BUTTERFLY LIFE: Interview With Franchisee Matt Wilson

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After attending a well-orchestrated sales seminar, Atlanta-area franchise owner Matt Wilson and his wife joined Butterfly Life with the dream of being their own boss, helping women improve their health, and getting a good return on their investment.  Once they opened their club, they claim they received no help or support in overcoming their branding and marketing challenges.  Their club closed in less than a year.

UnhappyFranchisee.com asked Matt to share the lessons of his experience, and his advice for prospective franchise owners.

UF: Matt, what was your background prior to joining Butterfly Life? Did you have industry experience?
MATT: My wife, who owned and operated our BFL franchise, has in excess of 20 years experience in a variety of customer service positions including 10 years with a major cellular communications company. For several years prior to our investment in a BFL franchise she was the office manager for a successful salon. For myself, I have 20 years experience working in a variety of sales, marketing, educational, technical and business management roles. Neither of us had experience in the women’s fitness industry, however, my wife has been a patron of competing club’s and national diet programs having lost 40 lbs as a result.

UF: When did you decide to join Butterfly Life? Describe the process.
MATT: After attending a franchise seminar in August 2006 in Atlanta, GA, conducted by Taylor Golob, Cheryl Hoke and via video conference, Mark Golob. Around the time of the seminar we were actively investigating a Curves franchise and saw a BFL seminar commercial on television. That led us to check out the company web site and sign up for the seminar. Taylor and Cheryl put on a first class, well rehearsed and choreographed sales seminar. Towards the end they incorporated connecting to Mark Golob via video conference, who delivered a rehearsed speech underscoring the points made by Taylor and Cheryl. When all was said and done it appeared the investment was a low risk, high return venture. Especially given that Atlanta was a burgeoning market for the brand and BFL appeared committed to developing the market for the long run.

The appeal for us and we believe with many investors, was with the prospect of being able to help women improve their health while being your own boss. The bonus was there was what seemed to be a good return on the investment. Reality was much different.

UF: How was the company’s training and pre-opening support? Was it a positive experience?
MATT: The short answer is it served its purpose. That is it did a good job to reinforce the sales pitch we had bought into. It did little to prepare the new franchisee for what was in store. Training focused on sales and marketing your club and ways to increase membership, particularly prior to opening. Overall it was a positive experience and left us with the impression that corporate was there to help us in any way all we had to do was ask. That changed very shortly after our first royalty payment.

UF: What marketing and promotional guidance, programs & support were provided? Were they effective? Why or why not?
MATT: Beyond the training conducted at corporate there was a regular direct mail piece published to all clubs and little else. The materials provided by BFL were ineffective at best. Given my background with sales and marketing I conducted a detailed review of our marketplace, competitors, ads, programs and promotions. In one particular case, BFL ran a promotion of “no enrollment fee” and another with three months free. Competing clubs in the area had no enrollment fees, ever and were offering lower monthly rates and more months free. Maybe these were “new” concepts in California, but they were tired ones in Atlanta. As a result we developed marketing pieces that would fit our area better and attempted to have these approved by BFL corporate.

During University training at BFL they had told us getting our own marketing materials approved was not difficult as long as it maintained the brand image. Again reality was much different. BFL consistently stated their materials and programs were working everywhere, except for us, so we must be doing something wrong. They consequently never approved our materials so we were stuck with their tired pieces.

UF: How was your grand opening and your first year as a franchisee?
MATT: Grand opening and that month were great. Signed up 30 members and it looked like we were on our way. Member sales went down from there and the club didn’t last the year.

UF: Was the ongoing support what you expected?
MATT: No. We submitted reports to BFL corporate on a monthly basis reporting on our progress. Marketing efforts, promotions and more importantly new member sales. BFL receives this from all clubs. The fact our membership number were plummeting was in black and white. BFL informed us the clubs around us were doing great and they didn’t know what our problem was. Their district sales manager came to our club on two occasions in our early days of opening to fulfill the obligation of BFL to provide on site support for three days. While she talked a good game, we signed zero new members as a result of her “support”. Ten months after we closed our club, all Georgia clubs (6-8 at peak) are now closed.

UF: Have you tried to resolve your issues with the franchisor? What was the outcome?
MATT: Corporate was unresponsive to input regarding regional marketing programs or materials. Otherwise the “issue” with Butterfly Life was their complete failure to effectively build the brand and ensure the success of the franchise network. Resolving this seemed unlikely.

UF: How has your franchise investment decision affected your life? What is your current situation?
MATT: Strained marriage, emotional distress, depression and financial ruin to name a few. This single decision and the year and a half we were a part of it will take tenfold to recover from. Currently we are pursuing compensation from BFL through our support of the AAFD Butterfly Life Chapter and their arbitration case.

UF: Do you think that the franchise concept is viable? Under what conditions?
MATT: Yes, clearly there are some franchise concepts that are successful. The key is to have a franchisor that is genuinely committed to the success of the concept and franchise network. That requires more that a fancy web site and polished sales pitch. It requires focus on controlled growth and not losing sight of what got the brand to that point.

UF: What mistakes did you make? Looking back, what would you have done differently?
MATT: Not adequate research and due diligence investigating the company, executives and industry. We performed what we felt was a thorough look into the company and employed various business consultants to help guide us along the way, but that did not turn up anything overly alarming.

