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…
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
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View Comments
Could a stand alone gym based on the concept of Curves succeed?
Yes. It's the franchise fees, strict rules, and lack of any extras that kill Curves.
Bill, I know of a Curves that refused to renew when their franchise ended. Curves actually came out to their club to review them at one point because they had the old gear and were thinking of continuing with Curves one more year. Curves refused to renew them because they refused to make changes including removing 2 pieces of equipment. They simply said "No Problem, we aren't renewing then", and Curves came back and asked them to consider continuing on for another year. Their franchise ended, they renamed their club, added more interesting features club members would be interested in, and are doing OK - including BUILDING membership. Curves has asked them to cease and desist their business immediately and threatened legal action. This is not the only Curves that has rebranded and stayed in business that I know of giving Curves the heave ho.
When you got your franchise, Curves sent a PDF that was 300+ pages long listing all the Curves open, all the Curves who've ended, all the current, pending and settled lawsuits and all about the Curves organization. The 2nd set of paperwork was the ones that you had to sign and fax in. In all my documentation they don't refer to each other. We were supposed to get employees to sign documents saying that if they quit they wouldn't compete against us, and if there's anything in your documentation that limits you that way, it's a problem. Get legal advice. I needed some so I contacted the local legal services and got a 30 minute appointment/referral for $25. So check your documentation to see where you stand.
As a Franchise you have NO control if you play by Curves rules the way they want you to. You have NO ability to respond to your market or make the changes needed to keep your business viable. In 2015 I paid Curves over $9,500 in fees, advertising, OS, Mytrack and all other fees they nickel and dime you on and I lost (before accounting adjustments like depreciation) over $6,500. I made it known to them that there was NO way I got $9,500 of value from them, but it points out that I would of made a profit if I hadn't been part of their operation.
In the top right hand corner of this page do a search on other well known franchises. No one complains about Subway or MacDonalds because Head Office keeps their product interesting and works hard for their franchisee's. Forbes listed Curves as one of the 10 worst franchises for a reason and If Wikipedia says there were 10,000 franchisees in 2006 and in May 2016 there were 1,035, you can probably guess that there are less than 1,000 now, as I know of 5 that have folded in my area alone. Will Curves sue if you reopen under a different name? 3 of the Curves that have folded did so with no warning to Curves and I'm sure Curves in all their belt trimming doesn't have the manpower to do anything serious other than threaten.
I closed in December with 1 year left on my franchise agreement. I am curious if anyone has dealt with Curves recently. I am not paying them a thing. Such a relief to be done.
Recently closed; if you look at my Nov 13 post and work out your numbers you can figure out pretty close what they'll be asking for. I've been ranting on this site for many months now because way too many people (including me) have lost a LOT of money believing North Castle could turn Curves around. Curves has admitted that their brand is growing (or so they say) in Japan, but if you go to Wikipedia you'll see that Curves has dropped form 10,000 locations a decade ago to 1,035 in May 2016. They've downsized, re-vamped, laid head office staff off, trimmed their belts (only financially as the big honcho's at Head office don't look fit in the video's) and I don't believe they have money to take ALL the Curves that have been closing in the last year to court. Guaranteed there will be a lot of threats and bluster, but look at ALL the stories of people (like me) who've lost their shirts living by THEIR rules and believing in THEM. I was lucky to close nicely, and let me tell you we worked our butts off till the end, but I was left with $115,000 of debt, and I'll be working another 10 years to pay that off. Keep in mind that when they ask to "to pay them out essentially" they'll be asking for the maximum royalties you would of paid if your franchise was kicking butt times the months left in your franchise agreement, which might be 1/4 of what you might of paid them if you'd stayed open. As many on these pages have said "you can't get blood out of a stone".
Just called to cancel Socan. I said "You must be getting a lot of these lately? " She said "Yes, you are the third Curves this week for me I think ."
Curves International has bigger problems than me right now. I have been closed a month and haven't heard boo.
No Money Left: How did things pan out with the close? What did CI have to say regarding what you "owe" them?
Recently Closed: Please keep us updated! There are likely many of us sitting on the side lines pondering the same move!
They want 10000 USD plus 795 a month USD for the remainder of my contract. If I follow procedures I can reduce my penalties. I can follow procedure but I still won't pay them.
I closed in December. See above post. They have not contacted me since the end of January. I haven't paid a cent. I didn't follow any procedures. Good luck to you all. There is a great life after Curves. Members were all understanding. I was completely upfront with them.
Recently Closed: thanks for the update. That is really encouraging! The only thing keeping my doors open currently is a personal guarantee on the lease. I'm so looking forward to life after Curves!