Is Contours Express a Great Fitness Franchise?
May 10, 2007 by Sean Kelly
Filed under Business
Fitness franchises are the fastest growing segment of franchising. We sent out emails to fitness franchise owners, managers, employees, and customers asking which fitness franchise is best, and why. One of our first responses touted a women’s fitness franchise called “Contours Express.”
Franchise Pick reader Dee Dee said:
Contours Express is the best fitness franchise. Contours Express is the Better Idea in Women’s Gyms because we use Real Weights (not hydraulics) to achieve Real Results. Women will not plateau and continue to reach their goal of either weight loss, tone, gain strength or increase flexibility.
ARE YOU FAMILIAR WITH CONTOURS EXPRESS? IS IT A GREAT FITNESS FRANCHISE? LEAVE A COMMENT AND TELL US WHAT YOU THINK!
Carol Cross (or your Double),
Have you heard of the firm Dady and Garner (www.dadygarner.com)? Those 10 or so attorneys never lose. They have literally written most of the books on franchise law. Why don’t you send your perspectives and knowledge to them so they can plan an exit from their highly successful law practice specializing in cases of franchisees against franchisors. Or maybe you should start your own law firm to take care of franchisors.
Clara Fire:
I’ve been thru this on the Curves thread. Carol is not pro-franchisor (to the contrary) and is not trying to dissuade franchisees from pursuing a lawsuit. Her family was formerly MBE/The UPS Store franchisees that, I believe, sued the franchisor and later sold their franchise (something like that).
Carol means well, but she tends to drop variations of the same four paragraphs into every discussion, regardless of context. Her point is meant to be that the FTC, IFA, Legal system, etc. has unfairly stacked the deck against franchisees. She’s not saying don’t fight, just that you’ve got your work cut out for you.
She’s a smart lady & means well, but this habit is annoying and distracting. I have emailed her & asked her to stop cut-and-paste commenting in other people’s conversations.
And now… back to Contours Express… already in progress…
Yes! I have heard of the firm Dady and Garner and Zarco in Florida and I understand they are STARS of the franchisee Bar because they do win for franchisees in the courts sometimes because they are trying to establish new case law to combat the “stacked deck” provided to the franchisors because of federal regulatory policy.
Okay, Clara! I’m out of here! I do wish you luck in spite of your snide comments. A “word to the wise is sufficient.”
Thanks for the “clarification,” Sean. So my apologies to you, Carol, if I misread your intentions.
Thank you for your answer “Aussie Owner”,
it sounds like you think that the australian market for “small circle training and weight lost fitness clubs for women” specially in combination with franchise will get the same problems and at the end the same disaster, like it happend in the US in the last years.
When did you started your 2 CE clubs? Do you think you must close them or did you closed allready? what is going on with the “old fashion” fitness clubs and the big fitness chains in australia?
Is there a better system for longterm business in the australian fitness industry right now?
What´s going on with the “sleeping giant” = CE franchise in the UK?
another one bites the dust… japan, there is no business anymore. Oh what a success story!
Hey pt-eu,
If I had a crystal ball I’d be able to tell you how the fitness industry is going to pan out in Australia.
Australia’s economic shape is actually quiet good however the media driven pessimism towards our economy as a result of the global economic climate is certainly taking its toll on the fitness industry (and of course many others) here as the consumers are battening down to weather the coming storm.
I don’t believe corporate in Australia is doing a bad job, improving constantly as all businesses do and should. There is certainly a future for a womens only express gym and those that can manage to hang in there financially and more importantly emotionally to see these times through will come out the winners. I’m hoping it will be Contours and not Curves, not just because I own Contours studios but it’s because we have a far superior product to work with that gives far superior results.
I believe if Contours fades away in Australia we will be in good company as an industry is hit hard by the times. I also believe if Curves were to go under in Australia it will be because of what they don’t have to offer. There has been signs of Curves popularity diminishing for years.
