Curves Franchise Failures Prompt Attorney General’s Review

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Sun, Apr 20 - 10:46 am EDT | 7 years ago by
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(FranchisePick.Com)  Also read:

Curves For Women Franchise: 20% of Curves Franchises Closed in MA,

HAS CURVES FOR WOMEN ABANDONED ITS FRANCHISE OWNERS?,

Insider Advice for Curves Resale Franchise Buyers,

200+ comments: Is Curves for Women a Good Franchise Investment?

___________________________________________

In a recent Concord Monitor article, AG bureau looks into gym closings, Kate Davidson reports that 2 more Curves for Women franchises have closed their doors abruptly, leaving their members stranded and their owners’ dreams dashed.  Davidson writes that unhappy members who paid for services they didn’t receive have taken their complaints to the MA Attorney General :

The attorney general’s consumer protection bureau is reviewing complaints against Curves For Women gyms in Concord and Penacook, which closed last month without notice and without refunds for members who already paid membership fees.

The Curves franchises closed during the first week in March, displacing about 400 women who worked out at the two locations, according to owners of other Curves gyms who have taken on some of the members. The memberships are transferable to any other Curves location, but compensation was not offered to women who decided not to move to a new gym.

The attorney general’s office received four complaints in March and April against Atasal Enterprises LLC – owned by Janet Lasata of Gilmanton – which was doing business as Curves For Women in Concord and Penacook.

According to Senior Assistant Attorney General Lauren Noether said the complaints were from members who had paid for services they never received.  The AG lists the complaints on its website as “open – in progress.” According to the story, Atasal Enterprises was “not in good standing” by the secretary of state’s corporation division, as the company failed to file its annual report by the April 1 deadline.

Hat tip to sadderbutwiser for the article link.  Photo:  Bobu.  Licensed by Creative Commons.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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  • g muhin

    i think curves is the best thing to ever happen to me in my life. you do it right oyu get it right

  • http://www.b5media.com/sean-kelly/ sean

    g muhin wrote: i think curves is the best thing to ever happen to me in my life. you do it right oyu get it right
    g muhin: Are you a Curves franchise owner or a member?

  • Burned by Curves

    My wife and I have owned a curves franchise the early days. It was great at first and we ended up buying several more. Now the shit so to speak has hit the fan and we are starting a class action lawsuit for owners who have been ripped-off by the crook Heaven and his co-horts. The horror stories of what we have had to endure are overwhelming and the majority of owners feel the same way. If you are an owner who has been ripped-off please contact me by emailing confidentially unhappyfranchisee [at] gmail.com as any owner who would like to join the class action lawsuit against Curves International.
    Ask for your message to be forwarded to “Curves Z” and I will email back.

  • Lisa C.

    My friend/co-owner and I are also very unhappy about Curves. We have owned a resale since early ’05. We have been unable to pay ourselves for over a year and 1/2. We paid top dollar for our club, can’t sell it or give it away. There are 7 other Curves locations within 5 miles of our club!! How can we succeed?? Also AD is useless in supporting clubs that have complaints.

    Yes, we would be interested in finding out more about your lawsuit. Please send details. Thank You!

  • kieran Daly

    Hi There,
    my name is kieran and i own two Curves in Ireland. 5 years ago Curve’s came to Ireland with a huge fanfair and be came “Mega”…
    5 years on and it has crashed … help during its peek == zilch…… help with todays problem’s===
    minus Zilch…… 50 % of all country’s clubs closed…. the rest struggle .Now been sued for $60,000 for closeing 1 club and still no help to keep other one open. help from USA “”DOH”"”

    regards kieran

  • unhappy

    Hi kieran,
    My clubs are in the USA and there are other problems that I’m sure we as owners could complain about for hours on end. There maybe some satisfaction as there is a 2nd group action lawsuit that is starting up in the US. All franchises past and present, regardless of where they are located, can paticipate in.

  • http://www.unhappyfranchisee.com unhappy

    Kieran,
    send me your email address by sending this web page or sean kelly an email and and it will be forwarded to me. that way I can send you more info on the lawsuit

    [Ed.: Inquiries can be emailed to unhappyfranchisee[at]gmail.com]

  • Genny

    My daughter and I operated a franchise for 3 years. We could never take home any salary. We were able to pay the bills and that’s all. There are 7 franchises within 6 miles of our location. The women who came to our club loved it and whenever the national organization advertised, we did get business. However, they advertised only seldom. The area rep came to our gym only to spy and report back to corporate that we had Yoga classes after hours and two pieces of “non-regulation” equipment in our back room. Those two things kept our members coming. We even opened very early and had Sunday hours to keep our customers. Still we couldn’t make it. It is a disgrace. We closed after 3 years and now they have the nerve to ask a $10,000 fee because we broke the contract. What about the fact that they broke the contract????

    I would like to get in on the suit against corporate and Howard Heavin. They are greedy and deserve to answer for their swine-like behavior.

  • sad owner

    I am in the same situation as you are. Have you heard anything more on the 10000 fee? Are you going to pay it? Thanks

  • Barb

    I am so sad to hear your stories. I enjoyed being a member of Curves for three years. I hate hearing this. I loved the book I read years ago. Is the original founder gone? Who took Curves over?

  • Genny

    To answer Sad Owner. They immediately cut the request in half to $5,000. I have gotten in touch with the folks who are working on a class action suit. I need to know my options. I want to figure out if it pays for me to sign a closeout agreement by paying the $5000 or if it pays to joint the suit. In closing out with corporate, they will probably ask me to sign an agreement not to sue them. I have to weigh my options. Getting a lawyer is not a good idea since I may end up paying a lawyer more than I pay Curves. I will keep you posted on what I decide. Genny

  • sad owner

    To Genny. I offered them a lot less but never heard from them. I thought they might just take a couple of hundred dollars and call it quits. Have you tried to pay less to them? What is the suit.

  • sad owner

    Genny Have you heard of anyone paying the 5000? Or have you heard of Curves taking anyone to court over that money?

  • carol cross

    Wow! What guts these lousy franchisors have to offer buyouts wherein you pay them because they tricked you into signing a contract wherein you agreed to pay ten years of royalties if you failed out of business! If you really understood this, you would, of course, have never signed the contract. But, you perhaps signed the “boilerplate” and “standard” contract because this was the only way you could buy the franchise and achieve your American Dream, carefully promised outside of contract.

    Always, the franchisee is between a rock and a hard place. The class action lawsuit may provide results but it may not provide results, and can you support it financially for the distance? Thirty years of case law, since the FTC Franchise Rule was promulgated, pretty well protects franchisors —-not surprising, since this was the purpose of the Rule. The class action attorneys on both sides will be well paid and this is the only certainty.

    But! why should you pay your franchisor anything? If he sues you, (and maybe he won’t) maybe you could Pro Se in a counter suit for fraudulent concealment of the risk of the investment, and this would be cheaper and more satisfying. Also, this would alert the court system to what is going on!

    Think about this! You bought a franchise because you thought you had a partner franchisor who was offering you a safe and good deal and you wouldn’t have to do it all by yourself. But! look what happened! If they do sue you when you close down —why not countersue for fraudulent concealment of the risk and do it yourself. It is the law that you can approach the courts without an attorney, isn’t it? And, you will be saving the $200 to $300 an hour that some attorney would want to countersue. You would be in the small claims courts in most courts at $5,000 and maybe a small claims judge would wonder about the justice of trying to extort failed franchisees who are found to have “abandoned” their businesses when they fail.

    Good luck to you!

  • Genny

    Sad Owner and Carol Cross: E-mail [unhappyfranchisee[at]gmail.com and ask for it to be forwarded]. He will give you all the information you need to decide what to do. If you just want to get out and walk away, you can negotiate down to zero if you agree to sign a document promising not to sue them. If you want information about the class action suit, write to the above e-mail and he will give you the information you need. Do not sign anything or respond to any of Curves e-mails, letters, phone calls until you decide if you want to join the suit.

    To date, corporate has not sued anyone for not paying the closing fee.

    At least get the info before deciding what to do. Genny

  • unhappy

    Well Howard Heavin does it again. At the national convention he said he is starting a new contest for all franchises. He is going to pay 10,000 dollars to the franchise that loses the most money without the owner taking a draw. It is to help pay for a lawyer to file bankruptchy. But he is still going to charge that club 10000 for closing. He is also going to allow men in the clubs to work out….. what a joke although a sick one at that. Is there no new low that howard baby can go!!!!!!!!!

  • Abrianne Long

    I have been a member for curves for 5 months now. I joined at a facility in Bremerton, Washington. When I joined I expressed my concern for the workout not being enough for me because I just left the military. The owner and manager at that location said that it would not be a problem because I could use Curves Smart program to ramp up my work out. I worked out for 3 month there and did not loose weight. I also told her that I was moving in a couple of months and she told me that it was no problem because I could transfer my membership.

