CURVES: Negotiating Curves Closing Fees

View Comments

• I'm closing my curves. I made it through the whole 5 years and I am still adraid of what they will charge me. I don't see how they can, though, since I completed the whole contract. What should I expect? I bought it in Nov of 2011. It was a failing club, but I was sure I'd make it work. (pre NC took over. ) then right away I had to make all the changes. Clean standards, etc. Then came the tv, speaker, mats, etc. I've made no income and have staffed it all by myself for the full 5 years. So, if we don't have to legally destroy the equipment, what do I put on the closing checklist regarding that? I am an LLC and I do pay property tax on my machines. Help! Any information would be appreciated. I'm so stressed I think years have been taken off my life span due to this horrible business venture. I'm so glad it's not just me. I thought I was just doing things very wrong.

• I forgot to ask about the closing of the bank account. If I close my account, I won't get the last month or two of insurance reimbursements. Have any of you just closed your bank account and have had no hassle? (Those who finished the contract?)

• "No Money Left" and "Marne". We purchased a club with 235 members, took it up to 252 in 1 1/2 years, then a "low cost gym - $4 per week no contract" hit town. They parked themselves in a local mall for a full 2 months all day long 7 days a week and signed up 3,000 members in a town of 76,000. They now have 10,000 members. This club is owned by a hockey star (Club 16 coed and She's Fit women only) but only in BC Canada so far. Yes, he does the public a great service offering low cost gym alternatives, but from our point of view it was predatory. Golds gym is also opening up soon and have big signage $5 per months for the first 100 customers. Obviously you can't spend a couple of million dollars on a gym and only earn $500 a month - what am I saying? These gyms have deep pockets and are buying future market share. Curves Franchisee's CANNOT compete financially. We renovated our club from top to bottom, trained trained trained, and did all sorts of things besides the lame stuff Curves was promoting to stay in the game and at the end of the last day of 5 years we had 149 members. I lost $6,500 in 2015 and paid Curves $9,300 in fees of every kind - debit, ad, franchise, OS, CurvesSmart, etc.. Did I get good value for my money? NO!!!! A year before we closed I made a special promo for spas, hair salons, nail salons "join our Curves for 6 months free for every owner, manager and current employee. Learn what we do, why it works, why women love us so much, talk about us to your clients, and for every new member that signs up you get a free month". FAILED. Those who should of been interested were going to "She's Fit".

  I spent 5 years emailing Head Office about my concerns and their direction based on my 40 years in retail. Some of their advertising people agreed with me but they don't make decisions. People like Marty S. and Mike R. would answer me with "we're putting up with you" or belittling remarks (I'm male). But I made my concerns known and with several things about OS and especially reports, my complaints made a difference which you've all benefited from.

  Curves has done what EVERY other gym does - free weeks, discounting prices, but they have NOT gone out of their way to show how we are unique and DIFFERENT from other gyms. Because so many Curves locations have closed our members had no Curves alternatives, and most ended up at another local competitor, BUT every last one of them wishes we were still open and say we spoiled them. ie. they now walk in and no one knows them, they have to wipe down every machine after use, they have to bring their own towels (we provided towels -bulk white ones from Costco-thus had a washing machine/dryer).

  Curves HAS to be on TV educating the public. If Dr Ho can sell his Pain Therapy Products (a one time sale for $99), or others can sell "hip Hop Abs" a one time product for $25, or $19.99 flashlights all on late night TV and do so every night, they must be making good coin, but Curves refuses to do TV in any serious way. In October I saw ONE TV ad on the CNN channel, that's just not good enough.

  I say this just to show how hopeless the situation is - from 10,000 locations in North America years ago (in 2006 we had 1,000 members and the owner paid herself $110k a year and her son $65k a year), to (source Wikipedia) 1035 in May 2016 Curves management has FAILED it's franchisees. I know from ALL the promotions we did, there was nothing left we could of done. I was told by Jeff from North Castle that I just wasn't trying hard enough (paying for their "advanced" training), to which I replied "you're probably making $80k a year and probably have never owned a business and I'm going to lose $100k when my franchise ends. YOU don't know what it's like owning a business, everyone including Curves has their hands in your pocket!

  Marne look at the big picture. I closed down nicely - lucky, although broke - but in our area last year 3 clubs closed with NO notice. Yes, Curves does want to know what you want to do with the equipment, however, it's NOT their equipment, it's Curves AUTHORIZED equipment. I had the new gear and sold it to another club for a good price for both of us, BUT they wanted proof and I refused to provide cancelled cheques and such because that's a serious privacy issue. What the new people do I don't care, and they've left me alone 4 months later. There are Curves locations failing EVERYWHERE in North America and I'd be willing to bet there are less than 1,000 Curves left and that means that if a lot are simply closing their doors without "proper" notice there's probably no way Curves can keep up with the legal avalanche they'd be involved with.

