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.
I need to ask a few questions about my nightmare with Curves International. I am besides myself with actual court proceedings and need some ideas and advise.
This is in response to FitDude’s post regarding Curves Int’l settlement with NY AG. The associated press added the address’ of the clubs listed above. They were not named in the original complaint nor is there any indication that they cheated their customers of any monies. I know, because I owned one of the clubs. I spoke personally with the AG’s office in Suffolk County New York where the complaints originated from. They corrected the press release to make sure it did not implicate or imply that others were accused of the same as the club that received complaints. The AP took it upon themselves to “add value” to the press release by using Curves’ listings of clubs that closed and picked a bunch by name.
to L Rivera~
If you have actually had court proceedings initialized by Curves International, have you talked to an attorney in your state?
Generally, state law supercedes the codicels of the franchise agreement, so it is important to check out what your state law says.
Also, if you get into court, even though state law supercedes the details of the agreement, the judge has the final call in interpreting the law.
Exactly where are you at when you say “actual court proceedings”?
And what state are you in?
I closed 2 franchises in 2009. I started getting the letters from the Illinois collection agency, and still owed back rent in addition to loans for the initial opening and expenses (especially in the last year). We ended up filing bankruptcy late in 2010 and everything was dismissed this past April. It is a great relief, even though we
still owe some money because some of it was secured on our house. BIG lesson learned there. Things are still tight, but manageable. I still have a few friends who
are hanging on with their Curves-barely. I hope and pray they make it through this,
but I am SO glad to be free of CI. I have so much anger towards them and the
way they treat their franchisees. I do have a question for anyone who has closed.
I still have all of my equipment-I tried to sell it to other owners-what a joke-none of
them could afford it! And I absolutely refused to donate it to a women’s prison.One of my friends donated hers to the state women’s prison here anyway,
so I don’t think they would even want it. I have talked to one person who actually
auctioned his off and did pretty well. Does anyone have experience with this or
any suggestions as to how to sell the equipment. Thanks for any feedback.
Anna, I am so sorry to hear about your troubles. I am in court with CI as well. There are 39.5% of the clubs in the US remaining of the 9882 that once existed. It is probably much less but that is whats posted (if anyone could check their state that would be great) on the website. I am amazed that CI pursues future royalties in court based on a business model with this sort of closure rate. Is a franchisor not bound to some sort of reasonable expectation of profit, there are 6000 franchisees that have lost their retirement, homes and health.
The Power to Amaze, how true it is.
Well it been quite a while since I posted but just wanted to let owners of the 24/7 clubs know that Curves International is now filling suit against them and is sending out letters of termination to them. There are very few clubs left in the US and those that are are still closing at a steady pace. Our lawsuit is finally working its way through the court system and will be going to trial if a settlement is not reached late this summer. As par for the course, Howie has tried to delay the proceedings as long as he can but our judgment day against him is finally coming up. We can hardly wait……..
I have read all your emails and are starting to wondering if continuing with a purchase to buy a franchise here in australia is a good thing ? The figures seem to stack up for the business but is that all I should be looking at ? is the company curves really the issue ? the owner isn’t selling because of hard times she wants to travel and has 3 businesses and is only selling 2 so the fact that she is keeping 1 seems like it hasn’t been that bad to her ? I know that over saturation has caused alot of your businesses to fail have they corrected this at all over the years ? please let me know your thoughts before we go further
I am sorry to hear your stories and I hope that you remain strong knowing that you have people praying for you .
For heaven sake don’t buy a franchise from Curves. go back and read all the complaints and you will see all the crooked, deceitful and morally wrong behavior that Howie does to franchises. it will be the worst mistake of your life if you buy it.
this sounds terrible to ask but does howie look after the australian franchises as well ? was over saturation the key issue for all the closures do you think or was there more to it ? they seem to have 1 franchise per 40,000 is this the same for america ? I know that alot has happened to you all over quite a few years and I’m just wondering if they have corrected the problem ? I know that they have treated you like crap and that is wrong no one should be trated that way . But I can’t seem to find any issues on the australian front ? If you know of any please let me know ?
Nice to hear from you again Unhappy….Is it really you??
I have been forced to close both my franchises by CI, due to not being able to catch up on royalty fees….Now they have served me with papers to go to court, and they are asking for the franchise royalty fees, as well as the royalty fees for the remainder of the 10 years should I have stayed open….