    I transfered to a branch at 19709 Highway 99 in Lynnwood, Washington in early September. Told them that I need a smart card. I took them almost a month to even get cards in, once I did get my card and get it set up, it has never worked properly. Sometimes it ends a machine early and skips machines, sometimes it ends 3 machines early and skips more machines.

    Everyday I walk into that location I get the same \\\”I don\\\’t know anything about Curves Smart\\\” response from a variety of more than 6 different people behind the desk. I ask to leave a message for the owner because I have been told that I can not speak to her and she has no email address. I have left messages at 2 of the 3 locations that this owner bounces between. Every time they promise me that they give her the messages, but no one calls me.

    I am to the point that I have purchased a treadmill and a bike and I run at home and bike. Curves has NEVER helped me loose weight, to which the manager in Lynnwood says in front of a new customer \\\”Curves isn\\\’t for everyone.\\\” Funny, that was not part of the pitch 5 months ago.

    If I am told that I need to take this up with the local owner and can get no help from Curves Corporate I am going to file a small claims suit against this owner to get her \\\”too busy to talk\\\” attention.

    I have already driven 2 new customers out of that branch when they have overheard me talk to the employees at that branch. Other customers have also consistently complain about the lack of knowledge and customer service at that branch. I think it would behoove Curves, the owner, and me if we could find a solution to this issue.

  • unhappycurvesownerz

    Abrianne,
    As an owner who has problems with Curves International I can understand the fustration you are going through. But I can assure you that curves does work and will work for you if you do it right. I don’t know who the owner is of that location but I do know it is curves policy that the owner must attend and pass what is called club camp. the owner than has the responciblity of training the employees or trainers in how the circut works and there is 12 hours of videos that the employee should have had to watch. It sounds like the trainers haven’t had that training in your location. But if you use the program correctly you will lose weight as I have been with curves since 97 and I do know that the program works if you use it correctly. First off forget about curves smart. Ask if any trainer is fimilar with the advanced workout. If not than you can do this by yourself. You need to over load your muscle groups and to do this you need to do as many reps on each machine as fast as you can for the 30 sec. Second make sure you are taking your heart rate 3 times each workout and that you are in the red, yellow, or blue in the heart rate chart that is on the wall. Thirdly you must not increase your calorie intake just because you are working out. If you follow those guidlines you will lose weight in 30 days peroid. Good luck.

  • Guest in CO

    I will address the article of this thread rather than the responses that are seemingly off topic. In my opinion the MA Attorney General is investigating the symptoms rather the causes of the Curves Disease. True, a club owner could have broken some state laws by not providing services that were paid for, such as members who pay for one year in advance. However, the real culprit of the infestations of mass Curves closings is being brewed in a large vat in Waco, TX. Overbuilding, lack of business training, absent support, vacant oversight is a toxic foul stew that being forced down the throats of nearly every owner n the system.

    While the waiter may get hurt in the short term, it is the chef who will ultimately pay in the end.

  • xx

    All business are hurting right now, not just curves. We all knew what we were getting into. When you open a buisness, you take a risk. All businesses are risky. It is unfortunate to those of us that did not make it but there are still lots of Curves that are doing really well. I do not see bankrupt in the future. Sorry

  • Guest in CO

    XX,

    You obviously are not doing your research. Curves has been contracting for a couple of years now while the economy has been EXPANDING. In fact, the group action lawsuit was formed in 2005. Therefore your argument does not hold water.

    Furthermore, there are laws that regulate business transactions. Some of those specific laws govern deception which includes fraud and disclosure. These are the very things the lawsuit is about. As much as you and Howard want a Lazafaire economy, the fact is there are some regulations that we are bond to.

    What will happen is that given the economy we will see an acceleration of Curves closings. Curves contracted about 10% last year while the economy expanded. This year it is anyone’s guess how much the shrinkage of Curves will be. Mine is at least 25% to 33% for the US market. That maybe a shock for you, but if you have done any research out there the number is not that surprising given that Porto Rico has lost half of its clubs and MA has given up 20% of theirs as of last year.

    The results of this shakeout are clear. Owners will talk among themselves, as they always have (sort of makes it easier since CI packed us in so closely, eh.). The owners will go through the emotional process of denial and guilt. Eventually, because they will talk to each other, they will realize that their failure is less theirs and more because of the actions and inactions of CI. At this point, they will seek representation and file a claim.

    Considering that a few hundred owners & former owners are suing CI now, I suspect that CI will be faced with well over a thousand such suits.

    The take away message here is this: “The wolves are circling, they are angry and hungry.”

  • Guest in CO

    Final note to XX,

    Please define: “What is a Curves that is doing really well.”

    I will define a Curves that is doing really well as this. One club in which an owner is working no more then 50 hours a week and such owner can pay themselves a salary of $3,750 or more each and every month for the past two years. Currently there are about 7,000 clubs in the US. Please name 15 clubs that are “doing well” by my standard that are not owned by a family member of is a family friend of Howard.

    I seriously doubt that you can name 15 clubs, which would be 0.2% of the totally number of clubs in the US.

  • xx

    I didnt mean to stir the angry. Believe me, I closed my club a few months ago and it was not something that I thought was my fault other than thinking I could make it in a small town and of coarse got all of the backing of Curves Int. for the small town. When things go tough, of coarse they did not care, they just wanted a closing fee and I am sure that my club is probably back up for sale again. I am just saying that I know there are Curves clubs out there that are doing well. I currently workout at one and it has always done well. It is in a bigger town that has NO other curves and has the population to support it.

    I have been contacted about the law suit but I am truly ready to have all of this behind me so I dont know what I am going to do.

  • http://jd4010@msn.com another unhappy curves

    let me tell you I found out the hard way also that company is out only to bleed their franchisees. One club in my area bought for penniies one that was about to close.She under cut prices of those that worked the program correctly. She advertised in areas she did not belon CI knewShe charded 0 enrollment, She even renamed curvessmart and CI knew they do not care only about money This was brought to their attention before during and after this years convention pictures were send along with signage They didnt care. The ADs knew did nothing corporat knew still nothing Regional directors knew The sale as af yet has not been completed If CI does not do the right thing I too will join Lawsuit and also privately sue. I bought a franchise. This is not a company that stands by it franchisees they are onle about money. You can buy one for one dollar I am toldI have a fairly succesful location only to have it ruined for greed. This a poor excuse for a company as I see we all have been victims of fraud and for that I will sue and will get others to do the same.. For those who bought countless products from them making them money on our backs and giving nothing in return. no advertising yet they have our money every month. They stood up there and lied about not reknewing franchises that didnt do the right thing not only that they will sell to frauds and anybody that is breathing. I personally will not buy another product from them I will run my business the way I want and buy from whom I want they are a joke take it from me they dont care. There curvessmart does not work countless calls to mytrak only to be double talked I dont care for the junk they sell the members can see through it too workout and calorie count does not jive so you must lie to your members as curves does. I personally feel bad for the members. They do like exercising ands better than sitting on the couch but for franshisees we have been scammed this women will get it back and will spend as much money as it takes to get what I invested back then not another penny to CI dont get mad get even see you in court howard and all responsible in coporate including diane

  • unhappy

    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

  • http://www.franbest.com Sean Kelly

    unhappy:

    Are these available online? Does anyone have electronic versions? If so, email to unhappyfranchisee[at]gmail.com for posting.

    Is your complaint drafted yet? Can you share it?

    Also: With most of the 30 minute fitness chains in trouble, are you all alleging that you would have been successful had Curves fulfilled its end of the franchise agreement?

    It would be interesting to read the complaints for this reason. I’m sure CI alleges it’s simply market conditions, competition, lack of local advertising and the franchisee’s inability to retain members that’s to blame – not lack of support or the franchisor’s actions. How do you counter that?

  • unhappy

    Yes Sean, I believe that one can access them on line if you are a lawyer.
    According to the clerk at the Federal District Court it requires a special program that almost all lawyers have. Any one can request them from the court in Waco, Tx as they are public records and have not been sealed as of yet. If Curves International settles the case instead of going to trail they will probably try to have them sealed. I believe this is typical of most case cases when they are settled out of court.

    While it is true that the economy has certainly had an effect on all business world wide it is not the contributing factor in why so many Curves locations are closing and most defiantly not in our case. While Curves has had competition with what we call take offs or copy cats none have been successful in any of the territories that I have owned. As a matter of fact the competing clubs all have closed doors with in 6 to 8 months after opening as they all had flaws in the equipment that they were using as we are the only hydraulic equipment out there and they just couldn’t compete with the brand name Curves.

