Bally Total fitness case report.

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BUSINESS MANAGEMENT 9200

Professor Mehmet Genc

BALLY TOTAL FITNESS CASE REPORT

Team Members:

Ilka Nevarez

Matthew Preusser

Robert Schultz

Diana Villacis-Velez

February 17, 2009

TABLE OF CONTENTS

1. INTRODUCTION..........................................................................................1

2. CENTRAL ISSUE...........................................................................................1

3. ALTERNATIVES...........................................................................................3

3.1 Alternative I - Franchising.......................................................................3

3.2 Alternative II- Replace CEO.....................................................................4

3.3 Alternative III-Implementation of Corporate Governance.................................5

4. RECOMMENDATION..................................................................................5

5. IMPLEMENTATION PLAN.............................................................................7

6. CONCLUSION.............................................................................................8

7. APPENDICES...............................................................................................9

1. INTRODUCTION(Diana)

Bally Total Fitness, an owner-operated health club chain with 360 outlets in the United States and more than 50 internationally was experiencing a difficult time in 2004. Even with revenues of $954 million reported in 2003 and with 3.6 million members worldwide their stock price had fallen from an average of $25 dollars in 1999 to $5 in 2004. Bally Total Fitness was dealing with the pressures of the Health Club Industry competition, was being investigated by the Securities and Exchange committee and major shareholders were urging CEO, Paul Toback, to sell the company.

In this report, our team, Solutions Services Inc, the ("Team we") will provide our understanding of the issues faced by