I have spoken to their lawyers, have expained to them that I never said I would not pay the royalty fees that i owed, but that they should reflect the correct amount for the royalty month…
I am frustrated with the thought that they were allowed to ignore my calls, emails, and ignore my cry for help when I needed it, and now they make me look like the baddy…They ignored me when I had complained about a new Curves that was opening only 2klms away from mine, They ignored me when I wanted to sort out Curvaceous, and they ignored me when I wanted to pay the late royalty fees
when it was available to me….the Legal department simply said to me that it is no longer in their hands and i has gone to council.
When they sold the franchises to us they were not transparent, honest about how many Curves there really were in the US.
Most of the franchise owner out of the US have no idea what is going on in the US.
Their lawyer wants mediate with me, but I feel that I only owe them for the royalty fees..no more no less…and most owners left that I know are only staying open in fear of what lies ahead of them.
I use to read the comments above and could not wait to walk away from the nightmare and now I feel free dispite the law suit pending, I don’t even want to hear the name C outload.
unhappy if you have any advise on what I shouldn’t do please any advise would be good, as I will not be hiring a lawyer. can’t afford one…as they are passing their lawyer fees on to me….of course.
Do you happen to know if the courts are making franchises for the remainder of their 10 years royalty fees???
wishing you and everyone out there peace…
P.S funny how we were asked not to take our members to court for payment, yet CI is quick to do so…
..
CC, I am going to court with CI for future royalties, it will however take years to get through the system. Currently one third of the franchises that once existed in the US (9882) are open. I wonder where that number will be two years from now?
I would like everyone who has ever closed a club in the US and Canada to contact me. I doubt however that those 6000+are reading this post.
Actually the peak number of units occurred in 2004 with approximately 7600 in the U.S. Still, Curves has closed an impressive number of units. If Curves were publicly traded Heavin would have been sent packing and a capable woman would be leading that brand.
JW, The offering circular that CI filed for 2006 shows 9882 clubs in the US in the year 2005.
JW, and yes I had wished that CI was public so that there had been a Board of Directors to whom the execs had to report. Needless to say this executive team would be long gone and a person with strategic development knowledge guiding the way.
Karen,
I’ve closed two in the US. They had been open 7.5 years and 5.25 years before I closed them.
You said you’d like us to contact you, but why and how?
Thanks.
I went through the list of open clubs that CI has listed as “Curves Locations” on their website. I included only the 50 states….not Puerto Rico, Virgin Islands, etc. and the number I came up with was 3783. And some locations were listed twice! And if you go to the Yahoo owners website there are at least 2-3 clubs closing every week or so. And that is just the owners who frequent that website.
It is so very, very sad that this is happening. And I really don’t see how GH sleeps at night. I just know that I no longer have one little iota of respect for him and, as they say, “Paybacks are Hell”…..so he has a lot of paybacks coming to him!
Has anyone closed a few months prior to end of franchise agreement and just let CI take their payments without additional penalties?
Undecided, that is a closure of 6099 clubs in the US alone. What amazes me is that CI still attempts to collect future roylaties from a franchise system with such a high failure rate, 62% and growing as you say. I hope that unhappy’s court case changes all that.
I am SO glad that I found all of you. I was putting some thought into pursuing the purchase of a franchise, but after reading all of this, I will run the other way. Thanks for being so candid, since I know that it must have been difficult for some, if not all, of you to post your stories. God Bless each and every one of you!
About to close my club after owning for 5 years. i am in debt $250,000 and my club is slowly dying I love the concept, do as much as I can to keep the members but they still leave. I will be up for more money and at 60 I am too old to restart. What a disaster
what legally can they do to the clubs with unstaffed hours that are midway through their contracts? Can they legally charge us more monthly fees for going against policy even though it is not addressed in our contract?
Also wanted to comment that the reason CI is giving for being against 24/7 is to protect brand integrity…how is opening shopcurves.com to the public keeping the brand integrity intact? Now anyone can buy Curves branded items??? So when I see a 400lb man in a Curves Tee at my local grocery store, I am supposed to be happy for the free advertising??