    The lack of advertising has certainly been a contributing factor but by the business model that Curves sold their franchises on your advertising budget was set at 195 per month. When we first started in 97 there was no such thing as an advertising fee paid to corporate but that all changed around 2000. At that time Curves International started charging a monthly fee of 195 dollars per club for national advertising. The franchisee’s had to pay it but had no control or accounting of where that money was spent or how. Rarely did the franchisee’s ever see ads in there area and it became a major issue between the owners and Curves International. To this day owners are still upset on the fact that the we hardly ever see a national ad and that there is no accounting of where the money goes and what it is spent on.

    As a result owners must still send out flyers , put lead boxes out , and use buddy referrals and most of the franchisee’s I know have continued to do just that as we all know Curves International is not helping with effective advertising. The problem to retain members is in my opinion is only an issue in the metro territories. I have owned clubs in both metro areas and cites of 30 to 50 thousand in population, in the cities our retention rate is right around 80 percent. I have members who have been going to their curves for 10 years and still love it and swear about how good of program it is.

    It does become a social gathering for most of the baby boomers who is of course the majority of our membership. With the activities and games that are played it becomes a fun, fast and extremely good workout for older women. The result of weight loss shows that the program does work if the member uses the program right. Because of the economy situation we have seen a slight drop in membership in those areas but not the down turn that we have seen in the metro areas. I attribute this to the over selling of the franchisee’s in the metro area. The owners believing that their area was being unfairly improached upon started price wars, advertising in other territories to get membership, not allowing transfers to transfer and not allowing visitors from other clubs to use their facility.

    The clubs in the metro areas were cannibalizing each other and all of that had a disastrous effect on Curves,. Once clubs in those areas stared to close it became a snow ball rolling down hill effect. Members who were are best form of advertising started seeing and hearing about all the negative aspects and word of mouth spread fast in those areas. When problems arose between franchisee’s Curves International did nothing and refused to even address the complaints from franchisee. They stared to sell areas that were under 10,000 in population at this time and should have known that those clubs had no way of succeeding as the population was too small to support a facility.

    Curves International and Heavin knew or should have known that as they were warned about it by the top management they had released in 03. Even Gary Heavin acknowledged this fact at the Curves convention in 06 when he personally talked about the franchise wars and how he expected around half of the franchise’s to close. He knew what he was doing was wrong but greed got the best of him and he didn’t care as long as he was receiving money selling franchisee. This combined with the fact that Curves International lied on the UFOC document is the main reasons for the group lawsuit.

  • http://www.unhappyfranchisee.com cheated & unhappy in MI

    Hi, Can you tell me if My husband & I can join in the lawsuit? We had to close our franchise 13 months early of our franchise agreement. We were also sued for the $10,000 which we thought was terminal for our financial state! We explained that we had kept the club running for the entire time of ownership out of our own pockets. We never saw a single cent of profit, only more debt each month/yr. They also said that we had to destroy of give away our equipment to other Curves, or womens prisons. They said that we could sell for no more than $300 each extra piece of equipment that we had. But only to other Curves.

    I contacted both the Area , District managers as well as Curves International that according to my franchise agreement that at the closure of the business , the only restrictions were that I couldn’t sell it to another competitor, or for business use. They then proceeded to say that they would take $3,000 instead of the $10,000. I explained that we were literally tapped out. We had taken out both a home equity loan & a land contract to purchase this Franchise. I also explained that we had cashed out all $60,000 of our stocks, bonds, mutual funds for our retirement , & were down to less than 1 months operating costs for our personal bills. Mind that our home was paid off in full! Now they threatened us to death!

    I begged for some mercy& explained that there just wasn’t the money. They said I needed to get a personal loan or put it on a credit card within 3 business days or they would take our home, car, building where we had our club, & everything else we owned. Stupidly, We put the $3,000 on a credit card & had it direct deposited into our account, which they happily & I must say very quickly took it. Then we started geting more threatening calls , emails , etc saying that we were still in default, due to not complying with either destroying or donating our equipment. I told them that if I recieved any more emails, phone calls I would seek legal council for another Mary Jeans suit & harrassment.

    I had followed every closing proceedure to the letter other than the equipment. I gave more than 30 days notice. I let all of my members work our for free for the last month. I paid off my pre-paid, & handled all transfers both before & after the closure of our club. I had tried to sell several times.I guess I was too honest. I didn’t feel right lying to get a sale. I even tried to give the franchise away, if they would agree to a very low lease rate, or below market sale of building. No takers.

    We have literally lost everything, but have recieved a suit against us from Curves International for almost $190,000! I had wonderful members, but how can you possibly stay in business when your in a community of 1,200 people! Yeah I know what your thinking, what a smuck! However I was also told that since this was a rural area, I would be servicing several other small surrounding areas & was well with in the SAFE range. I know I was stupid, but I begged for help time after time without any results. It was always get out those leadbags, flyers, posters, advertisements, etc…..

    Thanks for letting me rant & rave. I hope that this CHRISTIAN Franchise finds itself in HELL’S HOT Water! I grew up in a christian home with a minister father. I can’t believe that they even dare to associate themselves with a Christian concept. They also failed to let me know that there would be several more Curves in our area. So much for the 25 mile or ride to another Curves rule. In the closing papers I was supposed to give the nearest Curves to ours. 3 had closed around us, but I just took the next closest 3 . They were respectivily 17miles, 19miles, & 19.7 miles. Remember this is not a city, but rural , farming community were talking about.

    I’d love to hear back from anyone else who’s in this situation.

  • http://unhappyfranchisee@gmail.com cheated & unhappy in MI

    Hi, it’s me again. I forgot to ask for this message to be forwarded to Curves Z. Please do so . Thanks so much.

  • North Jersey Curves Owner

    cheated & unhappy in MI:

    How can they sue you for $190,000 now? You mean to tell me that those SOBs negotiated you down to $3,000 fee, you agreed, they took their money, had you sign a waiver you wouldn’t sue them, and are now coming after you for MORE money? That’s illegal! This is what I mean. How is this SOB not in jail? What the hell is in the water at WACO? Maybe we should contact the Attorney General’s office, media, congress, and FBI to have this bum looked into.

  • unhappy

    Through this board and others here on franchisepick.com and unhappyfranchisee.com owners are beginning to organize not only for the lawsuit but to let people know how dishonest howie and curves international is. He is a neighbor of Pres Bush and we all need to write or send an email to Bush telling him about this disspectible, unethical, dishonest,and crooked business person. Also the national new meida needs to told about him also. We need to band togeather as we have more power in numbers so even if you can’t join the lawsuit you can certainly become part of our action group to stop the madness and distruction that howie has left in his path. The horror stories just keep getting worse and worse. It’s all such a shame as the workout does work but at the rate that the clubs are closing their wont be many left in the next 6 months.

  • North Jersey Curves Owner

    We need to start with the biggest markets for media – Los Angeles, New York, Chicago, Dallas TX, Houston TX.

  • http://WWW.unhappyfranchisee.com unhappy

    I totally agree with you and if you will send me your email or phone number we can talk about this . You can do that by asking Sean to forward it to me and then I will get a hold of you. Also anyone else who would like to join us in this endevor please drop me a line through Sean as I thinks it is a great idea.

    [Ed. Note: send email to unhappyfranchisee[at]gmail.com and request forwarding]

  • Karin Martin

    Gee,
    Neighbors of Bush? I guess calling the religious right Knights in Fading Armor won’t help!

  • Karin Martin

    Listen,
    After truly reading all the stories, let me share. CURVES will NOT go after you for any amount of money if you close, there are far too many of you. I know this. They just hope you are stupid enough to write a check. I closed three two years ago and went through hell, but they are all Bark and no Bite.

  • North Jersey Curves Owner

    You and I have talked before. I sent an email to Unhappy@

  • North Jersey Curves Owner

    Has anyone here closed and just not give Curves any monies? How long has it been? Are they suing you? This stupid $10,000 fee was instituted Feb 2008 so those who have closed before that, the fee wasn’t instilled yet.

    I think they have balls going after you when they have a million lawsuits against them. I called the Waco Court. The clerk is sending me the 47 page complaint. She told me she could not find a formal “answer” from CI on the complaint. My attorney in NJ wanted to see a copy of the complaint and the answer only. I am only getting the complaint. The clerk also told me that while there are 47 complaints, there is another file with 60 mini complaints, and a third file with 50 something additional mini complaints. She told me the last time they dealt with something was Dec 17. The judge refused to dismiss and wanted an update of all parties involved. She said some people settled but more are joining the suit.

    Is there anyway we can find out if they are going to claim “bankruptcy?”

