CURVES: Can Indie Clubs Thrive Where Curves Failed?
Rande LaDue, distributor of PACE hydraulic exercise equipment, is seeing a fitness industry trend: independent express fitness clubs opening in markets and locations that could not sustain a Curves franchise.
PACE sells hydraulic exercise equipment like the machines used in Curves franchise clubs*. In fact, the first Curves club in Harlingen, TX originally used PACE equipment, according to LaDue. Ironically, PACE is finding a new niche where Curves clubs are struggling.
In an interview posted on FranBest.com, (see PACE Express Circuit Training Equipment) LaDue states:
One of our biggest areas of growth right now is selling into markets where a Curves club has just gone out of business. There may have been 50-60 loyal members who loved working out but have been left high and dry; maybe this was not enough members to cover the high franchise fees, but usually more than enough to cover basic expenses.
LaDue gives the example of Kimberly Ellingsen, a former Curves member who opened her independent New Image Fitness when the local Curves club closed. According to LaDue, Ellingsen “had over 50 former Curves members signed up before she opened her PACE club, then recently had her grand opening and signed up dozens of new people.”
[Pictured, above right: Rande LaDue, Owner, Hydraulic Fitness Products. For information on PACE exercise equipment, email PaceEquipment@gmail.com]
Independent clubs pay no franchise fees or royalties.
How could an independent club – with no established branding or name recognition – survive where a powerhouse like Curves could not?
The most obvious reason is cost. Independent clubs cost less to start, and less to operate. In some low-volume locations, that cost difference could be the difference between success and failure.
According to the Curves website, the cost of a Curves franchise is $24,900 (new equipment) or $19,900 (refurbished equipment) with delivery of the Curves equipment ranging from $3,000- $5,000. A PACE new equipment package is well under $15,000, with training included (normally a $1000 option).
According to Curves, “Curves charges a monthly franchise royalty and a monthly advertising royalty based on a percentage of gross revenues….The franchise royalty is 5% of gross revenues, with $795 being the maximum monthly payment by a franchisee and $195 being the minimum. The advertising royalty is 3% of gross revenues, with $395 being the maximum monthly payment by a franchisee and $95 being the minimum.”
Independent clubs pay no franchise or advertising royalties, as opposed to yearly costs ranging from $3480 to $14,280 Curves owners must pay. Additionally, Curves owners have other costs, including mandatory purchases and program participation costs.
Independent clubs have freedom to experiment.
Franchises like Curves are based on conformity and compliance; they build their brand by enforcing consistent standards throughout their international network of clubs. Curves franchise owners do not have the freedom to, say, add a line of retail products on their own, or to promote their club as co-ed. In smaller, extra-competitive or nuanced markets, finding new and creative ways to add revenue or grow membership may require out-of-the-box initiatives that would not be approved by a national franchise.
In recent discussions on UnhappyFranchisee.com, some Curves owners have complained that they have trouble retaining members who plateau and/or get bored with the non-adjustable Curves hydraulic equipment, yet they are prohibited from going to weight-based machines or even the adjustable hydraulic machines offered by PACE.
Curves franchises face stiffer penalties for failure.
The penalties for failure also seem to be greater for Curves owners than independent operators. Many comments by Curves owners here (see the comments on Robert Lay’s Story) cite the fact that they are pressured to pay closing or “failure” fees if they cannot remain open for the full term of their agreement, and that they are pursued for “future royalties” despite having done their best to keep their Curves clubs open.
Independents stake their claims.
There’s no doubt that Curves pioneered the concept of circuit-based express fitness clubs. However, many, many franchise clubs are fighting for their survival in oversaturated or underpopulated markets. Where these clubs cannot survive, independent clubs – unburdened by franchise fees, royalties and corporate mandates – may be able to thrive. If they do, the independent owners and suppliers like PACE will have Curves to thank.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
* According to LaDue, PACE equipment differs from the Curves machines in that PACE equipment can be adjusted to increase or decrease resistance.
I get that the idea here is to blame everything on the big bad franchisors, but you are misleading anyone looking to get into business. From the business owners (not just Curves) that we’ve worked with, it is rent that is the number one issue for them. They signed leases for spaces that, when the economy tanked, they could no longer afford (and many should never have been in in the first place).
We’ve seen clubs like this in spaces 2000-3000 sq. ft. when they could, and should, be in spaces half or less than half that size – I’ve seen Curves and similar clubs in spaces as small as 1000 sq. ft. It’s not like they have a pool or showers! If you’ve only got a few hundred clients you don’t need that kind of giant (almost completely open) space. And rents today can be gotten down to <$1/sq. ft. outside a “city center” (and many city center strip malls and properties are doing deals that just 6 months ago would have gotten you laughed out the door!).
