Who are the defendants in the AKT Lawsuit described in the Bft FDD?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Dance Fitness Michigan LLC, et al. v. AKT Franchise, LLC, et al., filed August 30, 2023 (as amended on November 20, 2023), Superior Court of the State of California, County of Orange, Case No. 30-2023-01345433- CU-AT-CXC (the "AKT Lawsuit"). This action was filed by certain former AKT franchisees and their purported owners after AKT initiated an arbitration against and sought damages from certain of them for breaches of their franchise agreements. In addition to the relief described below, the plaintiffs seek declaratory and injunctive relief to allow them to litigate their claims in this action rather than in the original arbitration proceedings initiated by AKT. In this action, one or more of the following parties: Dance Fitness Michigan LLC, Property Maintenance, Inc., 6pk Mason LLC, 6pk Liberty LLC, Teeny Turner LLC, S2 Fitness Enterprises, LLC, Soros & Associates, LLC, AdEdge Services Inc., Deanna Alfredo, Amanda Davis, Nisha Moeller, Samantha Cox, Suzanne Fischer, Nichole Soros, Michael Soros, Paul Dumas, Jodi Dumas and Laura Hannan (collectively, the "AKT Plaintiffs") assert that one or more of the following parties: AKT Franchise, LLC, AKT Franchise SPV, LLC, Assetco, Xponential, XFI, H&W Franchise Intermediate Holdings LLC, Xponential Intermediate Holdings LLC, H&W Investco LP, H&W Investco II LP, LAG Fit, Inc., MGAG LLC, Anthony Geisler, Mark Grabowski, Melissa Chordock, Elizabeth "Liz" Batterton Cooper, Alexander Cordova, Lance Freeman, Ryan Junk, Megan Moen, John Meloun, Sarah Luna, Tori Johnston, Justin LaCava, Bobby Tetsch, Brandon Wiles, Jason Losco, Brittney Holobinko, Amy Wehrkamp, Scott Svilich, Sarah Nolan, Emily Brown, Rachel Markovic, and Brenda Morris (collectively, the "AKT Defendants"): (a) violated pre-sale disclosure obligations under the California Franchise Investment Law, the Michigan Franchise Investment Law and the Florida Franchise Act by failing to provide a compliant Franchise Disclosure Document and failing to disclose certain information they contend was required to be disclosed by, and making certain statements they contend were incorrect and prohibited under, those laws some of which they contend were erroneous (the "Pre-Sale Disclosure Claims"); (b) fraudulently induced them to purchase franchises; (c) breached the implied covenant of good faith and fair dealing (the "Covenant Claim"); (d) breached a purported agreement to provide certain financing; and (e) engaged in unfair and deceptive trade practices.
Source: Item 3 — LITIGATION (FDD pages 14–18)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the AKT Lawsuit involves several defendants. The lawsuit, titled Dance Fitness Michigan LLC, et al. v. AKT Franchise, LLC, et al., was filed on August 30, 2023, and amended on November 20, 2023, in the Superior Court of the State of California, County of Orange. The plaintiffs, referred to as the "AKT Plaintiffs," initiated the action after AKT started arbitration against them for alleged breaches of their franchise agreements.
The defendants in this lawsuit, collectively known as the "AKT Defendants," include AKT Franchise, LLC, AKT Franchise SPV, LLC, Assetco, Xponential, XFI, H&W Franchise Intermediate Holdings LLC, Xponential Intermediate Holdings LLC, H&W Investco LP, H&W Investco II LP, LAG Fit, Inc., MGAG LLC, Anthony Geisler, Mark Grabowski, Melissa Chordock, Elizabeth "Liz" Batterton Cooper, Alexander Cordova, Lance Freeman, Ryan Junk, Megan Moen, John Meloun, Sarah Luna, Tori Johnston, Justin LaCava, Bobby Tetsch, Brandon Wiles, Jason Losco, Brittney Holobinko, Amy Wehrkamp, Scott Svilich, Sarah Nolan, Emily Brown, Rachel Markovic, and Brenda Morris. The AKT Plaintiffs allege that the AKT Defendants violated pre-sale disclosure obligations under various franchise laws, fraudulently induced them to purchase franchises, breached the implied covenant of good faith and fair dealing, breached a purported agreement to provide financing, and engaged in unfair and deceptive trade practices.
For a prospective Bft franchisee, the existence of this lawsuit indicates potential risks associated with the franchise system's legal and financial stability. It is important to note that Xponential Fitness, Inc. is listed as a defendant. Xponential Fitness is the parent company of Bft. The claims made by the plaintiffs, if successful, could have significant implications for Bft and its franchisees. Therefore, it is crucial for potential franchisees to carefully review the details of the lawsuit and assess the potential impact on their investment. Consulting with a legal and financial advisor is highly recommended to fully understand the risks and make an informed decision.