  • Genny

    Hello everyone who is unhappy. I did get in touch with the law firm that I was told was suing Curves International. One of the attorneys informed me that they are not pursuing the suit. They also told me that I had a weak case because I bought my franchise from another person and not directly from Curves International. I have not yet been contacted by Curves International for the money they claim I “owe” them. I am waiting for that aggravation. So many people have been hurt by this company. I am sad that we don’t have a legal outlet to pursue. I wish you all a better 2009. Genny

  • North Jersey Curves Owner

    Genny,

    Call the Waco Federal Court to verify if the lawsuit is going forward. They have 47 complaints, and two separate cases with 57 & 67 mini complaints. The clerk told me the suit is growing and Curves International tried to have the case dismissed on Dec. 17 and the judge said NO. I have the first 47 pages of complaints and have forwarded to my attorney.

    What did you do with your equipment? When did you close?

  • http://Joe,thePlumber carol cross

    I have tried to talk to you before but I can’t now find my comments. I so want you to understand what I am telling you. I did tell these things I have tried to tell you to Butterfly Life Franchisees who did catch on, I believe.

    I am with you in your advice to Curves Franchisees but I again want to share my understanding of franchise law with you in the hope that this will help you to help other Curves Franchisees and to educate them.

    I am a close relative, the wife and Mother, of two of The UPS Store franchisees who believe that they were cheated and defrauded by MBE-UPS who duped them into buying an unviable investment, The UPS Store franchise, to increase the profits of UPS and MBE —But, who were just, in effect, right before Christmas, thrown out of a federal district court in California in a Summary Judgment for the defendant, MBE-UPS, who can apparently sell unviable franchises to the public as long as they are compliant with the FTC Rule and the State FDD and get the franchisee’s signature on the contract that indicates that the franchisor has not promised the any profits, etc.. to the buyer of the franchise.

    In otherwords, in a legal sense, franchisees are brought to agree by their signature on the non-negotiable contract that they are investing in the franchise at 100% risk of failure (because of the “no profits promise of the franchisor” and it follows, therefore, that if there are no profits, there may not enough to cover overheadoverhead, etc. and franchisees will fail .) but the prospective franchisees are not informed BEFORE the sale of the material risk factor of UNIT failure and unprofitability that is known to the franchisor at the time of the sale of the franchise to the new buyer.

    Because franchisees are tricked by the constructive fraud of the franchise contract being wrapped in a government mandated disclosure document, franchisees believe that there is some government oversight of franchising, and that the government would not allow franchisors to sell franchises with high failure rates and low or no profitability with immunity under the law. Failing and failed franchisees feel that they have been defrauded and don’t understand the implications of the malicious legal trap in which they have been ensnared.

    This, however, is the effect and apparently the intent of the FTC Rule that renders unit financial permformance statistics of franchise systems to NOT be a material risk factor that has to be disclosed to the new buyers of the franchise.

    I am not an attorney but the law belongs to the people (that is why we are allowed to represent ourselves) and attorneys are not actually free to explain the actual and practical effect of law and the regulation of franchising, process and procedure, to their clients because they are officers of the court —And, an honest and actual explanation of the actual and practical effect of the law to clients might imply criticism of the government and the courts that would not be ethical under the ABA Code of Ethics for attorneys. And, why would attorneys tell you the deck is stacked when at the same time they are taking your money to challenge the stacked deck?

    While they might explain that the contract you signed will work against you in a Civil Case, they generally don’t go beyond this with their clients, and this is understandable.

    Apparently, franchisors are allowed, under the FTC Rule to sell franchises without disclosing any unit performance statistics to the new buyers because the courts have decided or established that we Mom and Pop franchisees are “sophisticated” business people and full disclosure is not required to be made to us under the FTC Rule.

    I see where there is a query on whether or not the Zarco Law Firm has dropped the civil lawsuit —-is this just rumor? or is it true?

    If the Zarco Law Firm has dropped the lawsuit, they dropped the lawsuit either because they knew they wouldn’t have a chance of winning and/or there would be no money for them if they did win because of bankruptcy of the franchisor, etc. It follows, therefore, that there would be no money for the failed franchisee clients if the courts or an arbitrator would find that they violated the FTC Rule/FDD or they in some manner breached the terms of the contract.

    If any State AG’s are investigating a franchisor, they are investigating to determine if there have been any violations of the FTC Rule or the State FDD, or State Laws. If they find as violation, they might negotiate a recission and a franchisee might or might not have a private right of action under t he State Law but there is no private right of action for a violation of the FTC Rule and there is, in my opinion, tension between the federal and the state regulators on the matter of rescission and private right of action under Little FTC State Statutes. Even, however, when the state negotiates a Rescission, it is done with the view of saving the franchisor and not with the view of saving the franchisee.

    Generally, (almost always according to my research) if there is no violation of the FTC Rule or the State FDD, there is no fraudulent inducement or fraudulent concealment on the part of the franchisor —-even though he may have sold you a franchise that has experienced a high failure rate and low profitability or no profitability as demonstrated by UNIT (not system) historical performance statistics. Again, Franchisors are NOT required under law to disclose unit unprofitability or failure rate of units to new buyers of franchises. They are prohibited (but not really punished) from making earnings claims outside of the contract and the very great majority of franchisors make no earnings or success claims within the FDD and the actual contract to protect their safe harbor against fraud.

    Robert Purvin of the AAFD and the author of Franchise Fraud and Susan Kezios of the American Franchise Association have indicated to the Federal Trade Commission that this is a fatal flaw of the FTC Rule that governs pre-sale franchise sale disclosure to new buyers of franchises and that traps franchisees into indentured service under long-term contracts.

    The FTC will not fix this flaw —apparently, because if they fixed the flaw by mandating that franchisors disclose this material risk information (profitability and failure etc.. of the units) this would cause many prospective buyers NOT to buy the franchises that demonstrated low or no profitability and high failure rates and this, in turn, would inhibit franchising in the economy and would not in the opinion of the FTC, The Congressional Committees, the ABA, the franchisors, the banks and the lenders, the Landlords, etc, and the federal, state, and local governments, serve the greater good.

    In practice and reality, “failed franchisees” are a premeditated sacifice to the “greater good” and merely resources for the franchisors to experiment with new ventures in the marketplace. Regulation and case law upholds this public policy. (Slavery was supported by law under public policy. Child Labor was supported by law under public policy. Segregation was supported by law under public policy.)

    Then, of course, if attorneys can’t prove fraudulent inducement/concealment, attorneys look to see if there are any breaches of the contract on the part of the franchisor that could be proven to the arbitrator or the court? Generally, this is difficult because the franchisors are allowed to sell franchises without promising anything or very little to the franchisees in the contract. But, the attorneys always look for the breaches knowing, perhaps, that there has to be an appearance that franchisees do win something in the courts and in arbitrations now and then.

    I am not an attorney but it is my belief, formed on two years of research, that even through federal judges may not allow the franchisor defendant to dismiss the case in the beginning of lawsuits because of the appearance that the court must be open to the franchisee citizens, the franchisor defendants are generally successful in the end in the federal courts because case law and federal law supports the actual contract terms and federal regulatory policy.

    If there has never been or never will be a case that has been tried before a jury that establishes that franchisors have any duty to be competent or to sell viable franchises to the public or to identify if “churning” and “encroachment” etc., is legal, this, apparently, is the law. The status quo of the law surrounding franchising will be protected under the terms of the contracts that we have signed with the franchisors!

    Only when enough franchisees understand that the deck is stacked and how and why it has been stacked will there be any real change to protect the franchisees of the future.

    Franchisees need to complain in great numbers to local law enforcement, their Attorney Generals, the FBI and the FTC, and to the Congress of the United States and then perhaps the “will of the people” will come to play and the FTC will fix the flaw in the FTC Rule.

  • North Jersey Curves Owner

    One of the citings on the suit against Curves International was that they lied on their UFOC. They said the franchisee can make money even if they had 100-200 members. They said rent would be no more than $800.00 in any location. The list goes on.

    Again, if there weren’t any shananigans (and I understand what you are saying), then WHY would judge refuse to dismiss the case?

  • http://Joe,thePlumber carol cross

    The judge wouldn’t dismiss the case until there is “discovery” and a review of the facts bearing on your claims that they lied IN THE UFOC, etc.. If the Judge, in reviewing the facts that are supported by discovery, finds that the facts dont substantiate your claims and that the contract terms are supreme, the judge can dismss you in a summary judgment action after discovery is completed. He can hear arguments from the plaintiffs if he is granting tentative summary judgment in favor of the defendants, and then issue a final judgment that removes the plaintiffs from his court. Over 200 of the UPS Store litigants were, in reality, thrown out of the federal district court. Their only option is to take the matter to the Appeals Court but of course this is another year or more of delay, etc.. if the Appeals Court agrees to hear the case. At least, in an Appeal from a Summary Judgment, the case is heard “de nova” by the Court and more than one judge is involved. But, of course, it is hard for failed and failing franchisees to bear the costs of litigation for another year or so and the franchisors (and the courts, perhaps) hope they will fade away into the sunset. My family members want to Appeal to see what the Appeals Courts will do with this case and I have agreed, although I am not hopeful.

