CURVES: Robert Lay’s Story
The American dream of owning your own successful business seems to be going up in smoke for a lot of the Curves Franchise owners. The story you are about to read may seem like a Steven King horror novel but it is a real story that has happened to my wife and I. To all of the past, present and future owners of a Curves franchise please take the time to read the whole story as at the end we explain what we plan to do and how you as an ex or present owner may want to get involved.
My wife and I had owned and operated our own business for over 20 years and had been very successful at doing so. While we were making a great income from our business there was something missing in our life. Neither us felt that we were contributing to society but just taking and we decided to make a major change in our life. That was when we heard about Curves for Women. It was a new franchise that only had 300 or so clubs and for the first time in years we both became excited at the prospect of actually helping people reach their goals. We bought our first club in 1997 located in a city of thirty thousand. From the first day it opened it was more successful than our wildest dreams. Not only were we making excellent money but the personal rewards helping people better their lives was a truly rewarding feeling. I can still remember as if it was yesterday the first time a Dr. of one of our members came in to check out what we were doing as he couldn’t believe the ch
anges his patient had gone through. She had gotten off her high blood medication and had lost over 40 pounds in 4 months. It was truly amazing and over the years we have seen it happen numerous times over and over.
We sold our first club in 2001 and bought two more franchises. My wife became a mentor for Curves International around this time and I was helping to sell franchise for Curves International as so many of are members wanted to own a club. It was at this time that we started to see problems arising with Curves International but we attributed it to the fast growth that Curves was going through. In 2002 we bought two more franchises but this time they were in what was called a metro-area instead of city under thirty thousand in population.
The first problem we encountered with Curves International was in early 2003. Curves sold a franchise that was a corridor of land between one of our franchise’s and the next city 8 miles from our southern boarder. It was obvious to us that the territory didn’t have the necessary population to support a facility and that Curves International was selling any location just out of greed and the fact that there were so many people who wanted a franchise. The people who bought that franchise tried to open up on our border but it had always been an unwritten but followed rule of Curves International that you open in the middle of your territory so that disputes between owners over stealing members from your territory didn’t arise. We immediately filed a complaint with Curves International and they stopped the new owner from opening at that location. Unfortunately for the new owners there were no other commercial locations between the two cities so they were forced into selling that franchise back to Curves International for a loss.
It was also at this time that Curves International started to change personnel. The employee’s who we had a personal relationship with that had started Curves International with Gary Heavin were leaving the company at an alarming rate. Seven employees that were the top management of Curves left or were forced out because of Gary Heavin’s greed. They ended up filling a law suit against Curves which was later settled out of court. It was at this time that Diane Heavin became involved with Curves and a whole new history was being written about how Curves was started. The original Curves member guide which was written by Gary Heavin and June Manley was taken off the market and the new Curves book authored by of course Gary Heavin was on the top 10 of the Times best seller list.. To make sure it was on the Times best seller list all the clubs had to order at least on case. That is when we as owners realized Heavin was a manipulator and not the born again Christian he portrayed to be. It was also at this time that the price to buy a franchise more than doubled in price. This came as quite a surprise as Heavin had always maintained that he would never ever increase his franchise price and he even swore on the bible in front of a group at club camp that he would never break his word on that. Well as we all know he didn’t keep that promise for long, which just shows his greed.
At this point my wife and I became quite concerned and even considered selling our business but other problems arose concerning Curves International that demanded our full attention. In 2004 another Curves location located on our boarder of one of our metro-areas hired two of our employees and stole around 15 members from our club. Both employees had signed the anti covenant not to compete and in our state those agreements are strictly enforced by the courts. We considered going to court but since it was another Curves facility we decided to file a complaint with Curves International. And to let them handle it. What a mistake that was as they did nothing. We transferred the members files but refused to transfer the money for the members dues until such time that Curves International responded to our complaint. We were told by the area director, which was a new position at Curves International, that we were trouble makers and he refused to send any of are clubs the members appreciation bags. Shortly thereafter Curves International resold the corridor of land that had been sold back to them at a loss from the previous owners and they allowed the new owners to open up in nearly the same location that they had refuse the previous owners only a year and a half before. The new owners advertised in our area and ended up getting 10 or 11 members to transfer to their club. Again we held their monthly dues but did transfer the members files. We immediately filed a complaint but again got the same response nothing. It didn’t take long for most of the members who transferred to come back to our club as the other location was small and in a very run down area and to this day that club has not shown a profit and has been sold numerous times over the years for little to nothing.
