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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…

Another 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

234 Responses to “CURVES: Negotiating Curves Closing Fees”

  1. ADMIN says:

    You can email me at UnhappyFranchisee[at]gmail.com

    Thanks,

    ADMIN

  2. julia says:

    We decided to close our club, but don’t have any idea of how to do it.
    Does anyone knows how is the new management dealing with closing and with the future royalty fees?
    My agreement will expire in 2 years and as everyone here we are closing because we dont have money, so what should I do?

    Do I have to let them know beforre closing? Do they hold the wellness payment?

    Please Help!

  3. mary says:

    Hi,
    The curves in my town is closing before her 3 year agreement is up. I know the owner and she thinks I can take over the location and get rid of all the curves equipment and put in my own cardio equipments and strength training machines and should still be able to retain members and also increase them.

    I’m seriously considering it but still not sure if this will work. My town has a anytime fitness center near a grocery store already and so that will be a big competition.

    I’m not sure if this will work, what do you former curves owner think?

    thanks.

  4. Almost done with Curves says:

    We are getting ready to close at the end of the week. Curves is saying now you can’t donate equipment that you can only sell to another Curves or donate to another Curves or scrap it. Has anyone scrapped their machines? I’m just trying to figure out a way to say I scrapped them and keep them. You would think you could donate to a retirement home or senior center. This makes no sense. I will be so Thankful to be done with Curves!!!!! Worst decision we have ever made.

  5. Dee Dee Cooke says:

    Hello everyone, I just spoke with Kelly Spann at the Law Office of Jonathan
    E. Fortman about our potential claims as Curves franchisees. They want to
    talk to as many people as possible. Contingency/no cost. Please go to
    http://fortmanlaw.com/curves-request-for-information/ and give them your
    story!
    Dee Dee Cooke
    12 year owner, Ellisville, MO

  6. Shanna Hodgin says:

    Could someone give me some info. or help. CI has a collection agency calling trying to get me to pay $21,000 to CI. They agreed to drop it to $7,500. Should I pay it, or refuse?

  7. Shanna Hodgin says:

    Could someone give me some info. or help. CI has a collection agency calling trying to get me to pay $21,000 to CI. They agreed to drop it to $7,500. Should I pay it, or refuse?

  8. karen says:

    Shanna, I think I have been given your phone number and I will call you. I wish the owners who posted earlier with questions about closing had updated us on what happened….makes me feel like no one can discuss their deal with Curves after they make it. Do they sign some kind of agreement??? I am closed as of yesterday and don’t know what is in store for me just yet.

  9. Hope says:

    Hi Shanna and Karen, my last day was yesterday also….and now I am waiting to see what will be next. I have had contact with a few owners who have closed…those who didnt use an attorney, closed and were eventually offered a lower amount like you Shanna, one isnt paying and is waiting to see what will happen, one paid. Another went through an attorney and ended up paying curves even with the attorney, however if they use an attorney they cant discuss anything about it, so they dont post, in fact I think anyone who has settled cant discuss anything and probably sign papers. There is an attorney who posted on this site who is looking at the curves complaints, and wants owners to get in contact with him, thinking maybe to see if a class action is possible…? With the new changes at curves I think we will be seeing many more clubs close, its overwhelming for owners who are already under water. In the meanwhile I am waiting to see what is next and watching the posts here also. I wish you the best and that 2014 will be a better year!

  10. Linda says:

    I am looking at buyng a well established Curves Franchise but after reading these post I have concerns. The Curves has been around for 10 years but losing memebrs due to the current ownwers losing interest and looking to retire. The price is low but current memebership basically covers all cost. I have worked there part time for a year and really believe in the program and how it helps people lose weight. What advice can anyone give me? Thanks!

