Staff at Pure Barre and other boutique gyms say a major franchisee stiffed them on pay, sent bizarre emails, and talked about drinking his own urine

• Staff at some Pure Barre, CycleBar, Row House, and other high-end fitness studios aren't being paid.
• The employees work at locations bought by Mitch Brown from franchisor Xponential Fitness.
• Brown's two-month tenure is marked by bizarre emails and strange Zoom calls mixed with radio silence.

There's trouble in perfectly toned paradise.

Several locations of Pure Barre — the ballet-inspired workout studio that serves an upscale clientele with boutique fitness classes in dim, flatteringly lit studios across the country — have suddenly shuttered.

Outposts of CycleBar, Row House, and other pricey fitness studios have also shut their doors, suddenly and sometimes without explanation.

The culprit, it seems, is a self-described entrepreneur and franchisee named Mitch Brown, who took over ownership of 68 studio locations from franchise licenser Xponential Fitness in early September. Within a matter of weeks, staff were missing paychecks. Some were forced to choose between working for free or walking away.

Staff told Business Insider they haven't been paid since late October, and paycheck amounts were inaccurate for weeks before then, resulting in thousands of dollars in lost income to the hundreds of people employed at the studios. Their calls for help went unanswered, they say — save for a bizarre email to all employees that they described as "desperate" and "incoherent," as well as rambling Zoom calls. In one call reviewed by Business Insider, Brown spoke about drinking his own urine.

"I FAILED ALL OF YOU," Brown wrote in the November 8 email. He claimed he acquired an "underperforming" group of studios, but said he bears the blame for employees' missed paychecks. The emails from unpaid staff "filled with hatred, exorcism, and just plain meanness" were his burden to carry, he wrote, and he was juggling a lot because "my entire team left."

Business Insider spoke with 11 current and former staff, including studio managers and instructors and those who worked directly with Brown. A consistent pattern emerged: As Brown repeatedly failed to meet his payroll obligations, their patience gave way to frustration and a sense of betrayal.

"Everybody was giving them grace to figure out the payroll issue," said Amy, a manager at one of Brown's Pure Barre locations, who asked that Insider only use her first name. "There was way more grace than what they deserved."

A current manager of a fitness studio in the Midwest told Business Insider that the first paychecks for some of her staff after the acquisition were off by nearly 90 percent. "It looked like paychecks were missing zeroes. It was almost comical," she said.

Brown did not respond to multiple emails, phone calls, and text messages from Business Insider. In a statement, a spokesperson for Xponential Fitness, which licenses over 2,800 franchises, noted that it does not operate studios directly.

"While our network of studios is independently owned and operated by our franchisees, and we do not have oversight of their day-to-day operations, Xponential has attempted to assist the franchisee to remedy this situation," the spokesperson said.

Every studio employee Business Insider spoke to confirmed they hadn't been paid since October 27, the date of the most recent paycheck from MD Professional Holdings, Brown's company. Now, staff estimate that they are collectively owed thousands of dollars in back pay, with individual instructors and managers owed anywhere from $500 to over $5,000.

"They told us we were going to get the back pay, first in October and then in November — but no one has seen that," Jaime Miettinen, a CycleBar instructor in the Detroit metro area, told Business Insider. Miettinen said she has taught 24 classes since Brown acquired her studio, but was only paid for 4.

For many employees, Brown's November 8 email was the last straw.

"When I read it, I was in shock about what I was reading, because it didn't address anything," Miettinen said.

"It sounded desperate in a way that we had not heard before," said the Midwest manager.

Some saw it as an ill-advised plea for empathy rather than an action plan to fix pressing issues. "That's when I started telling my general manager that if I don't get this next paycheck, it was going to be my final class," said Miettinen.

Across cities from California to New York, many locations have now closed their doors, according to interviews with Business Insider and posts on social media. Employees gave tearful goodbyes to disappointed clients, unable to explain the real reasons behind their sudden closure.

"We couldn't ask people to work without pay," said Amy.

Erratic behavior, behind-the-scenes chaos, and the collapse of community

Even before the November 8 email, Brown's behavior didn't inspire trust, two studio employees said. On Zoom calls with studio managers, Brown's behavior was erratic. In one late September call obtained by Business Insider, he spoke for 15 minutes straight, veering from promising to fix the payroll issue into graphic metaphors.

"I only got one bottle of trust, and that bottle has been opened and dumped out. And I've pissed in that bottle and now I'm drinking the piss out of that bottle," Brown said at one point. He claimed that he eventually wanted to open 500 studios and offer equity to all general managers, despite their current anger at him. "Piss down my leg, and here I am treating you better," he said.

"Mitch would get on Zooms and ramble," said a manager. "I was just kind of incredulous that he could talk for 15 minutes and not say anything."

Several employees said they built close relationships with clients over many years, and being forced to choose between working for free or walking away caused "a lot of tears."

"Our instructors and members were heartbroken. There was something very special about our inclusive space," said the manager, adding that people of various body types and fitness levels had found a home there.

A dedication to clients meant some employees felt obliged to keep teaching classes without pay. But eventually, unpaid instructors had to stop teaching.

A person who worked directly for Brown told Business Insider that the initial payroll errors were unintentional mix-ups that back-office staff struggled to fix. But eventually, they said, the funds stopped showing up.