Ive managed and owned a Curves for 13 years I love my job but Curves over sold territory (5 clubs in a 25 mile radius) around me taking my membership from 800 to 300 in two years.one club opened 2 miles from me on my border her territory town was ten miles away. Shes closer to my town border than her own.They never enforced dues transfers, now the very contracts I sold my members saying their dues will never go up as long as they are a Curves member..is now up to the transferred to clubs to honor or not…Sure I get sales support (just started 3 years ago) I get no protection no non compete from Curves.. Now with the economy cannibalizing my membership, I will not be renewing my agreement. Love the concept of Curves
(by the way I was at the training when Gary swore he would never increase the cost of a Curves franchise…) Tired of being lied to, and not supported by corporate
karen, i’m with justine, how & why to contact you?? closed my club, received letters from avis. so, you stated that ci IS actually taking you to court? did a sheriff serve you paperwork? i am curious . yet i do believe that we as powerful people need to band together in this shitshow of an ordeal!
same issue as christina on july 30th… please contact me thank-you
Justine, Christina and Chris:
Yes, I will be going to court with Curves, Yes, of course I was served paperwork, and I am filing a defence. I believe that it will not be heard until 2013. I am in Canada, but the principles of common law apply in the US as well as does the Texas franchise law. I enjoy reading scholarly contract law books and case law. I will do a great deal of the work myself with a great lawyer refining and presenting my case. Legal costs will be kept to a minimum. My intent is to make CI think twice about reselling failed territories and taking people such as ourselves to court for future royalties. As I develop my case I will calling upon people such as yourselves to provide evidence affidavits etc.
I know there are rules regarding how we contact and I will ask the admin to inform me as to what they are.
karen_ how exactly were you served your paperwork? ups, fed ex, sheriff @ front door, certified mail?? i am curious as to how you received yours as we have all received it differently. seems odd, right? you think they would stick to one outlet. thanks
Christina:
If CI was taking you to court you would receive a “Notice of Action” that has to be handed to you by a process server in Canada but I would assume its similar in the US. CI also hires collection agencies to collect, that is not an action filed with a court. Can you describe what you received?
I bought a five-year franchise in 2006, so my sentence is almost over. Actually, I have 28 more days!
I know some of you call him Howie, but I call him Gare Bear–altho he surely isn’t the cuddly kind. He wants my Smart equip back. Funny that it’s totally paid for. I guess I have never heard of someone demanding back equip that is totally paid for…duh me. This gal won’t be sending it in his postage-paid boxes (what a guy to pay the postage for me!). But what is a girl to do with 10K worth of equipment that no one wants? And then there are the machines…I am (what?) supposed to either destroy them or give them to a prison. As my daughter succintly said, “Yeah, we need more buff gal prisoners around,waiting to get out…” (no offense, some are really not bad and do want to be healthy). At any rate, I am not doing that either. Is there a class action suit about the machines and the Smart equip??? If so, count me in. It infuriates me.
MORE IMPORTANTLY, is there a class action for the 24/7 clubs??? Because I am one!!! That was one of my main reasons for not renewing. I couldn’t deal with corporate anymore and even tho my girls LOVED it, and I repeat, LOVED it, I couldn’t do another franchise with Gare the bear and give up my door. SO, if there is a class action about the door, I’m in, okay???? PLEASE let me know asap!!!!
Ann in NC
@Karen, I have received numerous paperwork filed by ci, letters from their attorneys, collections agencies, paperwork via ci legal department,etc. having any club owner from the US join you in your crusade, would be pointless as we are located in a different country. i do support you however, as i feel as though ci has been unfair in their saturation in all of our territorial grounds. somewhere around the year 2000 or so, ci decided to take territories and split existing ones. after original territories closed or sold he did so. unfair, unethical & downright greedy. the class action suit that was in the past dealt with these same issues. ci is misleading when they advertise on their own site that they in fact support their franchisees. if our monthly projection sheets were looked upon, then ci would see we are failing & perhaps call us to ask/inquire or merely suggest. this however, they neglected to do. they claim that we as an owner have “abandoned” our clubs….well, truth is, we were already abandoned by ci first. i would love to investigate exactly where our monthly advertising fees were placed??? interesting fact, a new ci franchisee was listed @ approx, over $40,000 just a few years back on their web page. now, their current listing price is a smidge over $20,000. the value of curves has dropped…not that i needed to inform you of that fact…this we all know. best of luck on your case.
