CURVES DISCUSSION: Benefits of a Franchisee Lawsuit?

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• We closed our club at the end of July. Haven't heard from CI yet. Only know that they wanted 10K. Like positive-healthy wants to know what would be a legitimate reason to get into a lawsuit. We live about 12 miles from the club that we closed. There were at least 22 to 24 clubs in that corridor from my house to club. Maybe over-saturation would be a good reason. But after so many years of draining the finances, who has the money to go after them.

• First off the lawsuit is not about the high member turn over or buying a franchise that was over priced. While I do believe that Curves International is responsible allowing owners to sell clubs at obviously over inflated prices and I will explain that in a little bit.

  When you buy a franchise you have the right to expect that franchisors are experts at what they do, are honest, and are out to help the franchisee succeed in business by offering a sound business model. All franchisors have to file what is called a UFCO filling with the federal governments Federal Trade Commission. When buying a franchisee you must be given that document and sign the last page, have it notarized, and mail it back to the franchisor before you can own a franchise. Curves International had to by law follow this procedure. The lawsuit is concerned with Curves International over selling franchises in metro areas and selling territories that could not support a club in the first place. Most if not all owners in metro areas have and are complaining that other Curves are 1.5 to 2 miles apart. Curves has continuously allowed owners to open on their borders rather that in the center of there territories. Curves International had control of where each club opened and by buying a franchise you have a right to expect that the franchisor would protect your territory rights but they obviously did not live up to that. Furthermore they sold franchises which had less than 3500 in population which they knew could not succeed. Therefore one of the main issues of the lawsuit is the over-saturation of the market which was controlled by Curves International. Why did they allow this to happen? The obvious answer is greed.

  Another reason for buying a franchise is because of their expertise in that endeavor should you need help or advice in making you business profitable. This franchisor has a responsibility to provide that support/services in a timely manor. If you take the time to talk to the owners, most would agree, that the franchisor has given the franchisee little to none support/services. When ever a problem arose between franchisee concerning transfers, advertising within your protected territory by another franchisee, or any other problem that would arise, Curves International would either never respond or did nothing to correct or address the problems. Most franchisee were lucky to even see an Area Director from Curves International and some owners to this day have never had one step foot in their clubs.

  Now as I stated before when buying a franchise you have the right to expect that the franchisor will be honest and truthful when estimating costs and potential profits. On this particular point franchisee should have every expectation that they would be honest as they promoted Curves as a Christian based company with Christian beliefs. Unfortunaly this is not the case with Curves or Gary Heavin. The franchisor filed the UFCO documents with the Federal Trade Commission which by law must state the initial investment costs and the break-even and profitability. But they under-estimated the initial investment costs and made wrongful representations regarding break-even and profitability on the UFCO filling. Now could this have been a mistake? Yes of course it could have been but even when they were questioned about it they refused to correct it. Consequently one can draw the conclusion that it was done intentionally to sell more franchises. Regardless it is fraud and there is no if’s, ands, or buts. It is down right illegal, fraudulent, and not by any means the Christian way.

  Now lets go back to the your point that some owners paid too high of a purchase price for a resale. You are absolutely right. Some of the new owners that bought existing clubs did pay way to much for their facility and there is no way they can make a profit as a result. But if you are an owner you know as well as I that in order for you to sell a club you must submit to Curves International the Buy/sell agreement showing the purchase price, as well as the new owners lease agreement, and other documents to get the franchise agreement transferred to the new owners. You as an owner also know that you have to send in monthly projection reports which shows how gross income your club made during that month. Just by looking at those reports required by Curves International one should have been able to tell that those franchisee were not going to make it being sold for those over inflated prices. While Curves International is not legally required to question those sales don’t you think they had a moral responsibility to do so. Come on they themselves are the ones that promote that it is a Christian run business based on Christian beliefs and values. Consequently I defiantly believe they were wrong in allowing those type of sales to go through.

  So to sum up the legitimate reasons that one might be able to participate in the group lawsuit one must look at the issues that predominate the litigation against Curves International. Again those are over saturation of the market, lack of support/services, under-estimated initial investment costs and wrongful representations made regarding break-even and profitability. I hope that this has given you an insight into what would be considered the legitimate reasons for participating in the group lawsuit and I would hope that you will consider joining us in that endeavor.

  The unhappycurvesownerz

• I had previously been approached to join the lawsuit. I had decided not to do so.
  I closed a club in a town with a population of 2000 my fault for being so stupid.
  I have a second club with a population of 8000. I have been open 5 years.
  First two years were great. Now I am losing approx 600 per month.
  I just asked about closing procedure for my club and learn they want $10,000 to do so. Two and a half years ago my husband lost his job and income. The curves business would not support us. I left the business and went to work and a few months later my husband and I purchased the company that I was working for. This business is a mfg co and I have no time to put into the Curves. As a result we are down to about 120 members and are losing money and have been for 2 years. They want me to pay them $10,000 to close the doors. If I was not losing my rear I would be happy to keep the club open.
  Now I am considering joining the lawsuit.

