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Anytime Fitness Complaint

Anytime Fitness Complaint

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Published by Ryan Gile, Esq.
Complaint filed in Anytime Fitness, Inc. v. Rainbow Fitness, LLC et al, Case No. 09-cv-02185 (D. Minn.).
Complaint filed in Anytime Fitness, Inc. v. Rainbow Fitness, LLC et al, Case No. 09-cv-02185 (D. Minn.).

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Published by: Ryan Gile, Esq. on Aug 22, 2009
Copyright:Attribution Non-commercial

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04/11/2010

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UNITED STATES DISTRICT COURTDISTRICT OF MINNESOTAAnytime Fitness, Inc., aMinnesota corporation,Plaintiff,v.Rainbow Fitness, LLC, a Nevadalimited liabilitycompany, Fort Apache Fitness,LLC, a Nevada limited liabilitycompany, Blue DiamondFitness,LLC, a Nevada limitedliability company, LawrenceFagan, an individual,and LindaFagan, an individual,Defendants.File No.
VERIFIED COMPLAINT
Plaintiff Anytime Fitness, Inc. (“AFI”) for its complaint against DefendantsRainbow Fitness, LLC, Fort Apache Fitness, LLC, Blue Diamond Fitness, LLC, LawrenceFagan,and Linda Faganstates and alleges as follows:
INTRODUCTION
For the past 16months, Defendants have been taught by AFI how to develop andsuccessfully operate a limited service 24-hour co-ed fitness center business. They reapedthe substantial benefits conferred upon them by AFIunder five-year franchise agreements,which have permitted Defendants to quickly build a successful business in a field in whichthey had no prior experience. AFI provided Defendants with the information and “knowhow” to get their business up and running, and then to successfully operate their fitness
Case 0:09-cv-02185-JMR-FLN Document 1 Filed 08/20/09 Page 1 of 24
 
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locations, including proper club layout, services offered and the pricing of those services,implementation of security systems and related technology developed by AFI and anaffiliate of AFI, AFI’s membership agreement forms which were prepared and distributed by AFIexclusively to its franchisees, access to AFI’s suppliers, training in the methods of operating a largely unstaffed 24 hour co-ed fitness business, promotion and sales of fitnessclub memberships, processing of membership and membership fees, and numerous other trade practices of AFI and the Anytime Fitness franchise system. In exchange for AFI putting Defendantsin business, Defendants agreed to operate their Anytime Fitness centersfor the entire five year term of their Franchise Agreements and that during the term of their Franchise Agreements they would not compete with AFI, or assist anyone in competingwith AFI, in connection with any other fitness center.Defendants have blatantlyand brazenly breached their non-compete and appear to be planning to breach their five year commitment to AFI. They have recently opened and begun operating a business known as “Lifestyle Fitness 24/7”in the same Las Vegasmarketas their Anytime Fitness centers, and are currently constructinga second “LifeStyleFitness 24/7” location, which they intend to open within three weeks. They have indicatedthat they then intend to convert their three Anytime Fitness franchised locations in LasVegas to “LifeStyle Fitness 24/7” locations to compete directly with Anytime Fitness andits existing and future franchise locationsor close their Anytime Fitness locations andtransfer the members to the “coming soon” location. These new businessesrely on all of the above-listed “know how,”right down to the keyless entry fobs that Defendantsstealthilypurchased in late July from an affiliate of AFI. Equally disturbing, Defendants
Case 0:09-cv-02185-JMR-FLN Document 1 Filed 08/20/09 Page 2 of 24
 
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have usedAFI’s registered trademarks and confidential information in the promotion andoperation of their new business, including an advertising brochure that uses the AnytimeFitness name and logo in marketing Defendants’ “coming soon” location.These outrageous acts by Defendants require the issuance of immediate injunctiverelief by this Court to avoid further injury to a significant Minnesota company.
PARTIES
1.Plaintiff AFIis a corporation existing under the laws of Minnesota, with its principal place ofbusiness located at 12181 Margo Avenue South, Hastings, Minnesota.2.Defendant Rainbow Fitness, LLCis, on information and belief, a limitedliability company existing under the laws of Nevada, with its principal place of businesslocated at 7537 S. Rainbow Boulevard. #109, Las Vegas, Nevada, 83139.3.Defendant Fort Apache Fitness, LLCis, on information and belief, a limitedliability company existing under the laws of Nevada, with its principal place of businesslocated at 6125 S. Ft. Apache Rd., Suite 212, Las Vegas, Nevada 89148.4.Defendant Blue Diamond Fitness, LLC,is, on information and belief, alimited liability company existing under the laws of Nevada, with its principal place of  business located at 8180 Blue Diamond Blvd. #150, Las Vegas, Nevada 89113.5.Defendant Lawrence Faganis, on information and belief, a resident of theState of Nevada, residing at 7196 Laramie Avenue, Las Vegas, Nevada 89113, and doing business in Nevada.
Case 0:09-cv-02185-JMR-FLN Document 1 Filed 08/20/09 Page 3 of 24

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