ATTENTION ALL 24/7 CURVES CLUBS
Howie has declared an all out war against all owners who have 24/7 hours, He is terminating all franchise agreements and filling law suits in TX. against all 24/7 clubs. If you haven’t received your termination letter as of yet you should be getting it some time this month. Once you receive that within 6 weeks if you don’t comply with CII demands about ceasing 24/7 a lawsuit will be filed against you for the amount owed on franchise and advertising fees for the rest of the franchise agreement term and up to a hundred thousand dollars for damage done to the Curves brand. While there is nothing in most of the contracts before March 2009 about 24/7 hours most owners won’t be able to defend themselves against this as the lawyers in TX are requesting a 7 to 10 thousand dollar retainer to handle the case. This could have been avoided if the 24/7 owners had banded together and filed a group action lawsuit as most lawyers recommended but now once they are served they will be on their own. Once again the Curves owners are getting screwed.
I thought Unhappy said that the initial group action lawsuit was supposed to bankrupt the company in the first quarter last year? Instead, it seems like the real winners of that case were Zarco. Hell, even on BMM people talk about how Zarco would let anyone in the lawsuit if they paid the retainer.
I am friend to a woman that has owned a Curves for a little over a year and is now trying to sell it. She would admit that she was eager and excited and should have researched more but she WANTED to believe the stuff the previous owner and CI told her about the potential of the gym she bought.
It is in a rural area and has a very limited potential customer base it turns out, everything her regional lady tells her is stuff for urban areas, not out in the hills where there are literally miles between houses. She has pretty much hit her max customer base and can’t do anything about it.
At this point she is trying to GIVE it away and CI won’t even let her do that. She spent the money her husband left her when he passed on buying this place and has been paying out of her own pocket since to keep it open, hoping that the customers will start showing but they simply aren’t there.
She has 2 different members that will take it over, and can pay the franchise fees, but they can’t afford the initial costs and the training class costs (which just doubled to $2k). Curves told her bluntly that they don’t care if she closes her doors, but they will not waive a single fee. Plus the 5 YEAR contract they expect someone to sign?
At this point she is looking for someone to hand it over to and walk away from it and she has no takers, it has no debt, and the lease is paid 1 year in advance, yet still, Curves is more interested in getting their fees than keeping a location open.
To make it worse, she can’t even DONATE the hardware to a local women’s group so they can continue working out. Curves requires her to either sell them to another curves, or scrap the equipment and prove that it was destroyed, she cannot even store it in a barn or even move it out of the building without permission.
She has to close her doors in the next month because she cannot afford payroll anymore and she is afraid Curves will come after her and try to take her house or something for closing the business too soon after opening.
For being a supposedly “christian” company, they certainly are FAR from “Christ Like”.
Sorry to post again so soon, but what REALLY is CI able to do if an owner can’t stay open?
Do they just try to debit your account for the franchise fees every month until the contract period is over?
What if the owner literally has no money in the bank to deduct and nothing to sue for? The owner I know has no financial assets at all anymore and her only physical asset is her house, could they really sue her and put a lien on her house over “dues”?
Well your first mistake is confusing business with religion. Business as they say is BUSINESS. Secondly. they will get a judgement against her because for CI to write off the loss they must have a judgement. If they don’t get the money they will get a judgement and write off bad debt against income. Essentially it is a tax move. Just because you don’t have the money doesn’t mean they won’t take a tax deduction and they need a judgement for that.
Anyone facing this kind of issue should get a lawyer; even if you have to get help from legal aid because you may not have money to pay legal fees.
Get a lawyer. I agree with Guest. Business is Business.
As a manager of CURVES and have gone through the closing I can tell you a few things. We were a smart club..we sold smart equipment to another CURVES..sold some of the machines also. and still have some in storeage.
Never heard from them at all. we were at the end of the contract and did not want to renew…so happy we didn’t!
Liz, When did you close? Were you on a 10 year or 5 year agreement?
It was a 5 year and it ended last july….2010
I am closing August 31st. after a 5-year franchise! I have a 24/7 club and part of the reason I am clsing is that CI does not approve. My girls LOVE it, and it has kept my door open when other clubs have failed. I hear through the grapevine that there is a class action suit being considered by some of us who are being forced to either close or close our doors because of having this 24 hour system. Count me in! Please let me hear from others who are in my predicament.
Hello there!
I am a doctoral student at NYU doing some research on franchises and how/why they fail. I am interested in this posting and in the Curves International story as Curves is often hailed is one of the most successful models of franchising that are out there.
I have some questions for some current and/or former Curves franchise owners. Your responses will greatly help direct my research so are very much appreciated!
