Naked Licensing: What the Lagree Dispute Reveals About Brand Risk and Consumer Trust
Date: 21/10/2026
Since its founding in 2001, Lagree Fitness transformed from a small studio in Sebastian Lagree’s Los Angeles apartment to a global fitness trend. Today, Lagree licenses its specialised low-impact, high-intensity, full-body muscular endurance workout method and custom reformer-style exercise machines to more than 600 studios worldwide.
Operating in three different market segments (commercial studio equipment, boutique studio licensing, and home-based fitness technology), Lagree Fitness holds over 150 patents. Two popular products are the Lagree Method and patented Megaformer, a specialised ‘Pilates-style’ piece of equipment that Lagree developed. With the Lagree name, these elements form the basis of what Lagree licences to boutique fitness studios.
One such studio is Studio Physique, a privately owned fitness studio in St. Petersburg, Florida. When it opened in 2015, Studio Physique entered into a licensing agreement with Lagree Fitness. The Agreement permits Studio Physique to offer Lagree classes on the condition that it uses the Lagree Megaformer. The agreement treated any use of a non-Lagree machine as a breach of contract.
In July 2025, Studio Physique replaced its Megaformers with non-affiliated reformer-style machines. It claims the change was necessary for safety, and to prevent the studio from having to shut down. Studio Physique personnel claim to have emailed and called Lagree many times asking for help to find the rare machine pieces necessary to fix the Megaformers, but received insufficient support, which ultimately led to the purchase of the non-affiliated machines.
After learning of the change, Lagree’s CEO visited Studio Physique unannounced, stopping by for a total of two minutes and seventeen seconds, photographing the machines and touching two of them before leaving. On 1 October 2025, Lagree attempted to end the contract, claiming that Studio Physique was in breach of contract for having purchased non-affiliated equipment and thus Studio Physique was unlawfully using the Lagree trademark rights under the US Lanham Act of 1946. Lagree Fitness subsequently filed for a preliminary injunction, asking the US District Court to force Studio Physique to cease the use of their trademark, ‘LAGREE FITNESS’, immediately. In Lagree Fitness, Inc. v. Studio Physique, LLC (2026), the Court denied Lagree’s injunction despite Studio Physique having bought and used non-Lagree equipment – behaviour that the licence agreement explicitly said was a violation of the licence contract. What was behind this decision?
The Lanham Act of 1946 governs much of trademark law in the United States. The US Senate Report that accompanied the passage of the law in 1946 provides one purpose of a trademark is ‘to protect the public so it may be confident that, in purchasing a product bearing a particular trade-mark which it favourably knows, it will get the product which it asks for and wants to get’. It later says the protection of trademarks is the law’s recognition of the ‘psychological function of symbols’. Together, these statements establish that trademark protection serves not only to distinguish goods and services, but also to preserve the trust and expectations that consumers associate with a particular name or symbol.
The other purpose of the US Federal trademark registration, the Senate Report notes, is to protect an owner against other companies’ use of similar trademarked names that could confuse consumers or weaken owners’ brands. However, under US law, a trademark owner may unintentionally abandon its trademark if it provides insufficient control over its trademark. If a court determines that a trademark owner has engaged in ‘naked licensing’, the owner can lose the right to enforce the trademark.
In the Lagree case, the Court adopted another decisions’ definition of naked licensing as occurring when ‘the licensor fails to exercise adequate quality control over the licensee’. In order to prevent naked licensing, it is common for trademark owners to invoke a safeguard to avoid abandoning their licence through naked licensing by including quality-control provisions in licence agreements.
Although Lagree did not include this in the contract, it did require Studio Physique to uphold Lagree’s ‘good name’ – but no more specifics in terms of oversight. In addition, over the decade of their relationship, a Lagree representative visited Studio Physique only four times, one for the grand opening and three for training programs with one seemingly including an inspection. Lagree also did not review Studio Physique’s branding content, maintenance reports, or audits, noted the Court.
In short, the doctrine of ‘naked licensing’ requires trademark owners to maintain an adequate level of quality control, though it is not necessarily a guarantee of consistent quality and experience. When an owner fails to control how a licensee uses its mark, the mark may stop reflecting what customers actually receive (it could be superior, inferior or just different) and the owner may no longer be entitled to the benefits of the trademark. This is what Studio Physique argued in the case and the Court agreed that this was likely correct.
