The billionaire owner of the San Diego Padres owns a company that allegedly has been playing hardball with mom-and-pop entrepreneurs in a franchising empire that spans more than 1,000 businesses — and it has also been accused of trying to silence trade press who have reported on its tough tactics.
Peter Seidler – who also is the grandson of the infamous Brooklyn Dodgers owner Walter O’Malley, who moved the beloved Bums to Los Angeles in 1958 – took command of the Padres in 2020.
In December, Seidler also took a majority stake in Unleashed Brands — a Texas-based firm with roughly 1,300 franchises for youth-focused businesses like martial arts studios, trampoline parks and test prep — through his buyout firm Seidler Equity Partners, which has about $5 billion under management.
Unleashed had a checkered history before Seidler took over. It has faced lawsuits from several franchises with accusations that range from being charged hidden fees to working much longer hours than they were led to believe when buying licenses.
A suit filed by an Urban Air Franchisee Association alleging that Unleashed added big new royalty fees after operators signed franchise agreements was dismissed in May 2021 when a Dallas federal judge said operators needed to sue individually and not as a group.
A group of 54 Premier Martial Arts franchisees sued Unleashed Brands on Nov. 18, 2022, in a Tennessee federal court alleging they were “tricked” into becoming operators after being given false promises including the profitability of the karate studios and the hours needed to operate them. Unleashed says it is an indirect owner of Premier Martial Arts and not part of the franchise agreement so should be dropped from the case.
A judge has not ruled yet on whether to drop Unleashed from the suit.
The company has also been accused by some business owners of clamping down on their efforts to form franchisee associations, which allow them to band together to fight for better rights and fewer fees, according to sources.
Unleashed did not respond to the allegations it clamps down on independent franchisee groups.
The tough, penny-pinching tactics stand in sharp contrast to Seidler’s reputation as the Padres owner, where he has the third-biggest payroll in baseball and has been blasted for being too generous with players including Manny Machado and Xander Boegarts.
The Padres are one of this season’s biggest disappointments and likely will miss the playoffs.
Little Gym franchisee Tiffany Cianci claims her Little Gym franchise in Frederick, Md., was terminated for forming a franchisee association.
She took Unleashed to arbitration last year but was seeking a delay in late January from testifying because of her high-risk pregnancy at the time. The New York Times reported about her plight before Unleashed’s clampdown in arbitration.
Unleashed’s lawyer’s insisted Cianci fly across the country to attend the hearing in Arizona — despite her being “diagnosed with a threatened miscarriage,” she alleged in a letter to the Arizona State Bar reviewed by The Post.
She made a formal complaint to the Arizona State Bar March 30 against the four attorneys involved which has been reviewed by The Post.
An Arizona State Bar spokesman confirmed the complaint and said there was an open charge against three of those attorneys that is currently in investigation.
The Post called the attorneys in question and received no response.
“My counsel informed [Unleashed’s legal team] I was in active labor and on bed-rest. He informed them that I was not likely to be able to attend two days of depositions, and that I … needed to avoid stress as I was struggling with the pain and the emotional toll,” the letter said.
They “persisted in demanding that I be produced [for depositions in person] without delay, and regardless of condition,” she alleged.
Cianci not only lost her arbitration case, but also her child.
Earlier this year, a leading trade publication, the Franchise Times, published critical stories about Unleashed with headlines like “Unleased Brands faces turmoil at 4 or 5 recently acquired concepts” and “Longtime leader at The Little Gym criticizes new owner Unleashed Brands in a song.”
In response, the company this spring attempted to orchestrate a mass boycott of the outlet, sources claim. Beth Ewen, a former senior editor at Franchise Times, who wrote several of the critical stories, pointed to an anonymous website, nofranchisetimes.com.
Ewen said she believes the site, which encouraged fellow franchisors to stop participating in the publication’s conferences or to advertise with them, was launched by Unleashed Brands employees.
“Seidler buying Unleashed is inexplicable to me because usually private equity investors run at the sniff of unhappy franchisees and litigation,” Ewen told The Post. “If I were the owner, I would be trying to get to the bottom of this.”
Unleashed CEO Michael Browning has said he did not launch the site, though he agrees with the message, according to a May 23 Franchise Times article.
“While it is disappointing that some are continuing to retread the same old false narratives from social media that have repeatedly been disproven, Unleashed Brands’ focus remains steadfastly on driving profitability to our franchisees and delivering quality experiences to our customers,” an Unleashed Brands spokeswoman told The Post.
Seidler did not return calls.
Seidler has been accused of nickel-and-diming other businesses his equity firm has scooped up.
He bought Rawlings sporting goods in 2018 and then in 2021 added Easton Sports. Rawlings then closed a Minnesota plant, eliminating 80 jobs and moving production of baseball bats to Easton’s China facility.
“I think [this] is bad for their image and bad for what people want to think about Major League Baseball, America’s pastime,” Sen. Tina Smith (D-Minn.) said at the time.
Other brands under Unleashed include Snapology, Class 101 College Planning, and XP League.
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