My preliminary questions are:
a) What is the main reason that you felt like your franchise was not sustainable? Was it competition from other companies? Was it the exitstence of too many Curves franchises? Was it the rent prices/employee prices?
b) Curves seems to put forth the idea that these franchises can be very successful/profitable. Typical membership numbers are given as being around 600-700 members at any given time.
-Did you find that you had an average of 600-700 members? If not, how many members did you average per month?
-Did memberships tend to decline over time?
-Despite being a well-known brand name, why do you think there were membership issues and what did Curves do about it?
-What did you find to be your biggest expense?
c) Curves also talks about empowering women franchisee owners–did you find this to be a valid claim? What support do they typically give to their franchisees?
In the case of the gym my friend owns…
A:) The gym is failing due to local population not being able to sustain a gym. Gym membership is one of those things that is easy to cut out to reduce monthly expenses. Then when you are in a rural area there are only so many potential customers and eventually you have every single person that has a remote interest in joining. Curves can only work in specific areas where there are both “health minded” people, enough people to sustain a gym, and little or no local competitors near by.
B:) Curves sales pitch is full of CRAP, in my case, her peak membership in the last year was 63 and she has months where she loses more members than she gains and others where she gains a couple.
What did curves “DO” for her?
They required her to take a “training seminar” that cost her $3000 and held it in a hotel that I am sure let them have it there for free, if not gave them kickbacks, in the middle of an industrial area with no restaurants or grocery stores, so after paying for the seminar, which was really just a big sales pitch to buy MORE CI crap and them telling you how awesome they are, you have to pay for a plane ticket, then you have to pay for the hotel, no other hotels nearby so you HAVE to rent a room THERE, then with no refrigerators or microwaves in the room, you HAVE to eat at the hotel restaurant with very high prices 3 meals a day or walk to a 7-11 6 blocks away.
Once home, they tell you you HAVE to hold these silly little promotions like “princess parties” which you are required to participate in and have to buy decorations and supplies for and purchase and award prizes.
They require you to pay “advertising fees” but that is only for your part of the national TV campaigns, having nothing to do with any print ads that actually apply to your area.
They kill her with fees and required purchases, if she tells them she can’t afford to do it they point out that she is contractually bound to participate in any promotion they decide to throw out.
They require you to use the Curvesmart computer system and pay for the system as well as a monthly fee to use it and if you need help you call a support center in INDIA where you sit on hold for no less than 45 mins and have never been able to actually solve one of her problems.
There is an endless list of little BS things they “did” for her but overall, when she contacted them to ask how she could actually stay afloat, every scripted answer was related to advertising and promotions specific to a large suburban/urban area, they had no clue what to do to help a gym that was in a rural area.
When she contacted them to ask about GIVING the gym away to one of her members who would keep it open and pay fees, they refused to waive or reduce any fees and told her if she closed she had to pay them a Closing Fee, AND the franchise fee for every month that she agreed to stay open. So they would rather see her close the gym and sue her for fees and penalties, than let her give the gym to someone that will keep the location open for another 5 years (not likely of course) and continue to pay the franchise fees. They don’t care, they expect her to go down in flames and debt and will stand there with their hands out asking for their payments as they watch.
I am trying to contact other owners that had to close down before their 5 year contract was up. If you are, or know someone that is in that group please drop me an email at muggzyx AT yahoo DOT com
I won’t be a pest I am just looking for information on how aggressive CI really is with punishing people that couldn’t stay in business. My friend is a widowed mother of two halfway through paying off college for two daughters and she is broke and drowning in her club and doesn’t know which way to turn. Any input or help is much appreciated!
Hello M.Stine
I am an accountant and current MBA student. I owned many franchises. I am in court with CI so I will state only the facts and will leave the conclusions to you.
a) What is the main reason that you felt like your franchise was not sustainable? Was it competition from other companies? Was it the exitstence of too many Curves franchises? Was it the rent prices/employee prices?
The business model as it exists has a relatively short life cycle. Upon opening sales increased steadily for about 3 to 4 years and then fell off dramatically. This was especially true in areas where there were not enough people to cycle through. This cycle will vary in length depending on the population and was expedited with Curves opening too many franchises (in a town of 25,000 they opened two) The short life cycle was due to the fact that people got very bored of the circuit, they stopped getting results, people want variety in the industry.
b) Curves seems to put forth the idea that these franchises can be very successful/profitable. Typical membership numbers are given as being around 600-700 members at any given time.
