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CURVES: Negotiating Curves Closing Fees

June 20, 2012

CURVES franchise: Negotiating Curves Closing Fees

Struggling, failing and soon-to-close Curves franchise owners seek information and advice from Unhappy Franchisee on how to handle the demands Curves International is placing on them.    One of the frequent topics is the club closing procedures, and how to negotiate with Curves International in regard to their demands for “failure fees” and often tens of thousands of dollars for “future royalties.” (Also called “Liquidated damages”)

If you have advice or experience closing one of more Curves clubs, please share your experience below.

From the post CURVES: Robert Lay’s Story, here’s an exchange regarding the closing fee:

Donna  Submitted on 2009/10/08 at 2:41pm

HELP!!! I have read some of the horror stories listed. I to have to close my club. I can not get anyone to return my calls from CI. I do not know what to do. I have had my club almost 7 years and have paid my dues. I do not have 10,000 dollars. Because of the recession I have to close. I love my members and hate to dissapoint them but I have no choice. The closing packet was sent to me but I’m scared to send it in. Is there any help out there? I have to do what I need to do today. Will they let me out without the 10,000 fee. Has anyone out there been in my shoes. Please someone respond as I need advice and help NOW.

CA ex-owner  Submitted on 2009/10/08 at 8:21pm

We’ve all been there! Our club has been closed for over a year. We refused to pay the $10,000. They emailed us two more times, first lowering it to $8,000, then to $6,000 – we still refused. Next came a letter from Curves Legal stating we now owed fees for the remainder of our franchise agreement, somewhere in the amount of over $42,000, with a fair amount of scare tactics! (Read our story above: CA Ex-owner on October 16th, 2008) We then sent a letter back to legal, refusing to pay anything and the reasons why. Now I will knock on wood before I say this, but it has been over a year that we sent them that letter and we have not heard a thing yet.

We are not part of the legal action that many of the people above are pursuing, and I’m sure someone will respond on how to proceed in that direction, or direct you to on what other options you may have. Remember, you are not alone, we’ve all been through this horrible experience. It hardly makes it better, but at least maybe knowing there are so many of us out there, you might feel a little better…

CurvesAnother Curver Submitted on 2009/10/09 at 12:15pm

Hi Donna.
Like You, I had to close my club. I closed it Feb 28th this year…
Of course I did everything I could to keep Curves International properly informed and I asked them for advice on the best way to proceed…

The one thing they did spell out, there is no “standard” $10,000 fee. At least Not Anymore. They said, if I write a letter asking for a settlement instead of paying all the outstanding royalties and ad fees, then they will put it to a review board and the review board will make a suggestion for a settlement. Then they told me not to write a letter but to hold onto the closing packet.

Well, then they forgot about me for 6 or 8 or 10 weeks. I think it was sometime in May that I got a notice that I owed some $40,000 for the balance of royalties and such…
however, i did inform them that i was filing for bankruptcy. they never asked for the bankruptcy attorneys name or the case number. i am just now filing, so they havent gotten any legal notices yet either.
since then I have not heard one word. it’s been what, 7 months since I closed. ridiculous…
i do have another franchise, that i’m struggling to hold onto, and you would think maybe that’s why they’re giving me some slack…
they are very frustrating but i think they have a backlog of closed cases. i have been told by others (gossip?) that they are understaffed and overworked. of course they’re busy with the big lawsuit that “unhappy” is part of it. and all the little lawsuits. i would like to know more about gofigure’s lawsuit against them too.
my attorney told me not to worry about any of it, because our state law supercedes whatever was written in the franchise agreement….

Donna  Submitted on 2009/10/12 at 12:21pm

Robert was right on. Settlement from 10,000 now wanting 2,500. And its only been 12 days. I don’t close until Oct. 30th. They were also nice and I wouldn’t have to pay it until the end of Nov. I wonder If I ask nice they’ll say i don’t have to give away my equipment to another Curves or destroy it -I can do what I want with it. What do you think?