I opened my first studio 18 months ago which will soon be closed. I opened my second studio 15 months ago in which many members from my other studio are transferring to. I am closing my first studio because of many set backs and I’m cutting my losses (financial and emotional) on that one. I can’t say I’m disillusioned with Contours Corporate. I’m more so disillusioned with the industry. The industry is hungry, desperate and needy but for some reason the people of this nation don’t place enough value on their health and fitness. I bought into the industry as I thought it was a growing industry… I was wrong.
Actually just to clarify my last comment, I thought the industry was a growing one, I meant growing in demand for services. The industry has certainly expanded in the number of services but the supply has well and truly out-weighed and buried the demand.
Hello Mr Wynbourne,
please explain your definition of “coming soon”. since 8 month you are talking about studios in Maidenhead and North-west London.
What kind of definition of “coming soon” and “Contours Express is profitable and fun” you learned in kentucky?
One of our partners in the UK tried to contact your CE Head Office in Bournemouth but there was no answer. Is this the business behavior for a CE business?
I closed because I´m ill and there is no hope. I can not sleep at night and I have nightmares the hole day long. this business destroyed my live, I lost everything. My health, my family, my future!
What can I do?
it´s all over now:
It’s not over now. There’s always hope… it just doesn’t seem that way sometimes. You need to reach out to family, friends, pastor, counselors, near you and ask for help.
It’s got to get better, right? Don’t give up. ask for help.
it’s all over now:
I usually don’t post on here but I too had to close my gym over a year ago due to my health and no members to support the business. My husband and I had to file bankruptcy and lose everything that we had ever known in our 8 years of marriage. Some days through last year were unbearable for me but I looked at it as a gift from God. I told myself every morning when I woke that if he let me wake up breathing and blessed me with another day then I was still here on this earth to serve a purpose. Yes I must admit that I did “lose everything” and that is including losing faith. In fact it took me a year to even pray again! But the devil sure knows how to get you so down low that you don’t think there is anything left for going on.
I have a saying that I also told myself everyday and somedays where harder for me to hear this than others but… If you have one foot in yesterday and one foot in tomorrow then your wasting on today! Meaning you have to make it a day at a time. You won’t forget your past but you can’t dwell on all of the bad things in it. By living day to day that will help build you a better future! There is hope! I hope that I have helped a little. I’ll definately be saying some extra prayers for you and for you to have peace of mind.
It’s not all over now. It’s a new beginning! You must (and you will) get pass the regret and feeling of failure and realize what is truly important in your life and you will focus on that. Once you can do this you will be able to sleep again and the nightmares will stop. To do this open up to those that truly matter as Sean Kelly said. These people will listen without judgement and criticism and allow your innerself, your sole, to work thru all the issues. Distance yourself from those that cannot listen without judgement or criticism even if it is those that have been closest to you in the past. You will be amazed how quickly things will improve for you and how better you will feel.
“its all over now” your CE business is over now and you lost a lot… but you are still alive, so dont give up!
You are not alone, because on the official CE-webside you can count now 103 Clubs open in the US. If you check this clubs it seems to be that there are less than 50 clubs still open. More than 20 Clubs closed in the last 2 month in the US. This cant be only a problem of the club owner. The CE frachise and the people in the CE Head office are the main problem.
Isn´t that stange?
On the Internetside from CE-Ireland you will find three statements under the headline “franchising – the smart business choice” (www.contoursexpress.ie/smartchoice.html).
All these people have closed their clubs or are not still working with CE anymore. So tell me, what kind of business behavior is this?
Ireland lost 25% of there clubs in the last months!
Lies, lies, lies… good night CE-International!
Strange! Sorry, but this business behavior makes me angry!
UK masterfranchise giving up? last months there was no advertising in the UK franchise business from CE. also interessted people got no answers to there questions. why? mr wynbourne will give his masterfranchise back to CEI? hopefully yes! mr chong was a little bit more effective in the beginning… but at the end the same result. maybe a good basis for a wise decision from mr wynbourne. we will see!