Then in 2005 the real problems with Curves International started that we are still contending with today. In one of our metro-areas a competitor by the name of Ladies Workout Express opened up right across the street from our location. Unknown to us they had hired our manager and one other employee from that location and when the employee’s left they had stolen off our computer our member files. They ended up stealing over two thirds of our membership with in a week. The employees had signed the covenant not to compete so we immediately hired a lawyer and prepared for a lawsuit. As I stated before in our state that agreement is strictly enforced but it took four months to get it into court. During this time that location was losing so much money that we decided to move the location next to our other territory so that both clubs could stay open. We sent in the required change of location form to Curves International but never heard anything back from them so we went ahead and relocated in late 05. The owners of the Ladies Workout Express eventually went broke because of the lawsuit and the fact that they would end up owing us monetary damages. They filed for bankruptcy to prevent us from collecting any monetary awards in Dec 05 but we did have the satisfaction knowing that we did what was right
In early 06 we were informed by Curves International that because we abandon that location they were terminating all of our franchise agreements. We immediately requested mediation for all of our clubs which is authorized by our franchise agreements with Curves International. We never heard back from them so we hired a lawyer in Waco, TX to represent us. He proceeded to send them a letter requesting the same mediation process and they did respond to him. They sent him letter stating that it was premature to go through the mediation process at that time as they were in the process of researching our reason for moving. Curves International continued to debit our account for the franchise and advertising fees for all the other clubs we owned but stopped talking the fees for the one territory that they stated we abandoned. The lawyer had us send Curves International a check for the fees and a new authorization form for them to deduct it from our account. Neither our lawyer or ourselves ever heard anything back from Curves International so we all assumed that things were back to normal.
In the spring of 07 we made the decision to start selling off all of our clubs and to completely retire. It didn’t take me long to sell the club we owned that wasn’t in a metro-area and I agreed to stay with the new owner’s to help train them how to run the business. We sent all the documentation into Curves International and the sale was completed by January 08. That freed my wife and I up to concentrate on our metro-area clubs and to get them ready for sale. In Feb of 08 we heard that a Curves club was opening in one of our territories within a mile of our current club. We could not understand how Curves International could do such a thing. We again filed a complaint by phone and e-mail to Curves International and several weeks later we were informed by e-mail that they didn’t know what we were talking about. We were told we didn’t own any franchises and hadn’t since we were terminated in 05. That came as quite a shock to my wife and I as our franchise and advertising fee’s had been deducted all along from our checking account and we had just recently sold a club that they were telling us we never owned. We had a local lawyer send a letter to the new owners explaining the situation and that we would be seeking legal recourse against Curves International and depending on the outcome they were opening themselves up to a potential lawsuit. During this time we had bought and paid in full for the Smart Equipment for Curves International and were waiting for the installation which was scheduled for the June 24th. On June 20th , a Friday we received a phone message telling us that the Curves Smart Installation was canceled and that we had to call Curves legal for an explanation. We left messages both e-mail and phone every 30 minutes on Monday June 23rd and finally late in the afternoon we received an e-mail stating that one of there lawyers would be in touch with us before the end of the day, They never sent an e-mail or a phone call as was promised but by mid day the next day they did respond by e-mail. It stated because of the problems with the members transfers, the fact that we abandoned a franchise, and that we had interfered with the opening of the new franchise located in our territory we weren’t approved for the Curves Smart. Yet in late May they had sent all the promotional ad material for the Curves Smart and of course we had gone to a considerable amount of expense for training the employees, advertising and promotion of the Curves Smart equipment. It was at this point that my wife and I decided that drastic action had to be taken against Heavin and Curves International.
While we still love the concept of Curves we feel that because of the deceptive and we believe fraudulent business practices that Heavin has allowed under his management Curves will eventually end up in the toilet so to speak. After spending many hours on the internet we have found that there are many lawsuits against this man and his company. Just read some of the post’s that are on franchisepick.com from owners concerning the new ten thousand fee if your club goes under and closes to the vitamins that were sold in Feb and March by Ideas in Action at a discount to owners without telling them that they would expire at the end of May. The lack of support and communication from Curves International that all of us owners are going through is intolerable. It is impossible for an owner to get through to them on the phone and good luck if you expect a call back in a timely manor. The fact that we as owners pay a lot of money for our advertising fees and have no accounting of where it is spent and a quite frankly we never see many ads in our area.
I have taken the time to do the necessary research to find several good lawyers who handle franchise law who are more than willing to help Curves owners who are having similar problems with Curves. I for one am going to go after Curves International and Gary Heavin in a court of law. These are not class action but group action lawsuit and if you don’t understand the difference contact me and I will explain it to you. There have been over 200 such lawsuit filed against Curves in the last several years and while some have been settled in mediation others are in the process of going to litigation. If you are a past or present Curves owner who has experienced these problems and want satisfaction whether it be monetary or revenge please contact me. We have several options that we can go and I for one am positive we will win as the other lawsuits have been successful so far and have set a precedent for ours. It is time for the owners of Curves franchises either past or present to stand up together and put a stop to Heavins’s ramped destruction of peoples lives just for monetary greed.
Thanks for reading our post and God Bless you all.
ARE YOU AN CURVES FRANCHISE OWNER OR FORMER CURVES FRANCHISEE?
ARE YOU FAMILIAR WITH THE CURVES FRANCHISE OPPORTUNITY?
PLEASE SHARE A COMMENT BELOW.
