CURVES FOR WOMEN: Nearly Half The Palm Beach Clubs Have Closed

First the bad news:  the Palm Beach Post reports that the number of Curves for Women fitness club locations in Palm Beach County has shrunk from 27 to 15 in the past 18 months, a failure rate of 44%.

The worse news:  More more closings expected.

Why are Curves franchises closing in record numbers?  That depends on who you ask.

Curves International, Inc. Denies That Franchisees are Struggling

According to the Palm Beach Post article, Becky Frusher, spokeswoman Curves International, Inc., “dismisses suggestions that franchisees are struggling.”

“I’m sure the current economic conditions aren’t helping, but one of the great things about a Curves is that it was designed as a low-cost franchise and can be run lean and mean,” she says.

Palm Beach Curves franchisees claim:  It’s the Economy, Stupid!

The Curves franchisees quoted in the article blame the economy for the closings:

Curves franchisee Leslie Winer blames the economy. She and her husband recently closed one of three Curves they own, although they still operate gyms in Jupiter and Palm Beach Gardens.

“Although it shouldn’t, your health and well-being becomes discretionary spending when the economy slows down,” Winer says.

Cindy Moore agrees. She recently moved her 1,500-square-foot location in North Palm Beach to cheaper space. “The economy is causing people to clip their gym memberships,” Moore says.

Furthermore, the franchisees say their high-tech Curves Smart equipment keeps them ahead of the competition.

Observers Blame Over-Expansion, Copycats & Competition

The Curves for Women 30 minute workout chain went through an expansion frenzy in 2005 and 2006. Since that time, Curves owners in Boynton Beach, West Palm Beach, Royal Palm Beach, Jupiter and Palm Springs have closed their doors. The most recent casualty:  45th St. location in West Palm Beach which closed Oct. 29.

Cliff Fostoff of Transworld Business Brokers in Boynton Beach blames Curves’ aggressive expansion and the competition that followed from knockoff concepts.

“They opened a lot of locations not far from each other,” Fostoff says. “And there has been a lot of competition. It’s just vanilla box with a few machines, so it’s a very easy model to copy.”

WHAT DO YOU THINK?  IS IT THE ECONOMY, OVER-EXPANSION OR THE CONCEPT CAUSING CURVES WOES?  OR IS CURVE INTERNATIONAL CORRECT IN SAYING THAT EVERYTHING’S FINE?

Related stories:

CURVES FOR WOMEN: Paradise Lost as Hawaiian Curves Franchise Closes

CURVES FOR WOMEN: Business Broker Slams Curves Franchise and Franchisor

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CURVES FOR WOMEN: Business Broker Slams Curves Franchise and Franchisor

Franchise Pick features the sad story of the demise and closing of the Curves for Women franchise in Kailu, HI despite the franchise owner’s valiant struggle.

(Read:  CURVES FOR WOMEN: Paradise Lost as Hawaiian Curves Franchise Closes)

Franchise owner Robbi Ugini closed the Curves for Women franchise location in Kailua earlier this month, leaving some 270 members in the lurch and her 5 employees suddenly jobless.

According to Honolulu Star Bulletin reporter Nina Woo, “A corporate spokeswoman for Curves did not return calls by press time…”  Reporter Woo was able to get a reaction from a local business broker who has been trying to help struggling franchise owners for the past several years.

In Woo’s article, the broker reportedly categorizes the Curves franchise as a fad whose time has passed, and the Curves International franchisor as insensitive and uncaring to the plight of its failing franchise owners:

Mark Heilbron, a business broker at VR Mergers & Acquisitions, categorized Curves as a trendy kind of business.

Heilbron said he sold two Curves franchises over the last three years, but had several listed this last year that never sold.

“It’s a faddish type of business,” he said. “They made a lot of money and then when the trend went out, people who were still in them lost a lot of money.”

While buyers are more cautious in these economic times, Heilbron said they are still out there, with money they’d rather invest in a business than in the volatile stock market.

