Protecting Franchises: The FTC 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 your business grow. What you probably aren’t looking for is for a franchisor to mislead you about the risks and costs of opening a franchise. That’s what the FTC accuses Xponential Fitness (“Xponential”), the world’s largest franchisor of boutique fitness studios, of doing to potential franchisees.

Xponential sells franchises for many popular fitness studio brands including Club Pilates, Pure Barre, Yoga Six, StretchLab, and BFT. The company has sold thousands of franchises worldwide and has nearly 2,500 studios currently operating in the U.S. With an initial fee of $45,000 – not to mention the tens of thousands of dollars required to get the studio up and running – customers who buy a franchise from Xponential are at significant financial risk.

In light of this risk, and to ensure that buyers looking to purchase a franchise can properly compare potential investment opportunities, the FTC Franchise Act requires sellers to provide clear and accurate information about the franchise opportunity, including information about the franchisor’s executive, litigation and bankruptcy history, the franchisor and how long it will take for both of them to do so. Franchise to get off the ground. In its complaint, the FTC alleges that Xponential defrauded potential franchisees over several years:

• Claiming that franchisees usually have their studios up and running within six months of signing the franchise agreement. In fact, the FTC alleges, it typically takes more than a year (if the franchise is fully open).
• Failure to disclose key details about Xponential executives and ongoing litigation (for example, Xponential’s former CEO Anthony Geisler—who has been repeatedly prosecuted for fraud—was involved in the sale or operation of franchises).
• Falsely reporting the names and contact information of franchisees whose studios had ceased operations in the previous year.
• Failure to provide a legally required franchise disclosure document at least 14 days before the prospective franchisee signs the franchise agreement.

As a result, potential franchisees often agreed to expensive, long-term contracts – and studio rent payments, salaries, and other expenses – without receiving legally defined, accurate, and complete information about the actual risks and costs of opening an Xponential franchise.

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

Are you franchising your business? Visit ftc.gov/franchise for everything you need to know about compliance with the law and remember:

• Provide accurate and complete information to prospective franchisees. The franchisor must provide prospective franchisees with a franchise disclosure document that includes factual information, for example, the costs and risks of opening and operating a franchise.
• Timely disclosure. The franchisor must provide the prospective customer with an accurate franchise disclosure document at least 14 days before the prospect signs an agreement or pays the franchisor.
• The FTC monitors the site. The agency will continue to act to protect American workers from those who violate the law, consistent with the FTC’s labor task force launched in February 2025 by Director Andrew N. Ferguson.