Just a thought, after all the cases have been resolved, maybe they (current and former owners) are asked not to post anything as part of the deal……Just thinking……
If you look at the Court documents (need subscription), there have been quite a number of settlements made in the past month, so I wouldn’t be surprised if everything has been settled. As the number of plaintiffs got less and less the amount each of them would have owed to the attorneys for a trial would’ve racked up pretty quickly (unless the attorneys already had a cushion built in to what they had previously charged).
I’m sure the settlements are confidential, although they are disclosed in the FDD. Looking at the 2010 FDD on the CA website, settlements ranged from $0 to $25k, however, those settlements don’t take into consideration attorney fees, and each party was responsible for their own fees.
Their FDD also shows that they did file lawsuits in TX for franchisees that abandoned their shops, so people on here taking the advice to ignore notices, should take that into consideration.
As for Unhappy, I’m sure I was one of a couple of people he wanted banned. It’s ironic that he would criticize CI for being bullying around franchisees, yet it’s apparent that he was trying to bully the Admin into banning people.
jd – so sorry to see you back…..everyone posting on this site can see you’re a mole. I trust nothing you say. I’ll stick with the majority of people who are trying to support one another while we get on with our lives. I was fortunate enough to actually speak with unhappy. He knows his stuff! So everyone else out there, hold your heads up high and be confident that if and when we ever have the opportunity to fill a courtroom….we’ll have each others backs!….jd, Get Lost!
Drained, please tell me what i posted earlier today that had any bias whatsoever?
Sure, think I’m a mole, but wouldn’t you prefer an unbias opinion. I gave you and others information provided in the FDD for CA (look it up), that should be useful.
Unhappy provided one side of the information and was pretty biased to his opinion (hence he wanted me banned from posting). Remember how he stated that CI would be bankrupt by the end of 1st quarter next year? If this case is settled at a maximum of $25k, they had income to offset those losses (again FDD on CA’s website).
Many of the suits have been settled. I have seen the FDD. Some for a couple grand. When the venue was moved to Texas that was the beginning of the end. Federal law does not protect the consumer and Heavin has probably donated to every judges campaign in that county. Imagine having a chance in Texas. This ship has sailed. No person in their right mind would pay an attorney to do this all over again; although I am sure attorneys will welcome 180 more people paying them 4k each and monthly fees to try. Winning against a franchise system in their home court is impossible 99% of the time. It is sad but true.
I’ve posted the CURVES International 2010 Franchise Disclosure Document (FDD)
While you can read them in the litigation section, tomorrow I’ll post a table showing the amounts of the group action settlements as reported. As of the date of the FDD filing, there were 40 settlements determined and 81 plaintiff groups remaining. There are also other settlements apart from the group action.
The results for 46 group action plaintiffs is listed in the 2010 FDD, with 81 actions still pending.
As I read it, of the 46, 17 got nothing and 29 received cash settlements from CI.
Total Settlements: $240,400
Highest Settlement: $25,000
Lowest Settlement: $1,000
Average Settlement: $8,290
Median Settlement: $5,500
Does anyone know what the actual attorneys fees & costs borne by these franchisees are? How many of these franchisees even recovered the costs of their participation in the lawsuit, much less their time and aggravation?
See the list of individual settlements listed in the FDD here:
CURVES Franchise Lawsuit Settlements
Reactions?
They paid 4k down and 80.00 per month to the law firm. lawyers are worse than CI. They are bloodsucking liers who give false hope to reel in the suckers.
I’d like to say how very sorry I am to hear people who had already suffered losses (emotional, financial and physical) had to give so much of their already drained time, energy and money to ultimately receive such low settlements when all is said and done. My heart goes out to you.
My take on the settlements which could be way off base, is that with so many cases pending, I don’t think CI would have settled so many of them regardless of the dollar amount if they didn’t see that they weren’t going to win if it went to court. That’s a lot of cases to settle on. I know the whole “saves in legal fees” theory of settling and the settlement amount is pocket change for a multi-million (or billion) dollar company but if the next 40 or so settle that could be another quarter million, still not much by their standards, but maybe enough to open their eyes to the direction they are going. How much would they have been out had they gone to court and lost? I would have loved to have been a fly on the wall in discussions with their attorneys. Why would you basically give away that much money just to make something “go away” if you thought you would win by going to court? Oh, I know, because it was the “right” thing to do (definitely my sarcastic side coming out now). Sure CI cut their losses by settling, probably had gag orders as part of the settlements so far as anyone being able to bad mouth them anymore and they have probably stopped many others from even thinking of filing suit, but maybe, just maybe they’ll see how wrong they’ve been and stop or at least slow down their uncalled for treatment of the people who helped them obtain their millions. I know, I know, what can I say, I’ve always been somewhat of an optimist – wouldn’t have purchased the franchise if I wasn’t. Whether it opened their eyes or not, thank you to all of you who stood up to them, your efforts are greatly appreciated.
I’m still open (heaven help me) and undecided as to what direction I’m going to be taking. I would love to hear from anyone who has re-opened after closing. Are you still using your same equipment, did you go co-ed or remain women only, did you stay in the same location, have you had any repercussions from CI? I’m still trying to figure out what I’m going to do and would love some feedback.