"Mistakes happened, but they weren't intentional efforts to underpay people," this person said. Early mistakes in payment were due to failures of the MD Professional Holdings team to transfer payroll data correctly into payroll processor ADP's backend system, they said.

By mid-October, they said payroll was finally starting to right itself, with the payroll fully imported and some back pay being issued for those who had been underpaid.

"And then there was one payroll where nobody got paid," they said. "And then there was another one where nobody got paid. And at that point, it wasn't an ADP problem, it was a funding problem."

A bargain, big promises, and poor execution

The studios were acquired under franchise agreements with Xponential Fitness, which calls itself the "largest global franchisor of boutique fitness brands." Started in 2017, the company went public in 2021, and sells franchise rights to 10 high-end workout brands: Pure Barre, CycleBar, RowHouse, StretchLab, Rumble, BFT, Club Pilates, Yoga Six, Stride, and AKT.

In interviews, some staff questioned how Brown was able to acquire 68 studios. According to two former employees who worked directly with Brown, he struck a deal with Xponential Fitness to take over franchises for next to nothing. (Their accounts are similar to a report by short-seller Fuzzy Panda Research, which said franchise owners were selling studios back to Xponential Fitness for $1 in order to be free of the financial burden.)

Brown's acquisitions made him one of the company's bigger operators: In its 2022 annual report, Xponential Fitness said its largest single franchisee at the end of last year had 89 locations.

Studio employees at many locations Business Insider spoke to said Xponential Fitness was their operator before Brown took over.

According to one of the people who worked directly with Brown, all but a handful were losing money each month under Xponential Fitness' operation.

"We are aware of the challenges MD Professional Holdings is working through and the concerns raised by their staff," a spokesperson for Xponential Fitness said in its statement.

The spokesperson added that Xponential Fitness provided nearly $2 million in financial assistance to Brown to help cover rent and payroll for the studios it sold to him.

Internally, Brown promised that he could find funding to turn the studios around. At the time, the former employee who worked on payroll issues believed him. In hindsight, they said it was clear Brown was always going to struggle to find funding.

"A bank isn't going to lend money when all the locations are losing money," they said. "Big investors would have wanted more than 50% of the company, which Mitch never would have agreed to."

"He was acting in good faith, but the execution failed once payroll troubles started," they said. "I think he genuinely wanted to improve the studios, but it never came together."

Both former employees who worked directly with Brown said he would often go missing for periods, and become unresponsive to calls or texts. And unlike the fitness studio employees, they didn't find the message or tone of Brown's November 8 email surprising.

"It was a very Mitch email," the former employee who worked on payroll issues said.

But that person said those notes were typically internal. When Brown sent the email to everyone who worked for him at the studio level, "I was honestly shocked when I saw that," they said.

'If you are serious about paying us, you'd say when'

For instructors who spent years building their studios' brands, the chaos has been difficult.

"It feels like a brand with a message of community let people down," said an instructor at a CycleBar in the upper Midwest.

Amy, the manager at Pure Barre, said she attempted to refund memberships and packages to clients as instructors quit, hollowing out the class roster. But after a certain point, she lost the ability to issue refunds, and could only issue credits for classes.

Other instructors were surprised to see memberships still being sold. "How can we in good faith be selling memberships when we're not even being paid?" said former CycleBar instructor Pamela Chatman, who taught classes at various Michigan studios for over two years before quitting last week.

The imbroglio has also bubbled up on social media. CycleBar turned off comments on an Instagram post after it was flooded with posts from people asking why it wasn't paying its workers. An Instagram post by a CycleBar instructor outlining the failure of MD Professional Holdings to pay instructors lit up with comments from others who said they were experiencing the same issues. Subreddits dedicated to the brands have become clearinghouses for employees and clients to share the latest news of studios that have closed.

Meanwhile, Brown sent two more emails following his November 8 diatribe: One on November 10, accepting blame and promising again to get people paid; and one on November 13, promising to provide an update by 4 pm PST that day. But no further communication followed, and nobody Business Insider spoke to has heard from Brown since. Neither of his former employees have spoken to him in weeks.

Some staffers have retained lawyers to recover unpaid wages. They hope public exposure of what transpired might lead to change and accountability. But for most, the financial uncertainty is secondary to the deep feeling of betrayal.

While most staff blame Brown and MD Professional Holdings for fumbling the transition, some feel Xponential Fitness shirked accountability by washing its hands of the studios after selling them off. And they wonder about the long-term damage being done to Pure Barre, CycleBar, Row House, and other beloved brands.

After Business Insider reached out for comment, a spokesperson for Xponential Fitness followed up and said the company was attempting to make amends.

"Xponential presented a plan to the franchisee on Friday under which Xponential and the franchisee would work together to ensure all employees are paid wages owed. Xponential has not yet heard back from the franchisee on this plan," the spokesperson said.

The spokesperson added that Xponential was also planning to offer employees and members the ability to take over franchises from MD Professional Holdings, and would not charge royalty fees as well as paying rent for "a significant period of time." The spokesperson declined to define how long that would be.

The manager in the Midwest said she likes "any plan that gets my people paid," but was leery of the offer for employees and members to take over franchises.

"Cynical people would say that they want to make sure that no failed studios are on their books," she said. "I'd need a lot more details before I'd expose my members to any risk."

Chatman was more blunt. "It's hard to trust. It's like when someone says 'Yeah, we're gonna go on vacation, but I don't know when,'" she said. "If you are serious about paying us, you'd say when."