What specific relief are the AKT Plaintiffs seeking from Bft in this litigation?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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. The AKT Plaintiffs seek rescission of various franchise agreements, actual and special damages, attorneys' fees, costs and interest.
Source: Item 3 — LITIGATION (FDD pages 14–18)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the AKT Plaintiffs are seeking several forms of relief in their lawsuit against AKT Franchise, LLC, and other related parties. Filed on August 30, 2023, and amended on November 20, 2023, the plaintiffs are seeking declaratory and injunctive relief to litigate their claims in court rather than through arbitration, which AKT initially pursued.
Specifically, the AKT Plaintiffs allege violations of pre-sale disclosure obligations under the California Franchise Investment Law, the Michigan Franchise Investment Law, and the Florida Franchise Act. They claim that the defendants failed to provide compliant Franchise Disclosure Documents, made incorrect statements, and omitted required information. Additionally, the plaintiffs assert claims of fraudulent inducement to purchase franchises, breach of the implied covenant of good faith and fair dealing, breach of a purported financing agreement, and engagement in unfair and deceptive trade practices.
In terms of monetary and legal remedies, the AKT Plaintiffs are seeking rescission of their franchise agreements, which would essentially undo the agreements and potentially return them to their pre-franchise state. They are also pursuing actual and special damages to compensate for financial losses, as well as attorneys' fees, costs, and interest incurred as a result of the alleged misconduct. This comprehensive approach to relief indicates the severity of the claims and the potential financial impact on Bft if the plaintiffs are successful.