Unhappy,
Still wondering where you are and why you are no longer posting. Have you given up? Please post and let us all know one way or another what your thoughts are now and what is happening with you. You helped out a lot of us and made us feel more secure. Should we still feel the same? PLEASE let us know what your thoughts are now. Thanks.
I too, would like to know if anyone has closed and then reopened successfully. I am looking at closing the end of December, with only 1 1/2 years left on my agreement (10 year agreement). I had hoped to make it until the end, but we’re losing too much money every month. What is it actually costing to close and quit? In looking over our agreement, it doesn’t give consequences, just says you “will not be in default”. I have other things going on in my building, so without the fees sent to Curves, we could at least pay the rent on the space. Any advice or information would be appreciated.
Drained,
I closed my last of 5 clubs in May, 2010. I too received a letter saying “I abandoned my franchise” and I owe CI 60K + I was able to sell (1) while things wer still good. Unfortunately, membership declined so fast, for me and the new owner, that the balance on the sale went into default.
So, at that point in time, appx 2006, I started to work the remaining (4) clubs, with hopes of turning them around, possibly for a sale. I put everything I had to in these clubs, both emotionally and financially. I went through any retiement, or savings just to keep these clubs open. And of course, during this tome taking no compenation.
I was in constent communication with CI, Landlords, etc. trying to do anything to keep them open. I was fortunate enough that between 2007 and 2009 I was able to sell (really give away) three of them. Leaving me with (1).
1 year after the last sale, I closed my last club. I too was in contact with CI and following all their recomendations on closing procedures. Only to find out that shortly after closed, I received a letter saying that I “abondoned my franchise, and owe appx $60,000+” I sent an immediate response, and all documentation back to them, and to date have heard nothing.
Just a quick note: I told them that I had signed afftidavits from current, and previuos owners (all true) that show CI allowed these franchises t close with either no fees, or minimal fees. I’m not sure if this has any meaning.
I do have a few questions that possibly someone can answer for me;
Does that mean a precident was set, with none or reduced fees?
If they were aware of my closing, and sent me procedures, how can they say I abandoned my franchise?
(2) of my clubs were owned prior to any ad fees, but then ad fees were taken out automatically. Was that legal?
I have read many of these posts for years now. I feel for each and everyone of you. I pray everyday for direction and guidance, and will do the same for you. Look forward to hearing anyone experiences with all of this. God Bless.
As we near 1000 comments on this post alone, CI has decided to start monitoring and managing their online reputation.
CI press release:
“Saturday, 09 October 2010
“Curves International, Inc., the world’s largest franchisor of fitness clubs, has selected Engage121, Inc., a software company with expertise in social media and franchise communications, to help Curves monitor brand sentiment, leverage their news content, and develop relationships with online audiences through multiple social media networks and blogs.
“The Engage121 software application allows Curves to simultaneously monitor all relevant social media networks and more than 200,000 blogs, as well as traditional news media…
“We are pleased to have been selected by the most recognized fitness franchise in the world to facilitate their social media efforts,” Engage121 CEO Jon Victor said. “We’re excited to help Curves listen and engage conversations across all relevant networks and blogs in our integrated application,” Victor said.”
I have been a club owner for several years now & like many others have put in to many hours to actually count. God has blessed my business in the fact that he has kept my membership where it needs to be to meet the needs of my bills. There is not really any extra, the few times that I have managed to get ahead & pay someone so that I might have some time off never lasts very long. I am always grateful for that little bit of time to just be able to breath outside of Curves, even if it is only for a few hours.
Without giving out to much information because I am sure that CI is here amongst us & I do not want them to know who I am or where I am at. I have been trying to sell my Curves for a while now. I realize that I paid way to much for my Curves, I did the research but apparently not well enough…..I will never re-coop the money that we have paid for this business. After the lovely WSJ article and my members commenting on it while working out I decided to do some more research & stumbled upon this web page. I have read every post from beginning to end, it is so sad & disheartening because I have had a weight issue all my life & Curves has been a huge part in my losing weight & keeping it off. I love my members but there is NO WAY I will resign a franchise agreement with CI or try to sell it from this point on. There is absolutely no way I would sell my business to someone else, even if they offered me the full amount as to what I paid for it. I have delt with CI, they don’t give a rats behind about us! I pray every day that God will allow me to “hold out” until my franchise agreement is up. As that day grows closer, I begin to see the light at the end of the tunnel. I will still owe at least $24,000 to the bank for my franchise note when my agreement is finished but I will not renew or sell to some other unsuspecting person that has a huge heart & love for the people. I am zapped! I want my freedom back & will feel forever blessed if the Lord gets me thru this period in my life. I don’t blame CI for my mistakes but I also do not believe that they are going to help anyone other than themselves. My heart breaks for each of the posts because I know the love for the people & the business as well as the hardship it has played on my health, my marriage & my family.