That person who mentioned that Ireland has lost 25% of their clubs in the last few months is true, my friends are those people, where is the master franchisor when you need them? What did we pay a franchise fee for in the first place. We would be better off on our own.
Contours Express International is saying “there are currently over 600 Contours Express Fitness & Weight-Loss Studios in 30 countries and the concept grows”.
In real there are less than 400 clubs in less than 20 countries. AND EVERY WEEK A CLUB IS CLOSING!
So here is our question to you.. what can we do to stop these liars?
will this business-model still exist in 5 years from now? what do you think?
Will “fitness franchises” be around five years from now? Yes, some fitness franchisors will survive but in a SATURATED “fitness” market in a recession, these “fitness” franchises will continue to fail in great numbers and the blood of “good faith” franchisees will continue to be spilled.
I always feel disturbed when I read the words of those who have been so terribly hurt because of their good faith investment in a franchise, any franchise.
I post to try to educate franchisees to the fact that they are premeditated sacrifices to public policy that permits franchisors and their agents to sell franchises as if there is very little risk and to enable them NOT to disclose the actual risk BEFORE the binding and malicious legal contract is signed.
Public policy deems that if only 50%, less or more, of franchisees in a system fail, those who survive are what is important to commerce and to stimulation of the economy for the greatest good. Because of this public policy, franchisors have become more explotive and opportunistic in their pursuit of profits. Fraud is rampant in the franchise industry.
See my further comments at http://w.w.w.unhappyfranchise.com/2009/02/carolcross/
On the official US-webside of CE there where 103 Clubs in the US in the first week of february 2009. One month later (now) there are 93 Clubs in the US. officially 10 Clubs closed in the last 4 weeks in the US. this is a failing rate of 10% in one month and the dying is going on. shame on you CE!
May 10, 2007. Sean Kelly started this blog asking which fitness franchise is best, and why.
May 31, 2007. JohnDoe said that Contours Express is being sued by nearly 80 current and former franchisees for fraud… this was the first comment in this blog.
nearly two years and 800 comments later let me ask you what happend with this lawsiut and what happend to all the people here?
Is this blog dead?
Have you all given up?
CE has won this sad story?
What is going on here?
Why it is so quiet here?
Is this another example of unscrupulous traders, who go unpunished?
Hopefully not so don´t give up!
This blog is dead and my business too. I have looked for help and found nothing. And now I can not anymore. See you in heaven.
G’day. the australian market will die like all other markets in the world before. wilshaw is new, but he will also learn the lesson. The fault lies in the system!
I am looking into the purchase of a Countours Express and was wondering what the lawsuit was all about?? I have read and turned down the Curves contract – is there any franchise out there that is honest??
To ‘I Give Up’…I will help, I will help, I will help, I will help, I will help, I will help. I Will Help!!! I will help in whatever way I possibly can. Please email me so we can talk. I have gone through what you are going through. Sean kelly can give you my email address.
Here are the offical numbers of CE
Year U.S. Franchises Canadian Franchises Foreign Franchises Company Owned
01/2009 86 9 328 1
01/2008 166 10 284 0
01/2007 251 14 208 0
01/2006 335 15 105 0
01/2005 300 20 26 0
Here are the official numbers of CE
Month/Year U.S. Canadian Foreign Company Owned
01/2009 86 9 328 1
01/2008 166 10 284 0
01/2007 251 14 208 0
01/2006 335 15 105 0
01/2005 300 20 26 0
Why does this not work anymore? Is that Tracy
My Last one worked sorry, I expose Contours Australia on my website about franchsie fraud – yes I am an ex wonder and not afriad to tell it like it is
“Another Aussie” is that Tracy? PLease ex Contours owners lets get together and meet where possible, I am in Sydney – lets support each other
contact me anytime
What ist going on with the lawsuit?
Hi All,
It’s been awhile since I’ve visited this blog and I need to change my name to “One Studio Closed and Another to Go”. I know of a few others moving towards that stage of needing to close but are not quiet ready to let go and I know of many others that have closed so yes there are a few of us that could do coffee. I’m not far from Sydney.
