BUTTERFLY LIFE: Linda McBride, Former Franchise Owner

August 7, 2008 unhappyzee

Interview with former Butterfly Life franchise owner Linda McBride

Butterfly Life is a women-only 30-minute workout franchise that claims to be a superior version of Curves (since they use weight-based, not hydraulic, equipment). In December, 2005, experienced business owner Linda McBride purchased an existing Butterfly Life franchise location in Woodland, CA. After struggling to achieve profitability for 20 months, she closed the club in August, 2007. In an interview with UnhappyFranchisee.com in August, 2008, she shared with us the lessons she learned from her experience, and offers her hard-learned due diligence tips for those considering franchise ownership.

UF: Linda, thanks for sharing your story with those who are looking to start their own businesses, and for offering advice based on the hard lessons you’ve learned. Tell me, why did you decide you decide to become a Butterfly Life franchise owner? Describe the process you went through to determine which franchise to buy.
Linda: My husband & I had run the pest company since 1990. I wanted a business that was more “me” . I Belonged to Curves loved the concept. The owner of the one I belonged to had 3 franchises and was doing well at all of them averaging 500 members each. I researched many franchises but liked the concept of classes all day that Butterfly Life offered.

UF: How did you first learn about Butterfly Life?
Linda: I saw a banner ad online. I clicked on it and filled out a form online requesting more information. Janet Lossick contacted me by phone. I have my original notes and one of the first things I wrote is Mark Mastroff as director.

UF: How did you first hear about your specific franchise? What attracted you to the company?
Linda: I researched many franchises but liked the concept of classes all day that Butterfly Life offered. I also liked the fact that they used weight based equipment. The idea of helping women get healthy was what most appealed to me.

UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Linda: Janet invited me to meet her at a franchise closest to me. I visited the club

UF: You ended up purchasing an existing club?
Linda: Yes, I purchased a club that had been opened 12 months. I was the second owner of the club – the first claimed bankruptcy after 12 month. However, I thought with the marketing and support that was promised, this could be a successful club.

UF: What marketing and promotional guidance, programs & support were provided? Were they effective?

Linda: No. We were told to pay to have the postcards mailed out each month which cost $1500 to $1800/mo. The best return I ever received from this 8 new members.

I did not receive any of the Branding or advertising I was promised. All advertising was up to me. No other clubs were in my area. Mark Golob said “Don’t quote me on this but you aren’t going to want to miss the wave that is created when BFL is featured regularly on the Oprah timeslot and the rush of women clamoring to join your club. We will be offering the nutritional aspects on the show and your club is the exercise & motivation portion of the concept.”

Virtually nothing that was promised branding wise ever materialized.

UF: Was the ongoing support what you expected? Why or why not?
Linda: At first it seemed helpful but later it was simply the same old thing every time. When I complained about membership being a problem, I was told I was the only one having the problem. They didn’t want the franchisee’s talking to each other but eventually I did start calling other clubs only to find out my problems were their problems my complaints were their complaints.

UF: Were the positive aspects of your experience?
Linda: I had the greatest members on the planet. I had so many ladies getting healthier. It was a great place for the ladies to let their hair down, get exercise and have a good time!

UF: When did things start to go wrong?
Linda: Eventually no one at the corporate office answered the phone when you called. They just left calls go to voice mail. About half the time a call might be returned, the other half, nothing. District managers would tell me I was the only one having these problems

UF: What single factor contributed most to making you an unhappy franchisee?
Linda: Not receiving the support I was promised.
My District Managers (or D.M.) Janet was to spend full 8 hr days with me I was lucky to get her for 3-4 hrs. I got excuses – I had to go to corporate for a couple hrs first, I had to stop at another club first, I was behind an accident, traffic was at a stand still. Then after a visit she’d say I’ll put you together
A game plan and I can honestly say I never got one! The 2nd D.M. assigned to me did spend
more time and give me a game plan but it was too little too late.

UF: Have you tried to resolve your issues with the franchisor?
Linda: I told them I could not afford to stay open and I was told that if I closed I would be sued for monthly franchise fees and my landlord would sue me for the balance of my lease so I should stay open.

UF: What was the outcome?