I will count this as a very EXPENSIVE lesson from the “school of hard knocks”! I will walk away having learned something & pray that I never make a mistake like this again. To all of you that are still struggling or have closed, I am sorry & wish you the best!
Well…I am officially lopped from the dying Curves tree. I am now Closed, uh, oh…I mean “pruned”. I am relieved! It sounds like after convention the writing is on the wall….things aren’t looking so great for Howie!
Drained,
What happened at the convention?
I CLOSED MY CLUB OCT.15/2010,JUST RECEIVED A LETTER FROM CURVES LEGAL AND THEY ARE DEMANDING $45000.00 IN THE NEXT 10 DAYS.THEY ARE SUCH HORRIBLE PEOPLE .HAS ANYONE HEARD OF THEM ACTUALLY GETTING A LIEN ON YOUR HOME,LOOKS LIKE I’LL BE FORCED TO GO BANKRUPT LIKE SO MANY OTHERS .I HOPE GARY H GETS WHAT IS COMING TO HIM FOR DESTROYING SO MANY LIVES
I certainly cannot afford, nor will I send them one more red penny! They have brainwashed and manipulated so many people. Just take note of what is happening, there are so many of us in the same situation. I will not let Curves ruin my life anymore…..I’m gonna live it!
To Cathy and Drained: We are ex-owners who closed in 2008. We refused to pay both the $10,000 and then later, the $43,000 they demanded (and yes, they threatened to put a lien on our home and further legal actions to get “their” money). We wrote a letter refusing to give them even a cent more. It has been two years now, so hopefully that’s the last we’ve heard from them.
Although it was hard to close after so putting in (and losing) so much money, time and work; and although we will always miss our “ladies” and all the good experiences – the relief was just IMMENSE. Moving on, back to having a life.
Drained – what happened at convention that you said the writing is on the wall? I’m sure we’d all like to hear this!
Robert, I would love to talk to you. Just about thru my contract, and curves does not answer my phone calls… hope to hear from you….
■Small Town on April 9th would love to talk to you. Will be watching my emails…
Where are you Robert? Are you alive and well? I think many of us that have talked to you in the past would like to know you are still there for us. We listened to you and took your advise. We appreciated you were there for us. Why has all communication stopped from you? We are now in the dark not knowing what is going on in the CI world. Please post and let us know. If you are done and want no more to do with us, just let us know. To all of you out there that are in the dark and are getting no response(including me) I believe now we just have to sit back and hope for the best. I closed in Oct. 2009 and except for the demand of money(which I did not send) and the letter of abandonment, (I did not abandon them, they abandoned me) I have not heard from CI. I did receive 2 letters from some fly by night lawyers office in Illinois and a few phone messages from them but they have since left me alone. I have ignored this as Robert suggested at the time as he told me they had no right to collect from us. I guess we are now on our own and only time will tell what happens to CI and to us(the ones that made CI successful!. If CI had not been so greedy and had been more helpful and understanding to their franchise owners i feel most of us would still have their clubs. They only wanted to make all the money they could and to hell with us. Good luck in the furture to all of you out there. I have decided that I gave CI almost 8 years and I was in it for the right reason(to promote womens health) not to become a millionaire. We did what we were supposed to do now its up to CI to face their maker and do the right thing for all of us. They made their money off our hard work, now they should let it go and be thankfull for what we all did for them. We made them rich, but in money only. We are rich in knowing we did help a lot of women and we did it for the right reasons. You all should sleep well knowing this, I do!
It looks like we will be joining the ranks of the fallen. I am tired of subsidizing our loosing club. Does anybody know how many clubs have closed this year or where the information can be found? I am meeting with my attorney and would like to have all the information I can. I will fight CI to the end before I will pay them one more dime. As far as the equipment is concerned I will junk it before I will send it back to CI!! I refuse to sell the club to some other poor fool and pass on all the BS from CI. One year and five months sense we bought the club, moved it in to a brand new decorated building and still no one from CI has set foot in it. My wife ask the area rep if she was going to come by, “She is to busy to come by” If any one knows how to contact the attorneys that filed the suite against Curves please give me there contact information. I will keep everyone informed as to what transpires as we close.
I received my “Letter of Abondonment” from CI. They don’t even have my contract date correct on it. When I closed and sent them my e-mail informing them, I referred to myself as my franchise number, no name….that’s all we ever were to them anyway. As for convention, as I said I did not attend, although I had a few friends that did. I guess Howie got up on stage and instead of focusing on the positives and stomping out all of the negativity…he went on some trashing rant about all the people that have screwed him over (HA)…anyway I guess he bashed Cassie Findley, Go Figure, and many other people that he says let him down…what a freakin’ joke! I guess he even singled out some guy right in the front saying to him “I know you’re friends with him (a Go Figure guy)…but you can take that home with ya”…what a jerk! I also heard….again not first hand, that “unhappy” is finishing up some legal things (law suit stuff) that goes through the end of this year..and we’re assuming he has to not be involved with any communications realted to the matter. I think that may be why we haven’t heard from him on this site for awhile. I talked to him personally for hours on the phone, and he’s a ball of information and a wonderful guy! So, I’m moving on…filing all CI crap in the corner of a back room….and moving on with my life. I just continue to tell everyone that when I get down about it….think of all the things I am blessed with. I have my health, a loving and supportive husband, healthy parents and kids….it’s only money. What goes around comes around…we’re all a family of our own, and if it ever comes down to us getting together for a “family reunion” in a court room someday, we know there’s alot of power in numbers! I pray for all of us everyday…stay strong, and live your lives!