Cheers
Hello Mr Wynbourne. UK is still “coming soon”. since more than one year “coming soon”? Its a joke, isnt it? The sleepink gigant is dead! And you are part of the system! So tell us the true story of contours express franchise!
I take it “another aussie” that you are not continuing to pay royalties on your closed studios? I know of others that are not so I wonder how they can justify making some pay and others not. A law suit and media attention will not do them any favours however they are not selling new territories either so I’d say they are also sweating, grasping at straws to keep their heads above water with their debtors list growing and studios closing. Doesn’t look like a great future…. it’s a shame really…. our service would be missed by many if we disappeared but on the other hand the demand for us is just not there to run a viable business.
What is going on in the US? This blog has gone really quiet.
If you are thinking of a tele-conference, skype is the best way to do it cause it is free. Count me in cause I have 1 foot on either side of the fence, 1 closed and 1 to go before financial ruin.
Nick, you’re a beautiful man. I love how you can retrieve and put info together and you are so right.
I can agree with you Nick, afterall the perceived benefit and attraction to franchises being a business plan for people wanting to be self employed that have not got experience and knowledge all of which is promised to them in the package of purchasing a franchise. Bottom line is no business, regardless of the who the businesses are and who the customers are, should ever make promises or claims they can’t deliver on. Isn’t there a law against this? And, that brings us to the complete circle with this blog as that is what the US law suit is about!
so Aussie owner, aussie franchisee and Nick, are you all on the east coast NSW area?
Sorry for you australia but your CE business will be as successfull as it was in the us. right now there are less than 60 clubs open in the us. save your money, your time and your health and stop this business asap.
Sean, do you know what is goning on with the lawsuit in the us?
All Aussies current and ex owners I am compiling a list of closed down studios, I know there are more please add any u know of to the list until we get them all…
Moorebank
Bankstown
Liverpool
Wallsend
Newmarket
St Ives
North Manly
Erina
More?????
Closed Contours by 3oth Sept 2009
Kotara NSW
Castle Hill NSW
Bankstown NSW
Moorebank NSW
Parramatta NSW
Wallsend NSW
Dandenong VIC
Willetton WA
Mitcham VIC
Tuggerah NSW
Erina NSW
Liverpool NSW
Wyoming NSW
Corporate owned and closed:
Newmarket NSW
St Ives NSW
North Manly NSW
North Rocks NSW
Another 19 Contours for sale as found on the web 29/9/09
NSW (6)
QLD (5)
SA (2)
VIC (6)
contours express lost france. in 2007 started a franchise club in toulouse and was caled the pilot club. After 3 years ther was no development and no help from ce so the lady closed the ce club. you can find the same story in all the countries in europe where ce found people for this business model. germany dead, uk 2 times dead, ireland more or less dead, spain, more or less dead and so on and so on! in the last 5 years there was no developent in europe at all!
there where question from australia about selling or closing a club and about the fees.
there was no club owner with development problems in europe who was able to sell the club. most of them closed after one or tow years and lost a lot of money, time, health and passion.
some of them have not pay any franchise fee and no closing fee because there was no support and no service from ce side. ce did nothing to get any fees becoause they know that it will be impossible for them to get this money in europe.
so if you have any problems with this system stop your business asap, try to sell ist, stop paying any fee and close your club. safe your money, your time and your health!
we try to help this people and we tell eyeryone who is interessted in this system this stories. this business and the people behind it ar more or less criminal.
good luck to you all! there is a life after ce-franchise!
Joy elizabeth glasgow was my grandma well she still is and it is really hard to lose someone especially that way but you will get through it it just take times even though i am only 11 years old i still miss her more than ever and i think she had a pretty good busiess but that is my opinion well bye and i love you grandma!!
joy was my grandma and i miss her lots
Just to update you on Australia. 180 clubs open, 13 have closed in the last 12 months, more to close in coming months, and corporate are still selling new franchises, can you believe it when there are so many disgruntled franchisees. I’ve done some numbers and only 25% of clubs that have been operating for more than 12 months are still growing whilst only a total of 45% of opened studios are growing.
