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60+ Contours Express Franchise Owners Allege Fraud, Breach of Contract by Franchisor
(FranchisePick.Com) Curves for Women can be credited for setting off the fitness franchise gold rush.
In a little over ten years from the launch of their franchise program in 1995, express fitness franchise Curves for Women grew to over 10,000 locations. The consumer concept was simple: A women-only 30-minute circuit training exercise program geared for non-supermodels at a flat monthly fee. The franchise concept was also simple: Low investment. Low space requirements. Minimal payroll & inventory. No real experience necessary. In short, a big room with fitness equipment and a boom box.
Predictably, dozens of Curves knock-offs and variations began to pop up, each hawking their “unique,” low-investment franchise opportunities. Overnight there were not only dozens of new express fitness club franchises for women, there were men-only 30-minute club franchises, senior citizen club franchises, 24-hour fitness club franchises, retro-themed club franchises… even an exercise club specifically for golfers. Experienced franchise salesmen and brokers found themselves surrounded by inexperienced individuals eager to get in on the latest hot new concept and to be in business for themselves but not by themselves for less than $50K. The rush was on.
Contours Express: The Great Pretender to the Curves Throne
Curves challenger Contours Express launched in 1998. The Contours Express website states: “leveraging the success of Curves® while upgrading the product offering and member experiences, Contours Express has created The ‘Better Idea In Women’s Gyms.’ The company is now the #2 Women’s circuit training gym behind Curves. We are the second fastest growing with over 600 locations worldwide in 20 countries, and rated among the most affordable.”
However, more than 60 Contours Express franchise owners have filed a petition for damages in the Circuit Court of St. Louis County against AABB FITNESS HOLDINGS, INC. (formerly known as CONTOURS EXPRESS, INC.), CONTOURS EXPRESS, LLC, and franchise broker JAMES E. HOGG (dba Franchise Visions), alleging fraud and breach of contract. Among the numerous complaints, each of the plaintiffs allege:
- “The Contours Express UFOC dramatically understated the cost of building out and operating a location.”
- “The owners of Contours Express and their representatives also made “earnings claims” or verbal pitches regarding profitability, which are prohibited by the Federal Trade Commission, to entice the Plaintiffs to purchase franchises and their lenders to finance them.”
- “Once hooked, the franchisee had no way out. The typical franchisee’s working capital was exhausted soon after they opened their location and most could not service a debt load of 50 to 100 percent greater than they had been led to believe.”
- “… the franchisor provided little or no support to the franchisees as it agreed to do under the franchise agreements signed by the parties. In fact, once the stores were opened, very few of the franchisees were ever visited by representatives of the franchisor.”
- The franchisor failed to assist any of the franchisees in selling their locations because they would receive a higher franchise fee if the franchisee closed without selling their location and the franchisor could then sell the territory to a new franchisee.
- The franchisor covered up the many franchise failures by not disclosing all of the franchisees who had left the system, as required by law.
Many of the complaints are being echoed by franchise owners of other chains, especially those alleging vastly understated start-up costs and necessary working capital and overly optimistic and illegal earnings claims and profit projections. Recent FranchisePick.Com posts on fitness franchise Butterfly Life has prompted fiery comments and debate between current and former Butterfly Life franchise owners (See links below)
We’ll be continuing to follow the Contours Express legal dispute and other fitness franchise program controversies, and the lessons these disputes hold for those wanting to go into franchising with both eyes wide open.
Related reading:
Is Contours Express a Great Fitness Franchise?
Is Curves for Women a Good Franchise Investment?
IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?
Will the REAL Butterfly Life Franchise Please Wave Its Wings?
The Contours Express Second Amended Complaint for Damages document, Uniform Franchise Offering Circular (UFOC) and other documents are available in the FranBest.Com franchise document library.
ARE YOU FAMILIAR WITH THE CURVES FRANCHISE, THE CONTOURS EXPRESS FRANCHISE, THE BUTTERFLY LIFE FRANCHISE, OR SIMILAR FITNESS FRANCHISE OPPORTUNITIES? SHARE YOUR INSIGHT. LEAVE A COMMENT.
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To contact the editor of FranchisePick.com, email info[at]ideafarm.net or call 717-656-2107 ext. 24
To all curves owners who have had problems with curves International and Gary Howie Havein please send your complaints to the BBB of your city and Waco TX. As well as the attorney general of your state and TX. And the federal trade commission. Below are web links where you can file the complaints on line.
http://www.bbb.org/
http://waco.bbb.org/WWWRoot/SitePage.aspx?site=40&id=ab5100aa-4c5a-4314-8e1b-f5996973f10c
http://www.oag.state.tx.us/consumer/index.shtml
http://www.ftc.gov/bcp/index.shtml
Curves is named AAFD’s Total Quality Franchising Franchisor of the Year.
Comments invited:
http://www.bizzia.com/franchisepick/curves-is-franchisor-of-year-say-what/
1130 days ago
[...] comments) Curves Franchise Failures Prompt Attorney General’s Review April 20, 2008 (86 comments) Franchise Dreams Becoming Nightmares for Many Fitness Club Owners September 25, 2007 (62 comments) Curves For Women Franchise: 20% of Curves Franchises Closed in [...]
Recent Curves failures listed here:
http://www.unhappyfranchisee.com/2009/02/curves-for-women-list-recent-club-closures-here/
The post above has links to stories of closures in OR, NH, NJ, FL and MN. Also asks you to list closings you know of.
The post also cites 369 as the # of health clubs having closed in FL in the past year. I haven’t seen evidence of 100 clubs in FL closing this year.
