US- Based Gold’s gym, a renowned name among bodybuilders all over the world has been severely affected by the ongoing COVID-19 pandemic. The company has, on May 4, 2020, filed for bankruptcy protection under Chapter 11 of The Bankruptcy Code of the USA.
The company, in its official statement, stated that the pre-negotiated filing would enable it to “emerge stronger and ready to grow” and that it intends to be on the other side of Chapter 11 by August 1.
However, concluding that all of over 700 outlets of Gold’s gym will have to pack their bags would be incorrect. This is because the company owned gyms form a very small part of Gold gym’s outlets all over the world. A majority of outlets work through licensing and not through direct ownership of the company.
In an official statement, the company clarified that only 30 of the company-owned gyms, owing to viability will have to be shut with immediate effect. The claim would have no effect on its licensing division.
Therefore, it is safe to conclude that no Gold’s gym outlet in India will be affected by the decision.
“To be clear, the filing should not impact our licensing division, it is not associated with any of our locally-owned franchise gyms, nor will it prevent us from continuing to support our system of nearly 700 gyms around the world.”
However, it is also true that filing under Chapter 11 is the most complex of all bankruptcy cases and is usually the most expensive bankruptcy proceeding and is usually taken as the last alternative.
Businesses across the world and particularly establishments such as cinema halls, gyms, and shopping malls are facing the brunt of the ongoing COVID-19 pandemic.