Linda: As I mentioned, I was the second owner of the club – the first claimed bankruptcy after 12 month. I closed the doors after 20 months to save another person the pain. We’re currently in the process of filing for bankruptcy

UF: What would you like to see happen at this point?
Linda: I think BFL owes all franchisee’s restitution for the lies and misrepresentation.

UF: Do you think that the franchise concept itself is viable?
Linda: Possibly. Under different management at the top of corporate.

UF: What was the biggest mistake did you make?
Linda: Trusting Mark Golob and Tom Gergley was the biggest mistake I made. Looking back, I should have gotten all their “promises” in writing.

UF: How has your franchise investment decision affected your life?
Linda: I’m bankrupt and don’t see how I can ever recover the money before retirement.

UF: What advice would you give to prospective franchise owners?
Linda: Research research research. Call every franchisee you can find a phone number for. What questions should they ask? How far are you from profitability? Are you on on track for the goals you set? Are the people at corporate office helpful and supportive? Do they brand the name or is it up to you?

Visit similar businesses in your area or in a neighboring town ask them questions – offer to take them to lunch to talk.

UF: What warning signs should they look for?
Linda: Big promises in the presentation and meeting at corporate that aren’t in writing.

UF: Thanks very much for sharing your story and advice, Linda.

Try to understand! Franchisors are not required to disclose the unit performance statistics of their systems to new buyers or to current franchisees. This gives them the advantage of always keeping the unit owners in the dark as to how the system is doing in terms of the individual franchisees. They report only system sales to the IRS and as long as they are complient with the regulatory rules, they can perpeturate themselves for a long time before the system itself actually stands or fails. . The goal of the franchisor is to capture market share and if this means that franchisees are sacrificed in the process, this, apparently, is legal under current regulatory policy because it permits franchisors to perpetuate themselves and stimulates the economy and feeds the special interests; i.,e. the banks and lenders, the developers, the Landlords, the American Bar Association and local, state, and federal government revenues. The only party to fail in the arrangement is the franchisee whose personal assets and debt stand up the franchisor and feed the interests of the other parties involved in franchising.

If franchisors can continue to sell new franchises out the front door and discounted franchises out the back door, they can survive until the word gets around and they can’t continue to churn visibility in the economy. Remember that “discounted units” present an opportunity for the second generation franchisees who may have a chance of making it because of reduced overhead, i.e. reduced debt and lowered rent. Most systems contain a good share of second and third generation franchisees who got their businesses at a great discount over the original startup franchisees. Even if units fail, all of the time they are trying to get to break even, they are feeding the franchisor and the special interests and government revenues because the frachisor gets his profits in the form of royalties off of the gross sales of the franchisee and not off of the profits of the franchisee.

Talking with ex-franchisees is no substitute for hard financial performance statristics of the units that compose the system. Why should franchisors be allowed to sell their franchise “product” to the public without disclosing the MATERIAL unit performance statistics then in their possession to new buyers?
Try to understand that the Item 20 references are just cover for the franchisors that permits then NOT to make any representations within the actual contract or the FDD as to the success of the franchise. This protects franchisors in the courts from charges of fraud when in the actual boilerplate contract, the new buyer indicates that they haven’t been promised any success or profits from the franchisors.

While it is against the law for franchisors to make earnings claims outside of the actual contract/FDD, they make constructive earnings claims all through the sales process but can disclaim these earnings claims in the package of t he government FDD and the adhesory contract. After over 30 years of government regulation of franchising, only a small percentage of franchisors make “earnings claims” because the government has deemed “earnings claims” to be “optional” and not “material” to new buyers of franchises.

The FTC has been told by franchisee advocates, even the SBA Advocacy Committee, that the failure of the FTC Rule to require disclosure of unit historical financial statistics is a flaw in the Rule. We can only surmise that this “flaw” has not been corrected because a correction would mean that franchising might be inhibited to some extent and that the inhibition of franchising would be bad for the economy and thus not serve the “greater good.”

I am so sorry for your pain and I understand your fear! Try to spread the word to others so that the government will stop subsidizing franchisors and will regulate franchising in a manner that the true risk of the investment is disclosed to new buyers in a timely manner. If the government did this, only the truly viable franchisors would go on to stand in the economy and good faith buyers of franchises would invest in good faith KNOWING the risk of the investment up front before they signed the one-sided contracts that premeditate the success of the franchisor even when the franchisee fails. But, of course, there wouldn’t be as many franchisors out there. Franchising, as a model, does often overcome the very brutal statistics of startup of small businesses because the risk is bourn by the franchisee, the resourse, and even when the franchisee fails, the franchisor doesn’t if he can acquire the assets, or abet the acquisition of the assets of the failure for pennies on the dollar to continue in the servive of the franchisor.