UF: What advice would you give to prospective franchise owners?
MATT: Do your due diligence on the franchisor and their management, if you see any red flags, dig deeper. Hire an attorney and use him/her on every decision, signature, document, contract and aspect of your start in the franchise world. Don’t give into the hype. If the opportunity really is as good as it sounds, it will still be there next week, month and year. If it isn’t, do you really want to get into it now? Some signs to look for: too fast growth, rapid expansion of area representative network and lots of new staff at corporate.

UF: Was there a positive aspect of your experience?
MATT: To be completely honest, I can’t think of one.

UF: Thanks for sharing your story, Matt.
MATT: Thank you.

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BUTTERFLY LIFE FRANCHISE DISCUSSION

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BUTTERFLY LIFE: Franchisees Mourn the Loss of Cynthia Holt

A sad note from Butterfly Life franchise owner Sunshine:

It is with much sadness and a heavy heart that I say this.

An ex- BFL franchisee from Atlanta, Georgia, Cynthia Holt, who lost her club, was in debt beyond repay, whose home was in foreclosure- has ended her life.  All of the details are uncertain at this time.

As sad as this is, it says a lot about what destruction and despair many are facing. No one ever thought anything like this would happen, but it has. You will be missed Cindy.

All of our thoughts and prayers are with the Holt family and Cynthia’s friends.

Feel free to share your thoughts below.

BUTTERFLY LIFE: Lisle Head, Ex-Franchisee

Interview with Lisle Head, former franchise owner, Butterfly Life

Location: Sacramento/Roseville, CA
Franchises owned: 10
Time period of ownership: 1 year more of less
Total investment to date: A little over 250K

UF: What’s your background? What were you doing prior to owning your franchise?
I graduated from UC Berkely in 2001. I started working for 24 hour Fitness as a Sales Associate. Within 1 year I was a General Manager and Won Sales Associate of the Year for the company in my first year. I left 24 Hour after 2 years to start these Gyms. I was contacted from a source that is friends with Mark Mastrov as Mark approached him about the concept. My friend then contacted me as he thought it would be something that I would be interested in. He knew I had some funds and I was a proven operator in the 24 Hour System.

UF: When did you decide you wanted to own your own business? Describe the process you went through to determine which franchise to buy.
I choose Butterfly purely because Mark Mastrov was a part of it. I had worked for his company for 2 years and was very successful. I hired attorneys and accountants to review the company as well as my business plan. I met with Mark Mastrov himself to go over my numbers and get his opinion the investment and what he thought about working with Mark Golob. I spent about 6 months of Due Dillengence prior to making the move.

UF: How did you first learn about the general concept? What did you find appealing about this type of business?
I had been in the Gym industry and seen what curves was doing. When I saw that the owner of 24 Hour Fitness was ready to compete with them and that I could get on the ground floor I thought to myself this is a non-brainer. I will be one of there first owners and with me buying a whole territory I’m going to be there poster child. All they talked with me about is how there where going to spend all there efforts in getting me up and running and successful so they could go out to the other areas and show them that it worked. I was sold. I was going to be working in a start up with Mark Mastrov the greatest Fitness owner in the world. In my mind.

UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
These guys where my best friend. Treating me like I was there son and that they where not going to let my fall. I was only 26 years old and this was all the money that I had. I was making a big move and a very high risk. But I thought it was calculated because I was going to have support from the leading guys in the industry. I was going to be there Poster Child and my success was going to drive there success. “If you are not successful Lisle we will not be successful.” These are the lines I was getting on a day to day bases. The promised to personally mentor me through the whole process. As soon as I signed the check they stopped answering the phones. I heart hit the floor. I knew I had been scammed. L

UF: How was the company’s training and pre-opening support. Was it a positive experience?
We where the first group. So they where learning. I really did get a lot from it but I had already been through 2 years of training with 24 hour fitness.

UF: What marketing and promotional guidance, programs & support were provided? Were they effective?
They gave us some basic flyers and ideas on how to market. But I was expecting was for them to come into my market and drive traffic with TV and Radio and branding as they promised. I purchased 10 sites and they where supposed to make a plan of attack for my area. Never happened. They where going out to sell more telling everyone how this 26 year old kid just purchased 10. J

UF: How was your grand opening and your first year as a franchisee?
Nobody from the Butterfly Life Team was at my Grand Opening.

UF: Was owning this franchise what you expected? Why, or why not?
I really not to really get a sense of ownership. I only kept the first club open for less than 6months because I couldn’t see myself to continue to dump money into something that I was going to get no support from. But if this is the support that you normally get from Franchise then I was expecting to get a lot more support.

UF: Was the ongoing support what you expected? Why or why not?
Zero. I was talking with these guys everyday multiple times per day prior to signing the agreement. We talked about how they where going to mentor me and we where going to work on getting these 10 clubs open in the next 12 months so that we could show the world how successful this business could be. After I signed the agreement I called Bruce Fabel and he said that there is no reason for us to be talking everyday. I was shocked. I called Mark Golob told me that we would put together a plan. At the end of the day none of this happened and I as on a Island by myself .

UF: What were the positive aspects of your experience?
I learned how to not do a lease agreement. I learned that I can pick myself up and from rock bottom. I learned many things that I will take with me for life but I wouldn’t never wish any of them upon another human being as the way to learn.