“Most people get talked into buying a franchise, and you’ve got to realize, depending on who the franchisor is, that most don’t care whether the franchisee makes it or not,” he said.

The story raises many disturbing questions.

Why was Woo allowed to sign 2-year lease for what is assumedly a 10-year franchise?

What assistance did the franchisor provide to keep her from failing?

Will CCI charge Robbi Ugini the $10,000 “failure fee” for prematurely closing her franchise?

If so, will that money be used to repay members who might be due refunds?

Is the Curves website accurate in stating “With a Curves franchise, you’ll be in business for yourself, not by yourself…”?

Read more about Curves at: FranchisePick.Com

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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CURVES FOR WOMEN: Franchisee a Victim of Fraud?

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An anonymous commenter wrote that they were induced to buy an existing Curves for Women franchise club with fraudulent member and sales numbers.  She claims that the Go figure software prevents her from checking historical member numbers.  Curves clubs have been closing in large numbers around her and they are losing money every month.  If she closes her club, Curves International will demand a $10,000 fee.  She has an interested buyer, but one that’s only willing to pay less than half what she and her husband paid for the Curves franchise.

Anonymous Curves Owner writes:

We bought our club on false pretenses from a previous owner who lied about member numbers.

Curves did not give us the correct figures either.

Go Figure software makes it impossible to go back and look up member numbers. We paid over $90,000.00 for our club and were possibly selling it for less than half that. We have to incur the rest of the business loan via credit cards.

We cannot sell the business or shut it down while the bank still holds the note cause there is a lien on our business assets. Clubs around us have been shutting down everywhere. When we tried to contact our area director, it has been hard to get a response. I have had to write several emails. Lately, since we have been talking about shutting it down, our area director has been telling us that Gary is now letting people out of their agreement and it will be easy to get rid of the equipment.

But Curves wants to charge us 10,000.00 to close our club! Who the hell has that kind of money just lying around? The last two years have been an absolute nightmare. My husband and I have many times made comments about Gary being this “CHRISTIAN” He tell franchisees it’s all on us and before pointing fingers at him, we should point two fingers at ourselves. We have resorted to putting out own personal monies from our full-time jobs into this albatross.

We are VERY interested in this class action suit and would like to know more. There is a sale pending so we would like to know as soon as possible. If we can get involved, then obviously we would back out of the sale. No paperwork has been signed yet.

We always thought there was a case against Curves but did not know how to go about it. Since we bought Curves two years ago, we have lost over $40,000.00.

WHAT DO YOU THINK?  ARE YOU A CURVES FRANCHISE OWNER, EMPLOYEE OR MEMBER?  SHARE A COMMENT BELOW.

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CURVES: Robert Lay’s Story

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CURVES DISCUSSION: Benefits of a Franchisee Lawsuit?

Curves franchise owner positive-healthy asks:

Could anyone give any insight on what would be considered all the legitimate reasons that one might be able to participate in the group lawsuit? I’m not sure it would be appropriate to ask to be included solely based on severe downturns in a club’s membership due to being in a small town or because of paying too high of a purchase price for a resale. I don’t think I can blame it on Curves International that there is such a turnover in membership. Sometimes I think that our biggest threat is a woman’s lack of commitment to her workouts and the belief that she doesn’t deserve to have a membership on a long-term basis. I would appreciate any insight into this matter. Thank you.

WHAT DO YOU THINK? SHARE A COMMENT BELOW.

CURVES FOR WOMEN: Is McCord Brokers Required for Resales?

At the popular Franchise Pick post on the pros and cons of the Curves For Women franchise , there’s a disagreement over whether Curves requires franchisees to use McCord Business Brokers for all resales of existing Curves for Women franchises.
According to ACurrentCurvesOwner, franchisees are not required to use McCord and may sell their own club if they wish:

…struggling franchisees can only sell through their broker,—this is not true at all, you can sell your club to whomever you choose(assuming they pass the financials), there is no requirement that McCord handle the transaction, they are just one approved broker(I assume because they are the brokers to sell franchises). How I “know” I contacted McCord to evaluate my Curves to sale it and asked, secondly, a Curves in our area recently sold without McCord’s involvement(or any broker).