You are young and you have young children and you will survive but try to think about how and why this happened to you and whether or not “franchising” as a business model should be growing in our economy and providing more of the job numbers for government to report to the citizenry. Franchise jobs are generally not good jobs with benefits or a future —-even for the owners of the franchises who are destroyed by their good faith purchase of a franchise that is sold as the answer to The American Dream and their solution to a good job with profits.

Protest to your elected officials and to the FTC ——-The Committee Members in the Congress know that this is going on but they protect their innocence by deferring to the special interests and the experts who get to define policy for the “public good.”

12 thoughts on “BUTTERFLY LIFE: Linda McBride, Former Franchise Owner”

Sadderbutwiser

August 7, 2008 at 4:15 pm

Another sad story. I’m in the same boat. We co-owned a Curves that experienced phenomenal success at first, becoming a franchise of the year in 2004. Then a relative and co-owner asked us to buy her out. Foolishly we agreed, thinking her wealthy father, who bought the club for her in 2002 and asked my wife to be her business partner and mentor, would support our decision.

Four years later, we’re facing bankruptcy and foreclosure. And we’ve got two children ages 6 and 3. I’m terrified we’ll never recover before retirement.
Carol Cross

August 7, 2008 at 7:21 pm

Try to understand! Franchisors are not required to disclose the unit performance statistics of their systems to new buyers or to current franchisees. This gives them the advantage of always keeping the unit owners in the dark as to how the system is doing in terms of the individual franchisees. They report only system sales to the IRS and as long as they are complient with the regulatory rules, they can perpeturate themselves for a long time before the system itself actually stands or fails. . The goal of the franchisor is to capture market share and if this means that franchisees are sacrificed in the process, this, apparently, is legal under current regulatory policy because it permits franchisors to perpetuate themselves and stimulates the economy and feeds the special interests; i.,e. the banks and lenders, the developers, the Landlords, the American Bar Association and local, state, and federal government revenues. The only party to fail in the arrangement is the franchisee whose personal assets and debt stand up the franchisor and feed the interests of the other parties involved in franchising.

If franchisors can continue to sell new franchises out the front door and discounted franchises out the back door, they can survive until the word gets around and they can’t continue to churn visibility in the economy. Remember that “discounted units” present an opportunity for the second generation franchisees who may have a chance of making it because of reduced overhead, i.e. reduced debt and lowered rent. Most systems contain a good share of second and third generation franchisees who got their businesses at a great discount over the original startup franchisees. Even if units fail, all of the time they are trying to get to break even, they are feeding the franchisor and the special interests and government revenues because the frachisor gets his profits in the form of royalties off of the gross sales of the franchisee and not off of the profits of the franchisee.

Talking with ex-franchisees is no substitute for hard financial performance statristics of the units that compose the system. Why should franchisors be allowed to sell their franchise “product” to the public without disclosing the MATERIAL unit performance statistics then in their possession to new buyers?
Try to understand that the Item 20 references are just cover for the franchisors that permits then NOT to make any representations within the actual contract or the FDD as to the success of the franchise. This protects franchisors in the courts from charges of fraud when in the actual boilerplate contract, the new buyer indicates that they haven’t been promised any success or profits from the franchisors.

While it is against the law for franchisors to make earnings claims outside of the actual contract/FDD, they make constructive earnings claims all through the sales process but can disclaim these earnings claims in the package of t he government FDD and the adhesory contract. After over 30 years of government regulation of franchising, only a small percentage of franchisors make “earnings claims” because the government has deemed “earnings claims” to be “optional” and not “material” to new buyers of franchises.

The FTC has been told by franchisee advocates, even the SBA Advocacy Committee, that the failure of the FTC Rule to require disclosure of unit historical financial statistics is a flaw in the Rule. We can only surmise that this “flaw” has not been corrected because a correction would mean that franchising might be inhibited to some extent and that the inhibition of franchising would be bad for the economy and thus not serve the “greater good.”

