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nid 93072
Jun 02, 2026
pdonofrio@vixio.com
New York
New York AG - Letitia James (D)
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2068 charsNew York Attorney General Secures $3.9 Million Settlement from Xponential Fitness for Misleading Franchise Owners
On June 9, 2026, New York Attorney General Letitia James announced that the Office of the Attorney General (OAG) secured its largest-ever financial settlement related to violations of New York's Franchise Sales Act. California-based fitness studio company Xponential Fitness, Inc. (Xponential) and its current and former subsidiaries will pay $3,971,250 for illegally misleading small business owners about franchise opening timelines.
The OAG investigation found that Xponential and its subsidiary brands—including AKT, Body Fit Training, Club Pilates, CycleBar, Pure Barre, Rumble, StretchLab, and YogaSix—misled prospective franchise owners about the timeline for opening new locations while selling franchise licenses. Between January 1, 2020, and December 31, 2024, Xponential filed approximately 33 Franchise Disclosure Documents (FDDs) with the OAG representing estimated studio opening times of three to six months. However, the OAG's investigation determined that, on average, these fitness studios took more than 13 months to open from the date franchisees executed their agreements. Xponential disclosed substantially longer timeframes in annual reports with the U.S. Securities and Exchange Commission (SEC)—up to 12.2 months in 2022, 10.5 months in 2023, and 15 months in 2024—far exceeding the timelines reported in New York FDDs. The misleading timelines caused significant financial losses for some franchisees, while others never opened their locations.
Under the settlement, Xponential must pay $3,971,250 into a restitution account. The OAG will distribute $3,000,000 to 70 franchisees harmed by longer-than-disclosed opening timelines and $971,250 to 25 franchisees who never opened studios as compensation for franchise and transfer fees. Impacted franchisees will be contacted directly by Xponential regarding their eligibility for restitution.
REFERENCES:
Office of the New York Attorney General. "Attorney General James Secures More Than $3.9 Million from Xponential Fitness for Misleading Franchise Owners." June 9, 2026. https://ag.ny.gov/
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1491 charsLouisiana Legislature Enacts SB 254: Debit Card Surcharging
On June 2, 2026, the Louisiana Legislature enacted SB 254 , which creates Chapter 52 of Title 51 of the Louisiana Revised Statutes regarding the protection of consumers from debit card surcharges.
The law prohibits a retail business from imposing an additional surcharge on a cardholder who uses a debit card instead of cash, check credit card or similar means of payment. Specifically, this prohibition applies to any sale of goods or services, with retail businesses found in violation liable to the cardholder for actual damages incurred.
The law stipulates that the cardholder must provide written notice of the alleged violation to the retail business prior to filing a lawsuit. The retail business may cure the violation and reimburse the assessed surcharge within 30 days of receiving the notice to avoid a private right of action. The private right of action only applies to willful violations, repeated violations or violations that remain uncured after the provided time period.
Additionally, the law clarifies that the Louisiana Office of the Attorney General (OAG) is authorized to bring civil actions to enforce its provisions, with violators subject to civil penalties of up to US$500 per violation.
The law also requires the OAG to establish and maintain a toll-free telephone number and an electronic reporting system for cardholders, noting that collected penalty funds must be used to promote consumer protection and education.
The law takes effect on August 1, 2026 .