    If your franchisor lied OUTSIDE of the UFOC but you indicated by your signature on the unbargained contract that you RELIED only on what they told you inside ofthe UFOC and the actual franchise contract, any damages you may have suffered will not be found proximate to the lie because you said you DID NOT RELY on anything that was NOT disclosed within the four corners of the contract.

    If it was found by the judge that the franchisor actually violated the terms of disclosure as required by the FTC Rule and the UFOC and misled you, it would appear that the federal judge could order order the matter to be returned to the to the state regulator, the AG, for review and action. if you have an arbitration clause in your contract. The arbitrator has the power under the law to arbitrate fraudulent inducement to contract and to decide whether or not violations of the UFOC were the cause of your damages.

    The Supreme Court of the United States ruled in 2006 that the Federal Arbitration Act trumps state and federal law and that fraudulent inducement claims in contracts that mandate arbitration SHALL be heard by the arbitrators and not by the courts as long as the arbitration clause itself is constitutional. (Remember, I am not an attorney and this is my understanding of the law and the results of my research.)

    But —believe me! The deck is stacked against franchisees for the reasons I indicated.

    It is my impression that the federal court judges do not initially dismiss these cases if they are class or mass actions because the court, of course, must be careful to present an appearance of fairness and lack of bias to the public.

    Think about this and talk to me some more.

    Carol

  • North Jersey Curves Owner

    I am just curious about all this. I am not in the lawsuit YET. My club is still open and failing because we don’t have any money and have a full business loan we are paying. We just got the paperwork to shut it down. We will NOT be giving them any money – not the $10,000 and not the back franchise fees and ad fees. Let them sue us because we have nothing. We rent a house and lease both our cars. I lost my job and am on unemployment so if they think they can get something from us, good luck to them!

  • North Jersey Curves Owner

    OOPS $10,000 NOT 410,00

  • http://Joe,thePlumber carol cross

    I think you are smart, North Jersey –If you haven’t got any money and are on unemployment, how CAN they get any money from you? And, again why should they think they should get any money from you because your business is failing and you were tricked into signing a non-negotiable contract with the unconscionable term that indicates unclearly that you owe the franchisor royalties if you “abandon” the business because you failed? Would you have bought this business and taken out a loan if you knew how unprofitable so many of the franchise units were and how many failed and lost everything?

    But, remember that if you signed a personal guarantee on your lease and your Landlord thinks you have any assets, he will take you to Court and get a judgment for the amount due on the balance of the lease term —– if he can’t get the space rented. Or, maybe you are lucky and you sub-leased from Curves, or maybe your Landlord is a good guy and will take your equipment in return for releasing you from the lease.

    If you don’t continue to pay on your loan —-was it an SBA loan? the lender, if it was an SBA Loan will collect on the guarantee from the government and then the SBA will try to collect from you. You must have had to post something for collateral in order to qualify for the loan to buy the franchise. The SBA subsidizes the franchisors when they grant loans to franchisees.

    Think carefully about joining any lawsuit. If ZARCO dropped the lawsuit, this is not a good sign. If I knew then what I know now, I would have tried to stop my husband and son from joining The UPS Store Lawsuit. The famous attorney from the OJ Simpson Case first took the case and then they didn’t want it and it was taken over by the current attorneys, who are excellent attorneys with excellent reputations who are doing their best to fight for us in the courts —but the deck is stacked and perhaps more so today because of all of the fraud in the investment community today that has been uncovered and is yet to come.

    Hang in there. Good Luck to you and if there are any more questions or comments, I am always looking in on Franchise Pick.

    Carol

  • North Jersey Curves Owner

    Carol,

    Ironically, my lease expired in October and my landlord had no clue until we told him. We told him we thought we had a buyer. Soemoen with a lot of money was interested in purchasing it from us. The waiting was ongoing for 8 months for this woman and it never happened. The landlord knows our position but he also thought we were going to have a buyer. Since there isn’t any real lease (we have been paying month to month), he can’t really do anything either.

    My loan is not SBA. It is a CAP business loan from from one of the major banks. Since there is a lien on the business assets, we have to move the remainder of the loan onto personal credit cards. I have contacted a credit card counseling service because the remainder of the loan that I moved to credit cards is HUGE. That is another thing. My husband and I will be in a debt management program. Again, what can they take from us?

    Question though, what happens if they put a “judgement” against us? Dioes that mean we get arrested or does that mean that they will wait until we have any assets that they can take from us?

  • North Jersey Curves Owner

    Oh Yeah, P.S. We got a lease and a CAP loan based on our FICO scores. Curves knew of our financial sirtuation and rejected us for the franchise at first. The guy who sold it to us (under fraudulant terms – another snake) talked Curves into approving us anyway for the franchise transfer. Curves asked what kind of start up money we had. We told themw e had a line of credit and that was all it took as well to change their minds. HOW DO PEOPLE SLEEP AT NIGHT? I am actually writing a book based on this experience.

  • http://Joe,thePlumber carol cross

    Good for you, Norrh Jersey! It sounds like you have everything under contrrol. If you can’t handle your credit card debt and have to declare bankruptcy, this is not the worst thing in the world. It may be the smartest thing for you to do. The corporations do it all of the time. The government has made personal bankruptcies more difficult, of course, but if it looks like you can’t handle your debt, bankruptcy is a viable option. Why should you be paying on debt that you incurred to build a Curves unit for the rest of your life? If they can declare bankruptcy, why can’t you?

    If the Court gives a creditor a judgement and the judgement can’t be collected because there is no money, you will not go to jail. Judgments remain good —however, I haven’t studied this matter and I don’t know whether or not there is a statute of limitations like there is with the collection of a bad debt.

    I’d like to read your book! HOW DO PEOPLE SLEEP AT NIGHT? Apparently, because it is possible to lie and cheat and steal and get away with it under the status quo of the law, they rationalize that “everyone is doing it” and all is fair in love and war and businesss.

    Hang in there!

  • unhappy

    THE GROUP LAWSUIT AGAINST CURVES INTERNATIONAL AND GARY HEAVIN BY THE ZARCO LAW FIRM HAS NOT BEEN DROPED AND IN FACT THEY HAVE WON EVERY DECISION SO FOR FOR THE LITIGANTS.
    The disinformation that has been posted here in the last week or so is not factual and I will be responding to it in the next couple of days. It certainly makes me wonder about the person who is acting like a know it all who doesn’t even have or ever did own a curves and what their true motivation is.

  • http://Joe,thePlumber carol cross

    I hope “unhappy” gets busy soon and counters the “disinformation” she/he thinks I have posted. It must be me that this post refers to me because he/she indicates that the the “know it all” poster never owned a Curves.

    I’m sorry that “unhappy” is unhappy that I have made these comments but I stand behind them.

    I am trying to SHARE my understanding of the law surrounding franchising so as to help franchisees — not to hurt them.

    My motivation is to try to educate franchisees so that pressure will be put on the regulators and the courts to recognize the FRAUD that is produced by the ineffective FTC Rule and the FDD’s.

    This Rule and the FDD’s that govern pre-sale disclosure for franchisors permit franchisors to sell franchises without disclosing the financial UNIT performance statistics to new buyers. Therefore, buyers of franchises are deprived of the material risk factors that would routinely be disclosed under Securities law to protect the investor.

    Because the courts and case law have deemed that franchisees are “sophisticated” investors, they use this loophole to permit franchisors to legally withhold this crucial and material risk information of profitability and earnings, etc.. on the unit basis from new buyers of franchises.

    Do you think you and the others that invested in Curves are sophisticated investors? Would those who bought into Curves have bought these units if they knew how many units were failing and/or how many units were unprofitable for the owners? Did Curves owners understand that even if they were unprofitable, there was no exit strategy allowed under the contract and that they would either have to continue standing at less than breakeven or breakeven for the enti8re term of the contract, or buy their way out of the contract? etc.?

    I’m on your side “unhappy” —can’t you see this! Talk to me!

    Carol

  • Genny

    We closed on July 31, 2008, and collected no fees after June 30. We followed all their instructions for closing. We sold the equipment which we did not donate to a women’s prison. We also sold other office furniture and exercise equipment we had. We finished paying off the lease and the state taxes. We are about to file our list tax return for the business and are glad to get out before we lost everything.