HAVE YOU SUCCESSFULLY NEGOTIATED CURVES CLOSING FEES?  IS CURVES OR THEIR LAW FIRM HARRASSING YOU FOR CLOSING FEES & DAMAGES?  PLEASE SHARE YOUR EXPERIENCE BELOW.

This post was originally published October 12, 2009 and updated June 20, 2012

Contact UnhappyFranchisee.com

Comments

271 Responses to “CURVES: Negotiating Curves Closing Fees”

  1. Happily Closed says:

    Nedra Barnett, Have the web site manager connect you to my private email and I will help you.

  2. Carole Joyce says:

    I closed my Curves almost 3 years ago now. I ended up doing a bankruptcy, since it also meant I owed rent and other bills I was too broke to pay. For me, it was relief, piece of mind and an easy bounceback to life. I still miss my place, my members, but I do not miss the agony, stress…or seeing what other clubs are going thru.

    The legal Bankruptcy, which a bit challenging to go thru, was a piece of cake and ALL of my Curves financial issues went away. I could sleep at night.

    Indeed, there IS life after Curves!

  3. Nedra Barnett says:

    So…lucky me. I am closing early!! Been losing money since the first of the year since a new club opened that is 24/7… Decided to go check it out, because someone told me it had a women’s section AND it totally has Curves equipment! Well…it does!! I am so angry!!! Curves sets the price, take money every month for royalties, ads, system fees, etc… and some fly by night guy comes in with Curves equipment and steals all my customers, because he is cheaper and has my same circuit!! Let’s see how things go now Curves…

  4. Christine says:

    Hi Curves asked me 28 ,620$ i am from Québec i dont have any money to pay this they do offer of 9000’$ i dont have money for that amont too what do i have to do do you think they can get the collection after me help help help

  5. Jessica says:

    Christine…How much longer on your agreement?

  6. Christine says:

    Hi Jessica almost 3 years but all other franchise in Québec Who as the same Time. They ask them 5000$ what should i do

  7. Jessica says:

    Did you tell them you were closing before you did? I would keep bargaining the price down. I have heard of people doing that.

  8. Christine says:

    Hi Jessica i told them after the fire but they said i dident i send help ticket to tell them thats why i have to closed no other place was available i ask them often some help and they almost never answer or they did it in english nobody. Speaker french i have no services and now they ask me money on mater i have any money so they wont have nothing what do you think

  9. Jan MacNeill says:

    Christine I closed a Curves Franchise on Prince Edward Island, Canada about five years ago. They first wanted 43,000.00 then bargained down, down. I eventually agreed to pay one of their bully lawyers 360.00 dollars to end our agreement. Don’t let the bullying tactics win.

  10. Jessica says:

    I wouldn’t let them bully you. I would fight back, and keep bargaining.

    Jan how much time did you have left on your franchise agreement?

  11. Christine says:

    Hi they took me whit the collection and they ask me now 28620,00 Its really a jojke i told them i would not pay that and they say that Will affect my crédit

  12. Jessica says:

    That’s crazy. You can open a franchise for that price.

  13. Sick of it!! says:

    We will be closing Jan 31 contract is up. Have not informed Curves Corp yet, but like I said our contract is up!! It’s breaking our hearts to close after 12 years, but we can no longer struggle to keep our doors open. Did anyone experience any surprises from Curves Corp. when they closed legit?? Any info would be appreciated!!!

  14. Fed Up says:

    “Sick of it”, I’d like to talk to you privately. I’m an owner also losing money. I’m surprised you haven’t told CI because supposedly 4 months before your contract ends they try to get you to sign up for another 5 years, If you don’t, then supposedly they shut off you being able to enter new members into OS. For the owners who end their contract early the charges CI gives them are probably based on the amount of money CI WOULD of made if you’d stayed open with “optimum” membership. In other words if you had 6 months to go the maximum Franchise and Ad fees you would of paid if you had a ton of members is about $1,000 a month, then I think you would have to pay them $6,000. However if you had that many members you wouldn’t be closing! It is these cheap gyms that are taking over the market at $2.50 per week or Gold’s gyms $4.99 bi-weekly, other gyms $14.99 per month…. Like you, we worked our asses off and we simply can’t compete even though we have fabulous service. NC put their money into infrastructure but left it up to the franchisee’s to grow the brand by doing the same old marketing stuff from 20 years ago when the competition was insignificant. Where we used to be the only ladies only gym in town, now we’re one of 5 and the rest are all cheaper.