  As regards the bank Marne, that's a tough one. They took OS charges out of my bank and initially refused to reimburse me for 5% and 3% fees on refunds - it was only $75, but I kept emailing everyone in the organization, and eventually got me off their back by refunding me, but after that I closed my bank account.

  Curves has NO idea now hard most franchisees work. I'm an accountant part time and I took care of all of that plus promotions and such. My girlfriend who was manager in 2006 when it had 1,000 members ran the club. I KNOW how hard you have to work to keep a franchise going. Before we shut down I went onto google and Curves and made a list of every Curves in British Columbia Canada, and either emailed them or sent them letters looking for a buyer for my equipment. It was astounding to hear their stories. Years ago there used to be a Curves authorized "club" where franchisee's could interact with others, Curves apparently shut that down because of too much crap talk and complaining. I understand that, but that simply points out that if our franchises were doing well, we'd have nothing to complain about. North Castle took away our District Managers and the local meetings we used to have which left us completely on our own. Instead they set up Blue, Red, green..., teams hosted by an Aussie guy who was simply spouting the party line and knew NOTHING about owning a business.

  ALL of us we so happy that North Castle was involved - they gave us so many promises (we've hired such an such who turned Coke around, such and such who turned KFC around), we've done surveys that showed..., but every last one of those people did NOT know they gym industry and how it's changing and our position in the market has only gotten worse.

  NC sold the Curves Head office and downsized, putting as much online as possible and laying off staff and spent so much time doing that they forgot about us. Then the Forbes article came out listing Curves #7 (I think) of the 10 worst franchises, and NC's response was "well, if the franchisee's only did what we recommend and trained properly, they'd have nothing to complain about".

  They have a point. When we went to Curves conventions "in the old days", there were overweight CDN owners and staff and seriously overweight American owners and staff. How can you take a gym seriously as a member when the program doesn't work for your Curves Coaches? Or when your gym looks like it's not been cleaned in the last month? My staff weren't skinny mini's but they could out-work any of our members and they knew that! Plus our gym was immaculate. We had free filtered water, towels, my manager was a wedding decorator/professional floral designer and was always seasonally decorating the club and hosting different challenges each month. Members from other clubs told us we were the best club they'd ever been in. Three of us joined Jenny Craig and we even got a few members from JC. We tried. We tried as hard as anyone can.

  Yet we failed. We've questioned over and over, did we do everything we could do? Did we forget something?. What did we miss? NC said social media would win the day - it didn't, I posted everything they gave us, added our own things, celebrated members and we started with 109 likes and ended with 109 likes years later.

  We mined ex-members from the previous owners 2,972 member database with little success. I setup an email and regularly emailed members and ex-members with Curves news, new and happening things, interesting health news, where we were going to be in the community. When the Curves locations closed on either side of us Curves provided me with names and emails of their members to get them to join our club. The got our promotional emails also. Curves told us they'd be emailing them anyways but those who joined said they'd never been contacted on other Curves locations.

  We donated 100's of pounds of food the local food bank, we raised over $40,000 for Breast Cancer organizations, we packaged Christmas dinners, found a list of needy family's and delivered them. We have 2 newspapers, one has a "A-List" contest for the best business in different categories, another has a "Readers Choice Awards" for the best business. We won in different categories 8 times. I set up a web page with promoting our club with pictures and stories and how we were different from the competition. We had a competition "Flaunting your Curves" - wear Curves clothing in public, take a picture of you out and about and enter it in a draw for $50 or a free month. We offered a free month or $50 for any member who had a BR sign up. We did dozens of things. We were a member of a Womens AM networking group, the local Downtown Business Association, we participated (we had the 10x10' Curves tent) in every public event. We paid for space (expensive) in our local malls. We paid for ads in the local newspapers. We did special pricing for large corporations, school boards, & city halls. We had a member who was with the School District and she'd forward our promotional emails to all the female teachers and city workers. This is what's so disappointing, we tried so hard and had to close.

• RE: Closing short of Franchise ending. For all of you who have to close early this is for you. First, you're not alone and from reading through 60+ pages on this website and looking at how many locations are closing, Curves will probably make life uncomfortable for you, but is unlikely to do much because of their own cutbacks and no litigation money (because of declining fees because of closing franchisees) and NOT being able to collect blood from a stone!

  I'll use CDN numbers. According to my contract the maximum fees Curves could ever collect (go back to the first PDF they sent you - one that would be about 300 pages long and listing all the do's and don'ts and including previous and ongoing litigation, and all the current Curves and closed locations) - is $1,190 (5% franchise & 3% advertising). Guaranteed, they will demand $1,190 for the balance of your contract EVEN though you may only be currently paying them $300 a month. Now look at AussieZ Sept 19, 2016 above. Curves wanted $69k for 4 years remaining. Let's do the math assuming their fees are the same as mine (CDN).