Not sure about Florida, but I know three have closed this week in Southaven, MS….I was in that area yesterday on work and saw them.
I just heard an alarming report that 150 Curves franchises in the state of Fl. have closed since the first of the year. If any one can confirm this please post here at once as if it’s true Curves International is in worse trouble than anyone expected.
Sean, I need to get in touch with unhappy. Thxs.
FYI:
We set up a separate site for those wanting to buy or sell fitness clubs and/or equipment.
Buyers:
http://www.yourtownhealthclub.com
Sellers:
http://www.yourtownhealthclub.com/category/sell-your-equipment/
To all past and present curves owners
It is time for all past and present owners of Curves franchises to stand up and file complaints against Curves International and Gary Howard Heavin. I’m sure we can all agree that this company is in serious trouble with all the club closures and while the economy certainly has hurt our business the main set back is how the company is being run into the ground by Gary Heavin and his co-hearts. It should be obvious to all owners that the only way this will change is if we take action as a group. Some owners have been talking about a boycott of the monthly franchise and advertising fees that we pay. While that will certainly get their attention if enough of us follow through we can accomplish it even faster if we all file complaints with the BBB in Waco, TX, the BBB in your area, the Attorney General of your state, the Attorney General of the state of TX. and the Federal Trade Commission. I have included web site addresses where you can go to file such a complaint. Please do so ASAP and lets see how Howie handles the complaints.
http://www.bbb.org/
http://waco.bbb.org/WWWRoot/SitePage.aspx?site=40&id=ab5100aa-4c5a-4314-8e1b-f5996973f10c
http://www.oag.state.tx.us/consumer/index.shtml
http://www.ftc.gov/bcp/index.shtml
Important message to all Curves owners.
There is another site that all current owners of a curves franchise needs to be aware of. The site was set up by Curves using our advertising dollars so we all need to use it. It’s intent is to allow owners to converse with other owners and to share ideas. It is a good site if you are looking for ideas on how to save your club or just have questions for other owners. Here is the link http://health.groups.yahoo.com/group/curvesowners/?v=1&t=search&ch=web&pub=groups&sec=group&slk=1
Please go there to check it out and voice your opinion on the current posts and voice your concerns. This site is strictly for owners.
To all Curves Owners,
It is time we take our complaints about Curves to another level. All owners who are posting here should file a complaint with the BBB in their area and file a complaint with the Attorney General of their state. Than they need to go to the Federal Trade Commission web site and file a complaint with that federal agency also. Here is the link for the FTC http://www.ftc.gov/bcp/consumer.shtm. Just maybe Howie will get the message that it is time to change the way he operates his business.
If you go call the Waco court they will send you the copies of the law suit that has been filed for 50 cents per page. There are over 2 thousand pages so it can get very costly but you can get them by going to http://pacer.psc.uscourts.gov/ and it will only cost $2.50. You will need to sign up first but it is a government site and very easy.
1261 days ago
[...] Franchise Dreams Becoming Nightmares for Many Fitness Club Owners [...]
THERE ARE SOME HERE ON THIS SITE THAT DON’T BELIEVE EVERYTHING IS THAT BAD WITH CURVES. WELL FOLKS IT IS AND FOR THOSE WHO WOULD QUESTION THAT WHY DON’T YOU PROVE IT TO YOUR SELF BY DOING THE RESEARCH ON THE LAWSUIT. HERE IS WHO YOU NEED TO CONTACT.
FEDERAL COURT
U.S. CLERK OFFICE
800 FRANKLIN ROOM 800
WACO TX. 76701
254-750-1501
CASE OR DOC # 07′ CV’ 048
YOU CAN CALL AND REQUEST ALL DOCUMENTS REGARDING THE CASE AND PROVE TO YOUR SELF THAT HEAVIN IS NOT TELLING THE TRUTH TO THE CURVES OWNERS. SEE YOU IN COURT REAL SOON HEAVIN
Sad franchisee news:
http://www.franchisepick.com/gun-violence-claims-life-of-contours-express-franchisee/
This is a way an owner can get out of the mounting dept that curves has cost them, Its a desperate move on the part of the owner . They know they will not suceed and pass the buck so to speak. what a shame owners resort to more scams. This is happening more and more and curves allows it because they are still collect all their so ca;;ed traing fees, so you see how this is a scam and still curves gets paid I dont know how true this is but now almost 1000 lawsuits are being filed Internationally as well as here in USA Those crooks will be stopped
1296 days ago
[...] Franchise Dreams Becoming Nightmares for Many Fitness Club Owners [...]
Please visit and comment on the interview with Butterfly Life franchise owner Matt Wilson.
Please forward these links to others who would be interested, and encourage them to comment.
Franchise Pick: BUTTERFLY LIFE: Unhappy Franchisee Interview With Matt Wilson, Franchise Owner
AllBusiness.com: Unhappy Franchisee Matt Wilson Shares His Expensive Lessons
UnhappyFranchisee.com: BUTTERFLY LIFE: Interview With Franchisee Matt Wilson
Read other Butterfly Life franchisee interviews
I’m guessing that by now “Another Ex” (above)must have closed his doors, I’m wondering if he has contacted the AAFD or one of the BFL trustees.
It may be his only chance at stopping these pompous asses and possibly getting restitution.
Here’s a story about a group of members banding together to reopen their Curves club after the franchisee shuttered two Oak Park area clubs.
Your comments invited:
CURVES FRANCHISE: Members May Reopen Closed Fitness Club