‘Boutique fitness’ is a $37 billion USD global industry. As described in a Research and Markets Report, ‘boutique gym studios offer a personalized and intimate fitness experience, tailored to individual needs and preferences. Unlike traditional gyms, these studios focus on specialized training programs, often led by expert trainers in small group settings’. Customers are paying for ‘an experience’, not just a workout. The industry operates through franchising and licensing, the distinction being that licensing allows the gym owner to use equipment and a method but with the discretion to operate the gym as the owner wants; franchising will provide much more direct guidance to the studio owner or manager. CrossFit is another licensing-based brand along with Lagree, while Orangetheory is franchised. This distinction is significant for brands like Lagree, whose reputations depend on delivering a consistent customer experience across independently operated studios, despite exercising less operational control than traditional franchisors.
Trademark law requires brand owners to maintain adequate oversight of their licensees to preserve the trademark’s role in protecting consumers. If the licensing company and brand owner does not carry out sufficient oversight, it undermines the brand and misleads consumers. The Court, relying on the federal appeals court’s decision in Barcamerica International USA Trust v. Tyfield Importers (2002), stating that naked licensing ‘is inherently deceptive’. As the boutique fitness industry continues its meteoric growth, this decision provides a valuable roadmap to minimise the chances of the brand owners losing their rights at the core of their business – their name and methods.
A single Lagree or other ‘boutique fitness’ class can easily cost between $30 and $50 USD. Customers purchase a particular type of instruction, equipment, and overall experience, reflecting the ‘psychological’ function of a trademark described in the US Senate Report. Unconsciously, the consumer may assume safety both in the form of properly functioning machines and trained instructors. This is important because it highlights how trademarks can carry expectations of quality and consistency, and inadequate licensing oversight can undermine consumer trust and brand loyalty.
Although Lagree’s limited oversight of Studio Physique led the Court to conclude there had been naked licensing, the case raises broader questions about whether trademark law adequately protects consumers’ purchasing decisions and safety. Short of naked licensing which seems to require both poor contract drafting and neglect by the trademark owner, the brand can persist to generate revenues for both licensor and licensee. The same problem for consumers likely arises under European Union law, too, while any loss of rights by the owners would depend on other legal doctrine outside of trademark law as there is not the concept of ‘naked licensing’ in the EU.
In this case, even if a Megaformer frame could likely last for many years, the Megaformer consists of tension springs, carriage wheels, bearing, cables, straps and bungees, all of which likely have a much shorter lifespan in commercial use. Though the Court did not provide for how long Studio Physique experienced problems with its Megaformers and could not get parts from Lagree, it would appear from the case that for some period of time, customers at Studio Physique were using equipment that was in substandard condition. For all this time, the ‘quality control’ purpose of trademark law was meaningless. In addition, for at least two months, patrons of Studio Physique seemed to have used ‘reformer-style’ machines purchased online for less than 10% of the cost of a Megaformer, despite paying for a Lagree workout. During this time, trademark law arguably failed in its fundamental purpose, allowing the Lagree name to represent an experience that customers were not experiencing.
Zumba, Orangetheory, CorePower, TRIB 3, Club Pilates and many others have developed ingenious and unique ways to engage the busy, wellness-conscious person in meaningful ways to improve their health, mind and body. Trademark law has enabled many more people around the world to reap the benefits of healthy living, while also appropriately enabling the developers of these methods to grow their business and increase their revenues. Lagree Fitness vs. Studio Physique highlights to these business owners – particularly when licensing, though no doubt when franchising, too – the need to remain true to their founding values and to ensure that the quality the founders no doubt brought to their first studios spreads as the brand extends around the globe. At the same time, the case highlights that, short of extreme neglect, consumer remedies under trademark law may not have kept pace with the massive scale and range of businesses and ‘methods’ that are now part of what people are buying in a boutique fitness branded experience. Ultimately, the lasting value of licence-based fitness brands does not only depend on expanding reach, but importantly on preserving the quality and consumer trust that made the brand successful in the first place.