I am so sorry for your pain and I understand your fear! Try to spread the word to others so that the government will stop subsidizing franchisors and will regulate franchising in a manner that the true risk of the investment is disclosed to new buyers in a timely manner. If the government did this, only the truly viable franchisors would go on to stand in the economy and good faith buyers of franchises would invest in good faith KNOWING the risk of the investment up front before they signed the one-sided contracts that premeditate the success of the franchisor even when the franchisee fails. But, of course, there wouldn’t be as many franchisors out there. Franchising, as a model, does often overcome the very brutal statistics of startup of small businesses because the risk is bourn by the franchisee, the resourse, and even when the franchisee fails, the franchisor doesn’t if he can acquire the assets, or abet the acquisition of the assets of the failure for pennies on the dollar to continue in the servive of the franchisor.

You are young and you have young children and you will survive but try to think about how and why this happened to you and whether or not “franchising” as a business model should be growing in our economy and providing more of the job numbers for government to report to the citizenry. Franchise jobs are generally not good jobs with benefits or a future —-even for the owners of the franchises who are destroyed by their good faith purchase of a franchise that is sold as the answer to The American Dream and their solution to a good job with profits.

Protest to your elected officials and to the FTC ——-The Committee Members in the Congress know that this is going on but they protect their innocence by deferring to the special interests and the experts who get to define policy for the “public good.”
Stop the Butt Flies

August 21, 2008 at 2:18 pm

Linda-let’s all say “thank you” to Carol Cross. This woman has it going on!
HINT: Everybody who has ever owned a BFL franchise should be reading and coping her post and forwarding it to EVERY goverment office and agency in their state. Ok AAFD chapter members-lets start writing those letters, if you haven’t already. It is time to make our stories and feelings known all across America and beyond. And once again, thank you Sean!
Linda McBride

August 21, 2008 at 10:20 pm

Carol Cross – YOU ROCK!
We need you to Lobby for franchisees everywhere!

Thank you so much for your blog – I shall follow it to the letter.

Sincerely,
Linda McBride
Fool Me Once

August 28, 2008 at 4:04 pm

Carol Cross – You are awesome! What is your background? We have corresponded before through Franchisepick. I have sent stacks of communication to the FTC, the Ca. Dept. of Corporations, the Governors office, the US Attorney General, our state attorney general, our state assemblyman along with your blog you posted several months ago. You are an amazing, articulate writer. I want to thank you for taking the time to inform us of how and why the laws are enacted by the various government agencies………but not enforced! I, again, will copy your new blog and send it off to the powers that be.
Our voices may be a distant echo, but are getting louder each passing day. The bureaucrats won’t be able to turn a deaf ear much longer. We filed a second complaint with the DOC six months ago and have finally been adviswed that it has been passed on to “higher managerment” whatever that means! By the time they get around to “protecting the franchisee” we could all be broke. I was told three years ago when we filed our first complaint with the DOC, that they didn’t have the manpower to handle all complaints efficiently. We’re also waiting to go forward with arbitration….but guess what….the AAA (another big business corporation) who is handling our case decided in mid stream to make some changes we were unaware of. They say it was a glitch in the system! I think the AAA along with JAMS should be investigated regarding fair practice. Maybe that will be our next cause. You’re right….all these big business corporations must be working together because of one thing…………big money!!! If we the people don’t stand up and bombard these bureaucrats with our outrage, we will have no one to thank but ourselves. EVERYONE MUST GET OFF THEIR BUTTS AND LET THE LEGISLATORS KNOW THAT WE WILL NEVER STOP PROTESTING UNTIL THEY ENFORCE THE LAWS THEY THEMSELVES ENACTED AND WRITE NEW LAWS TO PROTECT THE FRANCHISEE.
And thank you Sean……for always being supportive and looking out for our best interests. We need more like you!
This has gotta stop!!

