CURVES: Why Did the Curves Franchisee Association Fail? (Part 1)

If ever a group of franchisees needed a strong independent franchisee association, that group would be the embattled franchise owners of Curves International.

Once touted as the fastest-growing franchise in history, Curves has now achieved the distinction of also being the one of the fastest-failing franchises in history.

According to an article last summer in the Wall Street Journal, “Curves now has about 4,000 U.S. locations—half the number at its zenith in 2005.”

WSJ reporter Richard Gibson stated “Last year 833 clubs, or 16% of the chain’s domestic presence, closed across the U.S., turning what many franchisees thought would be comfortable incomes and retirement nest eggs into money pits.

On the UnhappyFranchisee.com website, unhappy Curves franchisees have outspokenly detailed and protested their alleged mistreatment, bullying and harrassment at the hands of Curves International.

Thousands of franchisee comments, ranging from sad to scathing, have been posted at CURVES: Robert Lay’s Story, on the CURVES: Curves Posts on Unhappy Franchisee and on other Curves franchise articles.

Curves Franchisee Association (CFA) 2006-2011.  RIP.

The Curves Franchisee Association held its first meeting in October, 2006 and was laid to rest Sept 30th 2011.

Just 2 years earlier before being pronounced dead, Curves International’s funding and support of the CFA prompted the American Association of Franchisees and Dealers to name Curves International, Inc., its Franchisor of the Year for 2009.

According to the AAFD news release:  “Notwithstanding the challenges of rapid growth, and dynamic involvement in multiple channels of distribution, [Curves International, Inc.] has embraced a collaborative culture with its franchise network and has enjoyed a very positive relationship with its members as a result.

“AAFD Chairman Robert Purvin cited Curves’ exemplary franchise culture as the primary focus of the AAFD’s recognition. ‘Curves management has encouraged and supported the organization of an independent franchisee association, including a willingness to engage the association’s elected leadership.’”

CFA Autopsy by Attorney Ron Gardner

What killed the much-needed Curves Franchisee Association?

According to CFA attorney Ron Gardner, the fatal wounds were self-inflicted.  It was the distractions of franchisee infighting, bickering, and petty politics that rendered the Curves Franchisee Association ineffective.  Ultimately, the death blow was that Curves franchisees were unwilling (or unable) to fund their own association.

According to CFA attorney Ron Gardner, a number of contributing factors led to the demise of the CFA, including franchisee infighting, bickering, petty politics and Curves franchisees’ unwillingness (or inability) to fund its franchisee association. In the end, the Curves Franchisee Association simply ran out of steam.

In his final letter (and autopsy report – posted below), Ron Gardner had nothing but praise for Gary Heavin and Curves International management.  Not only was CI open to hearing the ideas of the CFA, Gardner praised Curves for “so generously funded the organization through its infancy.”

Do you agree with Ron Gardner that Curves franchisees killed their own organization? Share a comment below.

Here is Ron Gardner’s post-mortem and farewell letter, originally posted on the CFA website:

So Long … For Now

As someone who has practiced franchise law for almost two decades, I could have predicted that this day was coming several years ago.

The reality is that most franchise associations go through a lifecycle quite similar to that experienced by the most recent iteration of the Curves Franchise Association:

(1) lots of excitement by lots of people to get an association formed and to move forward;

(2) a lot of time, effort and hard work in setting the association up by a smaller number of people;

(3) continued hard work as the association tries to find its feet, both in terms of its goal and purposes, and its independent voice – by a smaller number still;

(4) a longer period of time in which a few people continue the work of the association, working hard to make the system better for all franchisees, but increasingly feeling unappreciated by the “membership”; and