Do the math. On the low side, these clubs have to pay just $290 a month in franchise fees – and if they are failing that would seem to me what they'd be paying. That relatively small amount is not THE issue. The thousands and thousands in EXTRA rent each month is THE problem. Most are OVERPAYING by $3,000, $4,000, $5,000 or MORE each month in rent, no sir, the franchise fees aren’t even close to the number one reason a business like this is failing.
looking at JUST rent and franchise obligations:
“Old” business in way too expensive or too large a location: $290 – $1190 franchise fees + $5000+++ rent = $5290 – $6190 /month (and then some)
“New” business in a reasonable location of 1000-1500 sq. ft.: $0 franchise fees + $1000 – $2500 = $1000 – $2500
The $2790 to $5190 potential difference there is NOT coming from not paying franchise fees.
Telling people that so long as they don’t have that nasty franchise fee to worry about they will do fine is absurd. The reason these “new” businesses are able to make it when the previous businesses failed is that they are getting into leases with far less a monthly liability. Period. And if a new business owner does not take advantage of that ability to get a smaller, cheaper place, they are sure to fail too.
Nice advatorial for Pace though.
We were paying $3,200 a month in rent for one club and $2,700 at the other, down from $5,000 when we turned our double-sized club into a single after the second club opened, That’s nearly $71K a year in rent alone.
How we WISH that franchise fees were our biggest concern!
Mike:
Thanks for your comment. You raise some good issues, but I think you’re missing the big picture.
When people buy franchises, they give up more than franchise fees, royalties & advertising contributions. They rely on what the franchisor tells them about the concept, acceptable locations, what rents they can support, etc. They give up their ability to adapt and change the business concept if it’s not working, to expand what they sell and how they sell it, to set their own hours, call their own shots, etc.
In giving up their autonomy, franchisees make a huge leap of faith that the franchisor will keep franchisee success as their priority, that the concept is sound and will evolve as necessary, that the franchisor will provide the benefit of their experience and a “proven system” to eliminate the start-up mistakes they would make as independents – including paying too much for rent, leasing too much space, going into the wrong location.
The Curves website says “We assume that franchisees have no experience or knowledge in the operation of a fitness and weight loss facility.” A widespread problem of high rents and oversized spaces did not happen in a vacuum… it sprung from a program that claimed to give expert guidance to people with no industry or business experience. You can’t say “no experience necessary” one minute and “you shoulda known better” the next.
You make the claim “The thousands and thousands in EXTRA rent each month is THE problem. Most are OVERPAYING by $3,000, $4,000, $5,000 or MORE each month in rent…”
Is CI addressing this problem? Are they actively assisting franchisees in getting rent relief, renegotiating rents and terms, etc.? If, as you say, the independents are coming in with much better terms, surely CI can address this problem before the clubs close… and they are forced to resell the territory to the next person.
Rent is also relative to top line sales. High rent percentages are a sign that member recruitment and retention strategies aren’t working.
The Curves website states “With a Curves franchise, you’ll be in business for yourself, not by yourself.”
I think that whether that statement is true, in practice, is what it comes down to. Many of the commenters here express that they feel they are indeed on their own and in business BY themselves anyway… that they are burdened with the downsides of both a franchise AND being on their own, without the upsides of either.
Findlay, OH club closed without notice. The landlord got word by fax. Doesn’t sound like the franchisee had been trying to get rent reduction or help:
http://www.thecourier.com/Issues/2010/Jan/06/ar_news_010610_story4.asp?d=010610_story4,2010,Jan,06&c=n
I own a Curves in a small town of 6,000. I am the second owner and barely bringing in $3,000 a month. My rent is only $750.00, so unlike some of the contributors to this site – the nearly $300.00 franchise fee/advertising fee, the 3
music licenses, and a fairly large payment to buy the club – are a big deal. And I have to pay for local advertising, as no one ever joins as a result of CI advertising.
I don’t feel that Curves International is “there” for us. I have to work all of the hours myself as I can not afford the payroll and taxes involved, I’m supposed to be out on the circuit with the ladies, check eligibility for each of the members receiving their membership through Medicare Supplement Insurance every month and record and report their workouts to Curves before the 5th of every month (or I don’t get the payment for that member 2 months later), report my income to them by the 7th of every month ( or they will charge you the maximum royalty and advertising fees), hit the streets to “sell” memberships, keep my own books (as I obviously can’t afford a bookkeeper), do all of the housekeeping chores, etc., etc. and go to trainings to do things the “Curves Way”.
I obviously don’t make a cent, but I just want women to have a place to go that they like to be – to take care of themselves, but I just don’t see how I can hold on much longer. The $300.00 that they take out may be what saves me from going down the drain – I don’t know what I’m going to do…
Worn To A Frazzle in Washington
Admin,
“…maybe this was not enough members to cover the high franchise fees, but usually more than enough to cover basic expenses.”
“How could an independent club – with no established branding or name recognition – survive where a powerhouse like Curves could not?
The most obvious reason is cost. Independent clubs cost less to start, and less to operate. In some low-volume locations, that cost difference could be the difference between success and failure.”
