Slender Lady Founder Bruce Sharpe Has Died
December 4, 2008
UnhappyFranchisee.com has learned that the controversial founder (and former business partner of Cuppy’s Coffee founder Robert “Morg” Morgan) has died.
An email being circulated to friends, family and former associates reads:
For any of you who don’t yet know, Bruce Sharpe passed away from natural causes on December 1, 2008. He was happily living in Colombia.
He is much loved by many of us and he will be sorely missed by his many friends and family.
There are no plans for his service as of yet, but when we find out, we will pass the information along. If any one of you knows, please let the rest of us know. Thanks.
His son Larry is reportedly en route to Columbia to bring Mr. Sharpe’s body home to California.
* * * * * * *
Bruce Sharpe was a controversial figure in franchising. He founded the Slender Lady Women’s Fitness chain as a head-to-head franchise competitor to Curves. According to a 2003 article in the Sacramento Business Journal:
Founder Bruce Sharpe, who used to work for the Gold’s Gym chain, opened his first Slender Lady in California in the mid-’90s and started franchising in 1998. Thirty opened, but then growth stalled. [Robert "Morg"] Morgan and John Verdugo joined Sharpe as partners last year, invested $500,000 and restructured the company.
By 2005, IHRSA reported that Slender Lady had sold 350 franchises and opened 150 units in the U.S. and Canada.
However, the chain was soon beset with failed franchise units, franchisee lawsuits and allegations of fraud and breach of contract by the franchisor. In April, 2005, The California Dept. of Corporations charged Slender Lady with making misrepresentations and omissions as to the level of training, assistance in marketing and advertising, Web site, and a commercial ad.
Based on the violations of California law, Corporations revoked the franchise registration of Slender Lady, issued a Desist and Refrain Order to CEO and founder Bruce Sharpe and his company to stop the offer and sales of unregistered franchises, and denied its application for renewal of franchise registration dated April 12, 2005.
What was left of Slender Lady was acquired by Healthy Inspirations in 2007. Jim Rowe, former majority stockholder of Slender Lady, is CEO of Healthy Inspirations.
CURVES FOR WOMEN: Nearly Half The Palm Beach Clubs Have Closed
November 15, 2008
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
November 15, 2008
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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123 FIT: Franchisees Debate Viability of Franchise, 30 Minute Fitness Biz
October 2, 2008
(Franchise Pick) Related reading:
Will the 1-2-3 Fit Franchise be the Quiznos of Health Clubs? Is That a Good Thing?
9,509,657 Reasons to Read Disclosure Documents Before Investing
"Quiznos of Fitness" 1-2-3 Fit in Financial Trouble
"They Lie": 1-2-3 Fit Franchise Owners Sound Off
The 123 FIT organization and franchise concept has taken some heat from commenters on this blog - in part because it is owned and operated by the much maligned (in franchise circles) executives of Quiznos. But 123 FIT is not an isolated target for criticism; the very viability of the women’s 30-Minute circuit training club as a sustainable business model has been called into question. Industry critics and failed franchisees alike complain of high recruitment costs, low retention rates, oversaturation of the market and profit centers that are too limited and too small.
Over at Franchise Pick, commenter Pete (anon) claims to be a successful 123 FIT franchise owner. He contends that the 123 Fit company have been given a bad rap, that the 123 Fit concept is sound and, contrary to what many would have you believe, women’s circuit training is "hot."
Read his defense of 123 Fit and the 30 Minute Circuit Training concept here:
123 FIT: Franchisees Debate Viability of Franchise, 30 Minute Fitness Biz
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.
BUTTERFLY LIFE: Interview With Franchisee Matt Wilson
September 30, 2008
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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.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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CURVES FOR WOMEN: Franchisee a Victim of Fraud?
September 14, 2008
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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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BUTTERFLY LIFE FRANCHISE DISCUSSION
August 28, 2008
CURVES: Robert Lay’s Story
August 27, 2008
BUTTERFLY LIFE: Franchisees Mourn the Loss of Cynthia Holt
August 25, 2008
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
August 20, 2008
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.
