Defendants: ANY TEST FRANCHISING, INC., a Georgia corporation,
JOE NEELY, individually, KEN KAREGEANNES, individually, CLARISSA BRADSTOCK, individually, KATHY KAPALKA, individually, SEAN
NEELY, individually, and LAURA BRADBURY, Individually,

Allegations from the court docket:

1. In brief, the franchisor, Any Test Franchising, Inc. (“ATF” or the “Franchisor”) sold to Plaintiffs franchises based upon extensive, unsupported, unsubstantiated and misleading representations of gross revenues, expenses and profits that were presented in website disclosures, internet presentations, discovery day slideshows, and spreadsheets.

2. The Franchisor also falsely represented that the business system that it had was proven; that franchisees could operate it as absentee owners; and that the break-even point of sales was $8,000 a month. Plaintiffs purchased franchises on the basis of these representations and invested hundreds of thousands of dollars in building out and equipping their labs.

3. The Atlanta outlets that ATF referred to in fact had been started by, and run by, Dr. Perlow. Those locations had at least one critical ingredient that franchisees did not have a physician who not only could authorize lab tests, but also who could funnel business to those walk-in labs. ...While the disclosure states that the company’s affiliate is the “originator of the business concept,” there is no disclosure that a physician owned and operated them.

The real story about Any Lab Test Now:

After opening their stores, the Plaintiffs discovered, to their horror, that the representations that had been made by the Defendants were false and fraudulent. In particular:

• Any Lab test Now stores could not be operated by an absentee owner. Rather, they required the full time attention of a manager as well as a medical assistant.

• The break even figure of $8,000.00 per month was illusory, and in fact the more realistic figure was $25,600.00

• The revenues and profits disclosed in the financial information that was provided were grossly overstated and the expenses understated.

• Margins on tests were not remotely as great as ATF represented.

• At the time that Defendants were making these representations of average revenues for actual or projected stores, the actual franchisee results for 2008, on an average basis, were $52,512 per year or a little over a tenth of the average revenue projected on the spreadsheet.

• Additionally, ATF misrepresented expenses: Actual lab fees were approximately one hundred and fifty percent (150%) higher than shown in the spreadsheet that was given to
  prospective franchisees; salaries were much higher because ATF falsely represented that a store could be run by a single medical assistant when, in fact, it required a manager; and advertising, which was at least double ATF’s projections.

...

ATF knew that the representations it was making were false and misleading.
In fact, ATF specifically made those false and misleading representations to the Plaintiffs in order to induce them into entering into the franchise agreements, and it was successful in its efforts.