Oh…I also heard (second hand) that “unhappy” had planned on attending the CI convention in Vegas. I’m anxiously awaiting his feedback on that! But, Howie will probably watch his tongue if he knows “unhappy” is in the house!
guys from all my poking around online I would guess that Curves International is heading towards the ropes. from what I can gather there are probably less than 3400 us franchises. additionally, while the average club break even point occurs typically at a membership of 300, again from what I am able to find online the average curves membership is actually closer to 250 per club.
what this means is that without a dramatic change at the corporate level, Curves seems destined to a continued relatively rapid decline in open franchises.
has anyone looked at the corporate business model and compared it to the modus operandi that was recommended at the franchise level.
local club curves international
the registration =initial franchise fee
monthly dues = royalty-adverising
merchandising =curves smart- i go figure, etc
early quitting fee = we all know what this equals
the life blood of our club is the registration, and monthly dues is the backbone. it was the same for curves international.
ci is now living off monthly dues and quitting fees,
you can’t make it with out the new members. You will have decreasing monthly dues and substituting quitting fee income for registration income is a losing gambit. Both at the local club level, and at the corporate level .
Curves international needs to rebrand so they are compelling and attractive in an increasingly competitive industry. They also need to start making enough money to survive without the new franchise fee income, (no franchises have been sold in some time) , and without the “quitting fee” (that will become a diminishing income source very soon).
I anticipate a switchover offer sooner or later that tries to reorganize whats left into a new company.
these are my thoughts anyhow.
I personally hope curves gets a good leadership team together and makes the necessary and long avoided changes so something can be salvaged from what was at its inception a truly special and unique concept.
It seems I too will be joining the ranks of the “closed or pruned Curves” in the very near future. It just breaks my heart not so much for me anymore – it will be good to have it behind me – but for my members.
I just got off the phone with “unhappy”. He’s still around and doing well – going to court in January unless something changes between now and then. I found him on facebook – sent a message with my phone number hoping it was the right person and he called me within a day, so he is still talking.
I too wish he was still posting here along with all of you – it has been so helpful for me to read his posts and hear your stories; as mine is much the same. As bad as I feel for everyone, it is somewhat comforting to know I’m not alone. I’m not sure I would have made it through this whole thing without losing my sanity if it hadn’t been for this site – so thank you ADMIN and everyone who posts here!
I sort of cut my sentence off early on my last post…I should have said “…he is still talking and being very supportive and encouraging”.
Over at the McCord Business Brokers website, they’re either not accepting any new clubs for sale, or the clubs that are listed are closing before they can be sold.
My state used to have several pages of clubs for sale. Now there are NO clubs listed in the “exclusive” listings and only TWO in the “for sale by owner” listings.
Check your state and see for yourself!
Comment from “Pete” posted to one of the Children’s Orchard posts (http://www.unhappyfranchisee.com/childrens-orchard-ceo-taylor-bond-claims-franchisees-giving-rave-reviews/):
“There is an interesting article in the Franchise Times Nov./Dec. 2010 issue on page 76 dealing with a franchisor suing a franchisee for future royalities when the business closed before the contract was up.
“The case involved New York Medicine Shoppe franchisee, TLC Pharmacy. Laura Sobolesk, the franchisee, opened the pharmacy in 2004 and signed a 20 year deal. She closed up shop in December 2008. The Medicine Shoppe franchise sued for unpaid royalties and marketing fund payments. It also asked for future royalties on the remaining 16 years on the franchise contract.(nearly $900,000)
“Sobolesk wrote letters to the court saying she could not afford an attorney or the plane fare to Missouri where the case was to be heard. She didn’t even show up to court. The judge ruled she had to pay past due royalties and interest, plus additional legal fees. ($128,000) But the judge REFUSED to grant lost future royalties.
“Ron Gardner, attorney with the Minneapolis law firm Dady Gardner, believes this ruling may ‘turn the tide’ of franchisors pressuring the franchisees for future royalty payments by providing case law in favor of the franchisee. Who is to guarantee that the franchisor would remain in business through the life of the contract?”
My wife and I had to close our Curves in January after 3 years open in to a five year contract. We have been getting the calls from some attorney in Illinois trying to collect a debt for future royalties and advertising. We are not sure where they came up with the amount due figure. I have seen people comment that they have ignored the calls, and nothing has come of it. I am seeing this account on my credit report now. Has anyone else checked theirs ??