-Did you find that you had an average of 600-700 members? If not, how many members did you average per month?
At the top of the peak, this number was exceeded and fell back to 200.
-Did memberships tend to decline over time? see above
-Despite being a well-known brand name, why do you think there were membership issues and what did Curves do about it?
-What did you find to be your biggest expense? Staff and rent . 92% fixed, 8% variable. Franchiseess made lots of money in the early years.
c) Curves also talks about empowering women franchisee owners–did you find this to be a valid claim? What support do they typically give to their franchisees?
Over 60% of the franchises in the US have closed. CI instituted a closing fee which most franchisees were unable to pay and then takes them to court for future royalties if they close without a mutual release.
I would be happy to send you actual sales figures or any other data necessary for your paper.
Interesting article today from the Wall Street Journal on Curves clubs closing: http://online.wsj.com/article/SB10001424052702303365804576432062058517684.html?mod=googlenews_wsj Heavin now says he is going to re-invent the Curves model (read- charge franchisees more money for another “miracle” product).
Interesting article today from the Wall Street Journal on Curves clubs closing: http://online.wsj.com/article/SB10001424052702303365804576432062058517684.html?mod=googlenews_wsj Heavin now says he is going to re-invent the Curves model (read- charge franchisees more money for another “miracle” product).
Fit Dude,
This article is upsetting. Especially this statement from Gary, The problems arose with resales by franchisees, he argues. “Resales often came as investors looking to get rich quick with a passive investment, when running a Curves is actually a very active investment.” While “we did our best to inform them” about the requirements of running a club, he says, “we were limited in what we could do to deny a resale.”
I am a resale and I didn’t get into this business to get rich quick. I bought the business because I wanted to “strengthen women”. The previous owner of the clubs I purchased was selling because she was not making the money she was at one point in time, and business was declining because she was never in the facility. Those who purchased in the very beginning just opened the doors and the money rolled in. The previous owner of my clubs abused the women in our communities and ruined the reputation of Curves. Where was Curves International when the previous owner of my clubs was drafting women who cancelled? Now there are all these rules and guidelines that have to be followed when you sell your club. Where were these rules and guidelines when I purchased my locations? Gary can blame the closures on resales, and say they failed because many bought just to “get rich quick”, but the truth is these clubs have closed because the new owners didn’t have a chance. The clubs were being sold to resales at too high of a price, and Curves International set the guidelines. I would like to know, out of all the clubs that have closed, how many were resales? I assume many since Gary is always putting the blame on resale clubs.
In regards to the allowing 24/7 Gary states, “Curves is about providing a supportive environment for women, and an empty room filled with machines in the night is not my idea of a supportive environment. Can you imagine the headlines when a member in the middle of the night in a women’s-only gym is hurt or has a heart attack and there is nobody there? Our brand would be ruined in one instant.”
This is ridiculous. No one would blame the facility if something like this happened. Gary not allowing 24/7 shows how little he really knows about women, and how little he cares about the success of our facilities. Curves hours may work for Diane, but most women do not have a husband who pays all the bills. The reality is, women need to be able to work out when they can fit it in.
Has anyone refused to destroy equipment. i really would like to donate to a non profit Curves wont let me do they really go after you
I did not destroy my equipment. My contract, written in early 2002, states that if the contract is ended before the ten years, for whatever reason, Curves has first right of refusal to buy my equipment from me. And there is a schedule of how much they would have to pay. For instance, if the contract ended after 2 years, they have to pay me $1500 for the circuit if they want it, otherwise I can do what I want with it. Look up your contract and read it. It might be different than mine, but you won’t know until you read it all. I just quoted the section of my contract to them and they left me alone. They did file a judgement against me, for closing early, but I hired a lawyer to deal with that (my state law on franchises supercedes their contract). Good luck.
@JUSTINE, how exactly did ci bring judgement against you? certified mail, sheriff knocking on door to serve papers? and yes, many of the states have a state law that supercedes their contract, god knows why they even bother filing judgement…although i have been told they do that only b/c in order for ci to write it off as a loss at the end of the year , they must first file judgement. ci can suck a fat…
@Fit Dude~ thank you for sharing the above article. in fact, Gary lied in telling the reporter that ci screens owners before selling them yet another one…interesting. he can keep talking while we all keep walking..