Morale has declined rapidly in the last 2 months with the appointment December just gone of a new CEO that has introduced many new fees at a time when most studios are not at break even let alone making a profit.
With new CEO it will be very hard for franchisees to close without significant costs adding to their already significant financial loss and mental anguish.
Contours has become a life sentence with hard labour that nobody deserves.
Business buyers beware!
Thank you aussie owner for your update.
It seems to be that australia is also experiencing the same CE disaster than the US and all the other CE markets all over the world got in the last years.
let us have a look to your numbers in a differnet way.
55% of the opened studios have no growing in the first 12 month, this means more than half are making big losses. 75% of the clubs that have been operating for more than 12 months now have no growing too. This means three-quaters of the the clubs are making losses after 12 month. 50% of the clubs who worked more ore less ok in the first 12 month will fail in the second year. What will be after 3 or 4 years of business? 100% of the open clubs are making losses?
What kind of franchise-business is this where you can buy a more or less 100% failing business, where at the end only the franchisor is making money? For us it is the worst franchise-business in the world and we think that this is almost criminal!
We must warn and protect a prospective franchisee against this company! what are you doing to protect this people? What can we do to support you? And all the others out there, this blog is important but it is not enough!
Do something against this company!
Are you able to tell me how many studios were open in the US when Contours were at it’s peak?
Do you know much about Curves in US and rest of world. I can’t seem to get any info on Curves in Australia such as studios closing, how many open at peak, how many have closed etc. Are they going the same way as us?
The stats I’ve given are what I’ve been able to work out and are not conclusive or confirmed by HO (this won’t happen of course) however I don’t think I’m far off. Can’t say how many studios are still profitable in the 3 – 4 year mark, yet.
I may have mis-lead you with my numbers, sorry about that, but all studios grow in the 1st 12 months, it’s after 12 months that my figures apply.
The new CEO just today has come out with some pretty far fetched and unrealistic ideas and the Contours I bought into years ago, is definitely not the Contours it is today. The CEO is treading on dangerous grounds for his employer.
Please let me know if you can about the numbers of Contours in US at peak.
Many thanks for your offer of help. Early days we are.
Cheers
Hi I have 2 contours franchises in australia and am just about to close both and declare bankruptcy. I believe that it was a combination of my own greed and being poorly guided by a master franchise who were themselves learning. I bought and opened a second franchise way too soon and was under capitalized. I believe corporate is trying to improve but for me and others like me it is too little too late.
I missed that somewhere. What has he come out with? I didn’t go tot he cluster meeting last week as I couldn’t face talking to my FDM
To whom it may concern.
I thought it appropriate to contribute, to set the record straight on the operations within Australia and what is happening in our network.
I do not wish to get into a debate with those contributors who remain nameless, but am more than happy to receive their phone call to discuss any concerns they have with the direction of the network.
To correct some comments made already:
* Contours Australia is growing. We are growing both in terms of total number of studios, total members and average members per studio. Our year on year growth has never declined. We disclose these figures to our franchisees every month.
* We, like any franchise network, have studios which at various points in their business life close. Since Contours opened its first studio in March 2005, 9 studios have closed (less than 5% of the network). We are committed to ensuring that our franchisees have the tools and process to make the most of their business. Whilst we close studios, our growth in terms of total studios continues to climb. We have opened 6 new studios in the first three months of 2009. We comply with the Australian Trade Practices Act code of conduct and disclose to every new potential franchisee the name, phone number and address of the studio owners who have closed so they can call them and ask about their experience if they wish. We believe this to be the action of a responsible franchisor.
*In the past six months Contours corporate (master franchisor) has, at a cost of some $400,000, committed to additional field based support staff to provide training guidance and communication to each franchisee to help them grow their business.