    If someone knows the address or phone number of the Zarco law firm, I would appreciate receiving it. I got in touch with a law firm in Florida. Is that the same one?

  • North Jersey Curves Owner

    Did u you pay them the failure fee and back ad fees/franchise fees?

  • Genny

    We did not pay the failure fee. They said we would hear from their attorneys but to date we have not. We were current with our ad and franchise fees. They got their due from us.

  • North Jersey Curves Owner

    Genny

    Just curious, where are you from? There was someone who owned a Curves 10 minutes from mine with the same name. Or mayber her name was Ginny. I didn’t think she closed her gym though.

  • Curious & Unhappy

    Does anyone here know why the “unhappy franchisee” site with Robert Lay’s story is “temporarily disabled”? Just curious!
    Thanks, Cori

  • http://www.franbest.com Sean Kelly

    Does anyone here know why the “unhappy franchisee” site with Robert Lay’s story is “temporarily disabled”? Just curious!
    Cori:
    The server is temporarily down. It’s being worked on and should be back up shortly.

  • North Jersey Curves Owner

    Sean or Unhappy

    Do we have a status yet of what has been going on with the lawsuit? I know it was mentioned that it would be posted Jan 5. I also need to know what rights if any I have as a resale. I have emailed Zarco and left a voicemail. No one has gotten back to me. I just called the office. no one answered. I spoke to the attorney in charge months ago who said anyone who bought a resale doesn’t have as great as a case as those who bought from the franchisor. Has anything changed? What about the lack of franchisor support? What about the advertising monies? I have an appointment with my attorney this week. I want to fill him in on this stuff.

  • http://Joe,thePlumber carol cross

    Generally, in a resale, you have signed a contractual release of liability to the franchisor as a condition of the franchisor approving the transfer-sale.

    These contracts are upheld by the courts generally as are the original contracts of the first owners.

    If Sean or “unhappy” know the actual status of the Zarco lawsuit, I would also be interested in this information.

  • unhappy

    First off Carol in one of your posts you state that “the appearance that franchisees are winning law suits has not been substantiated in any of the case law that I can find” which only goes to show me that you didn’t look hard enough or you intention is to discourage owners from joining the law suit. The number of cases that the Zarco law firm has won for franchisees is numerous and if you will Google Robert Zarco you will see a list of all the major cases he has won against franchisor’s . Furthermore you state that franchise attorneys do not take law suits on contingency which is true but you neglect to state that that is true of all cases except accident cases which involve personal injury. In the particular case of curves the reason as explained to me from on e of the participating lawyers is that you must have your financial records gone through by a forensic certified public accountant. This must be done regardless if you had an accountant keep your book in your area as when the case is brought into court, which in this case is in Waco TX., the forensic CPA will be giving expert testimony on each litigants behalf. The majority of the retainer that each of us must pay will be paid to that firm for going through our books and providing that expert testimony. With the number of owners that are signing on to the second wave of lawsuits I’m sure you can understand why the law firm is charging the retainer. For one if they do not succeed they would be stuck paying the accounting firm and the other is that the expense of covering the accounting fees upfront would be considerable considering the number of owners joining the suit. Your statements Carol makes it sound like you believe it is just spending good money after bad. Again I quote “Unless your attorney can find and prove an actual breach of contract, where will you be” statement and than you follow it up with “ I continue to believe the deck is nicely and legally stacked against franchisees who cannot over come the constructive fraud of the franchise contract in government disclosure procedures”. You obviously have not seen the franchise agreement nor the UFOC document that all Curves owners have in their files that the group action law suit is based on. You have drawn your conclusions as to the merit of our case without even knowing the facts of our case. At this point you ask us “to cite some case law where franchisees have won in the courts “ I will refer you to the Zarco Law firm site and you will see all the cases where they have won large settlements through the courts and this does not include the cases which were settled out of court.

    You do state that your are neither an attorney or a researcher but you certainly pretend to know everything about franchise law ant that we as litigants have no hope of winning which Carol is not the case with the Curves lawsuit. In previous posts I have given the information on how to contact the court in Waco TX. to prove to themselves what is going on as the litigants have won every motion so far. As some of the owners have done and found out there is a charge for this information but if you go to PACER search you can receive all the information for two dollars and fifty cents. All you need is the case number or doc number which I again posted in earlier posts. If I’m not mistaken you once posted that your husband and son have filed a lawsuit against UPS stores franchise which you were against and that the results have not been forth coming and the attorney have changed several times. I’m sorry to hear that they are having problems in court but with all your negativity it a wonder to me how they have even continued with the case as

  • unhappy

    To North Jersey owner,
    Please send an e-mail to Sean at franchiseepick.com requesting him to forward it to me with your phone number and I’ll get right back to you. Aslo the posts will appear sometime today on this site concerning the curves problems we are all having as owners.

  • http://Joe,thePlumber carol cross

    Thanks “Unhappy” for your comments and I accept your criticisms of my comments that I understand you make in good faith.

    But you misunderstand the purpose of the comments that I have made. I hope you win and I understand why you want to recruit other failed or failing franchisees to your cause. You believe you were defrauded and that Curves breeched their contract and I believe you were defrauded and I sincerely hope that Zarco Law Firm can prove that Curves breached the tems of the non-negotiable contracts that were signed.

    I am not trying to discourage Curves failed and failing franchisees from joining a lawsuit filed in the Courts by the ZARCO law firm.

    Robert Zarco himself, who is allied with Susan Kezios of the American Franchise Association, would tell you that the FATAL FLAW OF THE FTC RULE AND THE UFOC/FDD is that franchisors are NOT required to disclose unit performance statistics that would reveal profitability or failure odds to new buyers of franchises.

    Susan Kezios and Robert Purvin (the AAFD) have both told the FTC that this omission of historical unit performance data in the sales and disclosure process is misleading and unfair to buyers of franchises. Apparently, however, after thinking about it for ten years, the Government, in the new FTC Rule, last year, did not mandate that unit performance statistics or even “earnings” be disclosed to new buyers—- Probably, because of their fear that any true disclosure by the franchisors would slow the economy even more.

    It is misleading and unfair to new buyers of retail franchises because the new buyer invests without being provided with MATERIAL risk information that is in the possession of the franchisor, the seller of the franchise. Without this information, new buyers of franchises are brought to purchase franchises with low or no profitability experience and with high failure rates of first owners of the franchise. They are shockied when their franchised businesses fail because they believed the risks were minimal when they made their investment. When the concept sector itself starts to fail in great numbers for long-term owners, what then?

    Apparently, when franchisees incorporate themselves to buy and do business with a franchisor, they are considered “sophisticated” investors under Securities laws, and the franchisors are then not required to disclose historical unit performance statistics in their possession to new buyers of the franchise.

    Susan Kezios and Robert Purvin and others (both EXPERTS in franchising) have indicated that the PURPOSE and the effect of the FTC Rule and the UFOC/FDD is to protect franchisors from charges of fraud from that percentage of franchisees who fail to thrive after they have exhausted their startup funds, etc..or at any time during the term of the contract. . The package of the government disclosure as required by the UFOC/FDD and the signed, adhesory, unbargained contract does generally protect the franchisors from fraud in the courts, and “churning” –either directly by the franchisor or by assisting third party fire sales does mean that franchisors can retain the advantage of the failed units to maintain their gross sales figures.

    The purpose of the regulation of the Franchise Industry (the public policy) is to protect the franchisors AND the franchisees who thrive in the system, and to prevent the failed franchisees from bringing the system down through claims that they have been defrauded in the sales and disclosure process. This is rationalized as serving the GREATEST GOOD by our government because those who do survive do feed the economy and those who have failed do serve and stimulate the economy all of the time they are working to break even. BUT, the failures must not be allowed to destroy the franchisor’s system through successful lawsuits claiming fraudulent inducement to contract or fraudulent concealment of material facts. This would not serve the “greatest good.” And, mandated disclosure of the risk as revealed by unit performance statistics could inhibit franchising and this would not serve the “greatest good.”

    If Zarco has won big settlements for franchisees, this is wonderful – but I still can’t find the cases. Of course, if the cases were won in arbitration or settled, this information is not open to the view of the public.

    You misquoted me when you said that I said the UPS Store attorneys had changed many times. I said that the original lawsuit was filed by Robert Shapiro (his lawfirm) the famous attorney of the OJ Simpson trial, but then was taken over by excellent attorneys with excellent reputations who would now have to take the case to the Court of Appeals because they were thrown out of Court in a Summary Judgement by the federal district court judge. This is fact and not fiction and this could happen in your case as well.

    I understand that attorneys, especially in franchising and in cases involving contract law, cannot take cases on contingency and under law plaintiffs have to have an investment in their lawsuits. I agree that it is only fair that regardless of whether the attorneys win or lose a lawsuit, they must be compensated for their their time and efforts BUT franchiSEE attorneys do fight upstream against great odds under the status quo of the law surrounding franchising, as a result of the FTC Rule.

