Gym Imports Direct sues BFT for $3.3 million in damages over alleged breach of equipment supply contract

Body Fit Training (BFT) and its co-founders Cameron Falloon and Richard Burnet are reportedly being sued for more than $3.3 million by commercial fitness equipment distributor Gym Imports Direct.

Claiming BFT broke an agreement to have franchisees purchase Gym Imports Direct’s fitness equipment, Court documents reveal that the supplier is alleging Falloon (pictured below) and Burnet’s breach of contract have caused the company losses of an estimated $3,324,806.

In a Supreme Court writ obtained by the Melbourne's Herald Sun, Gym Imports Direct claims it entered into an agreement with BFT in November 2019 to supply gym equipment to its franchisees.

As part of the agreement cited by Gym Imports Direct, BFT were required to regularly update the supplier with information including the number of franchises sold in a particular territory and new studio opening dates.

In turn, Gym Imports Direct stated they would manufacture and store equipment based on the forecast reports provided by BFT.

However, the gym equipment supplier alleges that from at least June 2021, BFT breached the agreement after their franchisees failed to purchase the equipment from GID and approached the China-based suppliers directly.

The supplier alleges 45 studios were opened that did not use Gym Imports Direct supplied equipment, eight of which were located in Melbourne including Carlton, Footscray and Glen Waverley and Bundoora.

The company claims a further 37 BFT studios across Australia, New Zealand and the US advertised as “coming soon” will also not use the distributors equipment.

Court documents allege “the defendants conspired to supplant GID as the supplier of fitness equipment to BFT and BFT Franchisees and as the supplier to a purchaser of BFT’s franchise business.”

Gym Imports Direct allege the conduct amounted to “conscious wrongdoing in contumelious disregard of GID’s rights” and “high handed conduct calling for curial disapprobation addressed not only to the defendants but to the world”.

The business further claims dozens of studios across the country owed a total of more than $163,000 in outstanding bills for equipment ordered before the supply agreement was terminated in February this year.

According to a statement of claim, the contract was terminated after BFT itself accused Gym Imports Direct of breaching the supply agreement by undercutting commission and failing to repay a loan of more than $240,000.

Gym Imports Direct denies it owed BFT the loan or outstanding commission and alleges the termination of the agreement was “unlawful”, according to Court documents.

Gym Imports Direct also alleges that BFT and Falloon breached a nondisclosure agreement related to confidential information about their suppliers.

In November 2021, BFT announced it had entered into $60 million cash upfront deal with Xponential Fitness Inc, the largest boutique fitness franchisor in the USA, to sell its intellectual property.

In February this year, the Federal Court of Australia ruled in favour of BFT in a patent infringement lawsuit initiated by F45 Training.

A separate action initiated by F45 in the US state of Delaware, claiming that BFT infringes one of F45's patents, is believed to be ongoing.