As the company’s stock soared, Xponential routinely told investors that it had never had a franchised studio close – a metric it used to signal the strength of its systems and the growth potential of its brands. But many franchisees had a different story to tell.
The Capitol Forum began reporting on Xponential Fitness in February 2023, exposing omissions of key information in the company’s franchise disclosure documents, concerns from franchisees who said they felt duped into joining a flawed franchise system, and indications that the company’s assertion that it had never had a franchised unit close – a metric that Xponential used to signal financial health of its franchise systems – was not accurate, misleading investors and prospective franchisees.
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