UF: When did things start to go wrong? What was it that made you an unhappy franchisee?
Like I stated above. Thing went wrong right after I signed the agreement. They just went on to the next customer. Nobody every came to my sites. They didn’t help with finding me the proper location. I had only opened 1 office and had deposit on the other 9. They just took all my money and said thank you. 90K down the drain.

UF: Have you tried to resolve your issues with the franchisor? What was the outcome?
They just told me they where going to sue me if I went after them. I wasn’t in the position to go through a court process financially or emotionally. So I just took my lumbs and moved on with my life.

UF: What is your current situation? What would you like to see happen at this point?
I’m currently living in Costa Rica and I own a Coldwell Banker Franchise. Life is good. J I would love to see people atleast get back there Franchise Fees and to get them to stop selling people the franchises.

UF: Do you think that the franchise concept is a viable? Under what conditions?
I think is a great concept. But they need to work in one area and create a brand and get that area up a running. Trying to have 100 gyms in 30 different states in the first year is where they failed. They stretched themselves too thin. I truly believe that if they would have spend all the Focus on Northern California. The place they all live. And get the brand recognized and gyms up and running with profit they would have been able to spend across the whole world.

UF: What mistakes did you make? Looking back, what would you have done differently?
I personally don’t know what I could have done different. I hired one of the Top Operators from 24 hour fitness to manage my first gym as well as myself. Butterfly life just didn’t deliver the product or support that they promised.

UF: How has your franchise investment decision affected your life?
It was a life changing experience. I was completely broke. I was very lucky as I had invested in the real estate market and was able to sell a property and get back on my feet. Also I was single and didn’t have anyone to support. I have turned the event into a a very costly learning experience.

UF: What advice would you give to prospective franchise owners? What questions should they ask? What warning signs should they look for?
I think they only advise is to go with a company that has a proven record. Go to franchises that are successful as well as the ones that are not. Find out why.

BUTTERFLY LIFE: Julie Franco, Ex-Franchisee

Interview with Julie Franco, Ex-Franchisee, Butterfly Life
August, 2008

Prior to becoming a Butterfly Life franchise owner, Julie Franco of Meridian, Idaho managed a self-storage business for 23 years and handled the accounts receivable administration for her husband Chris’ business. After actively working out at another women’s fitness facility, Julie searched for a women’s fitness franchise she could open and answered an ad for Butterfly Life. The couple have lost $285,000 to date.

Location: Meridian, Idaho
Franchise owned: Julie & Chris Franco
Time period of ownership: 28 months owned/ 20 months operating open facility
Franchise fee: 29,500 Royalty: $600 Marketing/other fees: $400
Total investment to date: $ 285,000

UF: Describe the process you went through to determine which franchise to buy.
Julie: I went online to look for women only facilities and came across Butterfly
Life. I was excited about the concept of the club with classes, and weight plate machines.
Plus the lecture series for nutrition, fashion & the (never seen) medical lectures sounded
very unique.

They sent a DVD about the Butterfly facility, but that really did not show much. It was not until I had a phone-internet call where Mark Golob explained the facility and what it had to offer, along with all the branding they were doing and going to do to promote the club.

UF: What did you find appealing about this type of business?
Julie: I really thought women would enjoy taking the classes, and working out with better weight machines.

UF: What attracted you to the company?
Julie: Reading the bio’s of Mark Golob and Tom Gergley . What was exciting was to see that a successful club owner Mark Mastrov from 24 hour fitness was a part of Butterfly Life, along with the rest of the management team. I was told that they had so many years in the fitness industry and Mark’s background in Marketing.

UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Julie: They were very persistent in phone calls and locking in a time to talk with Mark via the Internet
follow long. My husband and I went to visit BFL headquarters in March 05 and were taken
around to a couple of facilities. (Most had just opened for a couple of months).

UF: How did you come to decide to buy the rights to open multiple clubs?
Julie: During their seminar of October 2005,and before I opened my first club, Mark Golob told me how the franchisee fee was increasing to $59,000 in June 06 and the monthly fees were going to $1000.00 for royalty and $400 advertising. This was due, in part, to the TV show he said was going to start airing June 06. Mark did his fast talking and I signed for three more clubs (even though they knew at the time I needed the UFOC for 10days before I could legally sign the franchise agreement).

Needless to say the TV show did not air and the franchise fee did not go to 59,000. The royalty fee went to $1000, but they dropped the advertising fee of $400.

UF: How was the company’s training and pre-opening support?
Julie: I felt the training was just adequate. I left feeling uncertain that I could show people how to work the weight machines properly.
Overall, I had mixed feelings. At this time Mark showed us the 30-minute TV show that was getting close to going on air. Mark also informed us that Mark Mastrov was no longer with the company because he just sold 24 fitness and it was a conflict of interest. I was upset because I believed Mark Mastrov was a big part of the company.

UF: What marketing and promotional guidance, programs & support were provided?
Julie: We were given places to call for mailers. There were a couple of different suppliers. They also put together TV ad you could buy for the 1st of the year. The TV did not prove to be that effective. Mark always talked about the big nation wide campaign of July 06. Again this did nothing to boost sales anywhere. I just don’t believe they ran the big campaign. Nobody saw but a couple of the commercials, these were on at bad times. The commercials always looked to homemade and were just not that inviting.

