Model A Fitness of Boonton, New Jersey has sued Retrofitness for fraud, consumer fraud, breach of contract, and violations of New Jersey’s Franchise Practices Act. Retrofitness Enterprises and Retrofitness Corp. owns, operates and franchises body building, health and fitness facilities under the “Retrofitness” trademark. The Retrofitness lawsuit is being watched by franchisors and franchisees alike.
Retrofitness franchises have been steadily increasing in number over the last few years. Back in November 2005, Retrofitness entered into a license agreement with Model A’s owners for the development of a facility in Boonton, but Model A alleges in its Complaint filed in New Jersey Superior Court that Retrofitness’ principal, Eric Casaburi, enticed them into the license agreement through a series of false promises and misrepresentations, and then attempted to coerce them into signing a franchise agreement on far less favorable terms for the owners. When the owners refused, Retrofitness terminated the license agreement and, according to the Complaint, opened a new location up the street which unfairly competed with Model A.
The case is being watched because it raises significant issues under the Franchise Practices Act, and also because it will test the applicability of New Jersey’s Consumer Fraud Act generally to franchises. The Complaint filed in New Jersey Superior Court can be viewed online here.