Xponential Fitness (XPOF) – “Abusive Franchisor That Is A House Of Cards”

  • CEO’s Secret Past Includes a Bangkok Boiler Room Pump & Dump; Misleading & “Cheating” Partners
  • Interviews and Disclosure Documents Reveal That Many Franchisees Are Failing & Kickbacks Are Increasing

The Founder and CEO of Xponential Fitness (XPOF), Anthony Geisler, has a long history of misleading investors and business partners. XPOF is boutique gym franchisor with 10 different boutique fitness brands. We discovered XPOF is hiding the fact that many of their brands and franchisees are struggling. 

  • XPOF CEO, Geisler, was previously CEO of a reverse merger, pink sheets, pump & dump called Interactive Solutions (INSC) that used Bangkok boiler rooms.
    • He was exposed on camera for using the boiler rooms in the film “Beyond The Boiler Room.”
  • At Geisler’s next venture, LA Boxing, former franchisees, and colleagues of Geisler’s described him “as a crook” and detailed his many “scams” and “illegal business practices.
    • Both lawsuits and former franchisees detail how Geisler “looks people in the eye and lies.”
  • Geisler’s arrest records show that he was arrested for pulling a gun and threatening to kill a court appointed process server.
  • Investors has been impressed Geisler’s false claims that at XPOF “we have never closed a store.”
    • We found >30 permanently closed stores.
    • XPOF likely is violating their debt covenants regarding the number of permanently closed stores they have. 
  • We went through 64 FDD documents, >16,000 pages. The FDDs suggest that 8 out of 10 XPOF brands are losing money monthly.
    • >50% of XPOF studios never make a positive financial return
    • Franchisees told usEveryone is losing money
  • We discovered >100 franchises for Re-Sale at a >75% discount to initial cost.
    • In comparison, we found zero Planet Fitness franchises for resale. 
  • Franchisees told us that losses were so bad that they sold their studios back to XPOF for $1.
  • XPOF seems to be making up new financial metrics. Specifically, how they calculate Average Unit Volumes (AUV) and Same Store Sales (SSS).
    • FDDs show that XPOF is selectively EXCLUDING underperforming stores from reported SSS and AUV calculations. 
    • Average revenue calculations are mysteriously missing >95 underperforming studios.
  • Payments to XPOF + “approved suppliers” (aka vendors that pay kickbacks) has increased by an average of 64%
    • Franchisees say XPOF “overcharges them for almost everything.”
    • For example, they sell franchisees exercises bikes for 58% more than the cost of a peloton. 
    • Former franchisees at LA Boxing also accused Geisler of charging far above market rates on equipment to get kickbacks and embezzling of marketing funds.
  • XPOF encourages franchisees to take out SBA loans and/or second mortgages to pay for start-up costs.
    • XPOF Sales reps say 90-95% of franchisees take out SBA loans.
    • Former franchisees say this results in families losing their retirements and entire savings when their fitness studio inevitably fails. 
  • Most quality franchisors make money from recurring royalty & marketing fees. At XPOF, >60% of revenue is one-time and non-recurring.
  • Consumers complain about “illegal billing practices” including continuing to bill consumers credit cards after a studio has been permanently closed. Some even called it a “1980’s style gym scam.”
    • Former colleagues from LA Boxing detailed how Geisler directly approved plans to illegally bill consumer’s credit cards.
  • Geisler condones a culture of sexual harassment both in previous companies and at XPOF. Colleagues informed us that he had sexual harassment allegations against him all the time and that he would “discriminate against women that were elderly and overweight.
    • A lawsuit also details atrocious sexual harassment violations at XPOF brand, Club Pilates. 
    • Note – A majority of XPOF’s consumers are women ages 20-60
  • The house of cards is starting to fall – XPOF takes money-losing studios with long-term leases called “transition studios” onto their own Balance Sheet.
    • The number of loss-making studios on Balance Sheet has increased by >4x YoY
    • Re-sales of transition studios has slowed dramatically.
  • Massive Insider Stock Sales – If you do not believe anything we said, then pay attention to the fact that Geisler and sophisticated insiders sold >$167 million of stock in 2023.

Franchise businesses are only as healthy as the franchisees. 

Through a deep dive into the health of the franchisees, including a multitude of interviews, we discovered that lots of XPOF’s franchisees are deep in the red. It is so bad that franchisees are giving up and selling back their stores for just $1. Others are desperately trying to re-sell the businesses at a 75% discount to their upfront costs–all to stop the monthly P&L bleed. XPOF is taking these money-losing studios onto their own balance sheet and has been less able to flip them back to new mom and pop franchisees. 

We have also learned that Geisler has run “many scams” in the past. We believe that when insiders sell,  it’s time to follow one of Geisler’s past colleague’s advice– “don’t walk away from Anthony Geisler, run as fast as you can.” 

Fuzzy Panda Research is Short Xponential Fitness. 

Please see additional disclosures at end of report and our terms of service.

Note on our “Anonymous Sources” – Most of the former business partners, franchisees, and employees of Anthony Geisler whom we spoke with requested that we keep their identities “anonymous.” Many of them were afraid that Geisler would try to enact retribution against them for telling the truth as he has a history of suing anyone that speaks out against him. As a result, we made the tough decision to keep all of the formers partners, franchisees, employees, and other sources “anonymous.”

Items presented in this report often had multiple sources tell us corroborating facts. We will happily provide interview transcripts, contact information, and any other documentation received from those sources who have agreed we can share the information with the SEC, State Attorneys Generals, government regulators, or reputable journalists.

Any franchisees, suppliers, or former XPOF employees that have more information should reach out to us via email at [email protected]. We will protect your anonymity. 

Part I – CEO, Anthony Geisler’s Hidden Past 

  • Caught On Camera Using Bangkok Boiler Rooms to Mislead Investors; 
  • Former Partners Call Him a “Crook” that Ran “So Many Scams”

Anthony Geisler fails to disclose to investors that before founding Xponential Fitness (XPOF) he was the founder and CEO of another US publicly listed company called Interactive Solutions Corp (INSC). Interactive Solutions was a stock promotion and reverse merger that was listed on the pink sheets and masqueraded as a gaming software company. Interactive’s only legacy is that of utilizing multiple boiler rooms, including the Brinton Group, an infamous Bangkok boiler room. 

This boiler room scam got so big that a joint international police effort was executed by the FBI, SEC, Thai Royal Police, and Australian Federal Police to take it down.  

ABC’s Australian investigative journalism show, Four Corners, even filmed an exposé featuring the raid of the boiler room and Interactive Solutions titled “Beyond the Boiler Room.” Interview footage reveals an ABC investigative journalist catching Geisler red-handed. 

Source – Film “Beyond the Boiler Room” (Geisler holding up an “empty box” for Vegas Fever.)

In the exposé, the ABC journalist began by confirming that Geisler and Interactive Solutions Corp used the Bangkok boiler room, the Brinton Group, with Interactive Solutions Chairman of the Board and two of the boiler room operators themselves.

