CHICAGO—Franchising is an integral part of Bally Total Fitness’ turnaround plan, and the fitness operator is forging ahead with plans to expand overseas through franchising. Two days ago, Bally announced the opening of its third fitness franchise in South Korea as well as plans to open a fourth facility in Seoul this spring. The number of overweight South Koreans has increased from 22 percent to 36 percent, and the South Korean government is looking for ways to deal with the obesity epidemic.
In other Bally news, the company appointed John W. Rogers Jr. as the lead director of the Bally board of directors. The chairman and CEO of Ariel Capital Management will also lead a special committee comprised of four board members to work with J.P. Morgan and the Blackstone Group to explore alternatives related to a sale of the company. The company, which is saddled with $757 million in debt and is under an ongoing investigation by the Securities and Exchange Commission, is engaged in a proxy fight with its two largest shareholders, Pardus Capital Management and Liberation Investments. Bally alleges that the two shareholders are working together to take control of the company without paying a control premium. Bally is seeking legal action against the two hedge funds. Shareholders will have the opportunity to vote on a proposal by Liberation to oust Paul Toback as Bally CEO and on Pardus’ proposal to overhaul the existing Bally board at the company’s annual board meeting at 8:30 a.m. on Jan. 26 in Chicago.