The main HOTWORX lawsuit is Skistimas v. HOTWORX Franchising LLC, a 2023 federal case in Washington state brought by a couple who paid $39,950 for a franchise that never opened and who accuse the company, its CEO, and two staff of fraud and misrepresentation. A judge kept the case alive over the defendants’ jurisdiction challenge in October 2024 but sent the dispute to arbitration in Louisiana, where it remains pending with no public outcome. Separately, HOTWORX studios have drawn consumer complaints over membership cancellation practices, and a February 2025 false-theft incident at a California studio has been floated as the basis for a possible lawsuit that has not yet been filed.
What the Skistimases Allege
Greg and Gabriela Skistimas, residents of Kitsap County, Washington, filed suit in October 2023 in the U.S. District Court for the Western District of Washington against HOTWORX Franchising LLC, CEO Stephen P. Smith, franchise recruiter Patricia Gattuso, and employee Nancy Price.1Justia. Skistimas v. Hotworx Franchising LLC, No. 3:2023-cv-05974-DGE They agreed in December 2020 to open a HOTWORX studio and paid $39,950 in franchise fees. The studio never opened.
According to the complaint, the defendants made fraudulent representations about leasehold improvement costs and the financial performance franchisees could expect. The couple also alleged that HOTWORX discouraged them from hiring an attorney, calling it a “waste of money,” and that the company improperly debited about $5,000 from their bank account and charged $750 in convention fees.1Justia. Skistimas v. Hotworx Franchising LLC, No. 3:2023-cv-05974-DGE The suit raises statutory, contract, and tort claims. The plaintiffs seek damages exceeding $75,000 and describe the franchise contract as one-sided and unconscionable.
Why the Case Is in Washington
HOTWORX Franchising is a Wyoming LLC based in Louisiana, and the defendants moved to dismiss for lack of personal jurisdiction. U.S. District Judge David G. Estudillo denied that motion on October 22, 2024, finding specific jurisdiction over each individual defendant.
Gattuso and Price had registered as franchise brokers in Washington and signed attestations that included an irrevocable consent to jurisdiction in Washington courts for franchise-sale disputes. When both submitted declarations disclaiming that consent, the court found their statements “directly contradicted by evidence in the record.”1Justia. Skistimas v. Hotworx Franchising LLC, No. 3:2023-cv-05974-DGE As for CEO Smith, the court found his personal participation in a video conference in which he allegedly reinforced fraudulent representations to the plaintiffs was a sufficient contact with the state.2Midpage. Skistimas v. Hotworx Franchising LLC
Why the Case Is Now in Arbitration
In the same order, the court sent the dispute out of the courtroom. HOTWORX’s franchise agreement lays out a three-step dispute resolution process:
- Internal resolution first, requiring a detailed written notice and a meeting with the franchisor’s corporate representative and counsel.
- Mediation, at the franchisor’s option, in Jefferson Parish, Louisiana, with costs split equally.
- Arbitration, again at the franchisor’s option, in Jefferson Parish under the Federal Arbitration Act and AAA commercial rules.1Justia. Skistimas v. Hotworx Franchising LLC, No. 3:2023-cv-05974-DGE
The agreement also requires Louisiana law to govern, shortens the statute of limitations, waives the franchisee’s right to punitive or exemplary damages by limiting recovery to “actual damages,” and contains what the plaintiffs described as asymmetrical attorney fees provisions.3CCH. Skistimas v. HOTWORX Franchising LLC, Case No. 3:23-cv-05974-DGE
The Skistimases challenged these clauses under Washington’s Franchise Investment Protection Act. Judge Estudillo declined to rule on those substantive challenges. Because the contract delegates “all disputes and claims relating to this Agreement” to the arbitrator, and because incorporating AAA rules constitutes a delegation of arbitrability questions, the arbitrator, not the court, will decide whether the dispute resolution clauses are enforceable.3CCH. Skistimas v. HOTWORX Franchising LLC, Case No. 3:23-cv-05974-DGE The court granted the motion to compel arbitration and stayed the federal case.
As of the most recent filings, the arbitration has not concluded. No award or settlement has been publicly reported, and the federal case remains stayed.
Consumer Complaints Over Membership Cancellations
HOTWORX has also drawn complaints from members over cancellation practices, though these are individual disputes rather than a consolidated lawsuit. The company’s membership agreement requires an initial commitment of at least six billing cycles. Cancellation must be requested in person at the member’s home studio during staffed hours, with a signature or authorized authentication, and members who cancel before the end of the initial term face a $99 early cancellation fee.4HOTWORX. Membership Terms and Conditions
Individual studios have added their own requirements. In Better Business Bureau complaints against a HOTWORX studio in Lakeland, Florida, consumers alleged the studio refused to process cancellations and continued billing after members tried to terminate. A 2024 complaint described being unable to find staff at the studio to handle the cancellation; the owner responded by invoking a 60-day cancellation notice requirement and threatened small claims court to recover delinquent dues.5Better Business Bureau. Hotworx Lakeland Complaints In a separate 2025 complaint, the same studio said it had hired an attorney to pursue a cease-and-desist order against a former member over slander allegations.
The Belmont False-Theft Incident
In February 2025, a HOTWORX studio in Belmont, California, drew national attention after a patron named Sydney La Day was falsely accused of stealing another member’s ring. The studio manager called La Day and described the alleged theft as a “felony” involving a ring worth $1,000. The owner later found the ring.6KTVU. False Theft Accusation at Hotworx Belmont Leads to Viral TikTok Video
La Day alleged the accusation was racially motivated. The studio owner apologized by email and said, “This was not a case of racial profiling,” while acknowledging the accusation was wrongful. The owner also reported death threats after La Day’s TikTok about the incident went viral.6KTVU. False Theft Accusation at Hotworx Belmont Leads to Viral TikTok Video As of March 2025, La Day was reported to be considering legal action and working with a local NAACP branch, but no formal lawsuit had been filed.7KRON4. Video of Woman Wrongly Accused of Theft at Peninsula Studio Goes Viral on TikTok
The CEO’s Earlier Franchise Litigation
Stephen P. Smith previously built Planet Beach, a tanning salon franchise, before launching HOTWORX in 2016. Planet Beach Franchising Corporation was involved in multiple franchise-related lawsuits over unpaid royalties, non-compete violations, and unauthorized transfers of salon locations, disclosed in the company’s 2012 Franchise Disclosure Document. Those cases generally resolved through consent judgments or settlements rather than trials.