ILoveKickboxing franchisor ILKB, LLC, CEO Michael Parrella, sales director Scott Ferrari, and franchise salesman Ryan Healy are getting hit hard by lawsuits. ILoveKickboxing franchise owners, represented by W. Michael Garner of Garner & Ginsburg, P.A., allege that they were defrauded into losing hundreds of thousands of dollars and their dreams of business ownership.
(UnhappyFranchisee.Com) One glance at the website of Michael Parrella, the founder and CEO of ILoveKickboxing franchisor ILKB, LLC, and you’ll see that he’s a larger-than-life character.
He’s a business guru, motivational speaker, a martial arts $100K growth mastermind who can “10x your franchise or small business.”
He’s taken pictures with Keanu Reeves, Daymond Johns, and other famous guys whose names escape me.
On his Facebook page he announced that he has innovative Memory Fabric with microfilament and biometrics built into the bracelet. Takes 4-5 times to learn and then will self wrap hands in under 8 seconds flat. Saves time, gets more out of your workout. $89.99 per pair, 2 for $169.99. 1 year money back guarantee. Who wants a pair?
Michael Parrella (aka “The Man”) claims he built the ILoveKickboxing franchise to “over 1000 locations around the world,” even though his 2018 ILKB Franchise Disclosure Document (FDD) lists just 227 locations.
Yet as entertaining as his oversized public persona may be, multiple groups of ILoveKickboxing franchise owners claim that Michael Parrella is guilty of more than self-promotion… he’s guilty of fraud.
They are suing Michael Parrella, his senior salespeople and his company for the hundreds of thousands they claim to have lost on the ILoveKickboxing franchise… and are asking for punitive damages of $1M.
Utah Franchisees Are Suing Michael Parrella, Scott Ferrari, Ryan Healy and ILKB, LLC
On April 8, 2019, W. Michael Garner of Minneapolis-based Garner & Ginsburg, P.A. filed the first Amended Complaint of Civil Case No. 2: 19-cv- KB Venture, LLC, v. ILKB, LLC, Michael Parrella, Scott Ferrari, and Ryan Healy.
The complaint document states:
Plaintiff West Valley KB Venture, LLC (“West Valley”) seeks to recover damages for fraud, violation of the New York Franchise Sales Act and breach of contract in connection with Defendants’ sale of a franchise for a kickboxing studio to Plaintiff. In brief, Defendants… made false, fraudulent and unsupported representations that ILKB franchisees broke even in a matter of weeks and generated certain levels of revenues and profits… that Defendants would handle virtually all marketing, which would result in more than enough memberships to make the franchise profitable; and that no franchises had ever closed.
The franchisees allege that ILKB, LLC promised them they’d “do virtually all of the marketing, which would result in sufficient members to generate profits in excess of $100,000 per year.”
ILoveKickboxing franchise owners James Lehrer and Dedeuc D’Antonoli allegedly invested $300,000 in building out and equipping the kickboxing studio, but the studio did not generate the volume allegedly promised. The franchisees claim ILKB breached its contract to provide marketing as promised, and that they lost more than $450,000 in the venture.
Suit Seeks Over $1M in Punitive Damages Against Michael Parrella, ILKB
The Garner & Ginsburg, P.A. lawsuit states that:
Defendants’ fraud was not isolated, but was perpetrated upon dozens of other people who innocently sought to invest in a franchise, believed Defendants’ representations, were unaware of their fraudulent omissions, and purchased ILKB franchises – often using their life savings, retirement savings and equity in their homes – only to learn that Defendants’ had defrauded them.
Defendants Michael Parrella, Scott Ferrari & David Healy were familiar with franchise laws and disclosures requirements, but violated them anyway.
Instead of complying with [franchise] laws, they proceeded to sell franchises to the public in wanton, gross and morally reprehensible disregard of their legal
obligations to make full and truthful disclosures to prospective franchisees.
Because of those willful and wanton acts, the suit argues, the Court should award punitive damages in an amount no less than $1 million in order to “deter Defendants from further unlawful conduct.”
Michael Parrella Has a Long, Dark History of Fraud Allegations, Suit Alleges
The suit alleges that Michael Parrella and ILKB, LLC failed to disclose to prospective franchisees that Parrella had a prior bankruptcy and had been sued for fraud. Among the allegedly required disclosures Parrella & ILKB hid from franchisees and their investors include:
That Michael Parrella was discharged from bankruptcy January 4, 2008
- That a 60-year old woman has asserted claims that Michael Parrella, assisted by Ferrari, had swindled her and illicitly taken ownership of her house
- That the Chapter 7 trustee in Parrella’s bankruptcy asserted that he had “engaged in fraudulent transactions and fraudulent disclosures.”
- That ILKB affiliate FC Online Marketing had been sued by Biggest Loser celebrity Tara Costa
- That ILKB had entered into a Consent Order with the State of Minnesota Commissioner of Commerce over the alleged sale of unregistered franchises
- That ILKB affiliate FC Online Marketing had been sued by for violation of the New York Franchise Sales Act
- That FC Online Marketing and Michael Parrella were both sued for fraud and unjust enrichment in a countersuit related to franchise encroachment
ARE YOU FAMILIAR WITH ILKB & THE ILOVEKICKBOXING FRANCHISE? MIKE PARRELLA? SCOTT FERRARI? RYAN HEALY? SHARE A COMMENT OR INSIGHT BELOW.
TAGS: ILoveKickboxing, ILoveKickboxing franchise, I Love Kickboxing, I Love Kickboxing franchise, ILKB LLC, ILKB, ILoveKickboxing lawsuit, I Love Kickboxing lawsuit, Mike Parrella, Michael Parrella, Mike Perrella, Michael Perrella, Scott Ferrari, Ryan Healy, W. Michael Garner, Garner & Ginsburg P.A., kickboxing franchise