However, according to a comment on Curves franchising by franchise owner Dorothy, that’s a bunch of hogwash:

In response to a current Curves owner HOGWASH! I was forced into a sale by John McCord’s office after I had decided to close July 31. A buyer came to the table and was coerced by Curves to not come back to me to complete the sale for $10k. They forced the buyer into McCord’s office and was told that they could handle it for her. Unbeknownst to her they were taking $5k of the $10k for thier fee.

I did not list with them. Curves automatically forwarded everything between the closing dept and McCord’s. They forced me into this sale, with the promise of release from my agreement. After the dust settled, and fees were paid, ( $1k for transfer fee and $1800 escrow), and still I had not filled out any paperwork, on my end I was told that they did not need it, and processed the sale without my signature.

So I decided to stick with my original plan to close on the 31st. I moved EVERYTHING out including machines and locked everything up. I paid for everything and they expected me to walk away from EVERYTHING, computers, programs etc for a paltry $5k NO WAY!

They found out what I did and provided her with machines last week and she reopened Monday. Is that fair to all the rest of us that paid our money, and she got it for $5k.

Curves is desperate to keep the income coming in. I was down to 125 members, so now they have her sucked in for 5 years. So don’t tell me that they won’t do this, they have. I won’t give back the machines, I’ve paid for them, and will eventually sell them off. And they are coming after me for over $42k in royalties and advertising fees, so they think. They can’t pursue it, they have already sold the franchise.

I loved Curves while I was in the family, but events from the last two years have turned me off to the franchise. I will seek legal remedy, fortunately I did not get to the point of bankruptcy and made a sound business decision to close before it was really too late. I have other stories, but will limit my response for now.

WHAT DO YOU THINK? ARE YOU A FRANCHISEE OR FORMER FRANCHISEE WHO SOLD A CURVES? DID YOU USE CURVES DESIGNATED BROKER? WHAT WAS YOUR EXPERIENCE?

CURVES FOR WOMEN: An Unhappy Franchisee Tale

When asked “Is Curves for Women a Good Franchise Investment?” reader ScrdByCurves posted the comment below. The bolded subheads have been added to improve readability.
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ScrdByCurves story:
“Hi and sorry in advance for the long post. I know we are just one of many unhappy ex-owners but hopefully our story can prevent others from going down the same path. And to those happy Curves owners that still making money - congratulations, you are rapidly approaching the other side of the bell curve.

“Here it goes: My wife was a successful business woman when we got married. After having our second child in 2001 she abandoned her career and stayed home with kids. After second pregnancy, my wife started to gain weight and decided to join the hottest women’s health club on earth – Curves. She loved it, but being a business oriented woman that she is, she noticed some inefficiencies that negatively affected the club she was in. So she came to me one day and asked me what do I think if we were to buy one, so she could implement the ideas she had while doing exercises and making extra income. I suggested that she get a part time job there first to find out first hand of what is involved. She did that and coincidentally, 6 months later that club was offered for sale for $320K. It was 1 year old, had 180 members and with $7K/mo rent at a brand new shopping center. I could not understand how current owner came up with this futuristic price and requested a meeting with him. He was extremely confident and his only justification was future profits and historic sales prices of other Curves. They had owned 2 other locations – one with over 800 members and another with over 600 members. After running some #s, I had offered him to buy all 3 for 650K. He did not even return my call. In a meantime, my wife was becoming anxious to own one. It was early 2004 and no new territories existed in our state or even US I believe. The only Curves one could purchase would be a resale.

“We started to look actively and eventually found one for sale within 30min driving distance from us. It had 300 members with $2K/mo rent making about 60K/yr. It was offered for $280K. After some hesitation we decided to buy it for my wife. I figured that the worst case scenario would be that we sell it 5 years later for ½ price and would still come a little bit ahead plus a health benefits to my wife. Oh, how naïve I was!

