Originally published: March 15, 2009
Archived copy reinstated from March 27, 2009
Several comments were posted yesterday regarding the beyond-troubled fitness franchise Butterfly Life. Both spelled further trouble for the Butterfly Life franchisees struggling for survival.
The first was from the attorney representing BFI against the franchisees:
Update on the franchisee class action arbitration: The franchisees’ claims are being terminated and dismissed because they failed to pay their allocated share of the arbitration fees. Several motions were pending against the franchisees when the arbitration proceedings were terminated.
Scott Hammel
Attorney for Butterfly Fitness, Inc.
On the Butterfly Life and ShapeXpress discussion pages, Slim Buster confirmed Hammel’s statement, and added that Butterfly Life has been acquired by Diversified Health & Fitness… a controversial company that buys up distressed fitness franchise chains:
Heard that BFL’s check bounced and the AAA dismissed the case. Also, heard that BFL was sold to the franchise equivalent of ambulance chasers!!!! Should we listen to the sirens?????
…all you [Diversified] are is a “legal” collection agency taking advantage of failing franchisees. Now you’ve obtained Butterfly Life and I’m sure you’ll be coming after the 75+ franchisees who got smart and decided to break away from Mark Golob and gang.
WHAT IS GOING ON WITH BUTTERFLY LIFE?
DOES ANYONE HAVE EXPERIENCE WITH DIVERSIFIED? PLEASE SHARE INSIGHTS BELOW.
Written by ADMIN · Filed Under 30 Minute Fitness, ALL POSTS, Butterfly Life
15 Responses to “BUTTERFLY LIFE: Franchisees Lose Arbitration?”
You are saying that Butterfly Fitness, Inc.’s (the franchisor’s) check bounced, so the franchisees, in turn, decided to abandon their bid for arbitration?
Where does this leave the franchisees? Has your AAFD chapter disbanded?
How many clubs are still operating?
Thanks for helping to clear up this confusion. Here are some of the rumors perhaps you (or others) can address:
> The check that Butterfly Fitness, Inc. used to pay its arbitration fees bounced
> Area franchise reps filed a civil suit against Butterfly Fitness, Inc. about a month ago. Franchisees see this and other suits as being a more expeditious use of resources than arbitration.
Has your firm or BFI issued a press release regarding any of these developments?
Thanks for your participation
I haven’t followed the whole arbitration thing too closely for one simple reason, I didn’t have any money left o be apart of it. BFI mislead us and pursued us to become a franchisee. When after six weeks we could not get a small business loan, Taylor Golob call us and suggested that we tap our retirement savings and the equity in our home to buy the franchise. Oh how I wish he had never called. To top things off, the landlord had offered us a three year lease, but BFI stepped in to help us negotiate and low and behold it became a five year lease. So when our fanchised failed after 18 months because virtually all the branding promises BFI made it broke, the landlord still expected us to cover the remaining 42 months of rent, instead of 18 months if the lease had been left the way it was. We filed for bankruptcy, having lost all of our meager cash savings, our retirement savings and the equity in our home, and still we are only scraping by and in danger of losing our home.
I would really like to see someone put these guys in financial traction like they’ve put us, but I too broke to do much about it. Maybe that was their plan all along. As we included BFI in the bankruptcy I believe the Federal Bankruptcy Laws trump CA Arbitration statues. So I don’t know why they’ve continued to include us in their arbitration proceeding or what they hope to gain. Perhaps someone here can explain it to me. I guess I need to check with the bankruptcy attorney to see if this is not illegal harassment.
PMG – I would check with your attorney too. I have been looking into brankruptcy too and have been told that the calls and demands for payment stopped once you filed.
I think the whole Butterfly Life saga has a more important issue to a consider, and frankly, it is an issue that lawyers like yourself are adept at stepping around. I am a former BFL franchise owner. I was sold on this business opportunity by many promises of ongoing support, of new ideas, expertise, etc. None of those promises, virtually none, were kept. Your response would certainly be that those promises were not in the final document which I signed, and therefore are not legally binding. But based upon a certain trust that I felt at the time, as did hundreds of others, I lost a lot of money and a lot of my life works. I feel blessed. Many others lost all of their money and their financial futures, and one case, the whole situation contributed to the loss of a life.
Does BFL have a moral obligation to live up to their words? Do they have a responsibility to deliver on promises? Do they have a human responsibility to inform potential franchisees on the true state of their operation?
And what are your moral obligations in this whole matter? Do you have a responsibility to do research into the claims made by BFL? Or is it simply your job to provide legal services to those who have the most money?
I guess I don’t really expect an answer, but it would be nice if you and your clients would look at and realize the devastation their sales tactics have caused.
I’m guessing that ambulance chasing has slowed quite a bit since you are blogging with we lowly franchisees! Or did Mark and Tom leave you out in the cold too and now you are scrounging for your fee.
For a lawyer you use contextually wrong dialog or maybe its purpose is incendiary. How can an individual or a group LOSE a case, a fight , a game that has never taken place? Non payment could very well have been part of a strategy and that efforts are now moving in a different direction. It must be the same strategy your clients utilized by bouncing their check in the mass arbitration filed against 70 or so franchisees. Which by its group nature was directly in violation of their own franchise agreement. Funny you fail to mention that. As to the filings group or otherwise, we all could have helped you with names, addrsses etc. as that was an abomination, but reflective of the BFL record keeping. If they would just read their mail they would find out so much about their former franchise system. It could have saved them time and money.
You went through all that education couldn’t you use it for the positve. It must be very depressing constantly harrassing school districts and bankrupt franchisees. Doesn’t yield alot of money either.
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