Shares in Xponential Fitness are rising following the news that the US Securities and Exchange Commission investigation (SEC) into the company has closed with no enforcement action being taken.

The investigation into the boutique franchisor started on 11 December 2023 and was looking into potential securities fraud and accounting issues. It followed a short-seller report from Fuzzy Panda Research in June 2023 which accused the company of inflating performance, overextending franchisees and relying on questionable practices.

On 1 July the SEC informed the boutique franchisor that it has concluded its investigation without action.

A separate investigation by the US Attorney’s Office for the central district of California is still ongoing, with which the company is co-operating.

Xponential Fitness is currently on the hunt for a CEO after Mark King’s recent announcement of his retirement.

During his year in the post he has strengthened the leadership team and worked to stabilise the company for short and long-term growth, although losses have been mounting.

Former CEO, Anthony Geisler, has re-entered the market with a new franchising company, Sequel Brands, helmed by many former Xponential execs.