UFC Gym Australia’s Maz Hagemrad declared not ‘to be a reliable or credible witness’ by Federal Court Judge

The recent judgement of Federal Court Justice Thomas Thawley in a case between three franchisees and the Australian franchisor of UFC Gyms, has seen Mazen ‘Maz’ Hagemrad, Director of Ultimate Franchising Group Pty Ltd (UFG), UFC Gym Prospect Pty Ltd and Ultimate Franchising Group Properties Pty Ltd, the companies operating the Australian master franchise for USA-based UFC (Ultimate Fighting Championship) Gyms, declared not “to be a reliable or credible witness”.

The conclusion of the recent six-day trial at the end of May saw the Australian franchisor of UFC Gyms ordered to pay more than $5 million to the three plaintiffs.

However, as of yesterday, it emerged that the three UFC companies all went into voluntary administration on 23rd May - the day after the Federal Court judgement.

The Federal Court had found that UFG had indulged in “deceptive” conduct involving “profiteering”, misleading the franchisees about businesses which were "near valueless" and unlikely to operate profitably.

The Federal Court judgement showed that Hagemrad and fellow Director Samer Husseini promised franchisees that their customer base grow to more than 1200 members in the space of just 10 months and that they would break even straight away.

Hagemrad also claimed to prospective buyers that he had “preferential payments” in place that would make “fitting out” their venue into a UFC style gym considerably cheaper while, in reality, he had an arrangement to receive a 10% discount for UFC branded equipment which he would then sell onto franchisees at a higher price.

The Court heard he obtained a dumbbell set for $9,500 but sold it on at $27,250, a 286% price increase.

In his judgment, Justice Thawley advised “this was more in the nature of profiteering from franchisees than securing preferential agreements for them with suppliers.”

Evidence also emerged that two businesses involved in the fit-out stage for UFC franchises actually had personal links to Hagemrad.

Hagemrad’s brother-in-law operated Intrex Projects Pty Ltd, the ‘approved supplier’ for all the UFC franchises.

This company charged $106,000 to the Balcatta franchise during the fit-out process, in what the court called “an unexplained charge”.

Karim Girgis the owner of the UFC Gym in the Perth suburb of Balcatta, claimed this cost was attributed to “consulting”, even though only a handful of phone calls occurred between this company and his builder.

During the cross-examination Hagemrad was accused of receiving “kick-backs” through this business, which he denied.

A company called Strategy Squared Pty Ltd imported UFC Gym equipment, with the freight and customs costs then charged to franchisees.

The Court was told that Hagemrad’s wife was the director of Strategy Squared.

He also held shares in the company, but denied his business relationship with UFC Gym “enabled his wife to profit”.

Judge Thawley noted “there was no evidence that the franchisees were informed of any connection between Strategy Squared and Hagemrad."

Judge Thawley also declared that he did not find Hagemrad “to be a reliable or credible witness” during the six-day trial.

Reports indicate that in 2018, the Federal Court found Hagemrad “deliberately and dishonestly created fake sales” to sell a Subway franchise, located in Sydney’s Haymarket.

During the hearings, it also emerged that one of the franchisee owners, Laziz Mirdjonov, the owner of the Castle Hill gym, had used funds from the business on personal expenditures such as domestic and international travel, restaurants, luxury shopping and two Mercedes Benz cars.

A UFC Gym Australia spokesperson reportedly said the company went into administration because it was the “best option available” to stabilise the business and that “the company retains full confidence in the future” of its brand.

Husseini is understood to be seeking an appeal.

Hagemrad was a member of the Industry Advisory Board for Fitness + Wellness Australia in 2021 and 2022 while, in April, real estate websites reported that he was selling his family home at Wentworth Point.

Images: Maz Hagemrad (top, credit: FIT Summit) and former UFC Gyms in Bankstown (middle) and Alexandria (below).