CURVES Sold? Gary Heavin Out?
July 27, 2012
CURVES Sold? Gary Heavin Out?
Curves franchise owners and UnhappyFranchisee.com long for the day when we publish that headline with exclamation points instead of question marks.
According to a report by Stuart Goldman on the Club Industry website, Curves International is close to an equity deal with North Castle Partners.
According to the Curves franchise owners and former franchise owners who have posted more than 1000 Curves franchise complaints on UnhappyFranchisee.com, a deal can’t close fast enough.
Speaking of closing fast, more than half of the franchisee-owned Curves U.S. locations have closed in the last few years. (Read: CURVES: The Rise & Painful Fall of the Curves Franchise Chain)
Curves franchisees complain that they have suffered brutal and callous treatment at the hands of Curves International. Rather than lending assistance or even compassion, devastated Curves franchise owners complain, the supposedly Christian Curves International turned loose law firm/collection agency attack dogs to demand final payments from failed franchisees. Curves franchisees were not allowed to sell their equipment, but were forced to return, donate or destroy it by CI.
It’s been alleged that Curves management repeatedly rubbed salt in the wounds of their many failed franchise owners.
As franchisees fought for survival, past-President Mike Raymond told the Wall Street Journal the widespread failures were part of a strategy to “prune” the Curves system. (Read: CURVES Franchise Owners React to Comments That They’re Being “Pruned”)
When confronted with the high SBA loan default rate from Curves franchise investments, founder and CEO Gary Heavin blamed greedy franchisees and “the overpriced resales of franchises between third parties.”
As their franchisees struggled to save their homes and savings and fight off bankruptcy, Gary and Diane Heavin publicized their Christian philanthropy by appearing on the national tv show Secret Millionaire (Gary Heavin on ABC Secret Millionaire: What do CURVES Franchisees Think?)
Curves Sale Negotiations in the “Final Stages.”
According to Club Industry:
Curves International, Waco, TX, says it is close to an equity deal agreement with private-equity firm North Castle Partners.
Curves CEO Gary Heavin says negotiations surrounding the transaction are in the final stages.
“North Castle and Curves are working closely together as the investment becomes finalized,” Heavin said in a statement released to Club Industry. “We will send out a notice to inform everyone when the transaction is official and follow up with details about upcoming changes shortly after that.”
Terms of the pending transaction were not disclosed.
North Castle Partners, Greenwich, CT, is a firm focused on the health, wellness and active living sector. Its investments range from $10 million to $200 million. Included in its portfolio are equipment manufacturer Octane Fitness, Brooklyn Park, MN, and Canadian clubs World Health and Spa Lady.
How the deal would affect the company roles of Heavin and his wife, Diane, who co-founded Curves in 1992, is unknown. Full details regarding any changes in the corporate structure will be released when the deal is finalized, according to the company.
Read all about Curves International here: CURVES: Curves Posts on Unhappy Franchisee
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