Interactive Solutions is a company that the Brinton Group (the illegal Bangkok boiler room) has raised money for. 

~Ed Tracy – Interactive Solutions Chairman of the Board

During the international police raid, government investigators also found written sales scripts and voice recordings for how illegal brokers should push Interactive Solutions stock in the boiler room’s offices.

The ABC journalist then interviewed Geisler and asked pointed questions about why he had used the Bangkok boiler rooms to raise money. Geisler declined to comment over and over again. 

ABC Question – Why were shares in your company being sold through Bangkok boiler rooms?

Anthony Geisler – I decline to comment. Are these questions gonna keep going down this way, because I’m gonna get real busy if so .. ?


ABC Question – If somebody bought shares in your company and they were sold as being traded on the main NASDAQ board, you’d agree that was deception?

Anthony Geisler – Um, I don’t know, I’d have to decline to comment on that right now.

Source – Geisler’s Full Interview in Appendix C (Full Transcript for “Beyond the Boiler Room”)

ABC also tried to visit Interactive Solutions’ headquarters. ABC found the headquarters DID NOT exist.

A web.archive.org search also revealed that Geisler appears to have tried to fleece the same Australian investors a second time one year later via a classic cashier’s check scheme to convince them to mail him money directly. 

Recently Geisler has hidden his shady past and instead pitched himself as a successful “Dot-Com Millionaire.”

Anthony Geisler—The “Bernie Madoff” of Gyms. How He “Cheated Business Partners” & Engaged in “Illegal Business Practices” at LA Boxing

The next business that Geisler was involved in was LA Boxing. Geisler started at LA Boxing as a member but then eventually offered the founders to use some of his “pump & dump” dot.com millions to expand the company into franchising. Many of them feel that Geisler cheated them in the same way as the Australian investors with the boiler rooms.

We interviewed Geisler’s former business partners, employees, and franchisees and we also discovered multiple lawsuits that allege that Geisler lied, cheated, and stole from people regularly. In our interviews the people who know Geisler best used a variety of ways to describe him. The responses from multiple colleagues at LA Boxing were:

  • He’s a crookandthat he committed “so many scams” (K)
  • “He’s very Machiavellian…He cheated us” (H)
  • He has no moral character…He’s right up there with Bernie Madoff(K)

“[Geisler’s] a cutthroat a**hole, I would NOT do business with him…I would not piss on him if he was in flames to be honest…I don’t know any one single person who’s ever been in business with that dude who’s walked away happy

 ~Former LA Boxing Colleague of Geisler (H)

Geisler Reportedly Did Multiple “Illegal” Things While Running LA Boxing

In interviews and lawsuits, both former franchisees and employees alleged Geisler engaged in a multiple illegal business practiceswhile running LA Boxing, including:

  • Labor violations
  • Theft/charging franchisees undisclosed fees
  • Paying for illegal robo-dialers and 
  • Embezzling marketing funds

There were so many scams, I could go on and on. You don’t have time for them all. [Geisler had] just so many…I think he probably lied about things he didn’t have to lie about. He just lied about everything.

~Former LA Boxing Franchisee (K)

“Geisler looked Mr. McCully in the eyes and LIED to him.” 

Sean McCully, one of the founders of LA Boxing, alleged that Geisler “committed fraud by cheating him out of millions of dollars. Geisler represented to him that LA Boxing was struggling and worth a lower market price than McCully and Geisler had previously agreed to in order to misappropriate the remainder of his equity at a discount. Shortly after buying the shares, Geisler announced an M&A deal to sell LA Boxing to UFC Gyms. Geisler ultimately settled the case for an undisclosed sum.

Another lawsuit alleges that Geisler lied & deceived his own national sales director, Chris Poland, out of equity and wages. Mr. Poland won this judgment vs Geisler for having him work for less than minimum wage, not compensating for overtime pay, and never delivering him his promised an equity share in LA Boxing. 

Source – Poland v. LA Boxing Franchise Corp & Geisler – OCC case no 30-2009-00121184-CU-WT-CJC

Anthony Geisler – Arrested for Pulling a Gun & Threatening to Kill a Court Process Server

If you still have doubts about Geisler’s character, consider some additional character evidence from his Orange County arrest records

Geisler pulled out a gun and threatened to kill an Orange County Court process server. 

Michael Danley, a court-appointed process server, was tasked with serving Geisler with legal papers for vacating a property. Instead of accepting the legal papers from the court process server, Geisler pulled out a gun, “pointed it at him,” and told him:

“Get out of here or I’ll F—ing Kill you” 

~Anthony Geisler w/ a gun pointed at an Orange County Court Appointed Process Server

It is unclear why but the Orange County DA eventually dropped the assault with a deadly weapon charge, but someone familiar with the matter claimed Geisler used his connections to get the charges dropped. 

Part II – XPOF Is Hiding Key Figures That Show Worse Performance

A Flimsy Bull Case:

The bull case that Geisler sells Wall Street on is that franchisees are happy and doing well financially. In order to pitch that Xponential Fitness has unlimited growth potential, XPOF hides the granular details of the franchise brand’s performance and instead cherry-picks metrics that make it seem as though everything is going well. 

The Missing Stores! – XPOF’s Appears to Have Invented New Creative Calculations for AUVs & SSS 

XPOF doesn’t break out the individual 10 brands performance but likes to brag that Average Unit Value for studios continues to grow. “Q1 North American AUVs of $542,000 were up 21% from $450,000 in Q1 of 2022, our 11th straight quarter of AUV growth.” (Q1-2023 CC

We think it is easy to show constantly increasing AUVs and Same Store Sales (SSS) when a company is actively removing underperforming stores from the comp base

Why does management claim AUVs & Comps are increasing but never disclose the total studios in the comp base?

XPOF defines “same store sales” and “AUV” to mean only studios that have been open for the last 13 months. BUT unlike normal consumer companies Xponential DOES NOT report the total number of studios included in their calculations. We believe XPOF actively EXCLUDES any underperforming stores that become company-owned “transition studios” by closing the stores temporarily and thus removing them from the comp base. 

Studios are disappearing from the comp base in the FDDs! 

Xponential does not disclose how many studios are in the Same Store Sales calculation in their financials, but we can see easily see this comp “anomaly” in the Financial Disclosure Documents (FDD’s) of the 6 brands that are struggling. 

For example, in Row House’s 2023 FDD, XPOF discloses having 81 franchised studios open as of December 2021.

Yet 13 months later in January 2023 XPOF only included 62 franchised studios. 

22 underperforming Row House studios DISAPPEARED!

Across the 6 struggling brands,we discovered that revenue data was missing a total of 95 studios.

