CURVES FOR WOMEN: Advice on Buying a Franchise Resale
February 24, 2009
The franchise information website Franchise Pick posted the question “Is Curves for Women a Good Franchise Investment?“ Most of the commenters think that it’s not, though many clubs are being sold as “resales” at fire sale prices. On comment #609, North Jersey Curves Owner responds to a possible resale buyer with this response, and due diligence advice:
I wouldn’t do it. Some canadian clubs are going through the same thing.
If you MUST attend the meeting, tell the owner you want the following:
1. Her tax returns for the last two years
2. The igo figure Projection Sheets for the last two years
3. A list of all her expenses and what the costs are
4. Her profit and loss sheet for the last two years out of her Quickbooks application or what ever application she uses to do her books.I would not buy a Curves honestly. It was the biggest mistake of our lives. Corportae will demand their money and offer you no assistance. Why is this owner selling in the first place? Are they selling it for next to nothing? It was just reported on an AM radio station here that Curves, Subway, and Arbys have had the most closing nationwide in the United States.
If you buy the curves and then realize you are not making any money, Curves will want a $10,000 closing fee. If you dont pay it, they will put a judgement against you for all back franchise fees. the only way out of that is that bankruptcy which my husband and I are doing.
What do you think? Share a comment below.
CORK & OLIVE: Bankrupt Stores Being Auctioned Off
February 17, 2009
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The contents of two bankrupt Cork & Olive wine stores are up for auction.
See them here: Bay Area Auction Services
Read more about the Cork & Olive WINE STORE FRANCHISE woes here:
ARE YOU FAMILIAR WITH CORK & OLIVE? SHARE A COMMENT BELOW.
Image: Bay Area Auctions
LA Weight Loss, Pure Weight Loss: NY Attorney General Demands Refunds
February 12, 2009
New York Attorney General Andrew Cuomo announced last week that LA Weight Loss Centers Inc. reached a settlement to pay $275,000 in refunds to thousands of New York state customers who paid for but never received services after LA Weight Loss closed its doors in January 2008.
Read more here: LA Weight Loss to Pay Refunds to New York Members
Also Read: LA WEIGHT LOSS, PURE WEIGHT LOSS
Diversified Health & Fitness Wants Failed Liberty Fitness Owners to Pay Up
February 12, 2009
Unhappy Franchisee received this email from a former Liberty Fitness franchise owner. He claims that a year after closing their failed fitness club, the new franchisor owner, Diversified Health & Fitness, decided to hit them up for future royalties for the remainder of the 10 year agreement.
Talk about adding insult to injury. Here’s the email:
About 4 years ago, my wife wanted to open her first business and enjoyed working out in a ladies-only gym. So after a little searching around options, she bought and opened a Liberty Fitness franchise . At it’s peak there were about 61 franchisees and it seemed to be growing (there were about 50 when my wife opened).
After spending over $250k in purchase, buildout, and continuous / mounting monthly losses, she notified the current franchise owner that she would close her club at the end of 2007 (about 4 months notice) – she was open for total of 3 years. In October 2007, Diversified bought the franchise and my wife notified them that we were closing, and had notified the prior owners of this too. We actually closed [in] 2008, with all monthly fees to Diversified fully paid up (minimum monthly fees for franchise including marketing etc which was never done).
In January of 2009, we get a surprise letter from an attorney for Diversified that they were trying to collect 7 years FUTURE franchise fees; about $250k. They said they interpreted the franchise agreement as REQUIRING us to operate for 10 years. Several Liberty Fitness franchisees that closed are getting similar letters; there are only 6 open and rumor has it three are about to close. Several clubs closed before Diversified, and this was never an issue – they just closed, done deal.
Even in the short period we worked with Diversified (about 3 months) they were aggressively trying to get us to pay a franchise exit fee that was NOT written in the contract for Liberty (maybe it was there for Shapexpress or for other franchises and they got confused; we never did understand it). But they went silent for a year, and now this shakedown.
Is this common in this industry, or even just this segment (women’s health clubs), or is it just Diversified? I’m surprised with this development and the almost total collapse of Liberty Fitness that there are no BLOG reference points ala the Shapexpress blog.
You know times are hard when companies are looking to defunct businesses for revenue.
What do you think? Share a comment below.
CUPPY’S COFFEE: Who’s Suing Them Now?
February 8, 2009
Commenters at UnhappyFranchisee and franchise site FranchisePick.com have posted the contact information for preparing or considering group action suits against Cuppy’s Coffee, Medina Management, Elite Manufacturing, FranSynergy, Morg Morgan and/or Dale Nabors and associated entities. The first two are leading franchisee law firms, the 3rd is a FL personal injury firm said to be “looking into” a possible action.
Scott Korzenowski 612-359-5486
5100 IDS Center 80 South Eighth Street
Minneapolis, MN 55402
phone: 612.359.9000
fax: 612.359.3507
Alejandro Brito, Esq. & Melissa Bernheim, Esq.
Zarco Einhorn Salkowski & Brito, P.A.
100 S.E. 2nd Street
Suite 2700
Miami, FL 33131
Tel. (305) 374-5418
Fax (305) 374-5428
Mr D Thornburgh, Aylstock, Witkin and Sasser, 1-877-810-4808
If you know of any others or can provide and update or details, please comment below.
