Xponential Fitness Removes Its CEO as Federal Investigation Expands

Anthony Geisler, who founded multi-brand platform company Xponential Fitness in 2017 and has served as CEO since, was removed from his position and suspended indefinitely effective immediately, the company announced Friday.

The decision comes as the parent company of boutique fitness brands such as Club Pilates, CycleBar and StretchLab faces an expanded federal investigation that now includes the United States Attorney’s Office for the Central District of California. Brenda Morris, a member of Xponential’s board since 2019, will replace Geisler as interim CEO, the company said.

Xponential said it received notice May 7 of a probe by the U.S. Attorney’s Office. In December it disclosed an investigation by the U.S. Securities and Exchange Commission, and the company is facing multiple class action lawsuits alleging it defrauded its investors by making “materially false and misleading statements and omissions regarding Xponential’s business, financial results and prospects.”

The company “intends to continue cooperating with the SEC and intends to cooperate with the USAO,” Xponential said in a statement. Its board of directors also formed a Special Committee of Directors consisting of independent directors Chelsea Grayson, Jair Clarke and Jeffrey Lawrence, “to investigate these matters.” 

Shares of Xponential, which went public in 2021 and trades under the ticker symbol XPOF, closed down nearly 32 percent May 10, to $8.48. They have fallen more than 70 percent in the past 12 months.

Geisler formed Xponential two years after he bought Club Pilates, which had 30 units at the time. The franchisor has grown to 10 brands, largely through purchasing founder-led, studio fitness concepts. Earlier this year it acquired weight loss clinic company Lindora and its 31 units. In February it divested running-focused concept Stride, selling it to Shaun Grove, who left his position as president of another Xponential brand, Rumble Boxing.

Also a director, Geisler remains employed by Xponential and will continue to receive his salary, the company said in its 8-K filed May 10. But, the filing noted, “he will not be involved with the company’s response to, or oversight of, the USAO investigation.”

Xponential’s board said it retained an executive search firm to assist in the search for a new CEO. Morris is a partner at CSuite Financial Partners, an executive services firm.

“The board has determined that appointing Brenda Morris to serve as interim CEO is in the best interest of Xponential, its employees, customers, franchisees and shareholders,” said Mark Grabowski, chairman of Xponential and also managing partner of founding investor Snapdragon Capital, in a statement. “Over the last five years, Brenda has been a deeply involved board member as we have pursued Xponential’s mission to make health and wellness accessible to everyone. The board and I have every confidence that Brenda will be an excellent leader during this period and we look forward to working alongside her.”

Xponential on its most recent earnings call said it had 3,156 studios operating globally.

Update: This story has been updated to include information from Xponential’s 8-K filed with the U.S. Securities and Exchange Commission.