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The reviewed case and its status
The FTC filed its complaint against Premier Franchising Group, the Premier Martial Arts franchisor, and former sales organisation Franchise Fastlane on 5 October 2026 in Eastern District of Tennessee case 3:26-cv-00487.
At the 12 November 2026 Pacific-time review, the FTC index, last updated 13 October, said Pending. Both posted stipulated orders had blank judicial signature/date fields. They contain non-admission language; court entry and a later disposition were not independently verified.
Would the newcomer do the same work as the reference owner?
In paragraphs 134–150, the FTC alleges the sellers promoted profitable semi-absentee ownership to buyers without martial-arts experience, often claiming fewer than 15 hours a week from the beginning, without evidence supporting that result for those operators.
The complaint contrasts established, often larger Legacy studios run by experienced owners with the smaller-studio newcomer model. It alleges differences in obligations, curriculum freedom and fees, selective inclusion of results and combined multi-studio figures presented as a single studio.
Paragraph 118 reports a 2022 FDD comparison of average 2021 EBITDA: $75,950 for the combined studio group versus $17,584 for New Franchisee studios. The first figure is not Legacy-only. EBITDA means earnings before interest, taxes, depreciation and amortisation; it is not cash available to the owner. These are complaint-reported figures, not verified accounts or a forecast.
The same comparison matters in calls and sales material
The FTC also alleges break-even and studio-earnings claims appeared outside the relevant Item 19 disclosures, and that Item 2 omitted Franchise Fastlane personnel despite their franchise-sales management responsibilities. Paragraphs 30–39, 122–133 and 195–197 describe those allegations and the franchisor’s retained approval/review roles.
For a brand making its own comparison, include the owner’s teaching, selling, absence cover and difficult decisions, not just a manager’s salary. Item 19 has required disclosures even without an elected earnings claim; a claim needs its reasonable basis, written support, relevant historical groups or forecast assumptions and qualifications. Item 2 concerns people with relevant sale/operation management responsibility and their last five years of principal positions and employers. An outside broker’s actual role matters; this case does not give every broker Franchise Fastlane’s alleged role.
What the proposed orders do not establish
The proposals address income/sales, break-even time, owner hours, semi-absentee claims and Franchise Rule compliance. Premier Franchising Group’s proposed cancellation-notice mechanism covers a defined group and excludes Legacy Franchisees, certain settling claimants and transferees.
Those proposed terms do not establish a present right to cancel, an entered monetary obligation, a refund, payment or a delivered notice. The actual entered record and eligibility would be needed for that conclusion.
Scope
- This is an allegations-and-proposals review, not a finding the conduct was proved or a complete current docket search. It does not establish that all management-run models are unlawful or unworkable.
Next step
Check whether your reference outlets use the owner skills, paid staffing and costs that the proposed buyer would actually have.
Sources & review notes
Federal Trade Commission / U.S. District Court for the Eastern District of Tennessee
Passage, dates and research notes
primary · Case Status; Last Updated; Case Timeline; actual linked PDF titles
Case Status Pending
Read actual current index. Last Updated October 13, 2026; timeline posts the complaint and both stipulated documents on October 6. The complaint docket stamp says filed October 5. Index describes proposed settlement and is not proof of court entry, payment, notice delivery or final disposition. No claim of a complete PACER docket search.
Federal Trade Commission / U.S. District Court for the Eastern District of Tennessee
Passage, dates and research notes
primary · Complete 53-page complaint, E.D. Tenn. case 3:26-cv-00487, docket 1, filed October 5 2026; particularly paragraphs 30–46,67–101,109–150,154–197
The PMA franchise has two different classes of franchisees, which are materially different
Read complete 53-page complaint text, including all 8 counts and prayer for relief. Source is allegations, not adjudicated findings. Numerical comparisons used in the guide come from legible narrative paragraphs 105 and 118, not reconstructed OCR charts. No allegation about either defendant is presented as a court finding.
Federal Trade Commission / U.S. District Court for the Eastern District of Tennessee
Passage, dates and research notes
primary · Docket 2-1 filed October 5 2026, PDF pp 1–15 of 64: complete operative body, stipulations/signatures and Attachment A notice; attached CFR begins after this
Settling Defendant neither admits nor denies any of the allegations
Read complete operative proposed-order body pp 1–14 and full proposed notice AttachmentA p 15. Judge signature/date on p 13 are blank. Party/counsel stipulations are not court entry. SectionsI–II address misrepresentations and Franchise Rule compliance; III has a defined cancellation mechanism excluding Legacy Franchisees, Settling Plaintiffs and Transferee Franchisees; IV has a proposed monetary judgment and partial suspension. Remaining AttachmentB reproduces the Franchise Rule and is not treated as a new/current rule source. No enforceability, payment or notice-delivery finding is made.
Federal Trade Commission / U.S. District Court for the Eastern District of Tennessee
Passage, dates and research notes
primary · Docket 3-1 filed October 5 2026, PDF pp 1–12 of 61: complete operative body and stipulations/signatures; attached CFR follows
Settling Defendant neither admits nor denies any of the allegations
Read complete operative proposed-order body pp 1–12. Judge signature/date p 11 are blank. SectionsI–II address misrepresentations and Franchise Rule compliance, III–V proposed monetary/customer-information terms, and VI–X acknowledgments, reporting, records, monitoring and retained jurisdiction. Finding 6 says a franchisor is not bound solely by contracting with FFL; actual terms and Rule 65 control. Attached Franchise Rule is not used as proof of current law. No court entry, paid judgment, refund or outcome is inferred.
Federal Trade Commission
Passage, dates and research notes
primary · Item 2: Business experience
principal positions and employers during the past five years
Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.
Federal Trade Commission
Passage, dates and research notes
primary · Item 19: Financial performance representations
reasonable basis and written substantiation for the representation at the time the representation is made
Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.
Detailed rule records (2)
Item 19 has required disclosure whether or not the brand elects to make a financial performance representation. Where one is made, reasonable basis, written substantiation, cohort detail or forecast assumptions and required qualifications matter. Revenue alone does not answer manager-adjusted profitability.
16 CFR §436.5(s): FDD Item 19Item 2 gives the relevant directors, principal officers and people with management responsibility for franchise sales or operations, including their principal positions and employers during the last five years. Delivery expertise and franchise-support experience are separate questions.
16 CFR §436.5(b): FDD Item 2Related case records
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