CURVES franchise: Negotiating Curves Closing Fees
Struggling, failing and soon-to-close Curves franchise owners seek information and advice from Unhappy Franchisee on how to handle the demands Curves International is placing on them. One of the frequent topics is the club closing procedures, and how to negotiate with Curves International in regard to their demands for “failure fees” and often tens of thousands of dollars for “future royalties.” (Also called “Liquidated damages”)
If you have advice or experience closing one of more Curves clubs, please share your experience below.
From the post CURVES: Robert Lay’s Story, here’s an exchange regarding the closing fee:
Donna Submitted on 2009/10/08 at 2:41pm
HELP!!! I have read some of the horror stories listed. I to have to close my club. I can not get anyone to return my calls from CI. I do not know what to do. I have had my club almost 7 years and have paid my dues. I do not have 10,000 dollars. Because of the recession I have to close. I love my members and hate to dissapoint them but I have no choice. The closing packet was sent to me but I’m scared to send it in. Is there any help out there? I have to do what I need to do today. Will they let me out without the 10,000 fee. Has anyone out there been in my shoes. Please someone respond as I need advice and help NOW.
CA ex-owner Submitted on 2009/10/08 at 8:21pm
We’ve all been there! Our club has been closed for over a year. We refused to pay the $10,000. They emailed us two more times, first lowering it to $8,000, then to $6,000 – we still refused. Next came a letter from Curves Legal stating we now owed fees for the remainder of our franchise agreement, somewhere in the amount of over $42,000, with a fair amount of scare tactics! (Read our story above: CA Ex-owner on October 16th, 2008) We then sent a letter back to legal, refusing to pay anything and the reasons why. Now I will knock on wood before I say this, but it has been over a year that we sent them that letter and we have not heard a thing yet.
We are not part of the legal action that many of the people above are pursuing, and I’m sure someone will respond on how to proceed in that direction, or direct you to on what other options you may have. Remember, you are not alone, we’ve all been through this horrible experience. It hardly makes it better, but at least maybe knowing there are so many of us out there, you might feel a little better…
Hi Donna.
Like You, I had to close my club. I closed it Feb 28th this year…
Of course I did everything I could to keep Curves International properly informed and I asked them for advice on the best way to proceed…The one thing they did spell out, there is no “standard” $10,000 fee. At least Not Anymore. They said, if I write a letter asking for a settlement instead of paying all the outstanding royalties and ad fees, then they will put it to a review board and the review board will make a suggestion for a settlement. Then they told me not to write a letter but to hold onto the closing packet.
Well, then they forgot about me for 6 or 8 or 10 weeks. I think it was sometime in May that I got a notice that I owed some $40,000 for the balance of royalties and such…
however, i did inform them that i was filing for bankruptcy. they never asked for the bankruptcy attorneys name or the case number. i am just now filing, so they havent gotten any legal notices yet either.
since then I have not heard one word. it’s been what, 7 months since I closed. ridiculous…
i do have another franchise, that i’m struggling to hold onto, and you would think maybe that’s why they’re giving me some slack…
they are very frustrating but i think they have a backlog of closed cases. i have been told by others (gossip?) that they are understaffed and overworked. of course they’re busy with the big lawsuit that “unhappy” is part of it. and all the little lawsuits. i would like to know more about gofigure’s lawsuit against them too.
my attorney told me not to worry about any of it, because our state law supercedes whatever was written in the franchise agreement….
Donna Submitted on 2009/10/12 at 12:21pm
Robert was right on. Settlement from 10,000 now wanting 2,500. And its only been 12 days. I don’t close until Oct. 30th. They were also nice and I wouldn’t have to pay it until the end of Nov. I wonder If I ask nice they’ll say i don’t have to give away my equipment to another Curves or destroy it -I can do what I want with it. What do you think?
HAVE YOU SUCCESSFULLY NEGOTIATED CURVES CLOSING FEES? IS CURVES OR THEIR LAW FIRM HARRASSING YOU FOR CLOSING FEES & DAMAGES? PLEASE SHARE YOUR EXPERIENCE BELOW.
This post was originally published October 12, 2009 and updated June 20, 2012
Gross Law Group PLC attorney Robert Vincent, on behalf of congressional candidate Keith Gross, has…
Our expose and real-time discussion of DonutNV Fort Myers franchisee Mike Malagon, Hayley Malagon, Selling…
Michael Malagon, the Fort Myers franchisee of DonutNV mobile mini-donuts, is an aggressive and active…
DonutNV franchise owner Michael Malagon founded Ryder Research Supply and the Mike's Pep Talk promotional…
One day after watchdog website Unhappy Franchisee revealed that DonutNV franchisee Mike Malagon was openly…
DonutNV Franchising Inc. continues to do everything in its power to hide franchisee complaints and…
View Comments
As for these "failure fees" that are hidden in the unilateral, unbargained contracts, you can see from the above that they are negotiable.