* We have committed to a strategic plan process, mapping out the business to the year 2015. Some contributors may feel this is “unrealistic “and “far fetched”. I would prefer to call it responsible business practise, and essential to ensure we continue to grow and evolve our offering to stay relevant to consumers.
* We have not increased any fees for existing franchisees (and in fact reduced the training fee by 37% for existing franchisees). We have increased some fees for incoming new franchisees to pay for a 200% increase in the initial training they are provided to ensure they start their business journey off well.
* We have committed, and began delivering, the first 8 of 120 committed training sessions conducted by Contours corporate over a calendar year. Providing increased support, assistance and training to our franchisees and staff.
* We have instituted monthly communications meetings, held in every state, to ensure the communication is strong between our franchisees and Corporate Office.
I won’t comment on Contours Express in the US, and whilst Contours Australia is growing in members, studios, innovation and best practise I struggle to see why an Australian franchisee would occupy their time with this line of enquiry.
As always I am always available at the end of the phone for any franchisee, with every franchisee provided my office and mobile number. I have toured every state of the country since commencing with Contours in January, some multiple times. I encourage any franchisee with concerns to speak with me.
the numbers of Contours in US at peak was less than 300 in 2005. right now there are less than 80 on the official webside.
well I closed the doors on studio on Saturday and the other will hopefully be bought from the liquidator for $15000. Lol. Lost everything we ever had and now face personal bankruptcy but you know, I still have fantastic kids a wonderful husband and at this point a rented roof over our heads. I have my health and my family. Its a new path.
another aussie:
I’m sorry to hear about your club closing and bankruptcy.
You’ve got the attitude and perspective of a winner whose suffered a temporary setback… hang in there!
Best of luck in all you endeavor
I´m so sorry about your closing.
do you got any help from the master? what was your main reason for the closure?
we wish you all the best!
In a word “no”. Lots of platitudes. I went onto liquidation on the 11th of May. There were all sorts of “non promises” and optimism from the master about them being able to find buyers etc. Our new FDM is the worst of them all. Talks up a storm but does nothing.
The Liquidator closed one at the end of the month as there was no buyer in site and the cost of administration far outweighed any return via sale.
I went into liquidation as I was under capitalized to start the second studio and then basically ran out of money and then ran out of energy from the stress of juggling money and bills, robbing Peter to pay Paul.
Maybe if I hadnt spent so much time and energy helping out my fellow franchisees and being on the FAC and studio trainer etc, I may have had some more energy but still would have run out of money.
Still you live and learn. Gonna get a plebby job for a while and re-energize.
Are you really interested in purchasing a business that has a law suit attached to it? Maybe if it’s a multi-billion dollar company and this unfortunate collateral damage happens from time to time, but not a tiny little company like Contours Express. You happened upon this blog and are actually inquiring about purchasing a “job” from this corporation? You should be running, running, running far far away, and then consider yourself one of the luckiest people you know.
We are the happy owner of 2 Contours. You make your business successful or not. Contours Provides a model you make it profitable. Maybe Contours need to do a better job of screening business owners.
Hi Nick, no, this is Cathy and I am from WA. Who is Tracy and how many others of us are there?
Hi Nick
just reading your website. I went back through the stats that we had to start putting in with the studio names published 12 months ago. For the studios that had been open for more than 12 months, 55% experienced negative growth between June last year and March this year. 10% overall had a negative growth of over 20%. I still try to think positive. I believe that although they were greedy and a inexperienced, I don’t believe that the franchisers were deliberately trying to rip anyone off. And if being greedy and inexperienced is a crime, then I too have committed that crime
Hi Cathy,
I don’t know how many of us there are, but many just don’t want to think about it anymore and don’t post here. Thanks for those stats. Franchising in general is flawed because it is unregulated. I don’t think head office of Contours wanted to deliberatelty rip anyone off, they are working within the rules of franchising, which is make money with other peoples investment at no risk to them.
What I do know is how I was treated and spoken to when I went in to discuss options with the struggling studio, their comments were insensitive, heartless and just plain mean. They simply don’t care at all about their franchisees – they’re only concern is themselves…..