September 1, 2008 at 6:29 pm

I’ve compiled a list of government agencies for
you to email your complaints to:

CA Dept of Corporations (DOC)
http://www.corp.ca.gov/about/complaint.asp

Governor Schwarzenegger
http://gov.ca.gov/interact

CA Attorney General
http://ag.ca.gov/contact/complaint_form.php?cmplt=CL

US Attorney General
http://www.usdoj.gov/contact-us.html

List of CA assemblyman
http://www.assembly.ca.gov/acs/acsframeset7text.htm

Federal Trade Commission
https://www.ftccomplaintassistant.gov/FTC_Wizard.aspx?Lang=en

Better Business Bureau (No Complaints Currently Listed)
https://odr.bbb.org/odrweb/public/complaintlink.aspx
Name: Butterfly Life
Phone: (800) 288-8373
Fax: (925) 743-8820
Address: 2440 San Ramon Valley Blvd Ste 155
San Ramon, CA 94583-1602
Principal: Mark Golob, CEO
· http://www.butterflylife.com

If you need an example of a letter already sent
to these agencies about BFL ask Sean to give your email one of our Trustees & she’ll email you one. Email Sean: unhappyfranchisee[at]gmail.com

Lets make as much noise as possible
Leanne

September 16, 2008 at 9:02 pm

I was wondering if anyone could help me out. I had joined a Butterfly Life in Minnesota this June. Just recently there was a sign posted on the door that the owner was having health issues and was going to be closed for a few days. Now, today I pull up to work out and the door is locked, desk and furnishings gone! The excerise equipment was all that was left. I called my bank and cancelled my automatic withdrawal payments as soon as I got home. Will that be enough? Should I be worried about the owner having my account info? I have never had this problem before. The only phone number I was given was the local fitness center and that is disconnected. Any advice I would appreciate it!
CAH

September 17, 2008 at 7:22 pm

Don’t Worry I know here personally also a fellow ex-club owner you have nothing to fear. She did have health issues, but this franchise has cause much more ruin. Sorry you were not informed, she tried to let everyone know.
CRAZY EXPECTATIONS

September 18, 2008 at 1:00 am

My guess is you should be fine – Sadly another club bites the dust! Say a prayer for her – it could be “Final moment ” on the following site:

http://www.franchisepick.com/is-butterfly-life-a-great-fitness-franchise/

She wrote:
Final Moment
Sep 12, 2008 at 2:07 pm

Another one bites the dust. And as I sit in my club with my world crumbling I wonder how many others have sat in my seat. 80-100 I have lost all and still continue to believe that I should have been able to do something about it. Just try harder, do this, do that. Please pray for me and my family. We fell for the — Martha Stewart, TV Commercials, Book in every BB and Barnes and Noble…. Pitch !! Trust me this franchise will blow up and you want to be part of it… Yeah right !! I have read this blog on and off and continued to push to get more members, ect. At first it was difficult for me to understand why someone would take there life. I can function no longer. God Bless everyone who has gone before me. I pray that you all get closure to your law suite. Time for me to pick up my pieces. I should have done my due diligance. Fooled me once, fooled me twice. Oh yeah I can even remember being told – dont have the lawyer go in depth on the franchise aggreement, it is a standard aggreement. I’ve lost everything and it is my fault.
Vice Versa

September 18, 2008 at 10:59 am

Leanne: Sorry this has happened. There are a lot of us ex-franchisees out here who have lost so much due to the misrepresentation and fraudulent inducement of those at Butterfly Life. Go to http://www.butterflylife.com and call the main number they have listed. I would be surprised to hear what corporate has to say. I’m sure they’ll blame it on the owner of the club saying she didn’t know how to run a business. Actually, they probably won’t be answering any phone calls. Let us know the outcome. Again, we’re all truly sorry.
Wondering

September 18, 2008 at 12:18 pm

Leanne – in this particular case, my understanding is that the owner has a close family member who is terminally ill and she choose to close the club to be with him. I believe she did try to inform all of her members.
CAH

September 18, 2008 at 7:45 pm

Leanne: Wondering is talking about another doomed Minnesota Club…. We went from 5 to 1 in less than a year. We did the best we could with what we had… A great concept and nobody there to bring it to life. I know you probably enjoyed yourself there. I know she was a great motivator before it got the best of her. I myself suffered health issues from this, ending up in the hospital for longer than I would have wanted to. And she still choose to move forward and open her club. Hoping to be able to be successful and change womens lives. But that is not your concern or do you need to listen to the complaining about how we were wronged and corporate. Just know that she loved you guys and that is the hardest part to let go, our women…. The people who touched us more than you know! We give thanks to all you believed in us!