---
title: "Xponential Fitness Agrees To Pay Nearly $40M in Settlements, Shares Plunge"
url: https://burnaze.com/article/43040440-887d-48b4-aeb3-5b5b918d88b2
source: "Athletech News"
original_url: https://athletechnews.com/xponential-fitness-agrees-to-pay-nearly-40-million-in-settlements-shares-plunge/
author: "Courtney Rehfeldt"
category: "Gym & HVLP"
industry: "Fitness"
segment: "Gym & HVLP"
published: 2026-02-27T21:07:31.000Z
modified: 2026-10-31T16:29:16.720Z
image: https://athletechnews.com/wp-content/uploads/2025/07/shutterstock_editorial_2334999423.webp
---

# Xponential Fitness Agrees To Pay Nearly $40M in Settlements, Shares Plunge

**TL;DR:** Xponential Fitness has agreed to pay $17 million to resolve a Federal Trade Commission investigation and $22.75 million to settle with over 500 current and former franchisees, totaling $39.75 million in legal payouts. The company's shares fell over 40% in response to the news.

*By Courtney Rehfeldt, originally published in Athletech News on 2026-02-27. [Read the original](https://athletechnews.com/xponential-fitness-agrees-to-pay-nearly-40-million-in-settlements-shares-plunge/).*

## Story

Xponential Fitness has agreed to pay $17 million to resolve a previously disclosed Federal Trade Commission investigation. The boutique fitness and wellness franchisor also finalized a $22.75 million settlement with more than 500 current and former franchisees for a combined $39.75 million in legal payouts the company says will “substantially reduce” regulatory and legal uncertainty.

The franchisor, which operates Club Pilates, Pure Barre and YogaSix among other brands, disclosed the agreement in its fourth-quarter 2025 earnings release. Xponential reported revenue of $314.9 million, down 2% from the prior year, and a net loss of $53.7 million for the full year. For the fourth quarter, revenue was $83 million, with a net loss of $45.6 million and a 4% decline in same-store sales.

The company also disclosed that approximately 30% of its contractually obligated studio licenses are currently more than 12 months behind their development schedules and classified as inactive.

Shares of Xponential fell more than 40% Friday in response.

Xponential agreed to the $17 million payment over 12 months without admitting liability. The franchisee settlement will be paid out over 35 months.

The consent agreement remains subject to approval by FTC commissioners and a court. The specific allegations underlying the FTC’s investigation have not yet been made public.

Xponential disclosed it received a civil investigative demand from the FTC on July 29, 2024. Prior to that, the company disclosed a separate investigation by the U.S. Attorney’s Office for the Central District of California on May 7, 2024. The U.S. Attorney’s Office declined to comment.

The Securities and Exchange Commission had opened its own investigation in December 2023, following a short-seller report by Fuzzy Panda Research that alleged Xponential had misled investors and franchisees about the company’s financial performance. The SEC closed its investigation without action in July 2025.

“The fourth quarter capped a year of progress as we refined the strategic priorities that will drive Xponential’s long-term growth,” Xponential CEO Mike Nuzzo said. “With strong franchise partner engagement and disciplined execution across our brands, we are continuing to reinforce our industry-leading position and capitalize on the opportunities ahead.”

He added that the franchisor is making “intentional investments” this year to drive member acquisition and retention.

Nuzzo was appointed CEO of Xponential last August, succeeding Mark King, who resigned after announcing that he would retire.

The Irvine, California-based company has offloaded several of its brands over the last couple of years, including Rumble Boxing and CycleBar, which were acquired by Extraordinary Brands.

## Entities

- Fitness (sector)
- Athletech News (publication)
- Courtney Rehfeldt (person)
- Xponential Fitness (company)
- Federal Trade Commission (regulator)
- financial performance (topic)
- U.S. Securities and Exchange Commission (regulator)
- Mark King (person)
- Extraordinary Brands (company)
- Mike Nuzzo (person)
- Fuzzy Panda Research (company)
- regulatory uncertainty (topic)

---
Originally reported by Courtney Rehfeldt, Athletech News (https://athletechnews.com/xponential-fitness-agrees-to-pay-nearly-40-million-in-settlements-shares-plunge/). Summarized by Burnaze (https://burnaze.com/article/43040440-887d-48b4-aeb3-5b5b918d88b2).