The changes didn’t take long. Within weeks, long-serving headquarters employees began leaving. In conversations with franchisees across the country, many owners expressed frustration that the support they had relied on had disappeared; instead of calling a trusted advisor anytime, they had to submit an online ticket. (Unleashed says it has “never tried to cut off” employees’ access, and has a ticketing system in place to ensure they respond in a timely manner.)
The company tried to impose a new payroll provider, which caused endless headaches. Certain events, such as karate, were canceled as Unleashed acquired businesses with similar shows; the company said it cut services with low enrollments to “streamline” its offerings. The company also outlined a process whereby franchisees could lose their licenses if they failed to meet branding standards, which has taken a toll on some operators. For someone fresh out of the pandemic and operating on thin margins even in good times, the changes feel unnecessary and destabilizing.
In the fall of 2021, the company will require all franchisees to sign a new agreement that will allow Unleashed to automatically debit their bank accounts. Mrs. Cianci notes that it also contains broad language that allows the company to pick up any other fees it may owe, which she believes goes beyond her franchise agreement.
On the advice of her attorney, she refused to sign and began paying royalties by paper check. But she worries that most franchisees will simply accept the new arrangement, and another that requires them to use — and pay for — a shared call centre.
Ring the bells for everyone else, ma’am. Cianci holds a conference call, usually with an attorney on hand. As concerns spread, in May a group of Little Gym franchisees formed the Happy Handstands Franchise Association, which eventually garnered more than 90% participation across the system. Mrs. Cianci was elected president. The company began issuing warning notices to franchisees who had not yet signed the new agreement.
On May 19, 2022, attorneys for Happy Handstands issued a restraining letter on behalf of members. Just the next night, an email popped up saying Ms. Cianci’s franchise has been terminated. When she tried to check, her email account was also gone. Unleashed said the company did not know she was the association’s president when it decided to fire her. Mrs. It was known throughout the system and was mentioned in Facebook groups visible to lower-level business executives, Cianci said.
To save her business, Ms. Cianci filed a preliminary injunction with an arbitrator declaring the dismissal retaliatory; the arbitrator ruled that she had not cleared the high legal hurdle needed to halt the process. After that, she began dismantling all of her Little Gym branding and tweaking her classes so as not to infringe on the company’s trademark. She stopped when Unleashed’s lawyers wanted to discuss the settlement, which she says she declined because of its onerous terms. When they asked her to immediately go through the process of “de-identifying” as a small gym, she was struggling to start over after undergoing surgery on a broken foot.