“Franchising used to be a really good on-ramp for the middle class—a great way for entrepreneurs to learn and get their foot in the door. Now it’s just risky.”
~ Tiffany Cianci

Special thanks to Kim Iversen for bringing the story of Tiffany Cianci to our attention.

Cianci was a franchisee whose gymnastics business taught therapeutic exercise skills to special needs babies, something that Cianci loved. After a private equity firm bought the franchise and started making controversial changes unfavorable to franchisees, she fought back and organized with fellow franchisees to protect their rights and businesses. In response, the private equity firm spent millions to smear her and try to ruin her reputation. Incredibly, when Cianci, through her attorney, requested a delay in private arbitration for medical reasons, she was pressured into an unwanted surgical abortion. Her franchise was abruptly terminated in May 2022.

In a November 2024 interview with Iversen, Cianci commented that she originally had believed the “sales pitch” for the franchise model, which promised a “plug-and-play” system and guaranteed profits. Now, she argues, franchise contracts–often running 350 or so pages in length, all non-negotiable—are becoming “more and more abusive.”

As part of a broader trend of private equity incursions into the family business sector, more than 60% of family-owned franchises have transferred into the hands of private equity over the last seven years, according to Cianci. With an estimated 5.5 million family-owned businesses in the U.S., private equity firms view this territory as “fertile ground.” But as a national valuation and financial advisory firm observes, “A family manages a business like its fortune depends on its continued existence (because it generally does); a private equity firm manages a business like it is one part of a diversified portfolio of winners and losers (which it is).”

In her interview with Cianci, Iversen comments:

“It’s an important story because it’s so extremely common, although most don’t fight back. Most just end up being totally and completely [debilitated] by these private equity firms. They lose their businesses, they go bankrupt, and this is what’s happening to our communities…. We just continue losing the fabric of our American communities—small businesses, the backbone of the economy—and it all just gets siphoned away to the faceless billionaires on Wall Street.”

Iversen adds that Robert F. Kennedy, Jr. has called Cianci’s battle “the most egregious case of lawfare against a small business owner he’s ever encountered.”

Related:

How a Battle Over a Kids’ Gym Turned into the Lawsuit from Hell

Mafia Tactics: A Private Equity Firm Forced Her into an Abortion to Retaliate Against Her Speaking Up