Please contact me with UNHAPPY at Curves site. thank you
Our curves may close with only 6 mo. left, any ideas out there?
To Iora herman, I am sorry that you are closing. However, after that 6 months you will have your life back!
We are going to close our Curves. Would appreciate any information from other Curves owners that have closed before franchise agreement fulfilled. Really interested in clubs in Missouri and Kansas area.
Thanks Ray
We are still waiting for some advice on what we can expect from Curves if we close. Please anyone.
Thanks, Ray
Ray & Copper:
I closed my club (PRUNED) earlier this year with a little under 3 years to go. I’ve no new advice that you can’t find here by reading the posts, though. I tried to close properly, did not sell or keep my equipment (donated to a prison), and did most everything asked except pay the fee. I recieved my letter of abandonment and ignored it. I have not received any calls yet regarding the attorneys in IL. If it is showing on your credit report, I think you can ask for a validation of debt from them – Google it and look for a debt validation letter template and ask it to be removed if they cannot validate the debt (and from what I learned from a para who deals in bankruptcy, they need a court judgment against you to validate the debt). Ray, just try to close with respect to your members – treat them right and try to transfer them to another Curves if you can. I keep hoping each day that I will hear no more, but it seems to be hit-and-miss on who they chase. I know a lady who closed 2 years ago and she heard nothing after the demand letter. I don’t know what criteria they are following in pursuit of franchisees. Good luck. Even though it is hard to close, you will truly feel a great weight of one kind lifted about 4 months after closing. I’m sorry I can’t help you much more.
Ray Beavers,
Sorry that you are closing. We’ve all been there and know how you feel. We closed two years ago and we are on the West Coast. We had not fulfilled our franchise agreement–we had 5 1/2 years to go. From reading the above posts, I don’t think things are much different than two years ago, but this is what happened with us:
We notified Curves of our intent to close. They then emailed us their “Closing Procedures,” an Intent to Close Facilty form, etc. (note the titles–”closing” not “abandonment”) and a demand for $10,000 so that a Mutual Release could be offered to us (this is their compromise for collecting future royalties/advertising fees from us). They basically tell you what to do with your equipment, with your clients, etc. We followed all their instructions to the T – except for the $10,000, which we refused to pay.
They then told us they would “reconsider” the amount and dropped it to $8,000–we refused. They again “reconsidered” and dropped it to $6,000. They also told us since we didn’t have the money, we could sign a promisory note with them (yeah, right). We again refused. Now at this point, other clubs have said that they went down to about $2,500. However, since we emphatically refused to pay, they stopped there and referred us to the legal department.
By the way, at some point, they began calling it “abandonment” instead of “closing” of our club – even though all their paperwork indicated “closing” and we followed all their instructions (except for the $10,000).
Next, the legal department UPS’ed us a letter saying we now owe them $42,480 for future royalties/advertising fees for the remaining 5 1/2 years of our Franchise agreement. We faxed them back a letter saying we will not pay future royalties/advertising fees for our club which is no longer in existence, addressing the issues of their being unethical, discriminating, intimidating and harassing. This is where I spoke with UNHAPPY, who does not post on this website anymore. He was a wealth of information and possibly ADMIN can refer you to him- not sure. I guess the next step is, they could serve us with court papers–we have not heard anything more.
Anyway, we are not in any of the lawsuits and it has been two years since we wrote them the last letter refusing to pay, with no more word from them. I hope it stays that way. One of the posts earlier advised everyone to check their credit reports because they have found an amount from Curves on theirs. I think that was good advice – I did check mine, and it is not there.
Hope this info helps.
CA Ex-Owner
Ray,
I believe they practice intimidation. It would be wise for you to do two things (In addition to the suggestion above to check your credit report etal)
1. find your franchise agreement. mine specifically says the equipment is mine to keep, no matter how the contract is ended. however, yours might say something different. find it. read it.
2. check your state laws. that might mean talking to your attorney general, or consulting an attorney, or reading your state code (if you can). The state codes are online. Your local congressional representative might also be able to help you. And are you acquainted with any other franchisees (in your state) who have closed? Look them up. Ask them about their experience. Especially ask if they consulted a lawyer.
Intimidation works if they succeed in making you act upon fear. Knowledge is the antidote to fear. Keep reading these posts.
Best wishes and let us know how things go!
For Ray Beavers
I closed several months ago prior to the end of our franchise agreement. I spoke personally with several people on this site, followed this site from the beginning, spoke with franchise lawyers, spoke with other owners who were currently closing and I decided I wanted to sleep at night. Closures are not as “easy” as they were more than nine months ago. I worked with CI and experienced a very graceful closure. Keep the communication open with them. (Advice from lawyer.) I did not experience intimidation. I paid a nominal fee and it was over with. Paying an attorney to review my agreement would have cost aloy more. At the end I was relieved. Let’s be fair, after all,I was breaking an agreement.
