01 Investigation
Written by: Li Yinglin
2021-01-26 07:00
Last update date: 2021-01-26 07:00
The new crown pneumonia epidemic in Hong Kong has repeated itself. The fitness center was ordered to suspend business for more than 100 days last year, and was ordered to suspend business for the third time in December. It has been reopened indefinitely.
"Hong Kong 01" checked the court records and found that the large fitness center Physical and Goji Studios have been filed for rent arrears by the owners in recent months. Among them, the branches of Goji Studios were filed by the owners in 2020. There were nearly 20 rents and applications for rent closure orders, and each time the amount recovered was more than 2 million yuan.
Pure Fitness, another large fitness center, also admitted that due to the impact of the epidemic and the suspension order, it has recently laid off some Hong Kong employees.
Li Yuemin, president of the Hong Kong Association of Recreation and Sports Professionals, pointed out that there have been no large-scale layoffs in the fitness industry, but he believes that some fitness center branches continue to owe rents, which is an operating alarm. We hope that the government will relax fitness coaches and take appropriate social distance to stay outdoors. Venue teaching, and speed up the approval of the fitness center funding plan under the Epidemic Prevention and Anti-epidemic Fund.
The new crown pneumonia epidemic in Hong Kong is repeated. The government ordered the fitness center to close for the third time in December last year, and it has been reopened indefinitely.
(Profile picture/Photo by Zhang Haowei)
Physical four branches were chased for rent several times, involving millions of dollars
Comfortable Castle Fitness Yoga Center Tuen Mun Tai Hing Garden Branch was filed by the owner, Hang Lung Properties, on January 14 this year, seeking a one-month rent of nearly 350,000 yuan.
Looking through the records, the Tuen Mun branch was also filed for rent by the landlord in May, August and December 2020.
In addition to the Tuen Mun branch, the Kornhill, Cheung Sha Wan and Sheung Shui stores of the Comfortable Castle Fitness Center were also filed for rent in May, August and September last year. The Cheung Sha Wan branch was in May and August. The rent was recovered for three months and two months respectively, and the total amount involved was nearly 2 million yuan.
In addition, the Kornhill branch was also filed by the owner, Hang Lung Properties, for rent for 1.8 million yuan in May.
Comfortable Castle Fitness Yoga Center Tuen Mun Daxing Garden Branch was filed by the owner, Hang Lung Real Estate, on January 14 this year for a one-month rent of nearly 350,000 yuan.
In May, August and December last year, the owner of the branch also filed for rent.
(Photo by Zheng Zifeng)
Goji's monthly rent exceeded 10 million yuan, and branches were chased for rent nearly 20 times last year
Another large fitness center, Goji Studios, Mong Kok branch was also filed by Hang Lung Properties for a month's rent of more than 2.6 million yuan on January 14.
In 2020, all branches of the group were filed for rent pursuit and lease closure orders by the owners nearly 20 times, and half of the filing records were related to the Mong Kok branch.
Goji Studios responded to "Hong Kong 01" stating that each of its clubs occupies more than 10,000 square feet, and the monthly rent of the seven clubs totals more than 10 million yuan. Although some landlords are willing to provide rent reductions or allow late rent payment, in 2020 It has been closed for more than 100 days, with zero income during the period, and has to continue to pay the salaries of hundreds of employees.
Goji Studios also pointed out that there is no reduction in staff at this stage.
In 2020, the branches of the large fitness center Goji Studios have been filed for rent pursuit and applied for lease closure orders nearly 20 times by their owners.
(Photo by Zheng Zifeng)
Goji: Government subsidizes a drop in salaries to discuss plans with owners
Goji Studios described the hundreds of thousands of dollars in funding provided by the government as just a drop in the bucket, and the fourth round of funding is expected to be released after the Lunar New Year, failing to help companies tide over the difficulties as promised by the government.
The company hopes that the government will introduce more relief measures and provide more substantive assistance to the industry, such as increasing the amount of subsidies for medium and large enterprises, paying rents on behalf of merchants, and requiring owners to waive rents, etc. It also hopes that owners can understand and Accommodate, discuss rent treatment plan.
Pure cuts manpower
The fitness room cannot be opened, and the large-scale fitness room Pure Fitness has recently reduced its staff. The company admitted that it was affected by the epidemic and the suspension order, coupled with insufficient government funding and the owner's failure to reduce rents by a corresponding amount. The group comprehensively reviewed the company's business and long-term development, and Adjusting the structure has affected a small number of Hong Kong employees.
The fitness room is closed, and Pure Fitness has recently laid off its staff. The company said that after reviewing the company's business and long-term development, it adjusted its structure, and a small number of Hong Kong employees were affected.
(Data Picture/Photo by Gao Zhongming)
Li Yuemin, president of the Hong Kong Association of Recreation and Sports Professionals, pointed out that Pure Fitness has laid off about 40 employees. The association has recently received about 60 Comfortable Fort employees who were affected by the layoffs.
"Hong Kong 01" once asked Comfortable Castle twice about rent arrears and reported layoffs, but has not received a reply so far.
Whether Comfortable Castle has paid off the rent arrears so far is not known.
Li Yuemin, president of the Hong Kong Association of Recreation and Sports Professionals, pointed out that there are no large-scale layoffs in the fitness room, but the continued rent arrears reflects that the operation has sounded the alarm.
(Profile picture/Photo by Liao Yanxiong)
Early termination of the franchise requires compensation for termination fees and membership fees
Li Yuemin pointed out that during the closure of a large fitness center branch, it still has to spend nearly 2 million yuan a month. There are no large-scale layoffs in the fitness room, but the continued rent arrears is a warning sign. If some branches are taken back by the owners, even if they are closed Orders are cancelled and cannot be reopened.
He estimated that nearly 300 fitness rooms closed last year, of which small fitness rooms were the main ones, and the new round of closure orders affected medium-sized fitness rooms, including fitness centers operated by franchises.
However, Li Yuemin pointed out that even if the franchisee is unable to operate, it is not easy to close the business: "When the investor signs a contract, he guarantees that the fitness center will pay for a certain period of shares. Recruited members compensate dues.”
Li Yuemin pointed out that even if the franchisees are unable to operate due to the epidemic, they still have to make huge compensations, so closing the business is not easy.
(Data Picture/Photo by Yu Junliang)
System rigidity 80% of the funding has not been received
Under the fourth wave of the epidemic, the fitness room has been closed since early December. The epidemic has been repeated. The government and experts have pointed out that there is no room for relaxation. The fitness room will be reopened indefinitely. Li Minyue suggested that the government relax measures to allow fitness coaches to take appropriate social distancing. In order to maintain their livelihood, they will teach in outdoor venues reserved by the Leisure and Cultural Services Department.
Li Minyue suggested that the government relax measures to allow fitness coaches to take appropriate social distancing to teach in outdoor venues granted by the Leisure and Cultural Services Department.
(Information Picture/Photographed by Lu Yiming)
He also criticized that the application system for the fitness center subsidy program under the Epidemic Prevention and Anti-epidemic Fund was rigid, and the required documents were not clearly specified, resulting in a long time for approval. Many fitness studios could not wait for the funding and have no choice but to close out: "Up to now there are still 80% The industries that have applied for have not received the third round of funding from the Epidemic Prevention and Anti-epidemic Fund." He believes that the approval of funding needs to be expedited to provide timely assistance to the industry.
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