They were suppose to do full page ads in women’s magazines in October 06. They only ran half page ads in a franchise magazine to sell more franchises.

UF: How was your grand opening and your first year as a franchisee?
Julie: Grand opening was a little disappointing. Janet is suppose to be with you the first three days of your club. Mark scheduled a seminar in my town October 26th 2005 to sell more franchises. My club would not be open for another two months. Janet came up to go over the opening check list and told me it would be better that she came before I opened. It wasn’t, she spent most of her
time running Mark and Taylor from the airport and the seminar. I had maybe 10 hours out
of the three days.

UF: When did things start to go wrong? What was it that made you an unhappy franchisee?
Julie: I guess right after I opened and realized that trying to sell memberships and getting the brand
name out there was going to be a challenge. Having a tag line of (healthy living solutions
for women) did not help. No one knew it was a women’s workout facility.

UF: Was owning this franchise what you expected? Why, or why not?
Julie: It was a good experience in meeting wonderful women. The hard part was getting frustrated because I was not trained as a personal trainer and women have questions about their muscles, if their doing a exercise why is something hurting, etc.
I was also told that only one person is needed to run these facilities and then later was told it would help if I hired someone so I could do more outside marketing.

UF: Was the ongoing support what you expected? Why or why not?
Julie: They tried to do phone meeting every month or so, but it got to almost be the same stuff talked about every time. Corporate did not like to be questioned or challenged on any topic.

UF: What were the positive aspects of your experience?
Julie: Meeting wonderful women and seeing them make positive changes. But that even changed when renewal time came around and the cheaper club with more to offer opens down the road.

UF: Have you tried to resolve your issues with the franchisor? What was the outcome?
Julie: Joining the AAFD group and banding with other franchisee to hold them accountable for overstating the amount of money the clubs were taking to open. The time we were told everyone was breaking even. And the promise of national branding of the franchise. We were told that
Butterfly Life clubs would shut down the curves club.

UF: What is your current situation? What would you like to see happen at this point?
Julie: We are in debt around 285,000. I don’t see being able to get out of debt for 15 years. I would like Mark and Tom to take responsibility for the misinformation given to induce us to purchase a
facility. If I had correct numbers and facts I would have never opened a club.

UF: Do you think that the franchise concept is a viable?
Julie: No. The weight machine did not have enough weight to keep the ladies who were in better shape
challenged after a year they plateau out. The classes were good, and the nutrition lectures
were good, but the fashion was really bad. We never received any of the medical lectures.
We also were supposed to be able to incorporate their vitamins and shakes to make
additional income. (again items promised that never happened) The clubs were too large
without additional workout item such as bikes, treadmills, ect. This would have helped to
attract the ladies who wanted a little more from their health club.

UF: What mistakes did you make? Looking back, what would you have done differently?
Julie: Signing on the dotted line. Would have waited to sign for the additional clubs until after the first one was successful.

UF: How has your franchise investment decision affected your life?
Julie: It has been very stressful to know that I have negatively affected my family. We are middle income. We had a decent savings, no credit card debt and enjoyed life. We were excited to open another business so that when my husband decided to close his business we would have the ability to have another income. Now we have no savings and more credit card debt then we can handle. It will be years before we are out of debt. This affects every part of your life.

UF: What advice would you give to prospective franchise owners?
Julie: I say get everything recorded to what they tell you about the costs of opening the facility and if they make claims of breaking even in a certain time frame make them show you the proof. Wait a year and see what other clubs are doing. Make sure you get the full list of all closed franchisee and call all of them before you make your decision. Tape all phone calls and meetings.

UF: Thanks, Julie
Julie: Thank you.

BUTTERFLY LIFE: Linda McBride, Former Franchise Owner

Interview with former Butterfly Life franchise owner Linda McBride

Butterfly Life is a women-only 30-minute workout franchise that claims to be a superior version of Curves (since they use weight-based, not hydraulic, equipment). In December, 2005, experienced business owner Linda McBride purchased an existing Butterfly Life franchise location in Woodland, CA. After struggling to achieve profitability for 20 months, she closed the club in August, 2007. In an interview with UnhappyFranchisee.com in August, 2008, she shared with us the lessons she learned from her experience, and offers her hard-learned due diligence tips for those considering franchise ownership.

UF: Linda, thanks for sharing your story with those who are looking to start their own businesses, and for offering advice based on the hard lessons you’ve learned. Tell me, why did you decide you decide to become a Butterfly Life franchise owner? Describe the process you went through to determine which franchise to buy.
Linda: My husband & I had run the pest company since 1990. I wanted a business that was more “me” . I Belonged to Curves loved the concept. The owner of the one I belonged to had 3 franchises and was doing well at all of them averaging 500 members each. I researched many franchises but liked the concept of classes all day that Butterfly Life offered.

UF: How did you first learn about Butterfly Life?
Linda: I saw a banner ad online. I clicked on it and filled out a form online requesting more information. Janet Lossick contacted me by phone. I have my original notes and one of the first things I wrote is Mark Mastroff as director.

UF: How did you first hear about your specific franchise? What attracted you to the company?
Linda: I researched many franchises but liked the concept of classes all day that Butterfly Life offered. I also liked the fact that they used weight based equipment. The idea of helping women get healthy was what most appealed to me.

UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Linda: Janet invited me to meet her at a franchise closest to me. I visited the club

UF: You ended up purchasing an existing club?
Linda: Yes, I purchased a club that had been opened 12 months. I was the second owner of the club – the first claimed bankruptcy after 12 month. However, I thought with the marketing and support that was promised, this could be a successful club.

UF: What marketing and promotional guidance, programs & support were provided? Were they effective?

Linda: No. We were told to pay to have the postcards mailed out each month which cost $1500 to $1800/mo. The best return I ever received from this 8 new members.

I did not receive any of the Branding or advertising I was promised. All advertising was up to me. No other clubs were in my area. Mark Golob said “Don’t quote me on this but you aren’t going to want to miss the wave that is created when BFL is featured regularly on the Oprah timeslot and the rush of women clamoring to join your club. We will be offering the nutritional aspects on the show and your club is the exercise & motivation portion of the concept.”

Virtually nothing that was promised branding wise ever materialized.

UF: Was the ongoing support what you expected? Why or why not?
Linda: At first it seemed helpful but later it was simply the same old thing every time. When I complained about membership being a problem, I was told I was the only one having the problem. They didn’t want the franchisee’s talking to each other but eventually I did start calling other clubs only to find out my problems were their problems my complaints were their complaints.

UF: Were the positive aspects of your experience?
Linda: I had the greatest members on the planet. I had so many ladies getting healthier. It was a great place for the ladies to let their hair down, get exercise and have a good time!

UF: When did things start to go wrong?
Linda: Eventually no one at the corporate office answered the phone when you called. They just left calls go to voice mail. About half the time a call might be returned, the other half, nothing. District managers would tell me I was the only one having these problems

UF: What single factor contributed most to making you an unhappy franchisee?
Linda: Not receiving the support I was promised.
My District Managers (or D.M.) Janet was to spend full 8 hr days with me I was lucky to get her for 3-4 hrs. I got excuses – I had to go to corporate for a couple hrs first, I had to stop at another club first, I was behind an accident, traffic was at a stand still. Then after a visit she’d say I’ll put you together
A game plan and I can honestly say I never got one! The 2nd D.M. assigned to me did spend
more time and give me a game plan but it was too little too late.

UF: Have you tried to resolve your issues with the franchisor?
Linda: I told them I could not afford to stay open and I was told that if I closed I would be sued for monthly franchise fees and my landlord would sue me for the balance of my lease so I should stay open.

UF: What was the outcome?

Linda: As I mentioned, I was the second owner of the club – the first claimed bankruptcy after 12 month. I closed the doors after 20 months to save another person the pain. We’re currently in the process of filing for bankruptcy

UF: What would you like to see happen at this point?
Linda: I think BFL owes all franchisee’s restitution for the lies and misrepresentation.

UF: Do you think that the franchise concept itself is viable?
Linda: Possibly. Under different management at the top of corporate.

UF: What was the biggest mistake did you make?
Linda: Trusting Mark Golob and Tom Gergley was the biggest mistake I made. Looking back, I should have gotten all their “promises” in writing.

UF: How has your franchise investment decision affected your life?
Linda: I’m bankrupt and don’t see how I can ever recover the money before retirement.

UF: What advice would you give to prospective franchise owners?
Linda: Research research research. Call every franchisee you can find a phone number for. What questions should they ask? How far are you from profitability? Are you on on track for the goals you set? Are the people at corporate office helpful and supportive? Do they brand the name or is it up to you?

Visit similar businesses in your area or in a neighboring town ask them questions – offer to take them to lunch to talk.

UF: What warning signs should they look for?
Linda: Big promises in the presentation and meeting at corporate that aren’t in writing.

UF: Thanks very much for sharing your story and advice, Linda.

BUTTERFLY LIFE: Carol King, Former Franchise Owner

Interview with former Butterfly Life franchise owner Carol King
August 5, 2008

Carol King is a mother and fitness advocate with a degree in physical education from Cal State Northridge. In 2004, she and childhood friend Linda Canale pursued their dream of helping women live happier, healthier lives by opening what they thought was an innovative new fitness franchise supported by a team of dedicated, experienced, trustworthy industry experts. According to Carol, her dream of business ownership almost immediately became a personal and financial nightmare. She now puts her energies into helping to educate potential franchise owners how to avoid the same mistakes she made, and advocating for more equitable treatment of the franchisees of Butterfly Life and other chains.

Carol opened her Woodland Hills, CA Butterfly Life location in October, 2004 and closed in April, 2005. They’ve has lost $240,000 to date.

UF: When did you decide you wanted to own your own business?
Carol: Once my kids were in college, my best friend and I decided to go into business together, found BFL, and felt it would be a great business opportunity for us given on our backgrounds.

UF: Do you have a fitness background?
Carol: I was a physical education major at Cal State Northridge and graduated with a BS degree.

UF: What were you doing prior to owning your franchise?
Carol: Raising my family and working temporary jobs in marketing and sales. My partner and I who have known each other since elementary school decided to join forces with our shared talents. She was a yoga instructor and we always wanted to be able to help women feel good about themselves and be healthy.

