Premier Franchising Group, the franchisor of Premier Martial Arts, and its former franchise sales organization, Franchise Fastlane, have agreed to pay a combined $1.85 million to settle Federal Trade Commission charges. The FTC announced the settlements on October 5, 2026, and says the money will be used to compensate franchisees.
The agency alleges the two companies made deceptive and unsubstantiated claims, including that people with no martial arts background could profitably run studios while working under 15 hours a week. More than 200 buyers paid an initial franchise fee of $49,500 or more, the FTC says.
What buyers were told about the work and the money
According to the FTC’s complaint, the initial franchise fee was $49,500 or more for a single location, and veterans were offered a 5 percent discount. The agency puts the estimated cost of getting one studio running at $100,553 to $421,800. The complaint says the sellers described semi-absentee ownership as roughly 8 to 12 or 10 to 15 hours a week.
The FTC says many buyers spent hundreds of thousands of dollars on build-out and operations and took on significant debt. For anyone who bought a Premier Martial Arts franchise, or who is weighing a franchise of any kind, the open question is what the orders mean for money already spent and whether a payment will come.
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The complaint compares the earnings pitched to buyers with the franchisor’s own records. It says the 2021 disclosure document reported an average “low” net income of $90,204.25 for 2020, while company records show $25,167. For 2021, the agency says the average EBITDA for new franchisees was $17,584 and the median was $28,347.
The FTC also says the studios behind the strong numbers were not like the ones new buyers opened. Existing franchisees ran larger studios, 2,000 to 7,000 square feet, against the recommended 1,200 to 1,600 square feet, and they had martial arts experience that most new franchisees lacked. The complaint contains allegations, not findings of fact.
How the $1.85 million adds up
The two orders are separate. Under the stipulated order against Premier Franchising Group, the company faces a $3,875,424 monetary judgment, which is suspended once it pays $650,000 within seven days of the order being entered. The suspension depends on the truthfulness of the company’s sworn financial statements, and the court can lift it if an asset was hidden or misstated.
The order against Franchise Fastlane carries a $1.2 million judgment with no suspension, also payable to the FTC within seven days. Together, $650,000 and $1.2 million make the $1.85 million. Both orders ban the misrepresentations at issue and require compliance with the Franchise Rule.
Will franchisees actually be paid?
The FTC says the money will be used to compensate franchisees, but its announcement does not describe how payments will be made or who will receive them. Neither order sets out a claim process. Each says the FTC may place the money in a fund it manages for consumer relief, covering redress and administrative costs, and may use it for related relief if direct payments are impracticable. Money not used goes to the U.S. Treasury.
The orders are proposed stipulated orders filed in the U.S. District Court for the Eastern District of Tennessee, Case No. 3:26-cv-00487. They carry the force of law once a judge approves and signs them, and the signature lines in the FTC’s posted copies are blank. The Commission voted 2-0 to approve the complaint and the proposed orders.
Separately, the order against Premier Franchising Group requires the company to send certain franchisees a notice offering to cancel their franchise agreements without penalty. The notice goes to all franchisees except legacy franchisees from the earlier Premier Martial Arts International system, those who settled earlier lawsuits or arbitrations, and those who bought through a transfer or resale. Recipients have 60 days from receiving the notice to elect cancellation, using a one-step online form, and owe nothing further after the effective date apart from fees already due.
The company must email the notice within seven days of the order being entered. If there is no sign the email was opened within 20 days, it must follow with tracked mail within 10 more days, and the 60 days run from the last notice sent.
What the Franchise Rule says about earnings claims
The FTC’s Franchise Rule, 16 C.F.R. Part 436, requires a franchisor to give a prospective buyer its disclosure document at least 14 calendar days before the buyer signs a binding agreement or makes any payment. Any claim about financial performance has to be included in the document’s Item 19, with a reasonable basis and written substantiation.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in the announcement that “franchisors are legally required to be upfront and honest about earnings potential and the associated risks.” He added that the FTC “will continue to take action to protect small businesses and franchisees.”
For anyone considering a purchase, the 14-day window and the Item 19 table are the two places the rule puts earnings figures in writing. A number given only on a phone call or a website is not part of the disclosure document, which is the gap the FTC says it found in this case.
Expecting word about Premier Martial Arts franchise money?
The orders do not yet set a claim form, a payment date or a notice deadline for compensation. Franchisees who also face the 60-day cancellation window have a real date running from the day a notice arrives, and a message that sits unopened in an email folder can use up part of it.
This story has no claim to file today, so the turn is from the FTC announcement to the paperwork that follows. The Settlement & Refund Recovery System includes the four-date rule for reading a settlement notice and a claim log and payment tracker, which keep each notice, its date and any payment in one place.
Get the claim log and payment tracker for the Premier Martial Arts orders →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