  4 years X 12 months X $1,190 = $57,120. That makes up the bulk of $69,000. The balance works out to $247.50 a month in OTHER fees and charges based on a club that's kicking butt. Of that $247.50 is $89 CurvesSmart fees, for legacy clubs $29 in OS fees - new clubs $49 OS fees. Subtract those fees and Curves has only to justify $109.50 per month, which is stuff like online web member access registration, EFT fees and such. Or it could a charge they feel is justified in an on staff lawyer getting reimbursed asking you for money, and that may be the case as they've raised the fees on all re-franchising and new franchises.

  Notice also AussieZ has the same experience as others on these 60+ pages that Curves will come back with a lower demand when you say you have no money - in AussieZ's case $35,000.

  Lastly, be informed - this is one of a LOT of pages, it's a real eye-opener. See here:
  https://unhappyfranchisee.mystagingwebsite.com/category/franchisor/curves-for-women/

• I have one year left. I will close on good terms with my members. Maybe not so with Curves. I will close my account and see what happens. I will have nothing left to give to them.

• I've been a long time lurker on this page and it is time for me to contribute.

  We purchased a resale in a mid sized market of 90,000 people in Canada. Things started off mediocre and went downhill from there. Our community has 20+ gyms and fitness studios. The market just isn't big enough to support us all, and sadly, Curves is losing the battle.

  We had 3 new gyms open up at roughly the same time as we purchased our Curves. We were already financially committed and tried to make a go at it. Unfortunately, we're hemorrhaging members and running out of money to pay the business's bills.

  We will have to close soon. Much sooner than the end of our franchise agreement. I'm interested in hearing any recent experiences with people negotiating their franchise failure fees, particularly in Canada. Please post your experiences for all to see!

  I will post about my situation once the dust settles. I'm luckily? in a situation where they can accept a very modest settlement from me, or I will simply file bankruptcy to separate myself from the dead weight that is Curves Corporate.

• Curved out. You're in the same situation we were in - your story is identical. When you search for franchises at the top of this page, most well known franchises don't seem to have negative comments, CURVES and NORTH CASTLE are the problem which is why they're ranked by Forbes as in the bottom 10 of all franchisees. Should you negotiate with Curves? There are a lot of pages on this site devoted to Curves and it would take a few hours to read all the stuff posted, it's that bad and most simply can't pay. Seek legal counsel. In BC you can get 30 minutes of legal advice through the "Lawyer Referral Service" for $25 and I had to do this and it was well worth it. But I'll sing this from the rooftops, THEY OWE US and are unlikely to take you to court because in all these pages, if we're this far away from Texas they don't have the resources to start something - and to get what? Broke is broke. It's largely their lack of business acumen that led to our failure and inability to be a "going concern" paying their fees and making a living ourselves.

  There is NO RISK on their part. They collect money from us, dictate what we should do (not entirely a bad thing for the Franchise image), but they've contributed not ONE thing to building the brand other than a prettier website. Their attempt at brand building through (see the bottom of the Curves website) web promotion have failed. Who really reads "People" or "Family Circle", etc., online? Their "promotion" attempts at this and social media for the last 3 years have utterly FAILED. We still believe in the Curves workout, BUT, the brand needs to be built at the corporate level who HAS to educate the public on why the Curves workout and formula are still relevant to ladies everywhere. I work in retail/service and people will pay more if there are recognizable benefits. Oddly, Curves advertising people agree with me, upper management doesn't, and I was very vocal in my views to anyone at Curves who'd listen. Problem is there's a huge level of incompetency there because they simply have zero experience running a franchise because almost everyone who's run clubs "in the old days when it was great", are GONE. All they do now is offer more courses which simply "pretty up" the same old ideas that worked 20 years ago. There's nothing new and exciting (Body Moves is good), but try to respond to our local market and have hand weights or hula hoops or a couple of stair climbers or whatever and you get shut down.

  This is what we know. North Castle has downsized personnel and is running a lean ship. Their shareholders still have faith in Raymond and Mike, but eventually their excuses (and blaming the franchisee's) on why an organization that was the leading Womens Gym with over 10,000 locations in North America is less than 1,000 today will wear thin and the shareholders will force a change.

  "I" was blamed for not trying hard enough, but I told them "in 2015 I paid them $9,300 in ALL charges & fees and LOST $6,500 (before accounting adjustments such as depreciation), therefore THEY did not give me good value and THEY failed ME. I have a line of credit to pay off of $114,000 so I can't go bankrupt and it'll take 10 years to pay off at which time I'll be 73. When I purchased Curves I did searches but I didn't find this site - too bad - I wouldn't of read these pages and made different decisions. My girlfriend managed the club and took 20 hours of pay every 2 weeks because she believed. I believed and didn't take a penny - like most owners who are struggling. In a metro area of 2.5 million people there are only 8 clubs left and one or 2 will be gone next year.

