Protecting franchisees: The FTC’s case against Xponential Fitness

If you’re thinking about opening a franchise, you’re probably looking for things like name recognition, training, and support to help you grow your business. What you’re probably not looking for is for a franchisor to mislead you about the risks and costs of opening a franchise. That’s exactly what the FTC alleges Xponential Fitness (“Xponential”), one of the world’s largest franchisors of boutique fitness studios, did to prospective franchisees.

Xponential sells franchises for several popular fitness studio brands including Club Pilates, Pure Barre, YogaSix, StretchLab, and BFT. The company has sold thousands of franchises globally and has approximately 2,500 studios currently operating in the U.S. With an initial fee averaging $45,000 — not to mention the tens of thousands of dollars required to build out and operate a studio — consumers who purchase a franchise from Xponential take on significant financial risk.

In light of this risk, and to ensure that consumers looking to purchase a franchise can adequately compare potential investment opportunities, the FTC’s Franchise Rule requires sellers to provide clear and accurate information about the franchise opportunity, including information about the franchisor’s executives, the litigation and bankruptcy history for both the franchisor and its executives, and how long it takes for an Xponential franchise to get off the ground. In its complaint, the FTC alleges that over several years Xponential deceived potential franchisees by:

• Claiming that franchisees typically get their studios up and running within six months of signing the franchise agreement. In truth, the FTC alleges, it generally takes more than a year (if the franchise opens at all).
• Failing to disclose key details about Xponential’s executives and ongoing litigation (for example, that Xponential’s former CEO Anthony Geisler — who had been repeatedly sued for fraud — was involved in the sale or operation of franchises).
• Misreporting the names and contact information of franchisees whose studios had ceased operating within the past year.
• Failing to provide the legally required Franchise Disclosure Document at least 14 days before prospective franchisees sign the franchise agreement.

As a result, prospective franchisees often agreed to expensive, long-term agreements — and to incur costs like rental payments on a studio, payroll, and more — without having received legally mandated, accurate, and complete information on the true risks and costs of opening an Xponential franchise.

To settle allegations that Xponential violated the FTC Act and the FTC’s Franchise Rule, the company will pay $17 million to affected franchisees. Xponential is also prohibited from making misrepresentations to potential franchisees in the future.

Do you franchise your business? Check out ftc.gov/franchise for everything you need to know about complying with the law and remember:

• Give potential franchisees accurate and complete information. Franchisors must provide prospective franchisees with a Franchise Disclosure Document that includes truthful information on, for example, the costs and risks of opening and operating a franchise.
• Provide disclosures on time. Franchisors must give prospective purchasers the accurate Franchise Disclosure Document at least 14 days before the prospect signs a contract or makes any payments to the franchisor.
• The FTC is monitoring the space. The agency will continue to act to protect American workers from those who disobey the law, in alignment with the FTC’s Labor Task Force launched by Chairman Andrew N. Ferguson in February 2025.