Owners of over 50 The Little Gym locations in the US are to individually sue private equity company Unleashed Brands over “damaging changes” to the franchise businesses.

The franchisees say Unleashed Brands, which acquired The Little Gym in 2021, has shifted focus to maximizing its own profits without regard to the interests of franchised locations.

One notable change was the introduction of a centralized banking system, where customers were required to pay the company directly rather than their local gyms, leaving franchisees to wait days or even weeks before receiving their share.

The company also scaled down essential resources like curriculum support, operations assistance, technology advancements, and marketing initiatives.

The Little Gym owners have formed a franchise association named SFFA in response to the negative changes made since Unleashed Brands assumed ownership. 

According to Bill Walenda – a 20-year franchise owner and president of the SFFA – more franchisees are expected to join the lawsuit during coming weeks.

“Our fight is not just for ourselves but for the future of small businesses everywhere,” says Bonnie Nasr, a 30-year franchise owner and VP of the SFFA. “Unleashed Brands’ actions remind us that integrity and ethics must never be sacrificed for profit margins.”

The Little Gym is a children’s gym offering activities for kids aged four months to 12 years, including parent/child classes, kids dance, gymnastics, sports skills and karate. Founded in 1976, it now has more than 300 locations worldwide.