XPOF claims to have positive SSS across the franchise system and to have AUVs increasing quarterly. There is a small part of this claim that is indeed real and due to healthy growth at Club Pilates and Stretch Lab. But another part of this claim is due to optics caused by M&A. Two recent acquisitions (BFT and Rumble) had higher average AUVs so they could have artificially boosted AUVs even though the FDDs show avg revenue per studio is declining at both brands. However, we think that the largest driver of the AUV and SSS increases is the systematic REMOVAL of underperforming studios from the comp base. 

Majority of XPOF Revenue Is Non-Recurring

Another bullish story around XPOF is around their recurring revenue–except that XPOF is different from most franchising companies since their incentives are not aligned with the franchisees. A majority of XPOF’s reported revenue actually comes from churning out new store openings (preferred vendor commission, training fees, territory fees, and start-up fees from selling overpriced equipment, fixtures, merchandise, etc.). 

~61% of Revenue is Non-Recurring (new store openings, vendor kickbacks, etc) 


Only ~39% of Revenue is Recurring (from royalty & marketing fees)

Should You Trust Geisler’s Future Growth Story? Franchisees Say No! 

Geisler tells investors a compelling story about future store growth, but as you are now aware, he seems to have a difficult relationship with the truth. XPOF’s growth story is just like every other story he tells investors—it’s riddled with holes. 

Our calls have revealed that it seems XPOF DOES NOT update their licenses sold number to include franchisees that have abandoned plans to open a store or additional stores. 

We spoke with multiple franchisees who were listed in the S-1 & Credit Agreements (see Schedule 9.27 for a long list of franchisees’ personal numbers) as “soon to open” or “behind on development,” and many informed us that they canceled their plans to open an XPOF franchise once they realized the true economics of the store. Many NEVER EVEN opened a store

Others who signed multi-unit agreements told us that they have no intention of opening more studios.” They said that after opening one studio they learned how bad the economics were and they could not afford nor would want to open another studio. 

XPOF better hope that potential franchisees do not figure out the reality of how many of their brands are performing. 

XPOF’s Misleading Statements Debunked “We Have Never Closed a Store” 

Yelp, Google, and Public Records Prove this is False. 

Geisler frequently tells investors  that “we have never closed a store.”

In addition, XPOF’s CFO (whose past includes being a director of finance at University of Phoenix right before the FTC opened a major investigation into false claims by the company and won a $190 million settlement) has also been repeating this narrative at investor conferences saying “we don’t have closures in our studios.” 

We’ve never closed a store; and post COVID, we’ve never closed a store.”

~Anthony Geisler, CEO, Bank of America Conference – March 2022

Any permanent store closures in the whole franchise system would prove this statement to be a blatant lie. We discovered >30 permanent store closures.

Using XPOF’s S-1, Yelp, and Google we discovered that XPOF has a multitude of permanently closed locations. 

XPOF’s own disclosure documents confirm that the this statement is false! The franchise disclosure documents (FDD’s) show both terminations and franchisees ceasing operations (aka store closures) at some of XPOF’s largest brands Pure Barre, CycleBar, Club Pilates, as well as at AKT. 

Below are some obvious examples of permanently closed stores. (Full list in Appendix C)

Example 1 – Row House in Pasadena, California that yelpers reported is “permanently closed.”

Example 2 – Pure Barre-Asburn, VA is closed but Rai’s Pizza is Open! A phone call (571-510-3921)to this closed Pure Barre Studio, which has zero scheduled classes results in being connected with Rai’s Pizza!

Example 3 – AKT in Mason, Ohio Google & reviews show the studio is “permanently closed.”

Example 4 – Closed Pure Barre in Toronto that is listed on the Pure Barre website as “open” despite the studio beingobviously closed.

  • The studio currently has a dumpster parked in front of it.
  • Calling the studio at (647) 222-4647 results in a disconnected phone call. 
  • The online schedule shows No Classes for at least the next 6 months.

Example 5 – CycleBar in Phoenix, Arizona that Google reports as “permanently closed.”

In total, we discovered >30 permanently closed stores. We also discovered >10 studios that are currently closed but that XPOF lists as only temporarily closed. 

Furthermore, we found many examples on XPOF’s social media of them continuing to charge customers monthly subscription fees and refusing to provide refunds even though a local studio has permanently closed. 

XPOF is charging consumer’s credit cards even when a studio is closed!

“We bought packages right before they closed and no one will respond to give our money back” 

~CycleBar Denville, NJ Customer

Geisler Also “Lied About How Many LA Boxing Franchises He Had Opened”

A former LA Boxing franchisee informed us:

“[Geisler] was cheating the franchisees up one side and down the other. And I was seeing it, and he was even lying about even how many franchises he had opened … if he sold a franchise for Boston, for example he would say, let’s put Boston up on the window. But there was nothing open in Boston. Never did open in Boston.

~Former LA Boxing Franchisee (K)

Next time you hear Geisler, CEO of XPOF, claim that they have never closed a store, we suggest you heed this warning from a former profitable Club Pilates Owner:

“The Xponential culture is very truth averse Anthony Geisler lied to my face the very first time he ever talked to me He lied right to my face. The sad part is I knew he was lying right to my face.” 

~ Former Profitable Club Pilates Owner (E)

Has XPOF Tripped Their Closed Franchised Locations Debt Covenant? 

XPOF’s debt agreements have a very strict covenant regarding franchise store closures. The debt covenants get tripped if XPOF’s total “closed franchised locations” is >50 closed franchise locations in aggregate or if >25 locations are closed during a year. The numerous closed stores we discovered indicate that it is likely that XPOF is violating its “closed franchised locations” debt covenant.

From our read of the credit filing, XPOF’s lenders could immediately demand all debt to be due as a result of XPOF hiding the number of closed stores from them. This could result in ~$262 million of debt due immediately. 

XPOF’s debt covenants provide a strict definition of a “permanently closed” store, defining it as closed for greater than 30 days. Yet, XPOF is still claiming that stores that have been closed for >2 years are still open or just temporarily closed.

If XPOF misleads investors about issues like ~1% of their store base being permanently closed, then what other big lies could they be telling?  

Geisler & Insiders are Selling Hand over Fist. Geisler Sold > $47 million in 2023; Insiders in Total Have Dumped $167.5 million

From studying Geisler’s history of deceiving his business partners, we learned it is important to be skeptical of what he says and watch what he does. And Geisler, and other insiders are selling shares of XPOF aggressively.

Geisler’s Investment History:

  • Geisler sold shares out of boiler room “pump & dump” Interactive Solutions before it crashed.
  • Geisler allegedly “deceived” his LA Boxing partner and got him to sell Geisler additional shares right before it was announced that  LA Boxing was being acquired at a much higher price by UFC Gyms
  • Now Geisler is selling XPOF shares almost constantly. In 2023, he sold a total of >$47 million.

A Fuzzy Panda investigator met with Geisler earlier in 2023 after he had sold $30 million of stock, and he told us and other investors point blank, “I’m not selling any more stock.” 

Geisler lied to our face and he proceeded to sell another $18.1 million over the next 2 months.