UF: Describe the process you went through to determine which franchise to buy.
Carol: We looked into Curves, but there were none available in our area. A flyer from BFL fell out of my newspaper and we decided to look into it. That was in November, 2004. We attended a seminar in Newport Beach, Ca. that same month. The BFL presentation was very appealing and the health and fitness industry was something we always wanted to do. Mark Golob’s story about his past successes, the “dream team” which consisted of Mark Mastrov of 24HrFitness, Bruce Fabel the marketing expert from Nike and Warner Brothers, and Tom Gergley from Linda Evans and the New York Health Club along with other experts in the fitness areas was all very impressive. The presentation also spoke of the substantial profits we would make our first five-six months with breakeven stated within 3-4 months. We believed them…..they were the experts. Golob explained that running this franchise was so easy “you didn’t even need a high school education”. He also stated that only one person was required to operate it. My partner and I thought this was a good fit and that after a few months, we could trade off work days. Believe me, it took more than one person to run this business, especially with 12 hour work days.

UF: How did you first learn about the general concept?
Carol: In the newspaper. At the seminar we attended in Newport Beach, Ca. Mark Golob, Bruce Fabel, Taylor Golob, Sharon Simon (Mark Mastrov’s sister) Denny Marsico and a few others gave talks on this amazing new concept in women’s health and fitness.

What did you find appealing about this type of business?
We could motivate women to feel good about themselves and be healthy without becoming stick thin. We really knew that working with women and helping them become successful was our goal in life. We knew we had the tools to educate them and truly wanted to make a difference.

UF: What attracted you to the company?
Carol: Beside the “dream team” and the great potential profitability, we were told of a special Life Vision delivery system that was the first of its kind. It was in essence a 65” monitor placed on it’s side so it was higher than it was wide. DVD’s proprietary to BFL covering many areas of health and fitness would play in this format….the result would be as if there were a full sized instructor teaching a class. There was therefore no need to hire trainers and minimal requirements to lead classes. This was a great concept. Unfortunately, it never transpired. This “special” delivery system turned out to be nothing more than a large screen television with standard dimensions set in a standard configuration. According to Golob (and after the initial $10,000 deposit was paid), it was too expensive to put the original concept into place.

Additionally, with regard to finding a facility, BFL claimed that they would provide us with brokers who were experienced and knowledgable in finding and securing proper locations. After four brokers, all located in Northern California, tried and failed to find and secure an appropriate property in the area we had selected in Southern California, they advised us that they lacked experience in Southern California, and had no background regarding zoning and building requirements. We were then directed by BFL to a broker located in Long Beach, Ca., approximately 40 miles from where we wanted to be located. Unfortunately, he secured a location that was not zoned for a health facility but never advised us of this. After we signed the lease, we were told by the Building Department that we could not open. We found an expeditor who said to go ahead and open because once we start paying City taxes they won’t evict us. That’s exactly what we did since we were already tied to a 5 year lease. Mark Golob reviewed the plans for our build-out and thought it was a perfect size. His review was required by the BFL franchise agreement. We were also required to have approx. 1,500 sq.ft., but this building was 3,000 sq. ft. We were very concerned about the amount of our rent, but he assured us that we could bring in more equipment and attract more members based on our size. Therefore, we would make a lot more money. He suggested that we locate near a Curves so we could take their business, since “everyone wants to join the new kid on the block.” As a fluke, it turned out that we were located across the street from Curves. Their side of the street was zoned for health and fitness facilities. The Curves members were very dedicated and became angry at us when we opened so close to them. One of their members joined us, but the rest stayed at Curves. Nobody liked the new kid on the block!

UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.

Carol: Taylor Golob, Mark’s son, called me nearly every other day after the seminar, asking when we were sending the deposit. The sales process was high pressure and featured the dream team, promises of high profitability, Mark Mastrov, life vision, help availlable 24/7, and an assurance that they would supply us with 100 members prior to our opening because of their great branding program.

UF: How was the company’s training
Carol: We spent six days at the “BFL University” in San Ramon, Ca. They bombarded us with overwhelming and confusing computer classes aimed at bringing us up to speed on the operation the new Check Free computer, billing, and accounting system in a day and a half. There were 20 people in our group.

UF: Was it a positive experience?
Carol: Meeting the other people who were interested in helping women was a bonding experience for us. Friendships were formed. We were excited to start our franchise and learn as much as we could so we could be successful. We knew this was our calling. That was the positive experience. Listening to Mark Golob, Tom Gergley and the other trainers was stressful and very high pressure. That was not a positive experience.

UF: What marketing and promotional guidance, programs & support were provided?
Carol: We were advised at the University that they would provide all the local and national advertising necessary to make Butterfly Life a household name. Their advice was centered around programs such as pre-selling memberships before we opened, (but that didn’t work out because no one knew who we were, what the facility would look like, and what the experience would be). In the end, all BFL did was to design flyers and postcards and we were told to use Advo and direct mail to reach our area. Once we opened, we were told that it was solely our responsibility to reach the women in our area, and we should budget AT LEAST $1,500/month for advertising. This was the first time we had heard this. One additional service they provided at the university was to setup and practice dialogues to teach us how to close a contract. That was the most intense part of training. We practiced dialoging most of the days.

