Faruqi & Faruqi, LLP, a leading national securities law firm, is conducting an investigation into potential claims against Xponential Fitness, Inc. The firm reminds investors of the April 9, 2024 deadline to seek the role of lead plaintiff in a federal securities class action against the company.
Investors who suffered losses exceeding $50,000 in Xponential Fitness stock or options between July 26, 2021, and December 7, 2023, are encouraged to contact Faruqi & Faruqi partner Josh Wilson directly. The complaint alleges that the company and its executives violated federal securities laws by making false and/or misleading statements and by failing to disclose certain information.
The allegations include the permanent closure of at least 30 stores, the misstatement of same-store sales and average unit volume metrics by excluding underperforming stores, and the fact that 8 out of 10 Xponential brands were losing money monthly. Additionally, it is claimed that over 50% of Xponential studios did not make a positive financial return and more than 60% of the company’s revenue was one-time and non-recurring.
The investigation began after a report published by Fuzzy Panda in June 2023, which highlighted misleading statements by Xponential regarding store closures and the financial health of its franchises. A subsequent Businessweek article in December 2023 further revealed allegations of franchisees being misled into a “financial nightmare.”
Investors who believe they may be eligible for recovery are urged to contact Faruqi & Faruqi, LLP. The firm welcomes individuals with information about Xponential Fitness’ conduct, including whistleblowers, former employees, and shareholders, to come forward.
Xponential Fitness, Inc. operates in the fitness and wellness industry, providing a variety of boutique fitness brands and franchises. The company offers a range of exercise programs across its different brands, including cycling, Pilates, yoga, rowing, and others. With a focus on delivering unique and personalized fitness experiences, Xponential Fitness has gained popularity among consumers seeking specialized workout options.
The fitness industry has experienced significant growth in recent years, driven by increasing consumer awareness of the importance of physical fitness and the desire for unique and personalized workout experiences. According to market forecasts, the global fitness industry is projected to reach $105.5 billion by 2025, with a compound annual growth rate (CAGR) of 8.7% from 2020 to 2025.
However, the industry is not without its challenges. One of the key issues faced by fitness companies, including Xponential Fitness, is the need to maintain consistent financial performance across their franchises. Ensuring that individual franchise locations are profitable can be a complex task, especially when dealing with factors such as competition, changing consumer preferences, and market saturation.
Furthermore, the COVID-19 pandemic has significantly impacted the fitness industry, leading to temporary closures, reduced memberships, and financial strain on businesses. Many fitness companies, including Xponential Fitness, have had to adapt their operations and implement new safety measures to mitigate the impact of the pandemic.
To read more about the fitness industry and market forecasts, visit IBISWorld – Fitness Centers.
It is worth noting that the allegations against Xponential Fitness mentioned in the article raise concerns about the accuracy of the company’s financial disclosures and the management of its franchises. False and misleading statements, as well as the failure to disclose certain information, may negatively impact investor confidence and potentially lead to legal action.
If you have any additional information about Xponential Fitness’ conduct, such as evidence of misleading statements or financial irregularities, the law firm Faruqi & Faruqi, LLP encourages you to come forward. Whistleblowers, former employees, and shareholders who believe they may have relevant information can play a vital role in bringing transparency and accountability to the company.
For more information about Faruqi & Faruqi, LLP, and their investigation into potential claims against Xponential Fitness, visit their website at www.faruqilaw.com.