According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:
- Xponential had permanently closed at least 30 stores;
- Xponential’s reported same-store sales and average unit volume metrics had been misstated by excluding underperforming stores;
- 8 out of 10 Xponential brands were losing money monthly;
- over 50% of Xponential studios did not make a positive financial return;
- over 60% of Xponential’s revenue was one-time and non-recurring;
- more than 100 of Xponential’s franchises were for sale at a price that is at least 75% less than their initial cost;
- Xponential had misled many of its franchisees into opening franchises by misrepresenting the financial profile and profitability of its studios, as well as the expected rate of return for new studio openings;
- many Xponential franchisees were substantially in debt, suffering high attrition rates and running non-viable studios that had no realistic path to profitability; and
- based on the foregoing, defendants lacked a reasonable factual basis for their positive statements about Xponential’s then-current business operations and future financial prospects.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
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