(5) resignation by the few remaining members that, given the volunteer nature of the work, it is no longer worth the effort.
Let me be clear – none of the current CFA Board members have expressed to me a “resignation” that their service was not worth the effort. But, to be fair, I could see it in their eyes, hear it in their voices.
On a brighter note, however, it has also been my observation over the last two decades that an association like the CFA has laid too much groundwork for a franchisee voice to simply be ignored by the franchisor. Whether that voice is in the form of the CFA or some successor organization that is most certainly sure to spring up (if it has not already) is something that we will all have to wait and see about. However, during this “lull” in activity by an official independent franchisee association, it probably behooves all of us to take stock of the lessons that we have learned through the lifecycle of the CFA, as well as providing our sincere thanks to those who worked so hard, and quite frankly, accomplished so much, in pioneering this effort.
Among the lessons we have learned: while Curves certainly prefers to do things its way, it is willing to listen to reasoned and rationale viewpoints that are divergent from their own. Look, we all know that franchising is different than most people think it is when they first start – but, having a franchisor that is willing to listen to the concerns of the franchisee, and consider them, is a significant step in the right direction. I am not suggesting that you should not be dissatisfied with your franchisor at times, and maybe even most of the time depending on your situation. But, we know that screaming, yelling and suing each other rarely brings the parties closer to together to gets things moving in a more cooperative direction. One of the most refreshing things that I observed during my work for the CFA was the willingness of Curves senior management, including Gary Heavin, Mike Raymond, Roger Schmidt, and a host of others, to listen when we had something to say. Often times, Curves would agree with our observations, and change their approach, or at least consider serious modifications. We did not win all of our battles, but we most certainly had a lot to say, and Curves is a better system for it.
We learned that, not surprisingly, a collective voice is much louder than an individual one. As you know, Curves has thousands of franchisees, and is broken into several subparts. Just getting the attention of your franchisor can be difficult if you do not have a collective voice to go through. The franchisee association, in its heyday, was a loud voice for franchisee rights, and helped many individual franchisees find solutions to problems that they were not able to find on their own.
Of course, not all the lessons that we learned were positives. We learned that franchisee associations cannot function productively if they have to spend a significant portion of their time battling the viewpoints of other franchisees – rather than executing strategies aimed at changing the behavior of the franchisor. To my great dismay, the CFA and the people who committed so much of their time and effort to making the CFA a better organization, spent far too much of their time being victims of unjustified rumors, accusations, and other frivolous distractions. It is my sincere hope that the next time an independent association rises in this system, that those members who choose to disagree or not participate with those who are doing the work, choose to merely sit on the sidelines and/or voice their displeasure at the ballot box, rather than undertaking a campaign of personal attacks that make it certain that nothing productive can ever get done.
Another lesson that is not surprising that an association cannot survive, long term, no matter how much value it is adding to its member, if those members are not willing to fund the organization. Among one of the most remarkable things I will remember about the CFA was the way in which Curves so generously funded the organization through its infancy – never demanding in return that we take their particular viewpoint, or refrain from challenging them on any of their initiatives. Unfortunately, that was an unappreciated gesture by the vast majority of Curves franchisees, and when that money ran out, the value that the CFA was delivering to the members was either unappreciated, or unknown, and members were not willing to step up and contribute even a small amount to keep the organization vibrant. Again, my hope for the future is that Curves franchisees remember this the next time around, and that they might give generously to those who worked so hard to protect their rights.
Of course, the end of the CFA does not mean the end of issues between Curves and its franchisees. Therefore, if you find yourself in a situation in the future where you either have business disputes and/or legal disputes with Curves, it is my sincere hope that you realize that resources were developed over the years that will exist into the future – even if the CFA does not. I am virtually certain that most CFA Board members would be happy to share with you their experiences on particular business issues if you were to reach out to them in a time of need. Likewise, to the extent that you need legal help in your dealings with Curves, my contact information has not changed. You can still contact me at rkgardner@dadygardner.com, and I will be happy to share my knowledge and information with you about my insights into the Curves culture, contracts, and likely responses to particular situations.
In closing, I want to take one moment to extend a personal thanks to the Board members who I have worked with over the years (many of whom became very good friends), and most importantly to the four women who chaired the organization over the last several years, Melanie Schaengold, Mary Ella Young, Teri Bertrand, and Carole Keyes. Their wisdom, insight, leadership, and enormous commitment of time on your behalf can likely never be repaid. Thanks as well to those Board members who participated year after year after year, against difficult odds, giving of their time and sacrificing their businesses and their families, to try and make things better for the system. While I am sure I will forget some, I particularly want to thank Sandie Maddux, Shelly Ronfeldt, Angie Wisler, Darlene Bayer, Brad Steinberg, Don Marshall, and Cheryl Hdarecky. While these Board members did not always see eye-to-eye with each other, I firmly believe they all always had the best interests of the Curves franchisee members in mind as they went about their work.
So, at this point, it is not goodbye. It is so long – for now. I look forward to the day our paths cross again.
– Ron Gardner

In reacting to this post, Mr. Gardner added this clarification:

“While I do think it is likely that WITHOUT committed leadership AND adequate funding (one or the other is not enough), most franchisee associations will ultimately fail, such associations can be widely successful (and there are many examples) when the Association finds a way to groom and foster effective leaders for the future AND finds a reliable and on-going source of funding.”

Are you familiar with the Curves Franchisee Association (CFA)?  What do you think? Share a comment below.

Contact the author or site ADMIN at UnhappyFranchisee[at]gmail.com

Related reading:  CURVES: Robert Lay’s Story (1000+ comments)

CURVES: Curves Posts on Unhappy Franchisee (Curves story links)

8 thoughts on “CURVES: Why Did the Curves Franchisee Association Fail? (Part 1)

  • February 2, 2012 at 11:51 am
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    While I stand by absolutley everything I wrote to the Curves’ franchisees above, I do want to correct one interpretation the author has made to my words. While I do think it is likely that WITHOUT committed leadership AND adequate funding (one or the other is not enough), most franchisee associations will ultimately fail, such associations can be widely successful (and there are many examples) when the Association finds a way to groom and foster effective leaders for the future AND finds a reliable and on-going source of funding.

