Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Fitness studio franchisor settles FTC claims of deception, (Mar 18, 2026)

By Jody Coultas, J.D.

FTC has secured the largest-ever settlement in a franchise case.

Fitness studio franchisor Xponential Fitness has agreed to pay $17 million to settle charges that it violated the FTC’s Trade Regulation Rule entitled “Disclosure Requirements and Prohibitions Concerning Franchising” and the FTC Act, the agency announced. The franchisor allegedly misrepresented significant information about the operation of its franchises (FTC v. Xponential Fitness, Inc., No. 8:26-cv-00610 (C.D. Cal. Mar. 18, 2026)).

Xponential Fitness sells franchises for popular fitness studios brands such as Club Pilates, Pure Barre, YogaSix, StretchLab, and BFT, and is one of the largest global boutique fitness franchisors. There are approximately 2,500 of its franchised studios currently operating in the U.S. The average initial fee for an Xponential franchise is $45,000.

Under the Franchise Rule, a franchisor must provide prospective franchisees with Franchise Disclosure Documents (FDDs) that include “23 items of material information” prospective franchisees use to decide whether or not to open a franchise.

The FTC alleged that Xponential’s interactions with its franchisees violated the FTC Franchise Rule. Specifically, the franchisor falsely claimed that the usual time in which franchisees got their studios up and running, with buildout complete, was six months. However, the FTC found that franchisees have typically taken more than a year to open their studios, if they opened at all, and that Xponential knew this well. This allegedly resulted in franchisees incurring unexpected and substantial costs due to the delayed opening of studios.

Also, Xponential allegedly failed to disclose to prospective franchisees that former CEO Anthony Geisler was involved in the sale or operation of franchises—and that he was involved in litigation that Xponential was legally required to disclose under the Franchise Rule. Specifically, the company failed to disclose that Geisler has been repeatedly sued for fraud. The fitness brand also neglected to tell franchisees about the bankruptcy of the former President of Franchise Development, which is required by the Franchise Rule.

Xponential omitted the names of franchisees who had a studio that ceased to do business or was terminated, cancelled, or not renewed during the previous year, as required by the Franchise Rule. Where the fitness brand disclosed the names of those franchisees, in several instances, they disclosed outdated contact information.

Finally the FTC alleged that Xponential failed to provide accurate, complete, and timely Franchise Disclosure Documents (FDDs) to franchisees at least 14 days before they signed franchise agreements.

The proposed order requires Xponential to pay $17 million to redress franchisees, the most consumer redress in the agency’s history for an alleged Franchise Rule violation. Also, the order prohibits Xponential from making misrepresentations to prospective franchisees in the promotion, sale, or offering for sale of any franchise, including the alleged misrepresentations and deceptive omissions referenced in the complaint.

Chairman Andrew N. Ferguson noted that the franchise model provides “opportunities for many millions of Americans to pull themselves up by their bootstraps and improve their families’ lots in life. It is precisely because the franchise model is so important to American workers that the Commission must protect honesty and fair dealing in the franchise industry. Honesty and fair dealing will improve the lot of American workers and strengthen the franchise model, to the benefit of all.”

Companies: Xponential Fitness

News: ConsumerProtection FranchisingDistribution FederalTradeCommissionNews