  • unhappy

    It is real simple and even a child could find a listing of the cases that Zarco has won against major franchisor’s by just googling Robert Zarco and surfing his web page but like you said in previous posts your not a researcher. Zarco is a trail lawyer and usually does not accept offers done through mediation or arbitration as the awards are larger when you win the jury trial.
    Before you post another misleading, negative post about how hard it is to win why don’t you go to their site and read about all of their accomplishments and succesful cases against a whole list of franchisor’s. When your husband and son hired an attorney maybe they should have done more research and hired Zarco. Than just maybe you would have a different out look concerning your case as most of us curves owners have with Zarco. While I don’t have a lot of experence dealing with law suits I do know the outcome is directly related to the quality of representation you have so it has always been my belief to hire the absolute best in that field of law. Zarco’s firm is the best with out a doubt in the US in franchise law and they will prevail in this suit. It’s just a matter of time and how much each litigant will recieve.

  • http://Joe,thePlumber carol cross

    My dear Unhappy —-why do you persist in attacking me and my message? I am on your side.

    If it is true that money alone only buys the kind of representation that can determine the outcome in civil cases and in franchise litigation, isn’t this a pity? There are, of course, thousands of attorneys to be found in a Google Search who advertise themselves as franchise attorneys whom you offend by your remarks. And yes, probably most of them don’t charge the plaintiff franchisees as much as ZARCO.

    I have only asked WHY Zarco wins these cases that you say have resulted in large awards for franchisees. If there have been jury trials where he has had great victories, this is encouraging for me, because then perhaps the BSA excellent attorneys will have success if they win the right to a jury trial from the 9th Circuit Court of Appeals in the federal district court in California —with a different judge, of course.

    Why are you so defensive? I have only tried to share my experiences with you. The BSA Group who is litigating against MBE-UPS in the Federal Court in California has excellent representation from long-time franchise attorneys who enjoy excellent reputations in the field of franchising. They have worked hard and long for the BSA Group since March of 2006 but they were thrown out of Court on Summary Judgment just before Christmas and AFTER DISCOVERY and AFTER the BSA Plaintiffs paid for Expert witness testimony and expensive electronic mediation with over 200 Plaintiffs. NOW, they will have to approach the 9th US Circuit Court of Appeals to continue their quest for a jury trial that is provided for civil cases under our Constitution. This delay, of course, means thousands and thousands of dollars more that will have to be provided by the plaintiffs to support their attorneys before these test cases can be presented to a jury.

    Did ZARCO win his jury trials in the State Court or the Federal Courts? Since the Class Action Fairness Act came into being, most of the class action franchise litigation will be heard in the Federal Courts. This could make a difference for ZARCO.

    MBE-UPS have millions of dollars to fight the BSA Group in the courts and are delighted that the federal judge used his discretion and his view of the law to kick this group of over 200 plaintiff franchisees out of the federal district court.

    Are you “shilling” for ZARCO when you suggest that ZARCO is winning all the motions and that it will be a slam dunk? Shouldn’t you be careful and not imply that because it is the Zarco Law Firm, failing Curves franchisees will win and be made whole, etc.. Are you sure that the failing franchisees whom you are asking to support the case will have the financial resources to support the case for three or four or five years until ZARCO can get before a jury?

    I’m just asking you to be realistic and to understand that it is federal regulatory policy to protect the franchisor and the thriving franchises from destruction from the failing franchisees.

    Any child could see this if they would open their eyes.

  • http://www.franbest.com Sean Kelly

    Carol & Unhappy:
    Knowing you both (at least from your comments here) I believe you both genuinely want the same thing: the best possible outcome for the struggling Curves franchisees and ex-franchisees.
    You both donate considerable time here, at unhappyfranchisee.com and elsewhere furthering that mission.
    If you let the rhetoric turn this into a personal squabble your message will be lost.
    In defense of unhappy: I don’t think unhappy is “shilling” for Zarco any more than the Brown Shield Association (BSA) was “shilling” for their law firm when they were recruiting fellow franchisees to join their lawsuit against UPS. He’s definitely promoting that course of action, but out of belief, not for personal gain. “Shilling” also implies some sort of collusion with the firm. Zarco, or other reputable law firms, would never participate in such a practice – and don’t need to.
    Plus, “Any child could see this…” is just inflammatory.

    In defense of Carol: I spar with carol a bit on 2 issues. First, she tends to be broadly anti-franchisor where I am anti-bad-franchisor, and pro-good-franchisor. Second, she believes that government regulation can fix the problems in the franchise industry, and I focus on things that might happen in our lifetimes. At times, she states these broad beliefs in specific forums like this, and they get misconstrued.
    But Carol is on a mission. After a bad experience with MBE/UPS she neither skulked off in defeat (without warning others) nor played the passive victim. She took up the cause. She read and reread books on franchise law, learned difficult legal concepts, interacted with attorneys online, and spends every day trying to educate others trying to get in – or out – of franchising.
    Want to know the truth of why franchise regulation is so much slanted in the franchisor’s favor? It’s simple: Franchisor’s effectively worked – and work – together, and franchisees never have.
    Maybe you guys can change that.

  • North Jersey Curves Owner

    Most of the posts here are about Curves. Let’s get back to the issue at hand here which Howard Gary Heavin and CI’s immoral and fraudulant money hungry business practices.

    We are in the process of closing down our club. We have an appointment with our attorney tomorrow. We aren’t paying CI $10,000 and and we are not paying back fees. We are accepting the fact that they will hold a judgement on us for 3 years. We are in such poor financial shape because of this mistake that it will take at least that time if not more to rectify our financial situation. So let them put a judgement against us. We are not staying in a situation where we keep getting more and more in debt for a company who couldn’t give a rats rear end about its franchisees. We are not going to be bullied or backed into a corner just so Greedy Gary can get his money.

  • unhappy

    I agree with you 100 percent but lets all start a new tactic to get results. Most all of us here that are or have been Curves owners need to start writing not only the BBB in our areas but also we also need to file complaints with the Attorney General of our state and tell them our horror stories with Curves International and Garry Heavin. But lets all take it one more step and file a complaint with the Federal Trade Commission ass well. You can do this by going on line at http://www.ftc.gov/bcp/consumer.shtm and filling in a form. Lets see how Howie likes that and how he responds to them.

  • North Jersey Curves Owner
  • unhappy

    NJCO,
    If this is off the frachisepick site it is probably from o7 but Sean will be able to tell you for sure.

  • North Jersey Curves Owner

    I need the most recent one they have so I can tell my attorney how to access it. We are meeting with him today.

  • unhappy

    The best way to get the new one is to send in a the form to curves international that a person is interested in buying your club. They will send him or her one by e-mail. Once CI recieves the form which can be done on line they usually will send it out asap. But again Sean may have an answer for you. You may want to try the FTC web site.

  • unhappy

    This may be the one you have. Go to this site http://www.franchisepick.com/franchise-controversies/curves-watch-curves-franchise-posts-discussions/ and there is one posted dated march of 08 but that would be inforomation that is for 07.

  • unhappy

    “THE POWER TO AMAZE OURSELFS”

    A fellow owner and friend sent this post to me and I decied to put it up here as she is right it need to be told.

    Hello Curves sisters, and former sisters.

    A thought occurred to me today about writing our senators, congressmen, representatives and all in Washington about this travesty that has occurred to us. Remind them that we pay their salary and they can be replaced in the next election. We have to start taking the power back. They are part of the problem. They are the ones that helped to draft the laws and help to enforce them that have caused us great pain. There is an old saying one hand washes the other, well I am not washing anymore of their hands, until they help to free us out here. If we all write, past owners and current in every state the FTC and AG’s in every state will start to make things change. I for one am going to start this week. So tell everyone you know about this campaign, there is strength in numbers, it is time that we stop being the minority and become the majority. Perhaps in doing so, it will send a message to Washington that we are tired of all the crap that they are dishing out and other things will change as well. Be bold be strong! After all we have “The Power to Amaze Ourselves”, don’t we? Let’s use the slogan that Gary gave us to turn the tables! My thoughts and prayers will be with you all, my battle is heating up right now, but I am determined to walk away the victor in all this.

    May God’s Blessing be upon you all, use your righteous anger for good, after all Jesus cleared the temple of the money changers didn’t he?

  • unhappy

    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.

  • unhappy

    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

  • True to yourself

    Curves franchisees

    In your heart did you really follow the systems, did you really follow the controls by the business. Or did you follow what you could in the time frame available of you and your family life……

    Did you really invest to make millions or was it to replace your day job. Did you live within your means during your business?