While your statements above are partially correct they don’t come close to telling the whole story. The “…high franchise fees…” are relatively low compared to other businesses and are “…usually…” a very small part of the “…basic expenses.”. The primary premise of your article was that not paying the franchisor’s monthly fees ad infinitum is THE operating cost that makes or breaks the clubs. That is simply not true. You also stated that they have “…mandatory purchases and program participation costs.” I looked into this as I thought it was something I was unaware of. It’s not, the programs (like the Insurance/Medicare programs that someone talks about above) are ALL completely voluntary and any associated fees are only taken from incoming payments. i.e. if no money comes in from the program to your club, no money goes out. Same thing for the “mandatory purchases”. No one has to buy anything from Curves. And many of the things (clothing, supplement, artwork, etc…) that they do buy from their franchisor is stuff an independent club would buy anyhow. They just buy it from someone else. The reason I point this out is that it’s another expense that is NOT eliminated by not being part of a franchise. So as I said, the ONLY thing eliminated is the $290-$1190 in franchise fees which for many most is a single digit percentage of their overall operating expenses. BTW, to actually be paying the maximum of $1190 a month, a club would have to be grossing $14,875+ a month. So it’s hardly THE expense that determines “success [or] failure”.
Regarding the overpaying of rent, you asked: “Is CI addressing this problem? Are they actively assisting franchisees in getting rent relief, renegotiating rents and terms, etc.?”
The first thing I ask any business owner is if they’ve tried to get a rent reduction. I can tell you that many of the Curves owners I’ve worked with have said that it was in fact suggested to them by Curves – but that they (the owner) didn’t really think it was possible and never tried. Actually, that is the mistaken belief of most business owners – that they can’t renegotiate. However, do you really believe that is it the job of the franchisor to renegotiate the leases for all its franchises? That is simply not practical.
“They rely on what the franchisor tells them about the concept, acceptable locations, what rents they can support, etc.”
My understanding is that Curves still does make recommendations on this based on what 150(?) members brings in and says to keep your expenses below that. I’m not sure if that is the exact amount or current as it’s been quite awhile since someone showed me the calculation sheet they got from Curves. As I’m on the “keep you open” side of things instead of the “get you opened”, I can’t really state for certain if this is still what happens. But I know that it certainly used to.
But I still work with people who needed 350-400 and more members just to break even. You say that is all Curves fault because their website says ““We assume that franchisees have no experience or knowledge in the operation of a fitness and weight loss facility.” and believe that that basically means they are saying “No experience necessary”. I say “No experience necessary” doesn’t mean “Don’t do ANY research.”.
But who is to blame is a whole different debate, one that I’m not interested in getting into on an internet blog. My issue was and is that you are misleading people into thinking that so long as they open an independent facility and are not liable for the $290 to $1190 in franchise fees that they will succeed where others failed. No mention of ANY other operating expenses, the ones that make up the vast majority of your operating expenses, is mentioned. I believe that that is a dangerous position to hold.
Don’t listen to this guy !
The Franchise fees are not the biggest issue here.
The big expenses are: rent, payroll, gym and office expenses, advertising and promotion over and above the Curves amounts.
And there are lots of other expenses that inexperienced owners do not anticipate like Socan, hydro, bank charges, insurance, Curves give away product, accountants fees, telephone , internet, and so on that add up to thousands per year.
You will be proven VERY wrong. if you think that you can be sucessful at one of these operations as a one-woman owner operator. This is a complex business requiring many skill sets from fitness and diet expertise, to well developed business systems, IT, people management and sales and marketing.
During the 30-minute workout “bubble” , gobs of easy cash flow was the norm.
Its now almost 10 years since the height of that bubble.
Take a ride on some hot new trend, and when it looks like the peak is never going to end, SELL IT, and move on.
businessguy writes: The big expenses are: rent, payroll, gym and office expenses, advertising and promotion over and above the Curves amounts.
And there are lots of other expenses that inexperienced owners do not anticipate like Socan, hydro, bank charges, insurance, Curves give away product, accountants fees, telephone , internet, and so on that add up to thousands per year.
You will be proven VERY wrong. if you think that you can be sucessful at one of these operations as a one-woman owner operator…
Curves disagrees. Their website claims this is a low overhead business that can be run by an owner and one PT “young person or student.” From their website:
Profit with Low Overhead
A Curves franchise can operate in a space as small as 1,000 square feet which keeps rent and other operating costs as low as possible. Payroll expenses are minimal when a franchise owner-operator hires a young person or student to work Monday through Friday evenings. Other costs include insurance, utilities, and small miscellaneous expenses.
businessguy writes: This is a complex business requiring many skill sets from fitness and diet expertise, to well developed business systems, IT, people management and sales and marketing.
Curves website: We assume that franchisees have no experience or knowledge in the operation of a fitness and weight loss facility.
Are you saying that Curves is setting unrealistic expectations in terms of investment and expertise required? That franchisees go into this business unprepared for the harsh realities that await them?