Including the private equity sponsor, insiders have sold a total of $167.5m in 2023 alone. 

Why are insiders and Geisler selling shares so aggressively…does he know something that he is not telling Wall Street? 

Is he selling because he knows what we know?

That XPOF franchisees are in deep financial trouble…

Part III – “Everyone is Losing Money”

  • 16,000+ pages of Franchise Disclosure Docs Show That Franchisees Are Failing
  • Kickbacks Are Choking The Life Out of Franchisees

We reviewed thousands and thousands of pages of Franchise Disclosure Docs (FDDs) for all 10 of XPOF’s brands. The major takeaway is that many of XPOF’s franchisees are losing lots of money while XPOF has increased the fees and the kickbacks they receive.

What’s an FDD & Why does it matter? 

Franchisors are legally required to provide Franchise Disclosure Docs (FDDs) to prospective franchisees. These legal documents (250+ pages) filed with the FTC and state regulators ensure transparency and inform a potential franchisee (purchaser) about the true health and performance of the franchisor’s existing store network and cost estimates of opening a new store. We reviewed over >64 FDDs and >16,000 pages in total of each of XPOF’s 10 franchise brands FDDs from both 2023 as well as all available historical FDDs since pre-XPOF acquisition until today.

We learned that the economics for XPOF’s franchisees has gotten considerably worse while kickbacks and payments to XPOF have increased substantially. 

FDD’s Show Bad Franchisee Economics at 80% of Brands and >50% of Avg Studios Are Losing $$$ 

Using the current and historical FDDs, which provide actual studio economics + conversations with franchisees, we calculated estimates for the average P&L for each XPOF brand. 

We used what we believe are generous labor cost and rent estimates and despite that we still estimate that the average studio in 8 out of 10 brands is losing money every month

“The monthly cost of operations was ~$30,000 and typically we only made about $20,000 a month … I estimate we lost about a million dollars over the 4 years.

Everyone is losing money! … I’m stumped about how [XPOF] can keep going while everyone is losing money, but I’ve come to the conclusion that there is no shortage of suckers.”

~Former CycleBar Franchisee (A)

We break down the methodology behind our estimates which stem from historically disclosed unit economics in the FDDs as well as our assumptions, base market rent, labor rates, etc in Appendix D. According to our average P&L estimates: 

> 50% of XPOF studios never make a positive financial return. 

The major takeaways are as follows:

PureBarre (24%); Cycle Bar (11%); YogaSix (7%); and Row House (4%) studios on average lose lots of money

Those brands average losing between $45,000 to as much as $194,000 a year!

Most of those brand franchises are nowhere close to monthly break-even, let alone generating the positive ROIC’s that XPOF promises in sales pitches.

We think a Pure Barre Franchisee & CycleBar Franchisee summarized it best in their interviews. 

I would never suggest (buying my Pure Barre studios) to anybody. Way more of a risk than a reward both in terms of financially and in terms of times.”

~Former Pure Barre Franchisee (G)

We were losing a little over $40,000 a month

~Former CycleBar Franchisee (B)

The two brands that were not losing money according to our estimates were Club Pilates and Stretch Lab. But XPOF has begun to extract more and more of the economics out of the only successful brands they have. For example, at Club Pilates the royalty rate has increased from 6% to 8%, and initial start-up costs paid to XPOF or vendors that engage in kickbacks have increased at Club Pilates by 118%!

XPOF’s Formula for Ensuring Brands Fail = Revenue DOWN 30% + Opening Costs UP +43% + XPOF Payments & Kickbacks UP +64%

We went through all 10 fitness brands’ “opening costs” in their FDDs before or at the time XPOF acquired the brand and afterwards. According to FDD’s, the average revenue per fitness studio at XPOF brands has declined significantly from before XPOF’s acquisition to today. 

Average revenue per store by brand DECLINED by ~30% 

Average cost of a new studio INCREASED by 43%!

A like-for-like comparison of each fitness brand’s opening costs (includes purchasing equipment and fixtures) shows that the average brand’s studio is now 43% more expensive to open than before XPOF acquired it. 

Every one of those vendors gives Xponential a kickback. So they just bleed us dry.” 

~ Former Pure Barre and Row House Franchisee (F)

Why are costs up dramatically? 

Because of an eXponential INCREASE in vendor kickbacks & payments XPOF of 64%!

Those cost increases have primarily gone directly to XPOF and to vendors that provide kickbacks to XPOF. According to The Capital Forum, an investigative news organization that focuses on exposing corporate malfeasance, these vendor kickbacks to XPOF are often ~30%.

Through the FDDs we discovered that costs paid directly to XPOF and to vendors that pay kickbacks have increased at even higher rate than overall costs. Direct payments and kickbacks are up an average of 64%!

Franchisees told us that XPOF squeezes their franchisees with ridiculous prices to get kickbacks on all of their approved providers. The ones we spoke with reported that Xponential forces them to buy or rent exercise equipment for HIGHER prices than what they can buy on the open market. 

“Basically you have to use the vendors that they listed. And so they were like, “You can’t go outside of this.” Even though we could find the same things for less. They were like, “No, it has to be branded this way, it’s got to be this bike” … when XPO took over, they just started squeezing the franchises for more. They charged a premium on everything from apparel to merchant processing fees 

~Cycle Bar Franchisee Owner (C)

For example, XPOF currently sells CycleBar franchisees exercise bikes for 58% greater than the price of a Peloton.

Boxing Gloves for 1500% Above Cost! A former franchise owner discovered that at LA Boxing Geisler was reportedly buying boxing gloves from Thailand for ~$4 a pair and then charging franchisees ~$60 a pair. In other words, Geisler was charging franchisees 15x his own purchase price. 

They tell you materials to buy, vendors to use and so forth. Sometimes the vendors that they want you to use are more expensive. Like by a lot, their sign company was ridiculously priced to the point to where it was like stupid. So I used a local sign company which we were not supposed to do, but I, I had to because it was just cost prohibitive.

~Former Club Pilates Franchisee (L)

Franchisees Have Sued Due to Undisclosed Kickbacks: 

A CycleBar Franchisee sued CycleBar and its sales team St. Gregory Development Group for:

  • Not disclosing vendor kick-backs in FDD’s
  • Making misleading representations of future revenue expectations 
  • Untruthful estimates of the required initial franchisee investment
  • Concealing poor financial performance of other CycleBar Studios

California Consent Order v. XPOF’s Sales Agent

California  regulators evidently agreed with that CycleBar Franchisee as the California’s Department of Financial Protection and Innovation filed a Consent Order w/ Fueled Collective Franchising (aka St. Gregory Development Group, Xponential’s franchisee sales company until 2021) to cease and desist from continued franchisee sales violations.

Some companies would have completely ended their relationship with a shady sales firm that consented to a California judgment regarding violations of disclosure laws and improper sales technics. XPOF instead opted for HIRING most of the key people from St. Gregory Development Group. XPOF hired their President, VP of Operations, and VP of Sales, and others (1, 2, 3) involved in violating the disclosure rules.  

