FTC Says Premier Martial Arts Misled Franchise Buyers — Companies Will Pay $1.85 Million

October 6, 2026

The FTC says more than 200 consumers paid at least $49,500 in initial fees to buy Premier Martial Arts franchises, with some allegedly incurring hundreds of thousands of dollars in additional expenses. The proposed settlements require $1.85 million in payments. BearFotos/Shutterstock

The Federal Trade Commission has reached proposed settlements requiring the franchisor behind Premier Martial Arts and its former franchise sales organization to pay $1.85 million over allegations that prospective business owners received misleading information about how much money they could make and how much work operating a franchise would require. The FTC announced the action October 5 against Premier Franchising Group LLC (PFG) and Franchise Fastlane LLC (FFL). Beyond the monetary settlement, certain Premier Martial Arts franchisees would be allowed to cancel their franchise agreements without penalty. The case provides a particularly expensive reminder for anyone considering buying a franchise: projected income and promises of a relatively hands-off business deserve careful scrutiny before tens or hundreds of thousands of dollars are committed.

FTC Says Buyers Paid at Least $49,500 Just to Get Started

According to the FTC’s complaint, Premier Martial Arts franchises were marketed beginning in 2018 as profitable businesses that could be operated on a semi-absentee basis. More than 200 consumers allegedly paid an initial franchise fee of $49,500 or more to purchase the opportunity.

But that franchise fee wasn’t necessarily the end of the financial commitment. The FTC alleges buyers incurred hundreds of thousands of dollars in additional expenses building and operating their martial arts studios, with many taking on substantial debt.

For someone using retirement savings, home equity or borrowed money to purchase a business, the difference between a realistic financial projection and a misleading one can therefore be enormous.

The FTC Says Earnings Claims Relied on Very Different Franchisees

One of the central issues in the complaint involves the franchisees whose results were allegedly used to market the opportunity.

The FTC says Premier’s initial recruits included experienced martial artists who already operated successful studios under licensing arrangements with a predecessor company. These “Legacy Franchisees” differed substantially from many of the new buyers the companies later recruited.

According to the complaint, many new franchisees weren’t martial artists and had no relevant experience. Legacy operators also had advantages that included lower franchise fees, greater autonomy over class offerings and, in many cases, substantially larger studios.

The FTC alleges that results achieved by these established operators were nevertheless used to promote the opportunity to prospective new franchisees as a profitable business that could be run semi-absentee.

Regulators Challenged Claims About Profits and Work Hours

The FTC also accused the companies of making misleading representations about income, profitability and the amount of work required to operate a Premier Martial Arts franchise.

The proposed order involving Premier Franchising Group would prohibit misrepresentations about income, profits, or sales volume that franchisees have achieved or are likely to achieve. It also addresses representations concerning how quickly franchisees break even and how many hours owners work or are likely to work.

Those details matter when evaluating a franchise because the investment isn’t limited to the check written on opening day. An owner expecting to oversee a business part-time may make a very different decision about leaving a job, borrowing money or investing retirement savings than someone who knows the business may demand full-time attention.

The Companies Would Pay $1.85 Million

Under the proposed settlements, Premier Franchising Group and Franchise Fastlane will pay a combined $1.85 million to resolve the FTC’s allegations. The FTC says the money will be used to provide refunds to harmed consumers.

Certain franchisees would receive another potentially valuable form of relief: the ability to cancel their franchise agreements without penalty.

The orders would also impose restrictions designed to prevent future misrepresentations involving franchises and business opportunities. The Premier Franchising Group order specifically prohibits misleading statements about matters including earnings, profits, sales volume, break-even timing and owner work hours.

The settlements still require court approval.

Buying a Franchise Requires More Than Reading the Sales Pitch

The case is also a useful lesson for anyone considering a franchise as a second career, retirement business or investment opportunity. Under the FTC Franchise Rule, prospective franchise buyers are entitled to a Franchise Disclosure Document containing information designed to help them evaluate the opportunity before committing money.

A compelling earnings story shouldn’t replace independent due diligence. Prospective owners can speak with current and former franchisees, examine the required disclosures carefully, calculate startup and operating costs, and have an attorney or accountant who isn’t connected with the seller review the numbers.

Most importantly, distinguish between what an experienced, established operator has earned and what someone opening a brand-new location with no industry experience can reasonably expect.

When an investment requires a $49,500 initial fee plus potentially substantial additional startup costs, spending money on independent professional advice before signing can be considerably cheaper than discovering afterward that the economics of the business don’t match the sales presentation.

A Business Opportunity Can Put Personal Savings at Risk

Franchise investing can blur the line between a business decision and a household financial decision. Buyers may fund startup costs with savings, loans, home equity or money they had originally intended for retirement, meaning a struggling franchise can affect far more than the business itself.

The Premier Martial Arts case is particularly notable because the FTC alleges some buyers incurred hundreds of thousands of dollars in additional expenses beyond the initial franchise fee and that many assumed significant debt. Those allegations demonstrate why prospective owners should model a worst-case scenario alongside the optimistic projections presented during the sales process.

Before buying any franchise, ask how long your household could continue paying its regular bills if the business produces little or no income during its first year—and how much money you could afford to lose without jeopardizing your home or retirement.

The FTC’s franchise resources can provide a starting point for understanding the disclosures and questions prospective buyers should consider before making that commitment.