You people stuck on the franchise fees really are missing the point. If the members aren’t happy with results or want more we can’t do it because we are limited to conformity. I live in the south were it is too hot to walk outside, or it rains to much like today. My women have just signed a petition of over 23 member in my 112 membership role. It states that if I do not get three treadmills then they will move on to the other woman only gym in our town that has this stuff. This would be a 2,000 investment for all the treadmills. I am sorry what am I to do close? I am having the worst Jan. sales that I have ever had. I will not be able to get enough new members quick enough to cover the losses. I know doing this will violate my franchise, but not doing this will close my club. I can’t make it now, and to lose $782 a month is enough to close me down instantaneously. So my point is I am limited and yes a small amount can kill a club.
Next Step:
CI prohibits clubs from having treadmills?
Why do they say adding treadmills is prohibited?
I will say this, my problem is my purchase price for the club. The resale was over priced. I paid for a membership level of 400 members and had only 160. So my monthly note is more of a problem then rent, but that is another topic. The fees, promotions, and just having only one supplier for products is my biggest unnecessary expense. Not including the royalties fees. Excessive fees like mytrak 99 a month along with required internet access for the system, I paid 8,000 for the mytrak system and now a monthly charge. I read many stats that state the American population has been duped to think franchisees are the better way to go. Here is a quote on how successful franchises really are:
First for cost
The SBA found:
“There is also potentially more exposure per loan on franchise loans. In FY 2000, the average (mean) franchise loan origination was 40% larger than that of the average non-franchise loan. In FY 1991, the comparable figure was only 1%.” (pg iii)”
Just for clarity that means franchisees pay 40% more for start up cost.
Now for the failure rate
“Despite the popular view that franchisees are much more successful than non-franchisees, SBA’s experience with defaulted loans does not support this.”(pg. iii)
The rates of defaulted franchise loans are higher then for independents.
One last note is the failure rate of the franchisor
Although not looking into franchisee success rates as the other studies did, Prof. Scott Shane and Foo conducted research (1997) that shone a light on the high mortality (DEATH) of franchisors, revealing that 1,292 franchise brands studied between 1979 and 1996, only 15% of the franchisors lived to be 17 years old, a rate comparable to independent start-up failures.
What ? So what this means is that the actual franchisor has a success rate of comparable measure to a mom and pop? How is that possible with all of the little franchisees running around the country. I know because they close down and no more little royalty fees. My recommendation OPEN YOUR OWN BUSINESS it is not worth the name!
You can check my info at this NOT FOR PROFIT website
http://www.bluemaumau.org/7856/sba_studies_say_franchises_more_likely_fail_small_businesses
Wish I had read this info 5 years ago. I was also one of those who had no experience. I was 25 yrs old and thought that I would love to own my own business. I wanted to help women lose weight. Diabetes is high in my family along with morbid obesity. Plus I had just gotten out of the military and wanted to keep in shape. I quickly understood that just reading the Curves material was not enough to help me understand how to get women to lose weight. So now I am a certified trainer and working towards a RD degree in sports and fitness nutrition.
If it sounds too good to be true, then it really is. Owning a business is hard work, but if you do work hard and keep investing in your OWN company then you will make it. My mother owns her own business and for the first 3 years she only made enough money to pay her bills. She even lived at the business during that time. Now after ten years she nets 250K.
ADMIN
CI said that we are not trained on how to use a treadmill, so there fore can not have one because we could not teach our members how to properly use them. I said every woman in America knows how to use a treadmill!
They also said something about the club being too small, mine is 2,700 sq feet. I only get charged for 2,000 in my lease. Had to do with the bathroom location never the less their reasons are all a bunch of ******!
If I had to guess it is because CI is not selling the treadmill to me.
Next Step:
Here’s another article on bogus franchise survival statistics:
http://www.franbest.com/insider-secrets-of-franchising/lies-damn-lies-franchise-statistics/
For years the industry has promoted the myth that franchises, across the board, are safer than independent start-ups. The contention is not only incorrect, imho, it’s irrelevant. What matters is the success rate of the particular franchise that you’re considering, not industry-wide statistics.
For example, would you rather own a McDonald’s or Next Step Burgers? You don’t see too many Mickey D’s going out of business. However, if you had bought a Cuppy’s Coffee franchise a couple of years ago the odds are 100 to 1 you’d either never gotten open or failed shortly thereafter.
That’s one of the points of this post: That people need to see a franchise not as it’s marketed (as the sure route to success) but as a fee for rights and services that should exceed the additional cost and sacrifice. If someone’s evaluating a franchise and what they’d be getting doesn’t provide them with many more benefits than what they’re giving up, wouldn’t it make more sense to either go independent or not do it at all?
“CI said that we are not trained on how to use a treadmill, so there fore can not have one because we could not teach our members how to properly use them.”
Seriously? Doesn’t every major equipment manufacturer provide some sort of training, even if only DVDs or manuals? How hard is it to learn how to use a treadmill?