Geisler’s History of Overcharging Franchisees

We discovered from interviews and lawsuits that former franchisees from LA Boxing (Geisler’s previous business) were also charged ABOVE market rates for exercise equipment, merchandise, and payment processing fees.  

At LA Boxing, Geisler was sued by a franchisee for:

  • using “the franchisee marketing fund like a personal expense account,” 
  • providing “unrealistically low estimates of the investment” required by franchisees
  • and for charging “far above market rates on equipment and products.”

Payment processing fees on top of fees: A former LA Boxing franchisee informed us that in addition to Geisler overcharging for merchandise, Geisler forced franchisees to use a payment processing company that would automatically pay him an additional 3% payment processing fee. Geisler also decided that he should charge the LA Boxing franchisees 3% fees as though they sold a $5000 monthly minimum of merchandise, even if they sold nowhere near that amount. 

Franchisees Want Out! Selling Studios Back to XPOF for $1.00

XPOF franchisees are abandoning their fitness studios the same way underwater homeowners did in 2008-2009 with the banks—Here are the keys, I give up.

We discovered that many XPOF franchisees have being selling their studios back to XPOF for just $1! High turnover in a franchisee system is a sign the franchisee system is unhealthy. Franchisees being willing to give away the businesses for $1 is a sign of disaster! 

These signs of distressed franchisees are the warning signs of a franchisee system that is powder keg ready to implode. 

Even more importantly, XPOF has been forced to take more and more of the money-losing studios onto its own Balance Sheet. Year over year the number of money-losing “transition studios” owned by XPOF has increased by >4x. 

“I sold both of the locations back to Xponential. It was a difficult process because (Xponential) don’t want to have to manage the locations. Xponential bought them back for $1, including all of the equipment and everything…I would never suggest buying a studio to anybody. Way more of a risk than reward” 

~Former Pure Barre Franchisee (G)

That former Pure Barre franchisee still has >$150k in SBA loans from their two failed studios. Many of the former franchisees we spoke with also just wanted out. Despite having spent hundreds of thousands building out the studios and, in some cases, outright owning the exercise equipment, they told us they were glad to sell the studio back for just $1. They just wanted to end the negative cash burn. 

Another CycleBar Franchise owner told us that Everybody is failing.” Based on their conversations with other CycleBar franchisees, they estimated that less than 5% of the CycleBar studios were generating positive cash flow. 

“I’ve talked to other owners across the country and out of 250 studios, maybe half a dozen of them are making money… And the more I talk to other owners around the country, I’m like, okay, it’s not just me. Everybody is failing except for, like I said, maybe half a dozen studios in the huge, big cities

 ~ Former CycleBar Franchise Owner (B)

Ridiculously, Geisler has admitted to investors that franchisees failing and selling him stores for $1 is part of his strategy.

“So for us, we’ll buy those stores back for $1 or something if that’s what we need to do. And then we’ll refranchise them back out to someone else.”

~Anthony Geisler, Investor Conference March 2023

Another former CycleBar franchisee told us how their studio was re-sold for less than the cost of the studio’s exercise bikes, which they had paid for. 

“I think their (the new franchisee’s) total investment in it was <$20,000…didn’t have to pay off my SBA loan or anythingthey got it for less than the cost of the bikes” 

~Former CycleBar Franchisee (D)

Former LA Boxing franchisees told us that in that venture Geisler would even try to get the franchisees to PAY HIM to close their businesses. 

“If you wanted to get out of the franchise, [Geisler] wanted you to pay this extraordinary amount of money. I don’t remember now what it was, but, you know, a hundred thousand dollars to get out of the franchise”

 ~Former LA Boxing Franchisee (K)

In the last 3 years a total of 456 studios (20% of total studios) have “transitioned” to new owners with 102 of the studios (4% of total studios) being reacquired by XPOF. 

The number of XPOF company-owned transition studios” has increased by 435% since this time last year. 

Long-term this dynamic spells demise for XPOF. Geisler pitches on TV shows like Cramer’s Mad Money that studios get resold at a profit and for 3.5-4x EBITDA. However, the reality is that studios are actually sold for dramatically less than the cost of the franchisees’ initial investment.

Over a Hundred Franchises Listed for Resale at >75% Discount to Initial Cost

Franchises Priced to Sell! 

In the first 5 months of 2023 alone, we tracked 126 Xponential franchises that have come up for re-sale. ~5% of the XPOF’s studios is available for resale, and is “Priced to Sell.”

The XPOF franchise system is anything but healthy. We found a significant number of studios currently for sale for a median price of $60,000, which is LESS than 25% of the cost to build out a new studio. 

Our search of recent franchise resale listings discovered a massive number of Xponential Franchise Re-Sale opportunities, including:

  • 69 CycleBar Franchises listed for sale, 25% of the whole system! (median price of $60,000)
  • 24 Pure Barre Franchises for sale (median price of $60,000)
  • 15 Row House Franchises for sale (median price of $60,000)
  • 9 YogaSix Franchises for sale (median price of $60,000)
  • 5 Club Pilates, 2 Stride Fitness, 1 Stretch Lab, and 1 Rumble

One franchisee we spoke with was brokering his own resale for a reasonable price and the sales team at Xponential “squashed the deal” because it turned out the XPOF sales rep was not going to get a commission on his transaction. After sinking the transaction, the XPOF sales rep actually told the distressed franchisee:

“You’re going to end up handing the keys over [to Xponential] because no one’s going to buy it.” 

~XPOF Sales Rep to CycleBar Franchisee (C) After Blocking a Deal to Resell

A sign of a healthy franchise system is the ability for franchisee to monetize their investments and sell the franchise they built for positive IRRs. XPOF franchisees have to fight with management to give the keys back for $1. 

Why would a perspective franchisee invest in a new studio when they can buy a current studio for <25% of the build-out price? 

They won’t! 

XPOF’s future growth numbers are in deep trouble.

Ensuring Franchisees Fail Forever – Saddling Them With a Lifetime of Debt – 90-95% of Businesses started with SBA Loans

XPOF pitched investigators for Fuzzy Panda Research on investing in opening various brands of the franchises. Sales reps informed us that the key to getting the studio opened was to obtain an SBA Loan. XPOF sales reps informed us that 90-95% of franchisees fund their business development via an SBA Loan or a similar type of business loans.

XPOF convinces retirees to take out an SBA loan or a second mortgage on their home by selling the dream that they are investing in a low maintenance business that generates consistent free cash flow. 

(Note – SBA loans can’t be discharged in a business’s bankruptcy)

“We were looking for an executive operated type business that we could get into, to keep some income coming in, while I was laid off and to pay for cancer treatment…our broker was coming back to, “You should really consider CycleBar.”… By the time everything was said and done, we were all in at ~$1.2 million…and we were losing about $40,000 a month… What we wrote off as losses the final year that we had it, because we lost all the equity in our home, everything because of the SBA loan on the business. But that year alone, we wrote off $826,000 worth of capital losses. It was the single most expensive lesson of my entire life.”