We went to Texas for training and came back with elevated spirits thinking that we will make a world of difference in our area. My wife eagerly started implementing her ideas and actively participating in all community events. However, the problems began almost immediately. First, we discovered that we did not really have 300 members. The ex-owners that sold us the club had another one within the 2 mile radius. Mysteriously, right after we purchased the club, many members transferred to that other club. We have suspected the foul play but could not prove anything and instead decided to concentrate our efforts on growing ours. It’s been said on this board many times that Curves insists that all their clubs are working as a team, helping each other. Nothing is further from truth. This was a cut-throat competition with devious techniques of luring members to your own club, secretly complaining about other neighboring clubs to Curves Legal, spying by sending friends and relatives to neighboring clubs pretending they are new members and bad-mouthing other clubs in the area to members and other people around.

“My wife’s cheerful demeanor slowly evaporated. She became more aggressive, stressed, tired and exhausted as days passed. She had to let go previous employees who turned out to be still working for previous owners as they have been sabotaging business when my wife was not there by loudly complaining about her to the members and openly encouraging them to leave our club and go to the other Curves the ex-owners had. When one of the members told about it to my wife – she became furious and fired them. Then she discovered that those employees had given away hundreds of coupons for free Curves products that were reserved as a reward to those women who achieve their goals. Over 100 members had 5 or more coupons that they said were given them as rewards for their exercises. Fearing that we may loose more members if we try to revoke them, we had to spend several more thousand dollars buying expensive Curves sweat shirts that everyone wanted.

“All that set us behind considerably and created a lot of tension, but we were determined to make it work. Over the next couple of years we saw that despite of our efforts, we were not gaining new members and have had problems retaining old ones. Our expenses had increased - rent, advertisement, salaries for employees, with revenues steadily falling. We have tried to talk to our Area Directors but received no support, we have complained about it to Curves Int. but received no response. We tried to work with other Curves, participating in co-ops and sharing local ad costs, but it did not bring more members, while we were spending more money than ever. On top of that, Curves Int. asks its franchisees to fax the worksheets that determine the dollar amount of monthly franchise and ad fees. If they do not receive the fax in time, they charge you maximum fees allowed. On more than several occasions, even though we have faxed everything on time (and have proof of that), we have been charged the maximum fees that overdraw our business account and result in overdraft bank fees of $40 for every transaction after that. Then it would take a number calls leaving messages and faxes to get the franchise fees reversed and corrected, but Curves never reimburses you for the bank fees that result from their mistakes. In 2007, we have paid over $1500 just in overdraft fees due to Curves mistakes.

“Slowly but surely, from a profitable club we became a club that sucked money at the rate of $2K-$5K/mo. Several non-Curves competitors in the area started to pop up offering the same thing for 19.95/mo. I have not seen a single Curves TV ad since 2005. In a meantime they continue to collect money for a “national advertisement”.

“Finally, 3 months ago we were forced to shut down the club, refund prepaid memberships to several members and terminate our lease contract.

“Several clubs in our area are listed for sale in the $30K-$45K range – a far cry from 2004 prices. I am sure that those would eventually be shut down as well.

“Curves Int. is trying to collect the $10K from us but our club was purchased by a Nevada LLC where my wife is a single member rather than my wife personally, so they will have a hard time going after our assets and we have no more money to donate them.

“Overall, this is by far the bitterest experience that we ever had in our lives. I am just glad that our family was strong enough to endure it. We had another family addition last year that helped us be together. Now, 4 years and $370K later, our efforts are concentrated on putting this all behind and moving on with life. It had mostly eliminated our hopes for early retirement and good colleges for our kids.

“While some folks here say that it is all our (ex-Curves owners’) fault. I know for myself that it is not us but Curves Int. and those who run it that we have to thank for that. Their extreme corporate greed, total disinterest in Franchisees and, sadly, total lack of any concern for women they say they want to help (because it all trickles down to members that at the end are disillusioned, hopeless and no longer have a convenient place to go to) – that is what is at fault.