ADMIN
I do not want to mislead anyone either. I would think that some franchise are better then other, but don’t compare a McDonalds to other franchises. McDonalds has been around since 1940. These types of franchises have an opportunity to meet a person’s needs three times a day. That is any person every where. This is not the same as a coffee shop with one chance a day and only to those who drink coffee, or a retail shop that may get a customer 4-6 times a year. Some franchises are fantastic, and others are not. I do think that each one needs to be judged on their own merits; however most people do not really know how to tell if a franchise is a good choice in the long run.
I think back on my purchase, and I did not think about my limited cliental. I surly did not think of the limitations that were placed on me as a franchisee. Mostly because I was unaware of any problems with the business plan. For me the only thing I could do when I purchased my club was to see what people were saying about the franchises. I looked at the Baylor study, everything looked great.
The problem with this research was Curves was a new franchise and that no one had been in it long enough to find out the problems, or were not admitting the problems because they wanted to sell their clubs. Also I have found out that Baylor would have been under contract not to disclose any greatly negative findings to the public. Now if I was looking to purchase a Curves I would know better, just by reading the horror stories on this site and talking with other owners.
“Now if I was looking to purchase a Curves I would know better, just by reading the horror stories on this site and talking with other owners.”
Until the information exchange made possible by blogging, the Internet, etc. there was little meaningful dialogue about franchising. A big part of it is anonymity – the fact that franchisees can speak out without (or with less) fear of retribution. Back when you bought in most of the info was flowing from advertising vehicles like Entrepreneur magazine, the franchisor-controlled IFA and commissioned franchise brokers.
The Curves franchisees speaking out here deserve a lot of credit for sharing their experiences and the hard lessons they’ve learned. It might be small consolation, but you should know you are positively impacting franchising and enabling others to make more informed decisions than you were able to.
Ironically, the March issue of Entrepreneur will include an article on UnhappyFranchisee.com – quite a departure from the all-positive, hype content of years past. While there’s still mostly hype out there, that is a good sign that things maybe changing even mainstream.
AMEN! And thanks to Sean Kelly who makes “Unhappy Franchisee” possible out of his own funds and the voluntary contributions to the “Idea Farm.” This is the only American “franchise blog” that is uncensored. I’m sure there are franchisors who would like to see this site go out of business because it does give a voice to those who had NO voice in the not too distant past.
As a owner of a gym that was once a Curves, we opted to not take over the Curves franchise for the simple reason that anyone who has any fitness experience can utilize the system that Curves offers on their own. Curves has done a very good job of selling a system of fitness to a very narrow market segment, but in my opinion does not allow the owner/operators enough leeway to expand when the market demands it. As anyone involved in the fitness industry will tell you, it is a fad or cyclical business model. Customer needs change with the latest and greatest as they see them and as business owners, we need to be able to ‘go with the flow’. In our consideration in starting our gym, we saw the need to offer 3 main things:
1) Classes and one on one training
2) Juice and snack bar
3) and various machines not offered by the Curves franchise system.
The initial cost and the franchise fees were not as much a deterrent to us as the limitations of the Curves system.
Just my 2 cents worth…
NewGymOwner
NewGymOwner
I agree with the first and last point
1) Classes and one on one training
3) and various machines not offered by the Curves franchise system.
Not doing this is killing us. May it be the end of my franchise agreement, I have already started making the changes that have been requested. It has been postive so far.
I have managed a curves, our club had 780 members in the first year, after the first 12 months ladies get sick of it. Rent is the biggest expense along with wages, not paying franchise fee’s gives you so much to make your business better.
I have bought a fitness franchise called OZIFIT, this franchise is great you get hydraulic equipment as well as cardio and group fitness classes this business has full support from the franchisor and the best thing NO franchise fees I had an owner from Contours call me complaining the franchise fee’s are 1500 a month they are just like curves .
Curves is a well known brand, as is Contours, BUT is it known for being the best business ?
I too agree that the ladies are bored of going around in circles! They want treadmills, balls,etc. I just do not know what to do anymore as members are dropping like flies and requesting the above. Yes a juice bar would also be great!
Dont know how long I will be open? Any ideas?
Curves is defiantly on its way out and it is such a shame. Many owners have continued in operation under a different name but is that really a viable option? I certainly don’t advise any owner to do that but can certainly understand why they have done so. Many clubs have gone 24/7 and that seems to help somewhat but owners should be aware that by doing so they are risking termination by Curves International and at the least will not be able to sell their clubs as CI refuses to transfer the ownership of clubs that are sold which are 24/7.
Mands asks “Any ideas” Only one—- close before you lose more money and join the group action lawsuit against Curves and Howie……..
Howie hits a new low on dealing with 24/7 clubs.