~ Former CycleBar Franchisee (D)

Instead, franchisees are stuck paying off their SBA loan long after they have gotten rid of their XPOF studio. 

“I know that people have lost their complete retirements, their savings, me included. They’ve lost their homes because they’ve had to sell their homes to pay off the bank. People have lost relationships, marriages, over this business.”

~Former CycleBar Franchise Owner (C)

XPOF Misrepresentations to Us & New Franchisees:

The False Stories: what XPOF sales reps told us and other prospective franchisees in sales pitches. 

  • “This is just like side hustle, super easy” 
  • “You will be cash flow positive within 3-6 months” 
  • “Less than 2% of franchisees want to sell” 

Multiple franchisees have sued Xponential for omitting key material facts from the FDDs and for XPOF’s sales reps making questionable statements including:

  • Misrepresented the cost of opening a new franchise. Lawsuits show actual costs were >200% higher!
  • Misrepresenting the number of members and the revenue the studios would generate. 
  • Broke franchisee disclosure rules by providing spreadsheets and forecasts about business performance that were NOT included in the FDDs. 
  • Sales reps claimed XPOF has a partnership with Apple since XPOF has an Apple watch app. 
  • Mislead franchisees about the time to open a studio. One sales rep claimed it would be 4-8 weeks of renovation, it took 24 months!

Sources – (XPOF Sales pitches to Fuzzy Panda Research, interviews, and franchisee lawsuits (Vango Ventures v. AKT, Xponential, and Geisler case No. 30-2021-01222853; Tejal Kamdar v. Cyclebar Franchising LLC Case No. 3:16-cv-02704-LB; Anderson Holdings v CycleBar Franchising; St. Gregory Development Group – Case No. 1:18-cv-001-31-LG-JCG)

I would never, ever, ever open another boutique fitness, and anybody who’s saying they want to, I was like, this is not the time. I just think it’s so oversaturated.”

~Former Franchise of Pure Barre & Row House (H)

The Playbook is to Blame, We are Failing!  Row House Franchisees Cry for Help XPOF

Pre-Covid in February 2020 Row House franchisee owners got together and sent a memo to XPOF CEO Geisler about how dire the situation was. This Row House franchisee memo that was first discovered by “The Capital Forum” and it highlights that:

  • Many of the Row House studios were unprofitable & have been running negative P&L’s for over 4-12 months.
  • 2018 FDD had misleading projections of higher revenues, lower start-up costs.
  • Studios were seeing more member cancelations than new sign-ups.

Many studios are in danger of closing after 6 months of unprofitability.” 

~Row House Franchisees Memo to XPOF (Pre-Covid – Feb 2020) 

The Row House franchisees concluded that without royalty relief or better marketing their studios will fail. XPOF did not listen and never provided franchisees with royalty abatement. Unfortunately, many Row House franchisees have failed in the last 3 years. 1/3 of the Row House studios (32 of them) were “reacquired” by XPOF, and there are 15 currently listed for re-sale for $60,000 so dramatically less than their build out cost. 

It appears as though the Real XPOF playbook is: 

  • Acquire a small decent fitness brand.
  • Increase fees and establish large kickbacks.
  • Overpromise on revenue estimates, cost estimates, etc. 
  • Way overextend the brand.
  • Leave franchisees holding a bag full of SBA loans and a money losing fitness studio.
  • Blame franchisees for not following the XPOF formula 

Consumers Call XPOF a “1980s Style Gym Theft Scheme” – The Bad Billing Practices Are Infuriating Consumers

Consumers frequently accuse XPOF of Fraudulent Billing and cite the Xponential making it impossible to cancel memberships and even charging customers months AFTER they have canceled.

The inability to cancel memberships is rampant across all the brands, and we have heard from frustrated franchise owners that the bad billing practices come from Xponential’s corporate office. 

Geisler has a history of allegedly engaging in illegal billing practices. LA Boxing colleagues and former franchisees told us about incidents where Geisler approved and recommended that franchisees intentionally overbill customers credit cards in order to make rent payments. 

We think a San Francisco Row House customer said it best:

“The head office of Row House will make your life a living hell if you ever try to cancel your membershipthey keep trying to charge me for a membership I keep trying to cancel.”

~Kiely W. – Row House Customer

Tons of consumers have had the same horrible experience across all brands throughout the US. They cancel their membership with an XPOF studio, and XPOF continues to charge them and refuses to refund the fraudulent charges. 

These are not just one-off bad reviews. We found hundreds of angry consumer reviews online related to XPOF fraudulent billing practices lodged with the Better Business Bureau, pissedconsumer.com, Facebook, Yelp, etc.

Stride Fitness Customer Marc D. from Savannah, GA calls the gym a “Complete 1980s style gym scamfraudulently billed my wife for 8 months after she canceled her membership.”

Club Pilates – Katelyn Y. – “The Mass Ave Indianapolis IN Club Pilates is fraudulently charging my credit card monthly and has been since June 2022. I cancelled my membership with Ryan, the leader of Club Pilates at this location and he says there is nothing he can do. I am owed $636 dollars and will take legal action if this is not resolved immediately.”

Row House Customer – Charlie H. “While the exercise was good, their billing practices boarder on fraud … for several months after I ended my contract the billing continued – to date I am owed over $300…watch your pocket with these people. 

CycleBar Customer – Nika N – “Scam! … This is just another one of the gyms that charge your credit card after you cancel. I cancelled in person with the GM. Giving the required full 30 day notice. I was charged twice past the cancellation time.”

Club Pilates Customer – Dorothee L – I’m sitting here 2 weeks out $89 out of pocket, 3 months stuck in a contract and not able to take the first class because all classes have a waiting list of 4-15 deep. I haven’t even had an opportunity for one class… I am having my lawyer friend looking at the contract because Club Pilates is stealing money from me and many others.

Club Pilates Customer – Catharine“Billed two months after cancelling. Management called back very rude and confrontational. Horrible experience from start to finish. Would advise anyone considering to stay very far away.”

Cyclebar Customer – Kassi B. – “Don’t sign up. It’s not worth it. I’ve spent almost a year at this point trying to organize a cancellation/refund” 

Club Pilates Customer – Melanie – “I canceled months ago and they somehow came to the conclusion I didn’t cancel properly (which I did in studio and even talked with corporate). I now have a charge on my card months later for yet more membership. This place has become a scam.

Other consumer complaints include more egregious accusations of fraud including charging customers for studios that hadn’t even opened! Franchisees we spoke with told us that XPOF’s bad billing policies kept them from being able to run their own businesses the way they saw fit. 