  11. Hope says:

    Hi Linda, I bought a curves that had been in business for 10 yrs and it was the worst decision of my life. You need to make sure you have a lot of money to help with all the business expenses and to meet new franchise requirements each year. My club was basically paying for its rent, payroll, utilities….but it wasnt enough, and I ended up losing a lot of money!! You also need to see how many people are regularly working out….there were many members being drafted but werent working out and they eventually quit or didnt renew or I had to stop their drafts because they had been on the books way beyond what was morally right. I didnt realize until I bought it that there were members being drafted for years and they hadnt even worked out for 2 yrs! It was wrong, so I dropped them which resulted in my losing a chunk of monthly income right off the bat. Your only as strong as your base of members who are really working out. Insurance aka wellness members only bring in money if they work out…they have to work out 8 times a month to bring in the top amount paid by the insurance company which even then is still less than what other members pay. You need a strong monthly draft base of dedicated members and money in the bank for the extra expenses that the franchise demands. My advice, dont buy!!!

  12. Closed says:

    Linda, I absolutely agree with Hope. You need a MINIMUM membership of 250 to stay alive and at least $50,000 in the bank that you can afford to lose over the next five years. Many owners have lost a great deal more. I honestly doubt your owners are selling and membership is declining for the reasons you have listed. You need to treat this as a smart business decision and NOT an emotional one. Do your due diligence in investigating all aspects of this club before you decide. Part time employment does not reveal the hard work and dedication this takes. It is a 24/7 job with low if any return.
    Good Luck!

  13. Almost Bankrupt says:

    I am also now looking to close our club. We have been trying to sell/ give it away for over a year now with no success. I have spoken with our area manager countless times about potentially closing but instead of offering help she keeps telling me about the money I would have to pay if we closed. I honestly don’t know what to do. Does anyone know if it helps to be a limited liability company when closing? We have a huge company overdraft and owe Curves thousands of unpaid dues but we have no money to pay. Any advice would be much appreciated.

  14. Hope says:

    Dear almost bankrupt, there is an attorney wanting to hear from owners… you need legal advice, please see contact info…….

    Jane says:
    January 19, 2014 at 12:17 pm
    I am sorry about all of your circumstances with Curves. There is a law firm, the Law Office of Jonathan E. Fortman, LLC, which is preparing/reviewing a class-action case against Curves on a CONTINGENCY basis. They were successful at winning against Contours Express after the company was purchased by a private equity firm. You potentially could collect 3x the amount of monies afforded to franchise & advertising royalties, equipment, and build-out expenses.

    I realize many of you may have signed a mutual release with the settlement you arrived at with Curves, however, this would not exclude you from participating, and you may remain anonymous as a plaintiff, if a case goes forward. I believe it would be well worth investing some time to call Kelly at The Fortman Law Office regarding your situation. Her contact information is listed below.

    From their website:
    If you wish to join the potential lawsuit, please fill out and return
    the questionnaire along with the following:

    *your franchise agreement(s)
    *FDD/Franchise Disclosure Document
    *any written correspondence, letters, emails, any notes, advertising, etc.
    *anything you deem important to your case

    *AND the attached questionnaire (Be as detailed as possible!)

    The link to our Curves blog and questionnaire is
    http://fortmanlaw.com/curves-request-for-information/

    The sooner you can get the documents to us the better. You may email,
    fax, or mail them to us. We also have access to Dropbox if you would
    like to upload your files there.

    Our contact information is at the very bottom of this email. Should
    you have any questions or concerns please do not hesitate to contact
    us. Thank you and we look forward to working with you!

    Our website is http://www.fortmanlaw.com

    We are also on Facebook & Linkedin!

    Paralegal
    Law Office of Jonathan E. Fortman, LLC
    250 Saint Catherine Street
    Florissant, MO 63031
    (314)522-2312 x 103
    (314)524-1519 Fax
    kms@fortmanlaw.com

  15. Alan says:

    Has anyone had to deal with demand to pay “future” royalties to CI after having to close? If so, what was outcome and any suggestions on fighting this or negotiating the amount?? Help! Thx.

