ELLICOTT CITY, MD -- Planet Fitness, Dover, NH, has reached a settlement with a Maryland franchisee who sued the company for violating Maryland franchise and antitrust laws.
Diana Hamilton Dutt and her husband, Hans Dutt, filed the lawsuit in March, claiming fraud and civil conspiracy on the part of Planet Fitness and Brick Bodies, Cockeysville, MD.
In the settlement, the Dutts are released from their franchise agreements with Planet Fitness, sources say. The Dutts can convert their two Planet Fitness clubs immediately and must de-brand by no later than the end of next February. The Dutts will change their clubs’ name to Spunk! Fitness and are currently negotiating leases for future locations.
An undisclosed cash payment was made to the Dutts in the settlement, according to sources, and Planet Fitness also agreed to repurchase signage and equipment from the Dutts’ clubs.
“I’m excited to move forward with our intended vision that we have held in our mind’s eye for many years,” Hamilton Dutt says.
Planet Fitness declined to comment about the case.
In 2006, Hamilton Dutt opened a Planet Fitness franchise in Maryland and later opened a second club.
Victor and Lynne Brick, owners of Brick Bodies, purchased a Planet Fitness development deal in late 2007 for $850,000, the largest Planet Fitness rights deal at the time. The agreement required the Bricks to open 34 Planet Fitness clubs in the span of 10 years.
The complaint claims that Planet Fitness did not disclose to Hamilton Dutt in its uniform franchise offering circular that Planet Fitness had area development agreements (ADAs) in exclusive territories with franchisees in other states and could enter into ADAs in Maryland, which would block Hamilton Dutt’s ability to open new clubs or move her existing clubs.
The Dutts are still in litigation with Brick Bodies, sources say.