No Comparison to Planet Fitness – Xponential Has Worse Fundamentals

Planet Fitness (PLNT) is another gym franchise company. Planet Fitness IPO’ed in 2015 and except for 2 Covid impacted quarters (Q2 & Q3 of 2020) Planet Fitness has generated both positive net income and positive free cash flow from operations every single quarter from 2014 to present day. We think XPOF is nothing like PLNT. 

  • Xponential Fitness has only reported 2 quarters out of 12 with positive net income.
  • While XPOF’s CEO is constantly selling stock, PLNT’s CEO is doing the opposite. He is buying.
  • We found ZERO Planet Fitness franchises for resale; there are 100s of XPOF franchises for resale. 

Is XPOF “Transitioning” to Negative Free Cash Flow?

Xponential Fitness’s cash flow from operations DECLINED QoQ by 20% since Q4-22 and is DOWN >50% since Q2-2022. And this is from a business that is supposed to throw off MORE cash flow as the studio count increases.

Could this be from MORE money losing transition studios going on XPOF’s balance sheet? 

Transition studios are INCREASING! Transition studios = Negative Cash Flow!

XPOF tries to off-load “transition studios,” (aka money-losing studios where the franchisee gave back the keys) to new marks franchisees as soon as possible. However, in recent quarters XPOF has been unable to offload the transition studios. The number of transition studios has steadily increased from 20 in March 2022 to 87 in March 2023. 

This is a huge drain on FCF because XPOF has to make a choice either to continue to operate the money losing studio and lose potentially up to $5,000-$10,000 or more per month on that studio or close the studio and then XPOF needs to pay the rent (est $5,000-12,500) on a vacant studio. We believe that the negative monthly cash flow for franchisees that close their business and give it back to XPOF for $1 is likely significantly worse than bad average unit economics.

Sales of “Transition Studios” has Slowed Dramatically.

In 2021, XPOF was able to refranchise and offload an average of 13.25 transition studios per quarter. In 2022, XPOF averaged refranchising 5.25 per quarter. In Q1-2023, they were only able to refranchise 3 studios. 

In Q4-2022, XPOF owned the highest number of “transition studios” in their history at 55, and now in Q1-2023 they have 87. 

The more “transition studios” XPOF owns, the greater the negative FCF. 

Conclusion: Short XPOF – This Fitness Pump is About to Hit the Wall 

Franchised businesses are only as healthy as their franchisee base, and a large part of Xponential’s franchisee base is bleeding red ink every month. 

Many investors mistakenly compare Xponential Fitness to Planet Fitness. But Xponential is NOTHING like Planet Fitness. Planet Fitness’s average franchisees are profitable, there are virtually no franchises listed for resale, and Planet Fitness has low membership costs and high gross margins. Xponential lacks all these essential ingredients. 

In fact, Xponential Fitness is NOT even worthy of being compared to Quiznos (a bankrupt franchisor). At least Quiznos made a pretty decent sandwich and charged fair prices.

Xponential has shown that they have a culture of lying and deceiving franchisees, but what would you expect from a CEO and Founder who previously ran a boiler room pump and dump and who consistently “looks people in the eye and lies” to them?

We believe the XPOF house of cards is beginning to fall. 

  • >50% of the average studios are losing money.
  • 8/10 brands have unprofitable business models.
  • Franchisees are giving their studios back to XPOF for $1. 
  • More of the worst loss-making transition studios are on XPOF’s Balance Sheet and they have become harder for XPOF to re-sell.
  • XPOF has CLOSED lots of studios despite management’s claim to have “never closed a single studio.”
  • Insiders know their time is up–that’s why they are selling lots of stock. 

We are short Xponential Fitness (XPOF).

I would say don’t walk away from Anthony Geisler, run as fast as you can.” 

~Former Business Colleague of Geisler (I)

Note – We have reported and will continue to report all the information we have discovered regarding XPOF’s illicit business practices to the SEC, FTC, and have reached out to state attorney generals. 

Franchisees who have been harmed by XPOF or XPOF former employees that have experienced harassment, etc should please feel reach out to us at [email protected]. We will protect your confidentiality and anonymity.

Appendix A – “Geisler is a Real Scumbag to Women” 

  • Will Women Care If Their Gym’s Management are Sexist? … Yes!!!
  • Does Have XPOF’s Culture of Sexual Harassment? … Yes!!! 

“[Geisler is] a real scumbag to women. There are no bigger scumbags around.”

~Former Business Colleague of Geisler (H)

We don’t think that Xponential’s primarily female customers for Pilates, Barre, Yoga, etc are going to be excited to hear about the appalling culture at the corporate headquarters of their gym. Xponential’s end consumers are a majority female ages 20-60 years old. We think those consumers will be appalled to know that XPOF appears to have continued their CEO history of a culture of sexual harassment.

“Sexual Harassment Allegations All the Time” against CEO Anthony Geisler:

Multiple former business partners and colleagues told us in interviews that in Geisler’s previous businesses that there were “sexual harassment allegations all the time against Geisler.” 

Former franchisees told us “[Geisler] got very touchy with women. Hmm. He’s a creep. Yeah. He’s a real creep.”

Discrimination against older women and those that are overweight – At LA Boxing Anthony also reportedly discriminated against older women that were slightly overweight.

[Anthony] did not want them in the gym because they were older…and a little overweight…[Anthony] wanted 20 something girls behind the counter, girls with hardly anything on their top and who would lean over the counter and show somebody their tits. That’s what he wanted”

~Former Business Colleague of Geisler (K)

We heard from two sources that allegedly Geisler “slept with like two receptionists” one of which was an employee’s fiancé. 

Geisler’s former business colleagues also informed us that Anthony previously owned a strip club along with his business partner, David Bailey, called theLibrary Gentleman’s Club.

Sexual Harassment Continues at XPOF within Club Pilates:

A lawsuit details how a female business analyst at Club Pilates was sexually harassed by senior male executives. Instead of supporting the female employee, XPOF apparently tried to diminish her experience and convince her to change divisions. 

Meanwhile, the business analyst’s superior, Anthony Badalian, did the following horrific actions and somehow senior management at XPOF still hasn’t fired him.

  • He wrote “Let’s “F–k”” on a taco bell packet and gave to his female analyst
  • Rubbed his genitals on the plantiff’s keyboard pad and told her if she was good he’d “take her K-1”
  • It continued with actions like typing “69” onto her calculator, gestures mimicking oral sex, and telling her to give him a key to her apartment. 

Source – (Goetz v. Xponential Fitness LLC – Orange County Case No. 30-2022-01294378)

The Club Pilates National Sales Director, Mike Gomez, responded to the sexual harassment occurring within his division by asking the business analyst “when she was going to give him a key to her (apartment too).” The case was ultimately settled out of court for an undisclosed sum.

It is very important for people to feel safe at the gym. It is just important for a gym to have values that are similarly aligned with their clients. 

