When Unleashed Brands bought a chain of children’s gyms and began changing the way they do business, local owner Tiffany Cianci pushed back. She’s paid a heavy price.
, a private-equity-backed company. After Cianci pushed back against Unleashed’s efforts to change her franchise agreement, the company terminated her franchise.
Irvine again disagreed. At home, Cianci wrestled with her decision. Throughout the month, even as she’d sent Unleashed’s lawyers every medical chart and doctor’s note, they had peppered her with discovery requests. She posted a video to a private Facebook group for owners of franchises, telling her story while sobbing. “I think it’s safe to say the price was too great,” she said.
Cianci instructing pupils at Teeter Tots Music n Motion in Frederick, which she opened after a dispute with Unleashed Brands led to the termination of her Little Gym franchise. During their first three years of ownership, the Ciancis invested a big chunk of their savings, about $200,000, into replacing old equipment and building a local following. By early 2020, they were on track to become profitable—and even when the pandemic hit, Cianci was able to keep her business afloat, joining forces with 19 other franchise owners to offer virtual dance and gymnastics classes that were popular with parents struggling to juggle childcare and working from home.
In court documents, Unleashed has denied those allegations. In other articles and public statements, the company has said that the lawsuits represent a small percentage of its franchise owners and that its changes have benefited owners by boosting revenues. That’s similar to the position taken by the
Cianci’s optimism wilted, however, as the company made a series of moves that she found perplexing. At the Little Gym’s annual convention, she says, organizers cut a beloved longtime employee’s mic during the “Hello Song”—then announced that the song and other rituals would no longer be a part of the event.
According to Ben L’Italien, a franchise consultant who teaches at Georgetown University, it’s not unusual for private-equity-backed companies to try extracting more cash from franchise owners when they acquire chains, particularly when they finance those acquisitions through debt. But Cianci says there wasn’t a lot of extra revenue to be squeezed from a business that divides its customers into groups like “jazzy bugs” and “giggle worms.
Late that month, Unleashed sent Cianci a notice of default for not signing the ACH agreement. Shortly thereafter, the company sent notices to other owners who had not signed the call-center agreement, warning that they also would be found in default. Meanwhile, Cianci was helping organize her fellow owners. A group of them formed the Happy Handstands Franchise Association in May and elected Cianci as its president. Cianci says 93 percent of Little Gym owners ultimately joined.
Then things got weird. According to court documents, Unleashed sent “secret shoppers”—including a private investigator—to her studio. Pretending to be parents, the shoppers tried to get Cianci’s employees to admit that their new business was exactly the same as the Little Gym’s. Their goal, Cianci says, was to show that she was drafting off her previous association with the company’s brand, thereby giving up trade secrets. “There’s no such thing as a trade secret in gymnastics,” Cianci says.
Kelly declined to renew Cianci’s lease. He claimed that she owed back rent from the pandemic; she says Kelly forgave those payments and testified to that effect in arbitration. Kelly gave Cianci a few extra days to move out, and she vacated in early August—leaving behind several thousand dollars’ worth of equipment. Her previous location remains closed, and Unleashed says the Little Gym has taken possession of the space and intends to open a new location there.
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