Almost a year ago Howie tried to tell owners that the reason he was against going 24/7 was because your insurance would be too costly. Well when owners checked with sports and fitness insurance that was not the case. It did not raise the premium at all zilch, not one dime. Now all 24 /7 clubs are getting a notice from sports and fitness that they must fill out new forms and their rates are going up. When question they have told owners to check with CI. CI has told owners they know nothing about why sports and fitness would say that. It should be obvious that Howie has complained to them and told them to raise the rates. Other companies such as state farm have not increased rates for 24/7 clubs. Make you wonder if Howie gets a kick back for every club that signs up under sports and fitness. Why to go Howie screw the franchisees again!!!!!!!
New Curves post about the Niagra Falls club closure and CI’s standard reaction:
CURVES: Should Failed Franchises be Resold?
Comments, insights & opinions appreciated.
Breaking new of interest to curves owners
http://www.nixonpeabody.com/publications_detail3.asp?ID=3226
As more and more of the curves clubs go belly up may are closing on a Friday and reopening on Monday under a different name. Just in the last week and an a half I have talked to four clubs that are considering doing just that. If you aare an owner of a newly named club which just droped the curves banner please let us know how you are doing and if it has helped.
Unhappy is correct. I have heard of the same thing happening- as a matter of fact, I have sold my PACE equipment to several customers who opened their own non-franchise club within days of the local Curves closing. Some had the opportunity to keep the existing Curves equipment but chose not to do this; they wanted nothing to do with Curves corporate (as well as wanting superior equipment).
Thank you Rande for posting your info on what some of the owners are doing to stay open and save their business. For Curves owners who aren’t familiar with Rande LaDue or Pace equipment please go here and check it out.
http://www.pacegroupexercise.com/
Rande LaDue has an excellent reputation in the fitness industry and has all the qualities that we all complained about Howie not having such as integrity, honesty, ethical, moral and I for one have no problem recommending him as an excellent resource for Curves Owners thinking about dropping the Curves brand but staying open or selling your clubs without the Curves Brand.
Unhappy;
Thanks for the nice things you had to say about me and my company. Being very familiar with Gary Heavin and Curves, I made the decision about 10-12 years ago not to franchise my product. Instead, I give my customers the tools and training to be successful without any franchise fees or restrictions.
Good luck in your worthy campaign to educate people about the greed and immorality of Curves.
FitDude posted this on Curves Robert Lay’s story early today.
There goes another one……
http://thetimes-tribune.com/news/business/economy-new-competitor-taking-toll-on-area-fitness-businesses-1.793133
I just went to the link and read the article. What a shame and what a bunch of crap from Curves Internationals employee who is quoted in the article. At the end of the article the author or writer leaves their email address to comment about the article. Curves owners not only need to read the article but need to send an email to the writer asking them to do a news story on Curves telling the real truth of what is happening and why all the clubs are closing. Curves Owners it is time we get the real truth out and here is a chance to do just that by sending an email to the author of the news story. Please do so at once!!!!!!!
Unhappy
In the above mentioned article the author quotes Kathy Carr, spokeswoman for Curves International as stating “Ms. Carr said it is difficult to say how Curves is doing overall in the economy since the franchises are independently owned and operated.”
Ms. Carr, have you no integrity, honesty or ethical backbone at all. Where Ms. Carr is your moral compus ? Didn’t your parents raise you better than that? I’m sure they did Ms. Carr but you have told one heck of a whopper here and you need to explain why you would so blatantly lie like you did. You know Curves clubs are closing at an every increasing rate and the whole Curves empire is about to go belly up as result of Howie’s mismanagement. Come on now Ms. Carr, quit lying and tell the truth.
Hmm, so you criticize Ms. Carr for spinning what’s actually going on with the Curves brand.
How would you feel if you were a current Curves owner and read an article where a company spokesman said what was really happening and that Curves were closing all over the place and who knows how long stores will even stay open. I’m sure a current franchisee really wouldn’t want to see that in the press, and then have to answer the question from members that will ask if their Curves will stay open and maybe members will start looking at other places and possibly find something better. Or how would you feel if she told the truth and you were in the process of trying to sell a club? That would probably lower the price that someone would be willing to buy it for.
Hey Unhappy, do you find it ethical to come on here and talk about the majority of states that would find the transfer fee illegal? Don’t you think you are telling a ‘whopper’ there? How about telling people while Curves is being sued that they are also countersuing the same people.
CURVES OWNERS MARK THE DATE JULY 5TH ON YOUR CALENDER. tHAT IS THE DAY VICKI’S 1.2 MILLION DOLLOR TRIAL STARTS AGAINST CURVES AND GARY HEAVIN. 2 TO 1 ODDS HOWIE SETTLES BEFORE IT GETS TO COURT.
