I Love Kickboxing Lawsuits: Franchisee Claims, Broker Suits, and State Actions

The iLoveKickboxing lawsuits are a cluster of franchisee fraud cases, a parallel set of suits against the franchise broker FranChoice, and state regulatory actions, all centered on allegations that founder Michael Parrella and his sales team sold ILKB franchises using inflated earnings promises and omitted disclosures. The cases produced mixed outcomes in court, a Washington state cease-and-desist order in 2024, and a corporate unwinding that ended with competitor 9Round Kickboxing acquiring the remaining 56 locations in March 2024.

What Franchisees Alleged

The complaints are strikingly consistent from case to case. Former franchisees said Parrella and his sales representatives told them studios typically broke even within two to four months (in some pitches, 10 to 12 weeks), that owners could run a location as an “absentee owner” working only a handful of hours a week, and that corporate marketing would reliably deliver roughly 100 trial members a month with conversion rates of 70 to 80 percent.¹²

Buyers also alleged ILKB understated real startup costs, with pitches citing $200,000 to $250,000 when actual outlays allegedly exceeded $360,000, and that the brand told them no ILKB outlet had ever closed.³ Several complaints added that Parrella’s 2008 personal bankruptcy and prior franchise-law litigation were omitted from the Franchise Disclosure Document.¹

The Franchisee Cases and How They Ended

Gould v. ILKB

Roger Gould and Dolphin Kickboxing Company sued ILKB, Parrella, sales director Scott Ferrari, and franchise salesman Ryan Healy in 2020 in the Eastern District of New York. In June 2022, the court dismissed some claims as untimely but allowed breach of contract and portions of the fraud and negligent misrepresentation claims to proceed.¹ In September 2024, Judge Joanna Seybert granted summary judgment to the “successor defendants” — ILKB Too, LLC, Daniel Castellini, and Shaun York — on the successor liability claim, finding no evidence Parrella retained any ownership after the 2020 asset sale.⁴ The court excluded as hearsay a LinkedIn profile that still listed Parrella as “CEO at iLoveKickboxing.com.”

ILKB v. Singh

In a trade-secrets case ILKB brought against former franchisee Ardamandeep Singh, Singh counterclaimed with fraud, negligent misrepresentation, and breach of contract allegations that tracked those in Gould. In June 2021, the court dismissed all of Singh’s counterclaims. The fraud allegations were found insufficiently specific, the franchisor-franchisee relationship was held not to create the “special relationship” New York law requires for negligent misrepresentation, and the contract claim against Parrella personally failed because he was not a party to the franchise agreement. The court also held that ILKB’s marketing being “not as effective as Singh had hoped” did not amount to a breach.²

W. Valley KB Venture v. ILKB

W. Valley KB Venture, LLC brought the same mix of common-law fraud, negligent misrepresentation, and New York Franchise Sales Act claims. In September 2021, Judge Seybert dismissed the franchise act claims as time-barred under the three-year statute of limitations and dismissed the fraud claim without prejudice, allowing a chance to refile with more specificity. Neither Ferrari nor Healy appeared in the case.⁵

The Orange Rabbit Arbitration

Nicholas Giacopelli and The Orange Rabbit, Inc. went through JAMS arbitration in New York against Parrella, Ferrari, Healy, and ILKB, alleging fraudulent inducement based on concealed legal history and false representations about income, costs, and support. The claimants sought trebled damages on a calculated loss of roughly $1.1 million plus a $110,000 refund of franchise fees. Only ILKB participated in the hearing; Parrella never participated, and Ferrari and Healy, representing themselves, stopped participating after January 2020. A final award was issued in November 2020.⁶

The FranChoice Broker Lawsuits

A parallel track of litigation targeted FranChoice, the franchise brokerage whose consultants had marketed iLoveKickboxing to prospective buyers. Attorney Elliot Ginsburg of Garner, Ginsburg & Johnsen filed 15 lawsuits in early 2019 on behalf of ILKB franchisees, naming brokers Careyann Golliver, Matt Stevens, Scott Jones, Peter Gilfillan, and Ray Fanning. The suits were among the first to argue that brokers themselves should be held liable as “franchise sellers” for their representations.⁷

In March 2021, a federal judge in Minnesota granted summary judgment against the first case, Mount Holly Kickboxing v. FranChoice, holding in a 56-page decision that the plaintiffs’ claims were largely not actionable and that “reasonable reliance cannot exist” for certain representations, such as the claim that no ILKB outlet had ever closed.⁸ The plaintiffs’ attorneys then withdrew the remaining 14 cases. FranChoice CEO Jeff Elgin said the firm had been “vindicated” but reported spending seven figures on legal defense.⁷

State Regulatory Actions

Regulators in several states acted against ILKB and Parrella.