  16. Alan says:

    Has anyone had to deal with demand to pay “future” royalties to CI after having to close? If so, what was outcome and any suggestions on fighting this or negotiating the amount?? Thx for any help and input from anyone who has closed and had to deal with this!

  17. Hope says:

    Alan, when I had to close I still had 2 and half yrs left on my contract. I was told I could face paying 28,000 but if I followed their closing requirements it would be possibly lower….so I followed their closing procedure and waited to see what would happen….they came back with a final offer of 6000 but with terms that I had to pay it then or face it going back to 28,000. I borrowed the 6000 to get them off my back and they released me. I know others who didnt pay anything because they didnt have it or refused to and are getting continued threats from them. Some are fighting with attorneys…..if you read through the posts there is an attorney who is taking on a group lawsuit, Fortman….you could contact them also. Good luck!

  18. Alan says:

    Hope – thx for the input. How’d you get it down to $6k from $28k?? If offered a settlement amt close to $5 or $6k I might take it. Anyone close 2 or more years ago? What was outcome with CI and pursuing the future fees? I closed about a year ago and now have Cedar Financial, CA hounding for a reduced 1/3 settlement amt – legalized extortion! Cant afford the $10k of the original $30k amt but also can’t afford the threat of the $30 k plus their attorneys fees. This is jacked! I really wish I was parishioner were the Heavins’ go to worship and hold themselves out to be such devout Christians. HA! Someday they will get their reckoning! pls lmk if you’ve had to deal with Cedar Fin, Ca and the outcome? Thx

  19. Hope says:

    What a nightmare Alan! It looks like you are in a different situation than me…from what I know is, right from the get go, if you let curves know you need to close, and then follow their closing procedures then they will offer the 6000 to you and if you pay it then you are released from all fees etc…however if you close on your own and dont follow their process you are hit with all the max fees and there isnt any negotiating! I just closed some months ago and still had 2 and half years left, however I did comply with them during the closing. I know there are other stories of owners like you who closed without following curves closing process and were hit with all the max fees and then eventually collections started coming after them…..they are in the same nightmare as you…they have no money and they havent paid but are being harrassed by collections and they dont know what to do! I am so sorry I cant be more help, I hope someone out there who is in your same situation will have some advice!! I am not sure but I think the attorney Fortman is moving forward with a group on a contingency basis.

  20. Hello, Hope & Alan,

    My firm, Bridge Management Consulting, helps small business owners who are struggling with debt resulting from a failing or closed business, including future franchise fees/royalties.

    We’ve helped with unearned franchise fees, terminating franchise agreements, and non-compete clauses. We specialize in SBA loans and the Offer in Compromise procedure, and we help settle vendor debt, landlord/lease problems and other financial obligations resulting from a failed business.

    We’ve handled several franchisees who need to get out of their particular franchise hell, and we’ve successfully fought back on behalf of our clients. Don’t give into them!

    Feel free to contact:

    Ryan Lineham, Director of Client Services
    401-390-3800
    ryan@bridgemgt.com

    We offer free consultations to all franchisees on all of these issues. We’d love to speak with you.

    Nancy

  21. Alan says:

    Hope – yes I did comply. Let CI know was prob going to have to close several months in advance and they threatened the future royalties then and said we had to stay open period no matter what. So we closed, sent them an email saying we was and got an email back from CI about closing procedures (ie, taking down Curves signage and sending them pictures to prove signs were down, donated to equipment to a local tax-exempt sports organization for families. We complied. And never heard from CI for 9 mths well actually a collection agency saying Curves had put a debt of $33k with them that I owe. F#*king Bastards!

  22. Alan says:

    Nancy are you familiar with Curves and these demands for future (unearned) royalties they claim we owe? I don’t understand that at all. I’m no attorney obviously, but I did have contracts 101 and thought you had to an offer and consideration to have a binding contract? That’s simple to see while the franchise is operating using the Curves name and paying royalty for that. But how is that legal and binding after the business has to close? Where’s the offer and consideration part?