CALLING KATHY CARR WHERE ARE YOU??????? GEE DON’T TELL US YOU DIDN’T GET THE MESSAGE KATHY CARR AS WE SENT IT TO BOTH HOWIE’S AND YOUR CURVES ADDRESS AND LEFT THE MESSAGE ON BOTH OF YOUR PHONE’S SO WERE ARE YOU KATHY CARR????? DO YOU THINK SHE MAYBE JUMPED SHIP LIKE CASSIE FINDLEY HAS? HEY HOWIE HAVE YOU FOUND A LIFE BOAT YET OR ARE YOOU GOING DOWN SWITH THE SHIP LIKE A TRUE CAPTAIN OH OF COURSE NOT YOU LET THE OWNERS OF THE FRANCHISES GO DOWN WITH THE SHIP. DON’T YOU THINK YOU COULD HAVE AT LEAST THROWN THEM A LIFE JACKET? OR MAYBE LET THEM TRY TO SAVE THIER BUSINESS BY THINKING OUT SIDE THE BOX. YOU KNOW HOWIE LIKE THE 24/7 WHICH WAS ALLOWING SOME OWNERS TO SEE BLACK INK FOR THE FIRST TIME IN A LONG TIME. NO YOU COULDN’T DO THAT YOU HAD TO THREATEN TERMINATION OF THEIR CONTRACT IF THEY CONTINUED TO BE 24/7 PULLING THE RUG RIGHT OUT FROM UNDER NEATH THEM. WHAT A GUY!!!
I find this argument of the 24/7 clubs saving clubs interesting, because on another franchise website (BMM), there is a person over there stating that in certain states that the 24/7 clubs are illegal, because they don’t have a person on-site at all times as well as other things.
Of course the person that rants on that website is similar to Unhappy and rants about everything and anything on Snap Fitness, because they failed as a franchisee. It seems to be a popular theme with failed fitness franchises.
Unhappy, why would Kathy Carr or Heavin give you a call back? Aren’t you in litigation with them (or maybe you aren’t and just try to persuade other people to spend their money to satisfy your hate of the company)?
If you are in litigation with them, isn’t it standard that you would speak through your attorneys? And if you aren’t in litigation, why would they call you back anyways, since you aren’t a franchisee anymore?
How can you blame anyone trying something different in a desperate attempt to keep their struggling franchise alive?
The Curves way has about a two-to-three-year lifespan. Then the new members stop coming because you’ve gotten as many as you’re going to get from your territory and the old members drop out from boredom or go to a cheaper gym with their husbands because they now feel confident enough to work out in a coed gym. Then you’re on your own, and the nightmare begins.
Many curves owners are trying to think out side the box and to come up with ideas to help increase membership and pass it on to other owners on the site listed here
http://health.groups.yahoo.com/group/owners-managers/messages
http://groups.yahoo.com/search?query=curves+owners&submit=Search
but every time they come up with something seems to help Howie buts in any tries to take it over so he can make more money such as the new as Zumba classes or the 24/7 idea which has turned many clubs from being in the red into black. Fortunately Howie so far has been unable to terminate the 24/7 clubs as he has tried to do as the owners of the 24/7 clubs have stuck together and have fought it as no where in the franchise agreement does it state you can’t be 24/7 although it does state the minimum hours one can open.
I continue to receive calls every week from Curves owners or employees (or members) who are looking into opening a non-franchise club in place of a Curves that is closing or has closed. A question that keeps coming up involves the disposition of the old Curves equipment. Some club owners tell me that they have been informed they must donate their equipment to a non-profit organization or return it to Curves. Others tell me that they paid for it and they intend to keep it or sell it. I would think that as long as they took the Curves logo off the machines, they should be able to do what they want with it; but I am not a lawyer and cannot give legal advice. Can anyone tell me what the deal is?
(Some Curves owners ask me if I am interested in buying their equipment – the answer is NO! My equipment is far superior in quality; I want nothing to do with Curves equipment.)
Yes Randy It is the owners equipment and they can do what ever they want to with it. Curves does have the first right of refusal for the equipment but must pay 1000 dollars for it, I don’t believe they have ever bought one yet from any owner.
We had heard that you would possibly be interested in the smart equipment. Is this not the case. Thanks Unhappy
Unhappy;
Thanks for clarifying this; I will share it with others.
Although I am familiar with the MyTrak system and several of my coed customers use it successfully, I really have no interest in marketing used systems myself, especially if they have the CurvesSmart logo on them. I have referred a couple of the people who called me to some of my existing customers who may be interested and will continue to do so if you want to send them to me.
Thanks Rande !! You are a stand up dude and all curves owners thank you for all the help. Unhappy
More and More clubs are going rouge and becoming independent and are quitting paying Curves any franchise or advertising fees. We are talking to at least three clubs a week that are considering this option and many are clubs that have been up for sale and have buyers that don’t want to have anything to do with Curves. It is obvious that the brand “Curves” is in the toilet. We have heard that many club owners are changing the C to a K so the new mane is Kurves and getting rid of any item that has the trade mark name of Curves on it. The advantages are numerous such as no fees (typical savings as much of 800 per month) and the fact that they can put in different equipment such as treadmills and tanning booths. What do you think is it ethical and will it save some clubs from closing?
‘We have heard that many club owners are changing the C to a K so the new mane is Kurves and getting rid of any item that has the trade mark name of Curves on it. The advantages are numerous such as no fees (typical savings as much of 800 per month) and the fact that they can put in different equipment such as treadmills and tanning booths.’
