- Xponential Fitness will pay $3,971,250, the largest recovery ever under the New York Franchise Sales Act, to resolve allegations of misleading 95 New York franchisees.
- Roughly 33 FDDs filed between 2020 and 2024 promised 3 to 6 month openings; the actual average exceeded 13 months, a gap confirmed by Xponential’s own SEC filings.
- The deal sends $3,000,000 to 70 delayed franchisees and $971,250 to 25 franchisees who never opened, covering eight brands including Club Pilates, StretchLab, and Pure Barre.
- The settlement layers on top of a $17M FTC deal and a $22.75M class-action payout from March 2026, bringing the year’s enforcement total near $44M.
- A separate U.S. Attorney’s Office investigation in the Central District of California remains active, leaving Xponential’s legal exposure unresolved.
New York Attorney General Letitia James announced on June 9, 2026, that boutique-fitness franchisor Xponential Fitness LLC will pay $3,971,250 to resolve allegations that it violated the New York Franchise Sales Act by systematically misleading prospective franchisees about how long it would take to open a studio. The agreement represents the largest financial recovery ever obtained under the state franchise-sales statute and will return money directly to 95 small-business owners who signed agreements between January 2020 and December 2024.
Largest Franchise Sales Act Recovery in New York History
Of the total settlement, $3,000,000 is earmarked for 70 franchisees who signed agreements but saw their openings delayed well beyond the timeline Xponential had disclosed, while the remaining $971,250 will compensate 25 franchisees who ultimately never opened a location and will be reimbursed for franchise and transfer fees already paid. Funds will be deposited into a restitution account administered by the Office of the Attorney General (OAG), and Xponential will contact all eligible claimants directly to process payments.
Systemic Misrepresentation of Studio-Opening Timelines
The OAG investigation found that Xponential and its subsidiary brands filed roughly 33 Franchise Disclosure Documents (FDDs) in New York between 2020 and 2024, all stating that franchisees could expect to open their studios within 3 to 6 months of signing. In practice, the average opening window stretched to more than 13 months, more than double the disclosed timeline. Internal evidence collected from Xponential’s own filings with the U.S. Securities and Exchange Commission (SEC) showed the company knew its public representations were inaccurate: the 2022 annual report listed openings of up to 12.2 months, the 2023 report up to 10.5 months, and the 2024 report up to 15 months.
Brands, Scale, and the Cost of False Promises
The misconduct covered eight boutique-fitness brands operated by Xponential, including AKT, Body Fit Training, Club Pilates, CycleBar, Pure Barre, Rumble, StretchLab, and YogaSix. The misrepresentations caused tangible harm: some operators absorbed severe financial losses as rent, build-out, and staffing costs accumulated during extended wait periods, while others were forced to abandon their projects entirely after the gap between expectation and reality proved unbridgeable.
Regulatory and Legal Backdrop
The New York action is the latest in a string of enforcement events that have battered the Irvine, California–based franchisor in 2026. In March, Xponential agreed to pay $17 million to the U.S. Federal Trade Commission (FTC) to settle a Franchise Rule investigation launched in July 2024, and $22.75 million to settle a class action brought by 509 current and former franchisees whose claims date back to 2023. Combined, the three settlements now approach $44 million, while a separate inquiry by the U.S. Attorney’s Office for the Central District of California remains open. Founder and former CEO Anthony Geisler departed the company in May 2024 amid the widening probes.
New Yorkers who take the risk of opening a local franchise should be able to trust that the companies they are going into business with will treat them fairly. Xponential misled small-business owners with false promises and caused them to lose significant amounts of money. My office has secured restitution for the business owners who were misled by Xponential, and I will continue to enforce the law to ensure small businesses in New York have a fair shot at success.
About the New York Attorney General’s Office
The Office of the Attorney General (OAG) is the state’s chief legal officer and enforcement agency, tasked with protecting New Yorkers’ rights, consumers, investors, and small businesses. The Investor Protection Bureau, which led the Xponential investigation under Section Chief Joseph Punturo and Senior Enforcement Counsel Hannah K. Flamenbaum, pursues civil actions against fraudulent or deceptive practices in the offering and sale of securities, franchises, and other investments.
View the New York Attorney General’s Office documents related to this case by clicking the button below.
About Xponential Fitness
Xponential Fitness LLC is one of the largest curators of boutique fitness brands in the world. The company franchises studios under multiple concepts including Club Pilates, StretchLab, YogaSix, Pure Barre, Rumble Boxing, CycleBar, AKT, and Body Fit Training across the United States and internationally. Xponential did not admit liability as part of the New York settlement.