Do you think Curves will actually sue you for $10,000 if you can show the court that you are unable to operate your business without sustaining a loss? Do the Courts uphold these abstruse contract terms that obscurely define the failure of the franchisee as an opportunity for the franchisor to get a fee from the loser?
I don't think the Courts would go this far but I am not an attorney. The Courts do always appear to support the franchisors and their contract terms, but would they support such unfair terms now that "franchise fraud" and the economy are worsening the situation for franchisees ---and now that the abstruse franchise failure fee is getting coverage on the Internet ---and Curves are closing down all over the place.
In hindsight, I can see that we could have saved ourselves a lot of money if we had just closed down our The UPS Store and taken our chances with the court, when UPS threatened to demand liquidated damages from us because we failed to thrive and were trying to terminate the relationship. We stupidly lost even more money when they insisted that we get an attorney to bargain the "failure fee" and the termination with their outside attorney.
Please know that the franchisor is free to negotiate the terms of the contract with you and maybe you, yourself, can negotiate your "failure fee" down to one penny! Think about this! If you just close down and do nothing and see what happens, maybe nothing will happen and you will save yourself the price of an attorney at $200 per hour. But, do comply with all the paperwork involved in termination as described in the actual contract to the best of your ability to demonstrate your good faith in the termination of the business.
Good luck!
Tammy on October 14th, 2009 7:37 am
I have a club in Missouri and I know how you feel. I also hate to dissapoint my members. I work a 2nd job and my husband too. I need help with Curves. What can we do? HELP
Curves will sue in hopes that you are already broke enough that you can not afford to hire an Attorney in Texas and fly there for the case...they win by default. They know that the Courts will not be sided with CI in the majority of those suits.
I too am planning on closing oct. 30, 2009. Has anyone sold their equipment to help pay off debts and how much did you ask for each piece.
Thanks Penny .
To Tammy and Penny send an email to unhappyfranchisee@gmail.com [email corrected] requesting it to be forwarded to Robert Lay and he will be able to help give you some advice. Be sure to include your phone number.
I feel real sympathy for those Curves Owners who have to close down because I remember the terrible days when we realized that we had to close down our The UPS Store to avoid losing even more money each month ----and the terrible realization that we had lost our entire investment.
I know that those who are faced with this terrible stress and strain and the realities of losing your entire investment in the business are in pain and don't know what to do and who to turn to.
Some of you will be able to avoid personal bankruptcy but perhaps will have to continue to pay on any startup debt you assumed and personally guaranteed with personal assets. Some of you will have lease obligations that mean even more debt if the Landlord gets a judgment against you for a lease that has b een personally guaranteed. Some of you will perhaps not be able to avoid personal bankruptcy and if this is the case, don't keep digging the hole deeper. As Richard Solomon, Attorney and Author advises on Blue Mau Mau -----Do it! and quickly! and get on with your life, and out from under the stress of the indecision.
Those who have to quit to cut their losses when they have exhausted their startup capital and exceeded the startup estimates of the franchisor, etc.. do believe they have been defrauded in the sales process by misrepresentations and omissions. When these tired and angry franchisees survive with any personal financial assets still available, they often think of joining class action and mass action lawsuits to seek justice and restitution.
I am not opposed to these lawsuits because they do push the courts to look at the fraud that is going on in franchising, but I believe that failed franchisees need to be objective and not subjective and look at the status quo of the law and regulation surrounding franchising that has contributed to their current situation.
This is why I post ---to warn ---and to try to provide the benefit of my research to current and past franchisees.
Please see http://thegreatfranchisingrobbery.blogspot.com/ and read in a Google Search, the articles "Franchise Regulation Realities -- Deception or Patriotism" - "Disadvantage of Buying a New Franchise for Prospective Franchisee" and "The Franchise Disclosure Document --Beware of Red Herring"
Unhappy:
You gave the wrong email address, but I corrected it.
Please use the email address unhappyfranchisee@gmail.com if you'd like a message forwarded to Mr. Lay.
Thanks
Sorry about that I must have been in a hurry or maybe it's that I'm loosing my mind . take your pick.. Any way thanks again Unhappy who is getting happier every day
Penny...yes we sold evrything to include the Smart equipment to pay off as much debt as we could. Look to your local Clubs first to see if they are in need of any equipment then ask your members. Many of them will also buy their favorite stations and work out at home.
Sorry to hear you need to close but understand...life will go on and we will be back on our feet with time.
We owned 4 Curves. Lucky for us we sold 2 for good bucks a couple of years ago, closed 1, and kept the 4th, our flagship cash cow.
If you have to close, ignore the agressive posturing by CI. We negotiated the
10,000. down to a $100. monthly payment, which they agreed to and then came back and said they could not accept a monthly payment. We offerred $1200. which they took.
Listen, the people you are dealing with at CI are low level clerks, that sit at computer screens and answer the phone. Stand strong, tell them what you can or will pay, and never show weakness.
If you need to, buy a good book on business negotiation.
At club camp in 2002, I understood Howie's true intent when he said,
"money is God's way of telling me that I am doing the right thing"
Its a shame, because Curves is a brilliant concept..
.