  15. Jessica says:

    Are you near the end of your contract “Fed up?” The competition is deadly. Are you in Canada or US? Our rates in Canada are $54 or $59 which is crazy high….

  16. Larry Rausch says:

    We have 28 months left on contract planning to close. what will be my realistic nogiated exposure be?

  17. Fed Up says:

    Jessica, our rates aren’t really high if you compare our gym to the Crossfits & many other gyms. Where the problem is, is that the public expects that if they go to the Dollar Store and buy a broom that it’ll be the same quality as one from The Bay, or now-a-days Walmart. Think of it this way wages in Canada haven’t increased much over the decade, but Asian made products at the Dollar stores and Walmart have increased our purchasing power making our dollar purchasing power greater. Translated to gyms when Trevor Linden advertises they have 100 pieces of new gear with TV’s and $4 per week no contract including a ladies only section, that’s pretty appealing. Canada, we’re supposed to charge $49 per mo., more if you have a high cost lease. However we still have older members at $39. We’re due to close mid 2016. Larry, look at your agreement. There is a maximum amount you could ever be charged for Franchise fees and Advertising. Let’s say $795 plus $295 = $1,090. $1,090 x 20 months = $21,800. However they might also add in 20 months of OS and 20 months of Curvessmart which would be another $2,360. Oh, since the $21,800 is US that would be $28,340 right now I’d imagine. Because the $1,090 is fictitious and you wouldn’t be considering closing if you had a Curves doing that well, is the reason Curves drops their demands when told they can’t pay that much I guess.

  18. Fed Up says:

    “Sick of it”, you’d better read your franchise agreement ASAP. It’s the one that’s 300 pages long with (including all the Curves locations, locations that have failed, ongoing and litigated lawsuits settled by Curves…), the first page tells you the term of your agreement (Someone from Australia said they had a 12 year agreement, the 2010 agreements are 5 years), and it says (not verbatim), “Curves will notify you within 90-180 days of the expiration of your agreement that they want you to re-sign for another 5 years. FAILURE to reply to them will automatically sign you up for another 5 YEARS!” . You may be in big trouble by not informing them of your decision to not continue…

    NC has tried to rebrand “Curves is a Curves is a Curves”. That hasn’t worked, we know a few clubs that have the old equipment WITHOUT CurvesSmart, and they aren’t being forced to follow the policy line. It seems they’d rather keep whatever they have and even when a new owner takes over, as of lately they still aren’t forcing the new owner to rebrand. In that respect also, while they ask you to sign a 5 year agreement, if you tell them you want a one year or you’ll close, they’ll say “no”, but eventually will accept a one year agreement rather than have another Curves go under.

  19. Fed Up says:

    “Larry Roasch” – sorry my calculations were wrong. I thought I read 20 months and as you are 28. I also looked at my Franchise agreement and even “if” you had no members, you’d be obligated to pay Curves $95 for advertising and $195 for Franchise fees = $290 per month. But, it’s the maximum that everyone needs to be concerned with, because those are $395 for Advertising and $795 p/m for Franchise fees = $1,190.00 PER month. (3% and 5% of your Gross income).

    Now your numbers become $1,190 x 28 = $30,520 and of course they’ll probably want their OS and CurvesSmart fees (if you’re a CurvesSmart franchise) = (29 + 89= $118) x 28 = $3,304.00

    If you’re in Canada, take our low dollar into account and they become about $39,676 plus potentially $4,295.

  20. Fed Up says:

    Jessica, I’d add this about pricing. When Curves was founded, the gym industry was small. Getting a “ladies only 30 minute full body workout” was a big deal (there are now 5 ladies only gyms in our town now) and totally unique.

