What is the current status of the AKT Lawsuit according to the Body20 FDD?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Lindsay Junk, our Chief Executive Officer, previously served as Brand President of Y6. Anthony Geisler, the Chief Executive Officer of Sequel Brands, previously served in the same role for Xponential and various subsidiaries of Xponential. One or both of them have been named as defendants, along with other officers and employees of Xponential, in the following lawsuits involving Xponential and its affiliates, which involve similar claims and allegations. We are not affiliated with Xponential and these lawsuits do not involve us or our affiliates.
Dance Fitness Michigan LLC, et al. v. AKT Franchise, LLC, et al., filed August 30, 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 owners, including 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") against (i) AKT Franchise, LLC and
AKT Franchise SPV, LLC; (ii) Xponential, Xponential Fitness, Inc., XPOF Assetco, LLC, and Xponential Intermediate Holdings, LLC (collectively, the "Xponential Entities"); (iii) H&W Franchise Intermediate Holdings LLC, H&W Investco LP, and H&W Investco II LP (collectively, the "H&W Entities"); (iv) LAG Fit, Inc.; (v) MGAG LLC; and (vi) 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, (i) through (vi), the "AKT Defendants") after AKT Franchise, LLC initiated an arbitration against and sought damages from certain of them for breaches of their franchise agreements. The AKT Plaintiffs alleged that one or more of the AKT Defendants (a) violated pre-sale disclosure obligations under the California Franchise Investment Law, the Florida Franchise Act, and the Michigan Franchise Investment Law by failing to provide a compliant Franchise Disclosure Document, making statements that they contend were erroneous or prohibited, and failing to disclose information that they contend necessitated disclosure; (b) fraudulently induced them to invest in franchises; (c) breached the implied covenant of good faith and fair dealing; (d) breached a purported agreement to provide certain financing; and (e) engaged in unfair and deceptive trade practices. The AKT Plaintiffs seek (1) declaratory and injunctive relief regarding the enforcement of the mandatory arbitration provisions in their franchise agreements; (2) rescission of their franchise agreements; (3) actual and special damages; and (4) attorneys' fees, costs, and interest. The AKT Defendants have all filed a demurrer to the complaint.
Source: Item 3 — LITIGATION (FDD pages 13–17)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the AKT Lawsuit, officially titled Dance Fitness Michigan LLC, et al. v. AKT Franchise, LLC, et al., was filed on August 30, 2023, in the Superior Court of the State of California, County of Orange, Case No. 30-2023-01345433- CU-AT-CXC. The plaintiffs, a group of former AKT franchisees and their owners, are pursuing legal action against AKT Franchise, LLC, Xponential Fitness, Inc., and several related entities and individuals.
The AKT Plaintiffs allege violations of pre-sale disclosure obligations under franchise investment laws, fraudulent inducement to invest in franchises, breach of the implied covenant of good faith and fair dealing, breach of a purported agreement to provide financing, and unfair and deceptive trade practices. They are seeking declaratory and injunctive relief regarding the enforcement of mandatory arbitration provisions, rescission of their franchise agreements, actual and special damages, and attorneys' fees, costs, and interest.
As of the date of the 2025 Franchise Disclosure Document, the AKT Defendants have filed a demurrer to the complaint. This indicates that the defendants have responded to the lawsuit by filing a pleading that objects to or challenges the legal sufficiency of the plaintiff's complaint. The outcome of the demurrer could significantly impact the future of the lawsuit. Body20 states that they are not affiliated with Xponential and this lawsuit does not involve them or their affiliates. However, Lindsay Junk, Body20's Chief Executive Officer, previously served as Brand President of Y6, and Anthony Geisler, the Chief Executive Officer of Sequel Brands, previously served in the same role for Xponential, and one or both of them have been named as defendants, along with other officers and employees of Xponential, in lawsuits involving Xponential and its affiliates, which involve similar claims and allegations.