In 2012, the New York Attorney General determined that Parrella’s predecessor company, FC Online Marketing, Inc., had sold unregistered franchises and required it to offer rescission to affected licensees. In June 2014, the Minnesota Department of Commerce entered a consent order against ILKB for selling unregistered franchises, imposed a $2,000 civil penalty, and ordered ILKB to offer rescission to Minnesota franchisees.⁹ According to Washington regulators, ILKB’s Franchise Disclosure Documents from 2012 through 2019 did not disclose either action; the 2013 FDD stated that “no litigation needed to be disclosed.”⁸

On April 1, 2024, Washington’s Department of Financial Institutions issued a final cease-and-desist order against ILKB LLC, FC Online Marketing, and Parrella for violating the state’s Franchise Investment Protection Act. The order found three categories of violations: selling unregistered franchises; failing to disclose material facts, including the New York and Minnesota actions, in FDDs from 2012 to 2019; and making fraudulent financial performance claims, including telling prospective buyers that locations were “breaking even in just 10-12 weeks” while simultaneously disclaiming any financial performance representations in the FDD. The order became final after the respondents did not request a hearing.⁹

The $25,000 Asset Sale and Successor Liability

On June 26, 2020, ILKB, LLC sold its assets to a new entity, ILKB Too, LLC, for $25,000 in cash. The buyers, Daniel Castellini and Shaun York, became sole owners. Parrella was required to resign from all management positions, and the purchase agreement stated that ILKB Too was not assuming predecessor liabilities, including pending litigation.⁴

ILKB Too moved its headquarters from New York to Florida, overhauled the operations manual and training program, changed the logo, and restructured marketing and class formats. Only two non-management employees, an IT worker and a bookkeeper, were retained.⁴ Franchisees argued in Gould that the sale was a sham designed to let Parrella escape liability through a company that was functionally the same business. The court disagreed, finding no continuity of ownership and granting summary judgment to the successor defendants in September 2024.

What Happened to the Brand

By March 2024, the iLoveKickboxing system had contracted from a peak of roughly 260 locations to 56, with a 34.5 percent SBA loan default rate among franchisees who used government-backed financing and 19 recorded defaults. On March 6, 2024, 9Round Kickboxing Fitness acquired all 56 remaining ILKB locations in an all-cash deal.¹⁰ The two brands were placed under a new holding company, with 9Round stating a goal of growing iLoveKickboxing past 100 locations.¹¹

ILKB Too, LLC, the Castellini and York entity that held the brand between the asset sale and the acquisition, filed for voluntary dissolution in Florida on December 27, 2024, effective December 31, 2024.¹² As of 2026, the iLoveKickboxing brand continues under 9Round’s ownership, with one pending litigation action listed in its franchise disclosure document.¹³

1
GovInfo. Gould v. ILKB, Case No. 2:20-cv-05154
2
The Franchise Memorandum. New York Federal Court Dismisses Suit Against Franchisor
3
Unhappy Franchisee. FranChoice Sued by iLoveKickboxing Franchise Owners
4
CCH. Gould v. ILKB, Memorandum and Order
5
CaseMine. W. Valley KB Venture LLC v. ILKB LLC
6
Jus Mundi. The Orange Rabbit v. ILKB LLC, Final Award
7
Franchise Times. FranChoice CEO Feels Vindicated After 15 Lawsuits Dismissed
8
GovInfo. Mount Holly Kickboxing v. FranChoice, Civil No. 19-300
9
Washington DFI. Final Order No. S-19-2812-24-FO01
10
Franchise Times. 9Round Kickboxing Acquires iLoveKickboxing
11
PR Newswire. 9Round Kickboxing Expands Reach With Acquisition of iLoveKickboxing
12
Florida Sunbiz. ILKB Too LLC, Entity Detail
13
Franchise Overview. iLoveKickboxing