  If you plan on paying them something (I'm an accountant), set up a spreadsheet in Excel. In each column start off with how many members you had EACH month since you started. i.e. Column A titled Jan 2015 you might put 200, Column B titled Feb 2015 you put 180, Column C titled Mar 2015 you put 172... You get the idea? You'll see a pattern. Let's say that's a 5% drop in membership each month. Then you continue out till the end of your lease dropping the membership number 5% each month. In the row below calculate your 5% franchise fees for EACH month, and in the row below that calculate 3% advertising fees. Do that for every REMAINING month after you close till your franchise period would of ended. This means and I'll do a calculation for you.
  March 2016 (assumed you closed) - you had 172, so April would be .95x172 = 163
  Multiply this by the average membership - 163 x $44 = 7172 for April 2016.
  Franchise fees = $7,172 x .05 = $358.6 Advertising fees $7,172 x .03 = $215.16
  And let's say your franchise agreement ends Dec 2017 - 21 months left.

  You should come out with an amount owing on POTENTIAL fees of $7,567 based on a 5% declining membership.

  I guarantee Curves will ask for the maximum amount (also I'm sure they like the scare factor) $795 Franchise/mo & $395 Ad fees/mo, and will ask for $1,190 x 21 = $24,990 and they'll add to that other fees you might of paid for OS $29/mo ($49/mo for some), and CurvesSmart $89/mo plus EFT and online fees. So they'll add on at a minimum

  $29 x 21 = $609 for OS charges and $89 x 21 = $1,869 for CurvesSmart.

  $24,900 + 609 + 1,869 = $27,378 will be their minimum demand. Read all the comments on this site. https://unhappyfranchisee.mystagingwebsite.com/category/franchisor/curves-for-women/

  They'll come back with a much lower number ($13,000) and if you say you can't pay that, it'll go back up to $27k!

• I will try not to pay them at all. I will Let you know how I make out.

• I was doing research and came across a line on one of these pages "Gary & Diane still own 60% of Curves"! That would explain why they are still on the board. That would explain why North Castle still refers to "shareholders" - that means not just NC shareholders, but Gary & Diane. While the 60% number gives G&D controlling interest, I couldn't find out anything confirming it, but I did find this on the North Castle website where Gary states "we believe our partnership with NC...."!!!!

  http://www.northcastlepartners.com/news-media/north-castle-partners-invests-in-curves-international/

  I also found this 2011 article that's really interesting.

  http://clubindustry.com/blog/examining-state-curves

  In it Mike Raymond states "We made it easy for them to decide to leave by announcing a policy that removed any penalties for closing". Is this because they have (according to other pages on this website) that Curves has over 200 lawsuits filed against them that they're in court with and don't have the man power to deal with franchisee's who are abandoning ship well before their franchise closing date?

  It's also an eye opener into Curves decline and how they're pinning their hopes on China & India. There is also this statement "Raymond went on to say that many Curves clubs that are sold get turned around by energetic new owners". That's the same rhetoric they spouted in the June 2014 Forbes article used and EXACTLY what Curves told us just before the article came out. They told us "We'll be featured in Forbes and it won't be all positive because unhappy franchise's were quoted but we feel that everyone who operates their franchise in "The Curves Way" will be successful."

  http://www.forbes.com/sites/karstenstrauss/2014/05/27/crash-diet-after-shedding-thousands-of-locations-can-curves-get-back-in-shape/#6fabfa0363f8

  We took over an existing franchise that was doing OK in June 2011 - we were "energetic new owners". My girlfriend had been the manager in the "Golden years" when our club had over 800 members, when the owner and son were paying themselves $160,000 a year. I had been in retail for 40 years and had been an accountant for 30 years and was an enthusiastic gym member. We would of been considered Raymond's "dream owners". We took our club from 235 to 252, then, even with vigorous promotion watched it melt away when el-cheapo, no frills, no service gyms opened up in our town. From 10,000 clubs at it's peak, in one article I just read Curves had 4,000 locations in 2011 in North America. Wiki says in May 2016 they had 1035. It's probably less than 1,000 now (3 Curves have failed in the our area since). Again, I say, if you tried 1/2 as hard as we did, it's not your fault. North Castle, Gary and DIane failed EVERY franchisee. Buying Jenny Craig brought us nothing, it may of been good for corporate. They asked us to take on Jenny Craig, but with $50,000 in licensing, permits, equipment and their endless checklists, regulations and training we would of just gone deeper into debt.

  We're sooooooo glad to be out.

• Great read. I keep feeling more at ease with closing. Only a few weeks left. I haven't told Curves yet? Anyone have experience with this? They have bigger problems than me closing.