UF: Were they effective?
Carol: No. The woman “drill sergeant” who worked with us scared everyone to death. I felt like I was in school always being scolded because I couldn’t get it right. It was definitely not effective. She would dialogue with everyone using different scenarios until she felt you could close a contract. It was very stressful.

UF: How was your grand opening and your first year as a franchisee?
Carol: What grand opening? What first year? We were told that we would have corporate attendance to help organize it and support us (aside from the 100 members at our opening). They were going to place local newspaper articles to promote us and have potential TV coverage. Of course, that never happened!!! I think we had 5 people show up. People couldn’t tell what we did based on the signage that was required by Butterfly Life. For the entire six months that we were opened, the major complaint from everyone who viewed our signage from the street (signage required by BFL) was their confusion as to what Butterfly Life was…,,,.vitamin company, spiritual center, clothing store, etc. Golob and corporate lacked the ability to properly brand BFL which caused so many of the failures.

UF: Was owning this franchise what you expected?
Carol: Are you kidding???? If everything they told us was the truth, it would have been a great experience. We would have made a comfortable living doing what we loved to do, if they followed through with all their “verbal” promises.

UF: Was the initial and ongoing support what you expected?
Carol: There was no support!
The BFL “promised” pre-opening support was non existent. Their Franchise Agreement stated that someone would be with us during our opening. Nobody from corporate was there. Janet Lossick, a sales rep showed up three weeks later!
When we spoke to them and told them what we were experiencing, we were always advised that we were the only ones having problems. They said everyone else was doing very well. We decided to call some of the other franchisees (16 in total) to get their help, and were advised that they were being told the same thing; they were doing poorly and all others were doing fine.

UF: When did things start to go wrong?

Carol: In December of 2004, when we contacted Golob with some problems, he advised us that he was in the business of selling franchises….not running them!

UF: What was it that made you an unhappy franchisee?

Carol: Lack of promised support and Mark Golob!!!!! He refused any suggestions for improvement or change from anyone.

UF: Have you tried to resolve your issues with the franchisor?

Carol: Are you kidding!…..many times!

UF: What was the outcome?
Carol: We had the AAFD try to informally mediate our issues three times between 2005 and 2007. We had a formal mediation in San Ramon in November, 2007, (because Tom Gergley advised Bob Purvin that they were ready to settle and write a check to resolve the issues). After spending thousands of dollars to bring in our attorney, the trustees and Bob Purvin of the AAFD to mediate we were advised that NO checks would be written (deja vous all over again).

UF: What is your current situation?
Carol: We have filed a complaint with the Department of Corporations and are awaiting their decision as to whether they will pursue charges against Butterfly Life. We also filed a counter arbitration and a counter class action arbitration against Butterfly Life in January, 2008.

UF: What were the positive aspects of your experience?
Carol: The people that we met in our class. The support that we have had from the other franchisees has been very positive. We have learned a tremendous amount about franchising. We also learned how the mediation process works……….it doesn’t!!!! The sad part, I have found, is that the franchise legal system in this state and country is completely AWARE of the problems surrounding franchising but ignores pleas for help unless they are publicly challenged………and that doesn’t work most of the time! I have sent long detailed letters to the DOC, the Governor’s office, FTC, Ca. Attorney General, US Attorney General and State Assemblyman Todd Spitzer. In most cases, I’m still waiting for a response.

UF: What would you like to see happen at this point?
Carol: Restitution and recission for all the members who believed in their hyped stories, and either a cessation of or a complete change in the culture and operation of BFL corporate, as well as a plan to help those franchisees now opened and struggling.

UF: Do you think that the franchise concept is a viable?
Carol: We all would agree that the concept is a good one. It will never be viable unless corporate makes drastic changes in personnel, corporate culture, and efforts to follow through with the service and support that they have promised so many franchisees (and area reps).

UF: What mistakes did you make?
Carol: Not looking into the personal backgrounds of the principals of BFL (especially regarding prior lawsuits). Not looking more seriously into established and reputable franchises. (There was no information on BFL since it was a start-up company. Not realizing, that when we were at the BFL university training and were advised that the Life Vision system was going to be a large television and not the system touted as revolutionary was such a huge red flag. And, during the same time period when we were advised that Bruce Fabel was no longer with the company, that this was another huge red flag.

UF: Looking back, what would you have done differently?
Carol: NEVER PURCHASED IT!!!

UF: How has your franchise investment decision affected your life?
Carol: It has thrown my family into financial chaos. I have chosen to dedicate an incredible amount of time to protecting other innocent victims from falling prey to the same thing so many of us have fallen into with BFL. I pulled together other franchisees to form a Chapter under the AAFD to try and exert force against BFL. It has also taken me approx. 3 years, three attorneys, the AAFD and several hundred pages of backup documentation to get the complaint we filed with the Department of Corporations recognized and into their system.

UF: What advice would you give to prospective franchise owners?
Carol: I believe the biggest issue is that franchises are not required to post their profitability statistics, unit failures and/or reasons for unit closures. Without this information, I would advise any potential franchisee to shy away from purchasing ANY franchise.