They are dishonest, it’s a shame so many people are afraid to speak up……they sent me a threatening letter demanding I put in writing that I will close down the Franchise Fraud website – they also told me not to tell anyone that they sent me that letter – they accuse me of revealing their trade secrets which is against the termination deed…
It’s a friggin circuit – no trade secrets, unless they are talking about the underhanded franchises practices….
Seriously get a copy of the book The Franchise Fraud – you will read it and go on my god thats EXACTLY what they do………..
Now if you type “contours franchise” in google my site comes up front page
The do like to do the “we will do this for you but dont te3ll anyone” They made an agreement with consumer affairs to have a woman reimburrsed for her mambership for 2 years because she had never cancelled. they encouraged us at training to “never cancel” a member if they hadnt been coming no matter how long they hadnt been coming for. The contract was not to industry code and even though I actually advised them of that when 3 months after opeingning in 2006 they still did not get i8t right after the release of the new one. So that was being held over my head by the DOCEP and then Will spoke to them and arranged a settlement after syaing to me that they didnt have a leg to stand on. I felt very betrayed. That was the beginning of the end. they gave me a month off royalty and did they “dont tell anyone else” thing. I really dont approve of that and told the whople of west Australia as I didnt want them to face the same thing and also didnt want to have special treatment and wanted them to be able to say ” you did it for Cathy, now do it for me”
anyway. It’s done now. I kno9w my liquidator is very anti franchises. I see why.
Looks like another 2 over here in the not too distant future as well
To answer your previous question of how many have closed … 15 to date (that I definately know of), 4 of those being corporate owned. The problem that now faces franchisees wishing to close is that Justin is enforcing the continuing payment of monthly royalities for the remainder of the term. So I wonder how many of the 9 studios that have already closed are paying royalities on their closed studios and how many are not. If a franchisee continues to pay royalities on a closed studio that would mean they continue to own that territory and corporate cannot re-sell (not that territories are in high demand anyway) would it not?
Justin announced just a few days ago that the monthly royalities and marketing fee will as of September be deducted from the debit run prior to franchisees receiving their monthly income. He tried to justify this action saying franchisees would be saving money in fees (a huge $3.63 if paying royality by credit card!!!) however what he is actually doing is guaranteeing corporate gets paid each month. My guess is that many franchisee payments are failing each month, because their businesses are failing, and corporate’s bad debtors list is growing. Oh wouldn’t it be wonderful if we could go directly to our member’s employers and have the member’s monthly dues deducted directly from their wage and guarantee our income!
I just re-read my last posting and I’m horrified at all my spelling mistakes. I guess my mistakes are because I’m tired. I write this at 4.20AM because I can’t sleep … losing sleep goes with the territory of being a franchisee as you all know. I wonder if the CEO has lost much sleep?
I wonder how they can do that legally. Does that franchise agreement allow for them to make those sort of changes? A friend of mine over here has been told, also , that she would be responsible for the continued payment for the remainder of the 10 years. She has 2 studios but at present is $8k a month in the red. I told her that she should tell them if that’s what they want to do then she will just take it to a current affair. See what that gets them. Everybody that used to work at head office is gone now apart from 1 FDM who is onn the road anyway.
sorry state of affairs.
No I am not paying royalties. they have bothered to harass us we are going to be personally bankrupt anyway so there’s not much point. Cant get blood out of a stone. I hope they don’t go under as there are a lot of people with money tied up inn it one way or another
WOW, I know of another in Sydney that owns one studio who was told she has to pay ongoing royalties after she closes. She is the 3rd owner of same studio, first 2 went broke as well. If you are set up as a company, then it is ILLEGAL to trade if you are insolvent or in danger of becoming insolvent. So don’t let them tell you otherwise, you don’t need to pay a cent, according to the Companies Act.
Now if you want head office to shit themselves even more, lets get this get together for those in Sydney, I can round up, 3 ex owners myself.