    How did you do Local Area Marketing in your areas? Did you go out into your target market and perform a good 8-10 hours every week with your own sweat of promoting your business?

    Did you follow to the letter the program Curves offered?

    Did you reread the manual after training?

    Did you listen to other franchisees during the buying and operating?

    Some franchisees believe that by purchasing a franchise from Curves means that you own your own business. Well you DO NOT!! You are a member of a franchise system operated by the Franchisor where the tools are given, the manuals are written, the systems are set and you have to follow those 100% to reach MINIMUM. Fact, you will need to do double that to excel past average.

    Unfortunately it is tough to get non focused franchisees or franchisees that purchased for the wrong reason to do the first 100%… as a franchisee I understand that I have excelled in my business due to the “above average” I performed. It was not luck.

  • unhappy

    For Christ sake lady my wife is a mentor for Curves and we have been owners since 1997. I personally have sold more franchises in the early days than you can shake a stick at. We helped make Curves into the largest women’s health franchise in the world only to watch as Howie has proceeded to destroy it with his unethical and dishonest business practices. He has tried to rewrite the whole history of Curves to include his wife Diane who was never involved at the beginning. He has been sued by his management team for 20 million dollars that he fired in 03. They reached a settlement out of court shortly there after. Even his first book which he brags was on the Times Top Ten List was a fraud. It got on the top ten list because he made owners buy at the minimum one case each. He is trying to do this with his new book that was just published. In all honesty, do you call that fair and ethical? This not to mention all the other shady business practices that he has pulled on franchises just so he could make more money. But I will name a few such as selling Vitamins and other dated products on sale to his franchises with out informing them that they were within a month of their expiration date. He than refused to take them back or to give any of the franchisee’s credit for products that they had to throw out. How about the new program for weight management? The franchises are to offer free classes which they use to charge for so that the member will buy curves nutritional products on line through Curves rather from the franchises once again taking money from the franchises. What about the advertising fees that all Curves owners pay monthly and has no accountability of from Curves International. It obviously isn’t being spent on ads but is being misspent on things like Diane’s trip to the Chinese wall. Or the Curves granola bar that the franchise owners sold through there clubs until Curves International got greedy and sold them to discounters such as Wal-Mart who in return sold them for less than Curves franchise’s could buy them. This is just a few of the examples of how Curves International has damaged the franchisee’s and if you are an owner ( which I doubt) you can list many many more. How dare you try to blame it all on the individual franchises who have put their blood, money and tears on the line to help build this franchise only to be let down by Howie with his dishonest, unethical, deceptive business tactics. There are hundreds upon hundreds of franchises world wide that are closing and filing suit against Howie and he will in time be held accountable for his actions. There were 10,000 franchises in 05 and now there is less than 5,000 from some estimates and most insiders suspect that the total now is even less than that. That alone should give you a clue as to what is happening and the future of the franchise. It is very bleak and the only hope is that either the management does a drastic turn around or Howie sells out to someone who caries about franchises and knows how to run a franchise business.

  • cristina

    I own a curves in MA. I really believe in this fitness program. I believe what it does for women is incredible. Especially older women and women with disabilities. BUT, Curves INC has been nothing but a disappointment. My area director has never come to visit me. So called “buddy refferals” do not work. My AD does nothing but spout the Heavin party line.
    What really makes me sad is that I didn’t do this for the money. I did it because I wanted to help women. I have in so many ways and if this keeps up I will have to let these Women go.
    Shame on Gary Heavin.
    Shame on you Diane and Gary Heavin

  • unhappy

    You are so right and it is such a shame. Be sure to send in a complaint letter to the BBB of your area and of Waco .Tx as well as to the attorney general of your state and TX. But don’t stop there send in a complaint to the FTC also. All owners past and present should do this at once!!!!

  • unhappy

    PAST AND PRESENT OWNERS,
    Don’t forget to send your complaint letters to the BBB in your area as well as waco Tx. and your states attorney general as well as TX. and the FTC. Here are the links that you can go to to file 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

  • another owner

    To unhappy:
    The Yahoo Groups “curvesowners” you referenced was NOT set up by Curves International, nor did it cost anything. It was set up by an owner and is maintained by owners–all volunteer, no pay–as were many of the other networking list serves that have been established. Indeed, it’s been around longer than CI has had Internet access.

    Just wanted to clarify. It IS an excellent resource for owners. Indeed, one of the best we have.

  • http://www.franbest.com Sean Kelly

    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/

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  • Old owner

    We have been closed for years….had to close the doors on a lot of women. Very sad about having to do it but were going broke and had exhausted all means. We just recently received a letter from the Curves attorneys for back pay and fees. I guess they are making a last ditch effort to collect. Good luck Gary…..don’t have much left at this point.

  • sue

    I worked for Curves for 3 years. I was called 15 minutes before close on Dec 15th 2008. that we were closing, There was no notice given to members either. I was also told I would not get paid “for awhile” Merry christmas ! I called the owner ( who still owned another curves 30 miles away) and was yelled at for calling that Curves and requesting my pay check. Like “how dare me”.. for wanting to get paid before Christmas.” So, now it is March, and I am still out of a job, I did finally get my pay check, and others got theirs in Feb. of 2009, along with a late w-2. I loved the concept for Curves, but My thoughts are changed now, so much for the “strong” women concept. A lot is said of the owners, and their problems, but it all goes down stream. Much more is lost, please if you close, give a notice to your workers, for they too, believed.

  • DWhite

    I am interested in purchasing a franchise and being an owner operator. I recently visited a curve gym for the first time and I loved the concept and joined. From reading all the commits on this site I have alot of homework to do.

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  • http://www.franbest.com Sean Kelly

    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/

  • ja

    I am talking to a Curves franchise owner about buying her business. I want to find out how long I am obligated to Curves. I know that I have to pay a royalty fee and advertising fee while operating the business. Do my doors have to stay open XX amount of years? If the business is not profitable and I have to sell or close what penalty am I charged by Curves Headquarters?

    Thank you for any information you can provide to me.

  • http://igotcurves.com Debbie Deraney

    I am wondering if anyone has information on the amount of New Jersey franchises there were at their peak and what the total is now. I see many, many clubs closing around me and I am still standing in northern New Jersey. How can I get this information? Can anyone help me out?

  • unhappy

    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

  • Holly Gibson

    I am/was thinking about a curves franchise but now I’m afraid to consider it. I live in a rural farming community is middle G. The nearest curves is 30 miles away. I thought having one here was a good idea because I love the concept but the above horror stories have scaried the beejeeus out of me! Good to know beforehand!

  • Carol Cross

    This is the value of the Internet and websites like Franchise Pick that permit uncensored conversations that do warn prospective buyers of franchises about the possibility of failure with supposedly “proven” concepts.

    Sean has always pointed out that there are some localities where it would be impossible to survive —even with a good concept —because of saturation of the concept, or a territory that would not produce enough customers to make the concept profitable for a franchisee.

    Sean also is not adverse to warning franchisee prospects that once you buy a franchise and sign the unilateral franchise agreement in which the franchisor promises very little, there is generally no recourse if you fail because the risk wasn’t disclolsed to you in your due diligence endeavors.

  • gia

    I am NOT a Curves owner but a member and have been very frustrated by the limited hours the gym is open as well as the pressure to only conform to 3 workouts a week. I’d like to have the option to work out 5 days a week without feeling like there’s a problem with it.

    I’ve only been to one Curves that seemed to want to accomodate its members that didn’t close for 3 or 4 hours every afternoon. Fortunately, it’s still in operation but I moved from the area. I really think closing in the afternoons and not having enough equipment isn’t helping.

    However, I’m very sorry for the problems that owners are having with the corporate offices. Best wishes to everyone.

  • joan

    I too am interested and made an offer to the owners yesturday and waiting to hear back from them. I have spoken with tons of current owners, happy and unhappy. I think as long as you can use a low price and do your homework on the numbers and have a smart marketing plan that works, it is doable. What area are you looking in, some markets are better than others?

  • http://www.franbest.com Sean Kelly

    ja:
    You should definitely read through all the comments left on the top posts here:
    http://www.unhappyfranchisee.com/curves-overview/
    You are liable to royalties and ad fund contributions through the term of your agreement, whether you remain open or not. Plus, Curves requires a $10,000 failure fee (our term) for closing before the full term is up.

  • Carol Cross

    If you fail, not only will you owe the $10,000 failure fee but you will be responsible for the balance on the term of the lease that you will have probably personally guaranteed with your any assets that haven’t already been committed to the purchase of the Curves.

    In order to buy the Curves you will have to release the franchisor for any liability for the sale-transfer of the franchised business, and you will have to sign a realease of liability to the seller as well.