    I would also take issue with the characterization of my article as saying that the Curves’ franchisees alone “killed” the CFA. There were many factors involved, over a long period of time. I would characterize what I said as the organization “running out of steam.”

    RKG

  • February 2, 2012 at 1:45 pm
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    Every decision Curves International makes is for their benefit, and we make the sacrifices. What did the CFA really do for the franchisees?

  • February 2, 2012 at 1:55 pm
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    Mr. Gardner:

    Thanks for the clarification. We have revised the section that incorrectly interpreted your viewpoint, and added one of your comments at the very end of the post.

    Frankly, I’m glad to hear that your view of the likelihood of success of franchisee associations is more positive than I assumed. When you stated that “most franchise associations go through a lifecycle” similar to that of the the failed CFA, I assumed you were saying most franchisee associations were doomed to suffer the same fate. That assessment coming from a leading franchisee attorney would have been depressing indeed.

    The fact remains that franchisees must band together and speak with a single voice if they are going to be heard. And they need to be willing to make an investment in their association if they want their interests represented.

  • February 2, 2012 at 2:19 pm
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    Maybe it would have survived had we not felt that it was just another part of Curves International, used to appease us occasionally. If I am wrong, please share the facts.

  • February 2, 2012 at 2:22 pm
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    CurvesOwner2 wrote “What did the CFA really do for the franchisees?”

    On the CFA farewell page, Teri Bertrand, Past-President, 2010-2011 listed the CFA accomplishments

    “…Along with daily tasks, Board calls, internal committee meetings, we sat down face to face with Curves International’s Executive Team in Dallas a few times a year. We also had call meetings with them and our CI liaisons on average of twice a month to share ideas, issues, solutions, opinions and, they listened and, in fact, they incorporated many of the ideas that came from those brainstorming sessions–into current programs that are in place today. To name a few:
    • The current AD system
    • Tapes by Nadia Rodman for franchisees
    • CLE’s for franchisees
    • Fitness Study
    • Avon brainstorming meetings
    • Club Smart brainstorming meetings
    • Changes in ad marketing content and offers
    • Changing name of Figure Analysis form to Fitness Assessment
    • Change of date to report projection sheets
    • Working with CI on Curves Community to make it more user-friendly

    “We planted seeds for change in our communication with Curves International that were given to us by our constituents that actually came to fruition.

    “As a Board from 2006 through 2010, we were able to share our concerns over verbiage in the new Franchise Agreement whereby it stated that a Seller (owner), would be responsible for royalties if a buyer were to default. We delegated the task of discussing this unfair requirement which was brought to us by our members to our attorney, Ron Gardiner, who was successful in getting CI to remove that wording in the Franchise Agreement which released sellers (owners) from responsibility.

    “We also had concerns over blood pressure monitoring in clubs either on a monthly basis or including it in fitness studies. This was addressed with corporate by our attorney to CI at the Board’s request as they felt it would present a form of liability to owners. We took the stand that it would be and made our position clear by informing our members directly.

    “We listened to many of our members as it pertained to their success of using extended hours in their clubs as a means to keep their doors open in order to survive rather than close. In the Summer of 2010, through the efforts of the officers, Gary agreed to sit down with his Executive Team along with the current President, VPO, a Board Member and our attorney to discuss the pros and cons of this option for members in the system. While it was an informational and factual meeting, their decision, unfortunately, was an unfavorable one.

    “Many efforts were made by your Executive Board and, in 2010, we were successful in meeting our goal of becoming self-funded and independent of CI while realizing that our existence would then become dependent on the support of dues-paying members and working with vendors.”

    It seems to me, having read literally thousands of complaints from Curves franchise owners, that these (with a couple of exceptions) are not the burning issues facing Curves franchise owners whose ranks were being decimated.

    The contract change seems significant.
    The hours/ 24/7 issue was important – but management wouldn’t yield.
    Were other important issues addressed by CFA?
    What about treatment of failed franchisees, failure fees & the threats?
    What about accounting of the advertising contributions?
    Lack of national advertising?
    Lack of support?
    Why did the CFA fail to inspire broad support?
    Did the franchise lawsuits also impact the ability to get participation for the CFA?

  • February 6, 2012 at 1:38 pm
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    We have been complaining for the last six years and nothing has changed. It has been an abusive relationship we all need to get away from.

  • February 15, 2012 at 2:35 pm
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    I have heard that Curves International is holding franchisees, including those who have completed their franchise agreements, personally liable for all royalty fees and advertising fees for 12 months after they sell their clubs.

    Does anyone know if that is true? I thought the Curves Franchise Association changed this?

    Did Curves change it back, or did they never honor what they agreed to with the CFA?

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