FTC Warns Franchise Buyers After 200+ People Paid $49,500 or More on an 'Under 15 Hours a Week' Promise
The Federal Trade Commission (FTC) on October 19 issued a consumer alert detailing its case against the Premier Martial Arts franchisor: more than 200 people, including veterans, paid to open franchises after earnings claims that the FTC says were not supported by the Franchise Disclosure Document (FDD).
According to the FTC complaint, each buyer paid an initial franchise fee of $49,500 or more, plus hundreds of thousands of dollars in additional build-out and operating costs, with many taking on significant debt. The core claim at issue was that people with no martial arts background could profitably run one or more studios semi-absentee, working less than 15 hours a week.
The proposed settlement totals $1.85 million for redress: Premier Franchising Group will pay $650,000 against a $3,875,424 judgment, and Franchise Fastlane will pay $1.2 million. The Commission approved the settlement 2–0, and certain franchisees may cancel their agreements without penalty. The case is pending in the Eastern District of Tennessee and awaits a judge's signature.
The FTC alert explains the governing rule: any claim about sales, income or profit must appear in Item 19 of the FDD; the FDDs at issue were the 2020, 2021 and 2022 versions. The agency says prospective franchise buyers should demand written substantiation and contact current and former franchisees listed in the FDD.
Published by GSM · USA (original Chinese edition)
Photo: 图：美国一家跆拳道馆的儿童课堂（资料图）。图：美国海军陆战队，公共领域
