The main Hotworx lawsuit is Skistimas v. Hotworx Franchising LLC, a federal case in the Western District of Washington in which a married couple accuses the infrared sauna franchisor of misrepresenting earnings and violating franchise disclosure laws. In October 2024, the court refused to dismiss the case or send it to arbitration, meaning Hotworx, its CEO, and two employees now have to defend the claims on the merits in Washington.1Justia. Skistimas et al v. Hotworx Franchising LLC et al
Who Sued Hotworx and What They Allege
Greg and Gabriela Skistimas, a couple based in Washington state, brought the suit after their planned Hotworx franchise location never opened. Along with the company, they named CEO Stephen P. Smith, franchise recruiter Patricia Gattuso, and employee Nancy Price as defendants.1Justia. Skistimas et al v. Hotworx Franchising LLC et al
The core allegation is that Hotworx sold them a franchise using misleading numbers. According to the complaint, Gattuso made specific representations about leasehold improvement costs and the studio’s financial performance, and she discouraged the couple from having an attorney review the deal before signing. Smith, they say, joined a video conference on or about December 29, 2020, and reinforced those representations. The Skistimases claim these statements induced them to sign a franchise agreement that failed to deliver the promised returns, and that the conduct violated both the Federal Trade Commission’s Franchise Rule and Washington’s franchise investment protection laws.2Foley & Lardner LLP. Louisiana Franchisor Employees Personal Jurisdiction Washington
Why the Case Is Being Heard in Washington
Hotworx is a Wyoming LLC headquartered in Marrero, Louisiana, and every individual defendant is a Louisiana citizen. They asked the Washington court to throw the case out for lack of personal jurisdiction. On October 22, 2024, U.S. District Judge David G. Estudillo said no.1Justia. Skistimas et al v. Hotworx Franchising LLC et al
The reasoning was defendant-specific. Gattuso had registered as a franchise broker in Washington, signed renewal applications there, and executed an attestation consenting to service of process in the state for any legal proceeding arising from franchise sales. When she filed a sworn declaration stating she had “not consented to jurisdiction in the State of Washington,” the court called that assertion “clearly false and is directly contradicted by evidence in the record.”1Justia. Skistimas et al v. Hotworx Franchising LLC et al
For CEO Stephen P. Smith, the court pointed to his participation in the December 2020 video call with the Skistimases, where he allegedly backed up what Gattuso and Price had told them. Smith had also signed documents registering Hotworx as a franchise in Washington and appointed Gattuso and Price as the company’s franchise brokers there. Under an effects-based test, that was enough to satisfy due process and bring Smith within the reach of Washington’s Franchise Investment Protection Act.1Justia. Skistimas et al v. Hotworx Franchising LLC et al
Why the Arbitration Clause Didn’t Save Hotworx
Hotworx also moved to compel arbitration under a clause in the franchise agreement. The court denied that motion too, finding the clause unenforceable because it failed to meet Washington’s standards for arbitration agreements in the franchise context. The court described the clause as inequitable and held that fair dispute resolution processes took priority over the forum Hotworx had drafted for itself.2Foley & Lardner LLP. Louisiana Franchisor Employees Personal Jurisdiction Washington
What the Ruling Means for Other Franchisees
The Skistimas decision has drawn attention from franchise attorneys because it stretches personal jurisdiction beyond the corporate franchisor to reach the individual employees who solicit sales. Out-of-state franchise brokers who register to do business in a state, pitch prospective franchisees there, and make earnings representations cannot expect to retreat to their home jurisdiction once a dispute follows.2Foley & Lardner LLP. Louisiana Franchisor Employees Personal Jurisdiction Washington
The arbitration ruling matters for a similar reason. Franchise agreements routinely funnel disputes into arbitration in the franchisor’s home state, on terms the franchisor writes. The refusal to enforce Hotworx’s clause is a reminder that those provisions can fall when they collide with state-level franchisee protections.
Hotworx’s 2025 Franchise Disclosure Document acknowledges one franchisee dispute involving allegations of unconscionability, fraud, misrepresentation of investment costs, and violations of state franchise laws. That matter was settled, with the franchise agreement terminated and the initial franchise fee refunded. The filing does not specify whether it refers to the Skistimas case or a separate dispute.3FranDB. Hotworx Franchise 2025
Other Complaints Against Hotworx
The Skistimas case is the significant lawsuit currently pending, but Hotworx has other legal and public-relations exposure worth knowing about, especially if you searched expecting a consumer-side dispute.
On the membership side, consumers have complained to the Better Business Bureau about how hard it is to cancel. Because Hotworx runs on a franchise model, terms vary by studio, but recurring friction points include a 60-day cancellation notice, a requirement to cancel in person at the studio, and a $99 fee for ending an agreement before the initial term is up. In one early 2025 complaint, a customer disputed $209.72 in charges after saying they had asked to cancel months earlier; Hotworx responded that the customer had rescinded the cancellation to redeem membership rewards, which the company said reactivated the membership.4BBB. Hotworx Studio BBB Complaints
In February 2025, a separate incident at a Hotworx location in Belmont, California, drew national attention after Sydney La Day, a Redwood Shores resident, posted a TikTok saying she had been falsely accused of stealing a customer’s $1,000 ring during her first class. An employee texted her claiming to have video footage and calling it a “felony.” The ring was later found. La Day, who is Black, said the accusation was racially motivated; the studio owner denied racial profiling but acknowledged she had been wrongfully accused and said the studio apologized by email.5KTVU. False Theft Accusation at Hotworx Belmont Leads to Viral TikTok Video As of March 2025, La Day said she was considering legal action and working with a local NAACP branch, but no lawsuit had been filed.6KRON4. Video of Woman Wrongly Accused of Theft at Peninsula Pilates Studio Goes Viral on TikTok