  23. Hello, Alan,

    I’m not aware of Curves’ demands for future royalties, specifically, but I can tell you that every single franchisee that we’ve helped, there’s been a demand for future royalties. It’s a standard contract agreement provision.

    And, we’ve successfully negotiated reasonable and appropriate settlements for our clients. Franchisors can – and do – bully individual franchisees. They’re more reasonable when they encounter lawyers or business consultants (that’s us). They know that WE KNOW that they back down when their scare tactics fail against us.

  24. Alan says:

    Thx Nancy for input. They (Curves) says by their estimate (which is maximum monthly amt – which based on income was barely ever 1/3 that) amt owed is $33k but Cedar Financial (a debt collector Curves placed it with) has told me they have the latitude to settle for $9500. I think they are both fried in the head. But, based on that and previous experience you/firm have, what range do you anticipate they may take (little as possible – cause I have no money left) and your fees total about? Thx.

  25. Hi, Alan,

    The amount that Curves/Cedar Financial will accept as settlement amount depends on several factors, including how your PFS look. Many people assume that a creditor will accept a certain percentage; this is simply untrue.

    I am unable to give you an honest and accurate range here, only because I don’t know what your PFS looks like.

    Feel free to contact:

    Ryan Lineham, Director of Client Services
    401-390-3800
    ryan@bridgemgt.com

  26. Alan says:

    So, are there any previous Curves Franchise owners out there who have had to close their club over a year or two ago to have had time for the fallout of Curves future royalty demands? I’d like your input on your individual experience and the ultimate outcome nd if you beat this (without filing bankruptcy) pls help. Previous Curves owner who wishes he never heard of them!

  27. Gary says:

    My 74 year old mom owned a Curves that she closed 2 years ago. She put all her equipment in storage. ( like 30 machines). I am trying to get rid of the $300 a month storage bill. Any advice on selling this equipment? Mom says she has settled with Curves and has no obligations to them.

    Any and all advice will be appreciated.

    Gary: Sorry to hear your Mom’s Curves closed.

    If you make $125 contribution to the site and I will post a classified ad for up to 6 months.
    Contribute here: http://www.unhappyfranchisee.com/support-franchise-fairness/
    Send description, details, location and your contact info to UnhappyFranchisee[at]gmail.com

    Otherwise we don’t allow solicitations in the comment section.

    Thanks,

    ADMIN

  28. Aussie Z says:

    Dear Hope and Alan, I closed my club in australia 2 years ago. I had 4 years to go of a 10 year agreement. With instructions on how to close my club and working closely with CI it went very smoothly. Then I got a letter saying I owed them $64,000 I told them not so politely that I didn’t have that kind of money. Then it went down to $17,000 within a few days. I again told them I did not have that kind of money now it has gone back up to $64,000. I have not heard from them for about 18 months. When I closed I only had 74 members couldn’t pay rent or utilities but did you think they cared. They based the $64,000 on the maximum royalties they are allowed to charge even though for the 6 years I had my club I never paid anywhere near that amount. They are just greedy greedy bullies.

  29. a Sad Curves Owner says:

    I tried to close my Curves 2 or so months ago but became so overwhelmed with what CL told me they would be charging me, that I withdrew my closing. Now I am faced with no alternative but to close unannounced to Curves. I can’t pay my rent, utilities, etc. My membership has dropped due the economy. I had a member cancel today because one of her dogs died and she is having to dedicate her spare time to her depressed other dog. I don’t know what else to do but to close. I am figuring my refunds to members tonight and messaging my landlord tomorrow that I will be out by Monday. Any suggestions/ Has anyone used the Fortman attorney to help them?

