to freeze memberships across the board, however the return of the fees that had been charged was not addressed. An article in Bloomberg revealed that Walsh was considering having the company file for bankruptcy. Three weeks later, under pressure from the Attorneys General, the company agreed to issue credits and refunds of fees that had been charged to members.