Does anyone besides me think that Happy Closer is a CI plant? Has anyone else experienced anything “graceful” from CI?? Has anyone else considered the CI closure fees to be “nominal”?? Why pay an attorney a few hundred dollars to review an agreement we when can trust CI to be graceful and fair- it’s everyone else that broke their agreement- CI would never do anything wrong! Trust them and feel relief! What a farce…
Thanks to every one who responded to our questions about closing. We have an attorney and I am forwarding all your post to him. We will post the outcome here as we move on.
It really hurts that we have already invested over $50,000 in a year and five months and not one person from CI has set foot in our club or offered any help! The area rep informed my wife she did not have time to visit our club! Now we still have to worry that CI will try to extort more money from us.
YES!! I agree with Fit Dude, Happy Closer sure sounds like a CI plant.
Nope, not a plant.
Happy Closer
What was a very graceful closure?
What do you call a nominal fee ?
After buying a club that would have closed. Moving it to a new building with all new interior. Giving our all to try and make it go. Being lied to about number of members. Having our area rep tell us she is to busy to visit our club. I thank a graceful closure would be leave us alone as you have since we took over, and a nominal fee would be $0.00. What do you thank Happy Closer?
Ray Beavers: I sincerely want to help. Are you finished with your lease? I wanted to close earlier, but I couldn’t break a lease. Have you contacted CI regarding closure? I can’t disclose details because I signed a confidential agreement. My advice is to talk to them, explain your situation in detail. I know it is a scary time. Keep the communication open. This was advice I received from attorneys and other owners who “closed gracefully”. I will repeat, it’s not as easy to walk away as it was more than 9 months ago.
Curves International is taking me to court for broken franchise agreements. I closed a few clubs due to poor numbers and its lots of money. I am in Canada. I am stepping out my master’s studies and will spend the next three to four months preparing a case. I plan to launch a counter suit for damages resulting from opening clubs in territories too small to justify a club and that the sale of which was unconscionable. I have an email from International stating that clubs are not recommended in areas smaller than 10 000. So why did they allow it? I believe that the number is larger and will prove it based on closures. I owned 8 clubs at one time and Gary suggested that I open more years ago. Mike Raymond states franchisees got into for the wrong reasons as investors. Did they really think I was going to personally manage all these clubs?
I am asking for any information you may have that may help my cause which will in turn help all those who have experienced stress caused by CI dealings. I would love to have:
1. A list of closures or number of clubs at its peak in the US and Canada.
2. A list of all CI cases or other franchise case law that may be of interest.
3. A Texas Usury law which apparently prevents CI from suing for franchise fees after closure (Robert Lay mentioned this to me last year)
4. Anything else you may deem of interest.
To Karen! Please keep us updated! I am very happy that you are taking action! I wish you all success. I’m sorry I don’t have any of the data you requested, but I hope you find it all. There was somewhere on this site that a posting of a person who was doing their due diligence in considering buying a resale. They would have been in reciept of a document from Curves International listing all closures and lawsuits.
As of this morning there are 4309 Curves in the 50 US states. The WSJ article stated that there were 7748 at the beginning of 2007. If this was peak, although I suspect it may be higher, that is a loss of 45% of clubs in the US, wow. There is a Curves for every 72, 112 people in the US. I would love to know how many of those clubs are just hanging on due to the legalities of broken leases, franchise agreements, love of its members and the like.
Karin,
I believe an accurate count of the current number of open Curves franchises is known only to Curves International.
I cannot fathom a reason that Curves would reveal an up to the minute number that is lower than what they have provided in their most recent required disclosures. I may be wrong, but I think Curves is required to update the list of closed franchises annually. at best this current list is approximately 1 year old.
from my extensive online research California and Texas closures have left the actual open franchise count much lower than is represented by the number you have alluded to.
I believe that when the new figures come out the current no. at this time, November 2010, will be closer to 3300 or 3400, at the highest, quite possibly less than 3000.
I and my wife are in touch with 6 or 7 other franchisees, my acct does the books for 3 franchises in Brooklyn, I stay in touch with an owner of 3 in British Columbia, I met at club camp, 13 franchises altogether. The best of all the franchises we are in touch with is 600 members in 2 clubs they closed the third, down from a total of 2500 members in 3 clubs 3 years ago to 1200 in 2 clubs now, (huge territories). The worst are working to meet the negative cash flow of their clubs at around 150 members.
Most clubs we deal with when transfers or guest passes are called in are below 300 members, many below 200 members. We are in a resort community and will on occasion host traveling club owners from other areas. this past week we spent time with people from the cape who have gone from 300 to 150, and are working full time jobs to cover the negative cashflow at their club, (which they paid 6 figures to buy).
I seriously do not expect more than 1200 open franchises when the dust settles, 2 years from now. as I stated in a previous post, the typical break even no for a club is 300 members. the current average membership across the entire co. according to my research is 250. that would feel very precarious to me if I was the CEO of Curves international.
Curves International has suffered a 33% decline in gross revenue over the past 2 years. this next year should be interesting. Frankly, Curves international needs to make a dramatic change to their business or they will be a much smaller entity in the very near future, in my opinion.