    In the coming years with a great economy spending $39 p/m on a membership was entirely reasonable.

    Piggy backing on other business’s to promote yourself (lead boxes) worked pretty good, but when the economy tanked money became an issue, and other businesses you partnered with struggled to keep themselves alive and now they don’t want our materials on their precious shelf space, yet NC [Owner North Castle Partners] still wants us to promote that way, they want us to “solicit” in malls, leave flyers on cars in mall parking lots (illegal in our neighborhood), and the same old same old we’d been doing for years.

    On their end they’ve eliminated staff, now want us to pay for training (we went crazy on re-training our staff when we bought our Curves), and have in their own words “rebuilt the foundation” – great – we have a better OS and website & social media, but have failed to promote Curves substantially themselves.

    When a Big Gym (BG) came to town we thought with our excellent service we’d be immune – we weren’t. The BG parked themselves in a local mall for 2 months, all day long and during that time signed up 3,000+ members at $14.99 per month. We went WAY beyond what NC wanted us to do (coupon booklets, mail-outs, flyers, all sorts of creative promotions) and we’ve now lost 100 members.

    For the same price as us the public can join City Hall’s community gym with sauna, swimming pools, workout rooms, or any number of workout gyms, Zumba & Latin Fitness clubs in a town of 70,000. We joined the local Womans AM, participate in the local downtown business associations activities – public markets, movies in the park, farmers markets, etc., so we can’t be accused of not trying. We’ve even paid for space in the local malls.

    We got so desperate that we made an incredible deal to the local hair, nail & spa businesses – and got NO takers, because either they weren’t interested in fitness or were at the $14.99 gym.

    At the other end are the CrossFit and personal trainer gyms charging $200+ per month. Gyms are big business and many are targeting the baby boomers – just like us. We’re like that restaurant that used to be so cool but some new guy has opened up down the street with new flavors.

    NC has chosen to target the 55+ crowd – the crowd who is least interested in web access. When we talk to people we’re considered the “old ladies” gym which is practically true – last month one lady walked in looked around and said “is this all you have?” and promptly walked out.

    Despite NC’s original focus groups studies that showed people are generally not negative or positive about us (ambivalent), we aren’t considered the gym of first choice, and until Curves is rebranded properly and the public is educated on the things that make us different from everyone else, only sadness is on the horizon for Curves – except in small towns that big gyms haven’t targeted, and the successes in those small towns is what NC is holding up as shining examples of “how to do things right”.

    In 2015 I paid NC $10,000 in various fees (previous years way more). Did I get good value for my money? No – because I lost money and NOT from a lack of trying. So, is our pricing correct? Probably, but the extra $5 for web access membership isn’t, but like everything you purchase in life (while I’m an accountant, I’ve also been in retail sales for 40 years, many as a top salesman), people look for VALUE for their hard earned dollars.

    When we purchased our gym a trainer would be sent out ONLY IF we sent out 10-15k flyers which cost $2,000. We didn’t get one new member. We’ve mined our members incessantly for new BR’s, and our members are tired of being hounded. We have a super clean gym, free water, great coaches and excellent service, bars & merchandise (out of 8 remaining Curves in an overall population of 2.5 million we’re the only ones buying new product).

    I’m convinced that North Castle has to commit to TV advertising promoting what makes Curves unique in the industry – (hell, if Dr Ho can make TV pay anyone can). The public needs EDUCATION on the VALUE of a Curves membership, not the same promo all our competitors do – discounted enrollment fees, free weeks, free classes. Promoting the VALUE of a Curves membership is the only way to counter big gyms like Gold’s who open up with $4.99 p/m memberships for the first 100 members.

  21. Jackie Y says:

    I am looking for used equipment. Does anyone closing have theirs for sale?

    [If you have used equipment to sell, you can safely and confidentially contact this buyer through ADMIN at UnhappyFranchisee[at]gmail.com. I will verify identity before sharing contact info. -ADMIN]

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