“It is very much reminds me of Enron and I sure hope that it will end similarly.

“Thank you Gary. Remember – what goes around, comes around.”

CURVES FOR WOMEN: UFOC dated March, 2008

Here is the Curves for Women Uniform Franchise Offering Circular dated March, 2008:

Curves for Women UFOC 3/08 Part 1: curvesufoc20308

Curves for Women UFOC 3/08 Part 2: curvesufoc103081

Here is the list of Curves for Women franchise owners who have left the system, dated March, 2008:

Curves Franchisees who left the system part 1: curvesexzees0408

Curves Franchisees who left the system part 2: curvesexzeesfor07

Do you own a Curves for Women franchise? What do you think?

Another Curves Shuts Down Abruptly

Another unhappy franchisee reported by Susan Barr in California’s Kern Valley Sun: 

"Curves abruptly closes its doors  Susan Barr - Kern Valley Sun

The parking lot of Curves in Lake Isabella would normally be busy on a weekday morning with ladies bustling in and out to get a workout. But on Wednesday last week, that scene was replaced by one of members arriving only to find the doors locked and a sign posted telling them that the business was closed for good. There was no warning that the gym, owned by Cathy Sokoloff, was going to close its’ doors so abruptly."

As usual, Curves Corporate office had no clue, and put it all on the franchise owner:

"As of last Thursday, the Curves Corporate office located in Waco Texas, said that it was unaware of the business’s closure. Supporting that statement was the fact that company website was still referring interested women to join Curves at the Lake Isabella location. When asked about the situation, Becky Frusher, with the company’s Communications Department, said she was surprised to hear about the closing. When asked about members and what recourse they have with regards to getting reimbursement of any money owed to them, she reiterated ‘Each franchise is independently operated and owned. This is an unfortunate situation, but it isn’t the responsibility of Curves. Members will need to take it up with the owner.’"

Curves franchise owner Cathy Sokoloff overwhelmed by the stress level:

"Sokoloff did contact the Sun to offer an explanation to the community and especially those who were members of her gym. After owning the business for four and one-half years, she was faced with an ever shrinking number of active members and continually rising operating costs. ‘To make a go of it realistically, I needed at least 200 regularly attending members. When I made the decision to close the doors, I had only 60 to 70,’ she said. In hindsight, she wished that she had not closed the business in the manner she did, but cites her stress level as ‘overwhelming’ and that it caused her to make a snap decision. Sokolff says that she is committed to repaying any monies that are owed to members and stated this in a postcard that was sent out to the ladies last week. On a final note, she added that she was very grateful to all of the women who had attended her gym over the years. ‘They were a wonderful group of ladies and they taught me a great deal. I wish that it hadn’t to come to this.’"

Please join UnhappyFranchisee.com in offering some words of encouragement to Curves ex-Franchisee Cathy Sokoloff.  All she’ll get from Curves Corporate will be a bill for the $10,000 Failure Fee. 

Cape Girardeau Curves Franchise Closes

The Cape Girardeau, MO Curves franchise has closed. According to Rudy Keller’s column in the Southeast Missourian, Tish and Bryan Gentry, who also operate fitness centers in Dexter, Mo. and West Plains, Mo. had purchased the established Curves in March 2006. According to Curves Trish Gentry, the business was in worse shape than they had thought.

According to Keller’s column, The Gentry’s gave it their best shot:

“I hired someone really great at marketing and we definitely made some huge changes but I took two steps forward and four steps back,” she said. “I finally was just going deeper and deeper financially.”

Keeping the workout center open in the face of much stiffer competition for disposable dollars than in either of her other locations played a part in the closure, Gentry said.

Gentry, who’s been a Curves franchise owner for 11 years, said she’s working with the franchisor “to find a new operator, perhaps by combining the Cape Girardeau franchise with the Jackson location.”