UF: What questions should they ask?
Carol: Pay the money to have an attorney look over the Franchise Agreement. Ask about the
profitability of existing units, reasons for resales and/or unit failures and closures. They should also ask if there is a franchisee association they can contact.
Extremely important is making phone calls to as many prior (all of them if possible) and current owners as listed in the FDD. Keep in mind the closed franchisees phone numbers are probably not current, so they may have to write to them. The phone numbers listed are for the franchise locations, but their home addresses should be listed. They should make sure that their calls are made to franchisees especially who have been opened at least six months. They should also check ALL blogs on the internet.

UF: What warning signs should they look for?
Carol: Keep in mind that VERBAL presentations have nothing to do with the Franchise Agreement. If what franchisors are telling you is not stated in the agreement, then that is a definite red flag and you have to ask them why.

BUTTERFLY LIFE: Jeff Marks, Ex-Franchisee

Interview with Jeff Marks, Former Multi-Unit Franchise Owner, Butterfly Life
8/1/08

Butterfly Life is a women’s 30 minute fitness franchise chain that claims to be an improvement over Curves for Women. It was founded by Mark Golob, Tom Gergley, and, supposedly, Mark Mastrov. Golob & Gergley both have checkered pasts and a history of litigation in the health club industry. Many franchisees were attracted by the highly respected Mastrov (of 24 Hour Fitness), whose involvement ceased after they joined. (Read Butterfly Life Franchisees Allege Bait & Switch… of Execs)

Jeff Marks was an early, multi-unit franchisee in GA who claims to have lost $350,000 within a year of opening two Butterfly Life clubs. He says that he paid a $29,000 franchise fee plus a monthly $1000 royalty/marketing fee for each club, yet never received the branding, advertising or operational support promised.

UF: Jeff, thanks for sharing your unfortunate experience with the Butterfly Life franchise specifically, and your general advice for helping prospective franchise owners make informed decisions.

What was your background prior to joining Butterfly Life? Did you have industry experience?

JEFF: Yes. I was health club operator and consultant for over 20 years.

UF: When did you decide to join Butterfly Life? Describe the process.

JEFF: I met with Mark Golob and his partners, Tom Gergley and Bruce Fabel and they represented that Mark Mastrov was also involved and that they had as much money as they needed to grow and brand this franchise. They wanted me to open flagship clubs on East Coast and represent them in 7 states.

UF: How did you first learn about the general concept? What did you find appealing about this type of business?
JEFF: Mark Golob was previous acquaintance. I found it appealing because I thought it sounded like an improvement on Curves and Curves was growing rapidly, and they had Mark Mastrov’s experience and reputation on the team.

It made sense and the owners represented their personal and financial commitment as well as Mark Mastrov’s

UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
JEFF: I met them in California and they explained future of company. I was going to be one of the first so much of what they promised was not yet developed.

UF: How was the company’s training and pre-opening support. Was it a positive experience?
JEFF: It was a positive experience but not very impressive.

UF: What marketing and promotional guidance, programs & support were provided? Were they effective? Why or why not?
JEFF: Marketing was horrible and not prepared. It was reactive—they made it up after I asked for it. They had represented to me that they would put their own money into building the brand in Atlanta because I had their flagship clubs on the East Coast. Then they refused to put up anything.

UF: How was your grand opening and your first year as a franchisee?

JEFF: Things went wrong from the beginning because they couldn’t deliver what they promised. Nothing was ready on time.

I struggled from day 1. The name had no meaning to anyone and without brand building, it was very hard to get traffic into the clubs. Couldn’t hit any reasonable numbers.

It was a terrible experience.

UF: Was the ongoing support what you expected?
JEFF: There was no support and the materials, classes, videos, weight loss program, and everything I needed was not ready when I needed them. They pushed all the blame onto me and accepted no responsibility.

UF: Have you tried to resolve your issues with the franchisor? What was the outcome?
JEFF: After much pleading for help and receiving none, I made a final attempt to save the business—I offered to give it to them for $0 if they would take over the leases and run them themselves. I already had over $250,000 sunk into the businesses that was gone. They told me they “were not in the business of running clubs, just selling them” and refused.

UF: How has your franchise investment decision affected your life? What is your current situation?
JEFF: It set me back financially about 10 years and I went through untold personal and financial hardships. I declared Chapter 11 bankruptcy in July 2005. I had to start over from the bottom and work my way up again. It’s been a long road.

UF: Do you think that the franchise concept is a viable? Under what conditions?
JEFF: I think the concept is viable but not under current leadership and culture. They are in business to sell and not to service.

UF: What mistakes did you make? Looking back, what would you have done differently?
I should never have gone into a new concept franchise that didn’t have an established track record. As far as running the clubs, I did everything I could have done.

UF: What advice would you give to prospective franchise owners? What questions should they ask? What warning signs should they look for?
JEFF: I would tell prospective franchise owners to do their homework and talk to those who failed. There are so many successful franchise concepts out there, I would suggest they go with one that has a good reputation for servicing their franchisees.

UF: Was there a positive aspect of your experience?
JEFF: There’s always a positive, I just haven’t found it yet.

UF: Thanks for sharing, Jeff.

Related Reading: IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?

Will the REAL Butterfly Life Franchise Please Wave Its Wings?

Franchise Dreams Becoming Nightmares for Many Fitness Club Owners

Disclaimer: The statements and opinions of those interviewed by Unhappy Franchisee are neither verified for accuracy nor reflect the opinions of Unhappy Franchisee or Relentless, Inc. As always, do your own investigations and come to your own conclusions.