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California Consent Order V Fueled Collective Franchising LLC (Aka ST Gregory Development Group, Xponetnial Fitness's Sales Agent)
California Consent Order V Fueled Collective Franchising LLC (Aka ST Gregory Development Group, Xponetnial Fitness's Sales Agent)
Deputy Commissioner
2 SEAN M. ROONEY
Assistant Chief Counsel
3 AFSANEH EGHBALDARI (State Bar No. 250107)
Senior Counsel
4 Department of Financial Protection and Innovation
1455 Frazee Road, Suite 315
5 San Diego, California 92108
Telephone: (619) 610-2153
6 Facsimile: (619) 209-3612
7 Attorneys for Complainant
State of California – Department of Financial Protection and Innovation
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CONSENT ORDER
1 registering the offer and sale of franchises in California. To register a franchise, a franchisor must
2 file an application which includes a Uniform Franchise Disclosure Document (FDD) with the
3 Department for review and approval, in accordance with sections 31111 and 31114. The FIL
4 requires franchisors to disclose certain material information which is intended to provide prospective
5 franchisees with facts upon which to make an informed decision to purchase a franchise, as stated in
6 section 31001.
7 B. Fueled Collective was an Ohio limited liability company, formed on May 11, 2016,
State of California – Department of Financial Protection and Innovation
8 with a previous business address at 3825 Edwards Road, Suite 103, Cincinnati, Ohio. Fueled
9 Collective ceased business in or around the first quarter of 2020.
10 C. James Jagers was Fueled Collective’s Director of Operations and is authorized to
11 enter into this Consent Order on behalf of Fueled Collective.
12 D. Fueled Collective offered and sold franchises for the operation of collective office,
13 meeting, social membership and workspace, in California from August 22, 2018 to April 19, 2019.
14 Fueled Collective currently does not have an effective registration to offer or sell franchises in
15 California.
16 E. Under the Guidelines for Franchise Registration, franchisors are required to disclose
17 any affiliates that offer franchises in any line of business or provide products or services to the
18 franchisees of the franchisor. Franchisors are also required to disclose whether . . . affiliate who
19 induces franchise sales by promising to back the franchisor financially or otherwise guarantees the
20 franchisor’s performance; an affiliate who offers franchises under the franchisor’s principal
21 trademark; and any person identified in Item 2 of this part: any pending . . . material civil action
22 alleging a violation of a franchise, antitrust, or securities law, or alleging fraud, unfair or deceptive
23 practices, or comparable allegations.
24 F. Fueled Collective failed to list St. Gregory Development Group, LLC (SGDG) as an
25 affiliate in the FDDs filed with the Department in 2018 or 2019, as required by the Guidelines for
26 Franchise Registration.
27 G. Fueled Collective also failed to disclose SGDG’s litigation in the 2018 and 2019
28 FDDs, as required under the Guidelines for Franchise Registration.
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CONSENT ORDER
1 H. In July of 2017, a lawsuit was filed against SGDG in Orange County Superior Court
2 (30-2017-00934883-CU-BT-CJC), alleging several violations of the FIL, including the offer and sale
3 of a franchise by means of untrue statements or omissions of material fact.
4 I. In April of 2018, a lawsuit was filed against SGDG in the United States District Court
5 for the Southern District of Mississippi (1:18-cv-131-HSO-JCG), alleging fraudulent
6 misrepresentation and concealment by the defendants in connection with a sale of a franchise.
7 J. Without admitting or denying the Commissioner’s findings as set forth in
State of California – Department of Financial Protection and Innovation
8 paragraphs F – I, Fueled Collective desires to enter into this Consent Order which the
9 Commissioner finds is appropriate, in the public interest, and consistent with the purposes
10 fairly intended by the FIL.
11 K. Fueled Collective admits to the jurisdiction of the Commissioner in this matter and
12 for the purposes of issuing and enforcing this Consent Order.
13 L. The Commissioner finds that Fueled Collective failed to disclose SGDG as an
14 affiliate and its litigation in the 2018 and 2019 FDDs, in violation of section 31200.
15 NOW, THEREFORE, in consideration of the foregoing, and the terms and conditions set
16 forth herein, the Parties agree as follows:
17 II.
18 Terms and Conditions
19 1. Purpose. This Consent Order resolves the issues before the Commissioner set forth
20 in paragraphs A through L above in a manner that avoids the expense of a hearing and other
21 possible court proceedings, protects consumers, is in the public interest, and is consistent with the
22 purposes and provisions of the FIL.
23 2. Final Desist and Refrain Order. Pursuant to Corporations Code section 31406, Fueled
24 Collective Franchising, LLC is hereby ordered to desist and refrain from the violations set forth
25 herein, in violation of Corporations Code section 31200 (failing to include material facts in any
26 application, notice or report filed with the Commissioner). Fueled Collective agrees to comply with
27 this Desist and Refrain Order and stipulates this Desist and Refrain Order is hereby deemed final and
28 effective from the effective date of this Consent Order, as defined in paragraph 22 (Effective Date).