  30. Lucy says:

    Hi Everyone, I have so many mixed feelings about the breakdown I had yesterday at my Club. I can’t express the tremendous fear I have everyday over being a Curves Franchisee. I have horrible insomnia and am constantly trying to “figure something out” only to no avail. I feel like I am sinking in quicksand and that someone is choking me. I try to put on a front and a smiling face to my members because this in NOT their problem. I feel comfort and a little reassured reading the other posts because I can tell that most of the people on here care/ cared deeply for their members but I realized that as much as I care about them,I would never wish the type of poverty I have experienced being a Curves on anybody! I LOVE health, fitness, and diet I love to inspire and motivate people to become their best, and it is ironic because if I was living my best life it would not look like this. struggling to provide basic necessities for your family is very difficult. anyway thank you for allowing me to vent.

  31. Josephine says:

    Lucy, I feel the same as you. I bought my club 2&1/2 years ago and am painfully waiting for my lease to be up(another 7 months!) @ $3040.00 per month. I say painful because there have only been 5 of the last 29 months that I haven’t had to put our personal funds into the club to cover rent and/or payroll or required changes. I have kept up with all of the changes, out of my own pocket, and still I can’t cover all the expenses every month. Every dollar that comes in, goes to everyone else, and all of those fees! There is a fee for everything a human can think of! I bought myself a 24/7 job that not only doesn’t pay me anything, it costs me constantly. I feel so guilty for taking so much money from my family to keep such a loser going. I love my members and don’t know what they will do without Curves. Our club is busy and happy and I’m sure they all think I make a fortune. I would think that if I walked in and saw the activity. We currently have 282 members, still no money. I don’t know what to do, it is so difficult to sell. Who wants to buy a business that shows consistent losses? I guess I bought it thinking I could make a difference, but I would feel guilty selling it to another sucker. I don’t know what to do. It is for sale, but I may also have to close in 2015.

  32. Pamela says:

    I’ve been an owner for 2 yrs now this month. I bought the business knowing it was broken but was assured it was fixable because the owner had been out w/personal issues and had to rely on the manager for the last couple yrs., and she showed that a large amount of members were on the role, but neglected to say that about 1/3 of them were not actively working out and just paying dues. So anyway present day, those have cancelled or I wrote them off because it was 2 yrs or more they had been in, I have one sign up for 2 cancels in a town of 8,050 people and 3 any time gyms and one therapy gym in the area. what minor profit I may have one month from a 6 month period takes it back because of utilities or some fee or whatever else has gone wrong that month. so no income from me to my home and at times my husband is very stressed about it, with good reason. I’m considering closing before I lose everything in the bank, but don’t know how to go about it. I am LLC, so I don’t know if that makes a difference in anyway. Any suggestions on what my first steps should be. I’ve had it registered as “For Sale” on the CI website for probably 6 months and of course, no traffic on that. Suggestions welcome!

  33. Christy says:

    I closed my Curves Franchise in 2007. Hired an attorney the same day and he took care of the legal issues i was facing. I too was asked to pay a lump sum of money of which i did not have to do. There are many loop holes in their contracts and i suggest each one of you hire an attorney to handle it for you. I was told by my attorney that after five years of being closed and free of any legal matters that i was free to do what i wish with equipment. Even though it has been past the 5 year mark i am still storing my equipment. The worst decesion i ever made was buying into this mess. I still havnt recovered from it.

  34. Josephine says:

    Alan are you still out there? I’m wondering how things are going with CI. Have you closed yet? I would love to hear how things are going. My lease will be up in April, and I will be closing soon after that.
    What about you Pamela? Have you started closing procedures or do you plan to?
    I also have had my club for sale for 6 months…no response. I will be closing with 2 years left on my franchise agreement and am very worried. I just today place calls with Fortman Law Firm and Bridge Management. Has anyone been working with either of them recently? How is it going?

    Sad Curves owner, I would love to hear how you are doing after closing in June/July. Hope you are well.

    Josephine

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