According to Times Free Press, Premier Martial Arts is currently under accusation from several investors for collecting thousands of dollars in royalties and fees while many of its owners lost money. The complaint, first filed in November, accuses the company of fraud and racketeering and asks a federal court to award damages to a group of more than 50 plaintiffs who say they’ve lost thousands of dollars during the franchising process. The plaintiffs represent about a quarter of the more than 200 owners operating studios under the Premier Martial brand, according to the complaint.
The complaint also alleges owners were promised help with hiring and training, as well as access to Premier success coaches and traveling instructors to fill gaps in staffing if needed. But owners in the lawsuit say that promise was “simply not true.” To run a Premier Martial Arts location, the lawsuit states, owners were told they had to use the company’s own software and marketing, which many said was not effective, according to the complaint. Owners were also required to use contractors chosen by Premier to find and lease studio space and for construction.
In less than three years after the business began franchising, more than 700 locations had been purchased – though not all have made it to their opening, Smith estimated. The lawsuit alleges owners were also pressured to buy multiple locations, each of which cost tens of thousands to start. The company reportedly offered discounts on franchising locations and encouraged owners to use cash flow from one location to fund others.