Which Xponential Entities are named as defendants in the Nickle Acquisition, LLC lawsuit, and what is their potential impact on Body20?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
This action was filed by a CycleBar® and BFT® franchisee and its owners, Nickle Acquisition LLC, Michael Nickle, and Jana Nickle, (collectively, the "Nickle Plaintiffs") against (i) BFT Franchise Holdings, LLC and BFT Franchise SPV, LLC; (ii) CycleBar Franchising, LLC and CycleBar Franchising SPV, LLC; (iii) the Xponential Entities and Xponential Holdings LLC; (iv) H&W Investco LP and H&W Investco II LP; (v)
LAG Fit, Inc.; (vi) MGAG LLC; (vii) Anthony Geisler, Mark Grabowski, Trevor Lucas, Ryan Junk, Lou Defrancisco, Sarah Luna, Lance Freeman, and Kristie Lavasile; and (viii) Navitas Credit Corp. (collectively, (i) through (viii), the "Nickle Defendants"). The Nickle Plaintiffs allege that one or more of the Nickle Defendants (a) violated pre-sale disclosure obligations under the California 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 Franchise Agreement; (d) breached the implied covenant of good faith and fair dealing; and (e) made fraudulent omissions. The Nickle 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 Nickle Defendants will soon be filing 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 Nickle Acquisition, LLC lawsuit, filed on February 3, 2025, names "the Xponential Entities and Xponential Holdings LLC" as defendants. The plaintiffs in this case, CycleBar® and BFT® franchisees, allege violations of pre-sale disclosure obligations, fraudulent inducement to invest in franchises, breach of the Franchise Agreement, breach of the implied covenant of good faith and fair dealing, and fraudulent omissions. The plaintiffs are seeking declaratory and injunctive relief, rescission of their franchise agreements, actual and special damages, and attorneys' fees, costs, and interest. The Nickle Defendants, which include the Xponential Entities, are filing a demurrer to the complaint.
While Body20 itself is not directly involved in this lawsuit, the fact that its parent company, Xponential Fitness, Inc., and related entities are defendants could have implications for Body20 franchisees. The outcome of the lawsuit could potentially affect Xponential's financial stability and reputation, which in turn could impact the support and resources available to Body20 franchisees. Adverse judgments or settlements could strain Xponential's resources, potentially leading to reduced investment in Body20's brand development, marketing, or franchisee support programs.
Furthermore, the allegations made in the lawsuit, particularly those related to pre-sale disclosure obligations and fraudulent inducement, could raise concerns among prospective Body20 franchisees. They may scrutinize the Franchise Disclosure Document more closely and seek additional assurances from Body20 regarding the accuracy and completeness of the information provided. Existing Body20 franchisees might also be concerned about the potential for similar issues to arise in their own franchise agreements.
It is important to note that the FDD states that 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 various subsidiaries of Xponential. Both have been named as defendants in lawsuits involving Xponential and its affiliates, although the FDD asserts that these lawsuits do not involve Body20 or its affiliates. Prospective franchisees should carefully review Item 3 of the FDD and consider seeking legal counsel to assess the potential risks and implications of these lawsuits before investing in a Body20 franchise.