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CONSENT ORDER
1 3. Penalties. Pursuant to Corporations Code section 31406, Fueled Collective
2 Franchising, LLC is hereby ordered to pay an administrative penalty in the amount of $2,500.00, no
3 later than 30 days after the Effective Date of this Consent Order. The penalty must be made payable
4 in the form of a cashier’s check or Automated Clearing House deposit to the Department of
5 Financial Protection and Innovation and transmitted to the attention of Accounting – Litigation, at
6 the Department of Financial Protection and Innovation, 2101 Arena Boulevard, Sacramento,
7 California 95834. Notice of the payment shall be concurrently sent to Afsaneh Eghbaldari, by e-
State of California – Department of Financial Protection and Innovation
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CONSENT ORDER
1 under the FIL, the California Administrative Procedure Act, the California Code of Civil Procedure,
2 or any other provision of law in connection therewith.
3 7. Information Willfully Withheld or Misrepresented. This Consent Order may be
4 revoked, and the Commissioner may pursue any and all remedies available under law against
5 Fueled Collective if the Commissioner discovers that Fueled Collective knowingly or willfully
6 withheld or misrepresented information used for and relied upon in this Consent Order.
7 8. Future Actions by Commissioner. If Fueled Collective fails to comply with any terms
State of California – Department of Financial Protection and Innovation
8 of this Consent Order, the Commissioner may institute proceedings for any and all violations
9 otherwise resolved under this Consent Order. The Commissioner reserves the right to bring any
10 future actions against Fueled Collective, or any of its partners, owners, officers, shareholders,
11 directors, employees or successors for any and all unknown violations of the FIL or any other law
12 under the Commissioner’s jurisdiction.
13 9. Assisting Other Agencies. Nothing in this Consent Order limits the Commissioner’s
14 ability to assist any other government agency (whether city, county, state, or federal) with any
15 administrative, civil or criminal action brought by that agency against Fueled Collective or any
16 other person based upon any of the activities alleged in this matter or otherwise.
17 10. Headings. The headings to the paragraphs of this Consent Order are inserted for
18 convenience only and will not be deemed a part hereof or affect the construction or interpretation of
19 the provisions hereof.
20 11. Binding. This Consent Order is binding on all heirs, assigns, and/or successors in
21 interest.
22 12. Reliance. Each of the Parties represents, warrants, and agrees that in executing this
23 Consent Order it has relied solely on the statements set forth herein and the advice of its own
24 counsel. Each of the Parties further represents, warrants, and agrees that in executing this Consent
25 Order it has placed no reliance on any statement, representation, or promise of any other party, or
26 any other person or entity not expressly set forth herein, or upon the failure of any party or any
27 other person or entity to make any statement, representation or disclosure of anything whatsoever.
28 The Parties have included this clause: (1) to preclude any claim that any party was in any way
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CONSENT ORDER
1 fraudulently induced to execute this Consent Order; and (2) to preclude the introduction of parol
2 evidence to vary, interpret, supplement, or contradict the terms of this Consent Order.
3 13. Waiver, Amendments, and Modifications. No waiver, amendment, or modification
4 of this Consent Order will be valid or binding unless it is in writing and signed by each of the
5 Parties. The waiver of any provision of this Consent Order will not be deemed a waiver of any
6 other provision. No waiver by either party of any breach of, or of compliance with, any condition
7 or provision of this Consent Order by the other party will be considered a waiver of any other
State of California – Department of Financial Protection and Innovation
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CONSENT ORDER
1 represent and acknowledge that he, she or it is executing this Consent Order completely voluntarily
2 and without any duress or undue influence of any kind from any source.
3 19. Notice. Any notice required under this Consent Order shall be provided to each
4 party at the following addresses:
5 To Fueled Collective: Norman Leon, counsel for
Fueled Collective Franchising, LLC
6 DLA Piper, LLP
7 444 West Lake Street, Suite 900
Chicago, Illinois 60606
State of California – Department of Financial Protection and Innovation
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To the Commissioner: Affi Eghbaldari, Senior Counsel
9 Department of Financial Protection and Innovation
10 1455 Frazee Road, Suite 315
San Diego, California 92108
11 Affi.eghbaldari@dfpi.ca.gov
12 20. Signatures. A fax or electronic mail signature shall be deemed the same as an
13 original signature.
14 21. Public Record. Fueled Collective hereby acknowledge that this Consent Order is
15 and will be a matter of public record.
16 22. Effective Date. This Consent Order shall become final and effective when signed by
17 all Parties and delivered by the Commissioner’s agent via e-mail to Fueled Collective’s attorney,
18 Norman M. Leon at: norman.leon@dlapiper.com.
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CONSENT ORDER
1 23. Authority to Sign. Each signatory hereto covenants that he or she possesses all
2 necessary capacity and authority to sign and enter into this Consent Order and undertake the
3 obligations set forth herein.
4 Dated: April 9, 2021 MANUEL P. ALVAREZ
Commissioner of Financial Protection and Innovation
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By: ___________________________
7 MARY ANN SMITH
State of California – Department of Financial Protection and Innovation
Deputy Commissioner
8 Enforcement Division
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10 Dated: April 9, 2021 FUELED COLLECTIVE FRANCHISING, LLC
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By: ___________________________
12 JAMES JAGERS
Managing Member of Fueled Collective
13 Franchising, LLC
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Approved as to Form and Content:
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16 By:__________________________
17 Norman M. Leon, Esq.
DLA Piper LLP
18 Counsel for Fueled Collective Franchising, LLC
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CONSENT ORDER