Appendix B – ABC Interview Transcript of Anthony Geisler Declining to Comment While Holding an Empty Cardboard Box 

(ABC News Australia, Four Corners Exposé – Beyond the Boiler RoomTranscript Excerpt)

ABC Question – Why were shares in your company being sold through Bangkok boiler rooms?

Anthony Geisler – I decline to comment. Are these questions gonna keep going down this way, because I’m gonna get real busy if so .. ?

ABC Question – Well, can I ask you – can you confirm for us that you authorized the sale of shares in your company by Draper Securities, Benson Dupont, Sigama and the Brinton Group?

Anthony Geisler – No, everything that I have to say, is in that press release right there.

ABC Question – Why can’t you tell us that?

Anthony Geisler – No one, no one has been authorized to – you know, we have our press release right there and that’s what I’ve given you, so ..

ABC Question – What, you can’t tell me if those companies were authorized to sell shares in your company?

Anthony Geisler – No.

ABC Question – Why not?

Anthony Geisler – Because I decline to comment on all of those things.

ABC Question – But why? 

Anthony Geisler – Because I’ve been advised by counsel and as an officer and director of a public corporation I retain counsel in Australia and both in the United States and …..

ABC Question – Why did your counsel say you should not speak about it?

Anthony Geisler – You’d have to interview my counsel for that answer?

ABC Question – But didn’t they give you a reason?

Anthony Geisler – Huh – no, they told me to decline to comment.

ABC Question – Without any reason?

Anthony Geisler – Mmm.

ABC Question – If somebody bought shares in your company ah and they were sold as being traded on the main NASDAQ board, you’d agree that was deception?

Anthony Geisler – Um, I don’t know, I’d have to decline to comment on that right now.

ABC Question – Well, it would be deception though, wouldn’t it?

Anthony Geisler – That might be your opinion, I have no idea.

ABC Question – But wouldn’t it be your opinion?

Anthony Geisler – No. I am not making a comment on that.

ABC Question – So it would be your opinion – if I said to you … ?

Anthony Geisler – No, I said I’m not making a comment on it.

3rd party interjects –”We end this interview right now, because you’ve completely got outside the scope of things”

Appendix C – List of Permanently & Temporarily Closed Stores:

Below is the list of XPOF’s permanently and temporarily closed stores that we have found so far. According to their debt covenants a “permanently closed store” is defined as any franchise location that has been closed for >30 days. 

All 43 of these locations would count as a permanently closed stores under that definition. Some of them that XPOF are still counting as “open” have actually been closed for >2 years. 

Appendix D – Estimated Franchisee Economics

Using the FDDs we estimated what the average monthly P&L for each “average” studio in a brand would be.

From the FDDs we are able to accurately pull a franchisee’s costs for items like equipment and fixture rentals; monthly technology fees, music licensing fees, as well as calculate the expected royalty and marketing fees paid. 

We believe that our estimates are overly generous and likely estimate higher profits than the average studio experiences for a couple reasons. 

  • Revenue estimates likely too high – XPOF fails to include 95 studios for the loss making brands so the average revenue estimates for Row House, Pure Barre, CycleBar, and AKT are likely too high.
  • Rents & Utilities likely too low – We estimated many of the studios rents based on historical P&Ls that were provided in historical FDDs. We then applied a low interest rate to guesstimate current average rental rates.
    • For example at CycleBar we used the 2014 and 2015 FDD P&L to guesstimate today’s rents. But we have also see lawsuits from landlords vs 2 different CycleBar studios that had overdue rent that was at a monthly rate of $11,400 and $12,500 per month. 
  • Build-out costs likely too low – Franchisees have told us and lawsuits have confirmed that actual build out costs are higher than the FDDs estimate.

The other difficult estimation regards figuring out what should the average studio’s labor cost should be. We estimated based on cost of fitness experts in that brand’s space as well as the number of employees a studio is expected to have.

Regardless, however you slice it these businesses are bad businesses and generate nothing like the stable free cash flow that XPOF Sales Reps promises investors. 

Historical FDDs by Brand:

Appendix E = The Rare Profitable Brand – Club Pilates. The Growth is Almost Done But XPOF Keeps Squeezing Franchisees!

Club Pilates is the only brand within Xponential Fitness that we have seen show strong qualities of franchised business. 

Club Pilates signs of being a healthy franchise are:

  • Professional investors currently own a significant number of units and are buying more
  • Profitable unit economics with high ROIC’s and
  • Current franchisees can sell their franchise studios at a profit. 

However, we still would be concerned as to how long this can last:

  • Growth coming to an end – In a recent interview Giesler declared that Club Pilates growth is almost done as that brand is close to fully saturated in the US.
    • Geisler stated that he doesn’t think that the US can handle more than 15% more Club Pilates studios which stops the total penetration at ~1000 studios. 
  • Kickbacks have increased by 119% – new franchisee opening payments to XPOF and vendors that pay kickbacks are up 119%
  • Royalty rates increased from 6 to 8%
  • Customer satisfaction seems to be declining – we found many instances of customers that say that despite buying unlimited pilates packages that they have been unable to book a class. Other customers complain of billing issues. There also is a shortage of qualified instructors. 

Former Club Pilates franchisees informed us that “pilates is a great business” and that they were able to succeed despite Xponential’s involvement not because of it. It will be interesting to see it continues to be a great business as saturation of pilates studios continues to increase. 

Bonus Appendix: 

  • Suing your Own Franchisees
  • Meanwhile Fitness Guru’s & Former Employees Have to Sue to Get Paid 

Xponential is even suing the franchisees to try to keep them from telling the true story. To be honest that strategy is working; we contacted a multitude of Xponential franchisees that were concerned about responding or being kept anonymous because they were afraid of retribution.

Suing franchisees for negative social media posts – XPOF sued Former Pure Barre Franchise owners for criticizing the company, and XPOF ultimately were able to force them to take down negative social media posts. (Xponential Fitness v. Melissa and Kyle Haran AAA Case No 01-20-0015-1033)

Other business partners were forced to sue Geisler for violating their contract. 

Anna Kaiser, a famous celebrity trainer and founder of AKT Fitness was forced to sue Anthony Geisler after Geisler decided to stop pay the consulting fees they had promised her. XPOF allegedly also diluted her equity stake in the business that she sold to XPOF. XPOF ultimately settled the case. 

XPOF allegedly misled franchisees about Anna Kaiser’s, continued involvement in the brand even during the lawsuit and AKT promised that fitness celebrity Anna Kaiser would be at studios grand opening. XPOF sales reps never disclosed that XPOF had decided to eliminate Anna Kaiser, the brands celebrity fitness instructor, from AKT Fitness. 

At LA Boxing, the head of sales Chris Poland was also forced to sue Geisler too. Mr. Poland had asked Geisler to reimburse his travel expenses and pay him for overtime he was owed. Instead of paying him, Geisler instead fired him and never paid out the equity that he had promised. 

Bonus Appendix – Anthony Geisler in Beyond the Boiler Room

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