• We just recived information about the class action suit tonight. This whole situation is what we figured. We are actually in the process of either selling our club or shutting it down. 10,000.00 to shut the club down? THATS INSANE! Who has that kind of money lying around? We bought the club on false pretenses from a previous owner who lied about member numbers. Curves did not give us the correct figures or tell us we were overpaying. Go Figure software makes it impossible to go back and look up members. We paid $96,000.00 for our club and are possibly selling it for $35,000.00. We have to incur the rest of the business loan via credit cards. We cannot sell the business or shut it down while the bank still holds the note cause there is a lien on our business assets. Clubs around us have been shutting down everywhere. When we tried to contact our area director, it has been hard to get a response. I have had to write several emails. Lately, since we have been talking about shutting it down, our area director has been telling us that Gary is now letting people out of their agreement and it will be easy to get rid of the equipment. She always dodges the question about how much it costs and says she knows nothing about the process. The last two years have been an absolute nightmare. My husband and I have many times made comments about Gary being this "CHRISTIAN" but then turning around and telling franchisees it's all on us and before pointing fingers at him, we should point two fingers at ourselves. Anyone that gloats about being a Christian and advertises their religion is not a Christian. The Bible states when you pay homage to God, do it in secret and be humble about your faith. . . We have resorted to putting out own personal monies from our full-time jobs into this albatross. We are VERY interested in this class action suit and would like to know more. There is a sale pending so we would like to know as soon as possible. We always thought there was a case against Curves but did not know how to go about it. Since we bought Curves two years ago, we have lost over $40,000.00. If the choice is get involved in a class action or sell it, I would rather the class action.

• I opened my first location over 6 years ago. At that time, there were only about 1200 locations. My territory is very large. Now that the market is COMPLETELY OVERSATURATED, my membership has dropped well over 50%. I also opened another location 4 years ago in a much smaller population and had to close it due to lack of members. I closed the beginning of July and received a letter from CI today. They want me to pay them $28,440.00 for royalties and $14,040.00 for advertising. I DON'T THINK SO!! If I got 1% of my members from their advertising, that's stretching it! The programs they want us to do are ridiculous and only cost the franchisee more money by having to buy products from Curves. The sad part about that is Curves gets paid for the promotional items and we have to give them away. My AD has been in 1 of my locations once in 6 years. The only time CI ever contacted me was when my projection sheets didn't get sent in. I know they will try to sue me for closing fees, but I feel I have more to sue them for. My husband has been supporting my franchises the whole time because it never brought in enough to pay all the bills and payroll. The location I closed NEVER turned a profit. We are definitely interested in a class action. Please let us know what we need to do.

• PLEASE PLEASE PLEASE let me know about the lawsuit...we want a part....our population is 3700..just barely over the 3500 minimum. There are two other clubs with in 5 miles and their populations are similar. We have been losing like crazy and want out! But 10000 is CRAZY!!! I'm sure we have paid them that much in those crazy fees over the last 3 years!

• I lost my club (had to close it down) when diminishing numbers and rising overheads meant that I was barely break even. When I bought the franchise in 2003, Curves was a hot proposition (or just beginning to be). At that time, you had to have a 30,000 population base to constitute a territory.

  The first point is that selling a territory with as few as 3,500 people in them is such a radical departure from the practice of selling them with nearly 10 times that many that it can be said to be bad faith action on the part of Curves. And not in the contemplation of the parties to the earlier franchise agreements.

  The second point is that Curves had absolutely no overal quality control program and some Clubs just were not up to the mark. When I looked at other franchises prior to buying Curves, they almost always wanted to meet you. I remember the sales guys for Curves saying to me is that all Curves cared about is whether you had the money. The lack of quality control, the massive overselling of too small territories and the rapid expansion without regard to old or new franchise holders, meant that the brand suffered. And that impacted us all. The first I even met my area director was in 2007, nearly four years after I opened. And the first inspection I had was in 2007.

  Also, when I opened in 2003, "selling" was a bad thing -- whether it was tee shirts or Curves gear. I remember Gary Heavin saying (at my training) that he was opposed to selling tees and gear to members. That just was not our business. With the oversaturation of the market, Curves began encouraging us to sell, sell, sell. Everything from gear, to tees, to travel service. This was an acknowledgement of declining income.

  Despite monumental efforts, my numbers went down from about 550 (at the peak) to fewer than 350. If you begin life with 550 and end it with 350, you are strangled by the fixed costs (rent, utilities). People who bought the smaller territories (generally 2005 and later) had population bases that were untenable from the beginning. Curves had what the contract lawyers and negligence lawyers would call a "duty of care" towards their franchisees. And, from about 2005, that was thrown out the window in order to sell the maximum number of franchises. And, while she would not admit, my area director more or less verified that and told me that the game had become one of "orderly closures".

  If anyone can tell me where to sign up, I would love to join any law suit.

• Just curious. What happens if you dont pay the fees you owe from shutting it down? Do they sue you?

• Please tell me how I can join this lawsuit. I purchased a resale January 2007. The previous owner lied about the membership, etc. Curves Int. does not help me collect transfer members money. My expenses exceed the income and members cancel weekly. I leased CurvesSmart hoping that it would help us but that has turned out to be a $10,000 nightmare. They will not take it back and the leasing company has already paid CI. No help for the franchisees. their ads have not help me at all. I do local advertising so why do I have to pay CI monthly for advertising. I am sorry I believed in them

• Please tell me how I can join this lawsuit. I purchased a resale January 2007. The previous owner lied about the membership, etc. Curves Int. does not help me collect transfer members money. My expenses exceed the income and members cancel weekly. I leased CurvesSmart hoping that it would help us but that has turned out to be a $10,000 nightmare. They will not take it back and the leasing company has already paid CI. No help for the franchisees. their ads have not help me at all. I do local advertising so why do I have to pay CI monthly for advertising. I am sorry I believed in them