If people are doing this, they are asking for a lawsuit to be filed, especially in states that enforce ‘non-compete’ agreements. The idea that changing the C to K won’t fly in a court room either probably. People that are going ‘rouge’ should be consulting a lawyer and be putting money aside for a possible lawsuit. Also, be prepared for possible ‘liquidated damages’ in a lawsuit.
“We have heard that many club owners are changing the C to a K so the new mane is Kurves”
This is an absolutley ludicrous idea and it’s very irresponsible to suggest this is anything other than ludicrous.
“Curves” is a powerful, protected trademark. Trademark infringement is based on whether the new name intentionally or unintentionally prompts a “likelihood of confusion” in that people might confuse the registered name with the new unknown name.
Using “Kurves” is obviously trying to create a connection in people’s minds with the protected mark. Plus, you will still be answering your phone or running radio ads with the exact name that’s federally protected. If you use their trademarked name as your own on the Internet you’re liable for huge fines under the DMCA.
Holders of federally registered trademarks are obligated to go after trademark infringers to protect their marks. Anyone trying such a cheezy tactic as taking on the name “Kurves” will get sued into oblivion and rightly so.
Then again, if you get your legal advice from anonymous web commenters without so much as reading Trademark Law for Dummies, you probably deserve to be removed from the business community anyway.
What other owners are saying.
Number 1
Non-competes are generally recognized ONLY in the case of an employee-employer relationship, only for a very specific amount of time, and only within a very small geographical radius. AND most states (maybe all except Nevada) have had rulings that clearly support the contention that non-competes aren’t worth the paper upon which they are printed. The idea is that a company cannot prohibit an individual from earning a living within her/his knowledge/industry. In Nevada, the casinos pushed hard to have an enforcable non-compete, but even those are only good for 6 months. Oddly, most attorneys with whom I’ve spoke to this issue look at such contracts on the surface—meaning they interpret what they are reading. However a quick Google search by state will actually pull up the rulings and legal opinions that support what I’m saying.
That said, I think the most that CII would do is send you a nasty-gram (I’m telling you, UPS must LOVE CII for all the nasty-grams they send!). However, it is highly unlikely that they’d take it to court. For one thing, court is very expensive. VERY. Even the folks at CII admit that—what’s the return on investment? Very little. And you can’t get blood from a stone (although God knows they could be given high marks for giving it the “old college try”). Second, they are very likely to lose. Third, if they think that you are competing with them, they can just sell your territory again. Oh…wait a minute…they can’t. No one else wants it. Finally, if you want to “get around” this idea that you’re competing with Curves, start offering classes and/or bring in a few other pieces of equipment (like cardio). That will immediately differentiate you from Curves. Variety.
Number 2
Hmmmmmmmmmm, since clearly CI has no problem advertising directly to our members for competing products and services, and selling Curves branded products direct to local resellers, you have to ask yourself, are THEY honoring THEIR portion of the agreement
Hmm, doing a quick google search on franchise non-compete agreements, this came from the AAFD (who is pro-franchisee):
‘With non-compete agreements, it is important to distinguish restrictions on competition DURING THE TERM OF THE FRANCHISE from restrictions on competition after termination of the franchise.
Courts usually enforce restrictions on competition during the term of the franchise. However, one California court recently voided part of a non-compete agreement during the term of the franchise because the agreement foreclosed competition “in a substantial share of a business, trade, or market.”
Restrictions on competition after termination of the franchise are much more difficult to enforce. The remainder of this discussion concerns restrictions on competition after termination of the franchise.’
So, according to them the non-compete in term will usually be enforced (unless you are in California).
Another point to this is if people in the ‘second’ wave of lawsuits decide to file a group action, odds are that they will be counter-sued for terminating, just like the first wave was counter-sued.
Curves owners in doubt should check with a lawyer in their state about non-complete clauses in the franchise agreement. In the 30 states that we know of where owners have checked they were all told that they had nothing and I repeat nothing to worry about as non-complete clauses will not hold up in court and this includes the state of California. In Nevada because of the gaming industry they are upheld but only for 6 months to a year at most. Furthermore anyone who believes that the AAFD are pro-franchisee is not only misinformed but naive and need to go here http://www.bizzia.com/franchisepick/curves-is-franchisor-of-year-say-what/
One should also check out the post by
ADMIN on August 16th, 2009 12:07 pm on the site
http://www.unhappyfranchisee.com/curves-robert-lays-story/comment-page-17/#comment-28409 if you have any doubt about the AAFD
If people really want to read about non-compete agreements, read this article:
http://www.larkinhoffman.com/files/OTHER/Non-Compete.pdf
It’s a pretty fair assessment. It talks about cases that the franchisee has won, but it also talks about how the courts would rule in favor of the franchisor (and that they might win attorneys’ fees).
The last paragraph is something that should really be considered for these people wanting to get out of the system.