Their biggest fear is being exposed and yes going to current affair to show that these people want people who are bankrupt because of their system to keep paying royalties after they close, will ruin them.
Another aussie – email me here and we can arrange an ex franchisee’s coffee/dinner day and exchange war stories, and those of us who have been out of the system for over a year now can talk about moving on……its great therapy for all of us……….and I am sure beneficial……the benefits are what money just can’t buy………..hope to meet you all soon…
I would love to get together but unfortunately the airfare from Perth to Sydney is alittle restrictive for a coffee date. :-) I enjoy having a little bitch online tho.
The bit about trading while insolvent is true but when you sign a franchise agreement you provide a personal guarantee. So theoretically they could pursue you to retrieve the money and force you into bankruptcy. Fortunately I think they are just throwing their weight around as I think if it were to come to going to court and then the franchisee went public that would be way more damaging for the franchise as a whole.
I tried the email address you gave me but it bounced back
Perth that’s right I remember now…..LOL, well some here are from Sydney…..
yeah you do sign it, but Companies Act overides it – I haven’t paid a cent and never will………
Maybe a tele-conference……..LOL
I feel for Justin who has just walked into all this and is left with what is a hard situation. I had a fantastic relationship with all those at head off ice and felt I had a lot of emotional support. As I’ve said before, think everybody was inexperienced including myself and half the other franchisees out there. I think that head office thought, as did I (and most franchisees), that we would ride on the back of a new trend in Curves as we do do it better. I guess we were all wrong.
80% of small businesses fail in Australia in the first 5 years so I guess you have to go into it with those things in mind.
If you commit financially without taking total responsibility for your destiny, then you cannot blame someone else if you fail. The only thing that could have been better was the business support in the beginning. I know I learned a lot about marketing and sales from head office.
I guess neither head office or I were totally up speed. I do believe that the original team did the best the could do with the tools they had. I think the original model as imported from the U.S, was not up to scratch and they did not receive the support they expected. Dave and the team worked hard to make improvements constantly.
I do however, strongly believe that that it is wrong to try and send franchisees totally broke by trying to enforce the payment of franchise fees for the full 10 years if they cannot afford to keep their studios open. That goes against the moral and caring ethic that they originally had.
p.p. Nick and “aussie owner” are you the same person?
I’m on the East Coast and I’m not Nick.
I agree with your comments and I’ve never blamed HO for my business failure (or anyone elses for that matter) but HO does need to be held accountable for many claims they have made both financially and ethically, for questionable integrity and often withholding the truth. It is true that each prospective franchisee must be able to do the necessary research, put together their own business plan and be able to carry through and so are responsible for their own successes and failures but HO should not be able to morally and ethically feed mis-information (or withhold information) and then, when and if, the business does fail hold for ransom that franchisee for the term of the agreement.
HO also needs to let the failures go and focus on the successful studios. HO though cannot do this as they would suffer financial losses based on their fixed royalty rate. If the royalty was a percentage of turnover obviously this would incentivized HO to focus on successful studios and not chase those that close. To have a fixed royalty rate has been a selling point for them but I now see that it is a lack of confidence in the business plan as a realistic reason for the fixed rate.
I personally blame most gym business failures on an over supply and lack of demand for the fitness industry. I hope that turns around real soon as God knows Australians have major health and fitness issues.
Good comments. I agree.
No I am not aussie owner, hehe,
I agree with the point that we have only ourselves to blame only to an extent, we signed the contract, we need to do the research but the whole point of having a franchisor is to guide you in these things….
We can’t turn around and say we only have ourselves to blame, Contours advertises..
“No business experience required”
“no fitness experience required”
Then they go on to say we provide all the training, turnkey solution blanh blah….
Now if you don’t require business experience they claim to provide the training, then they should include, how to do a business plan, what an exit strategy looks like – if I could have done all that on my own – then the need for a franchisor is NOT there….
The whole point of them being there and paying the royalties, is for them to provide that training and guidance for us……..instead you get a an afternoon on how to make a sale -NOTHING on business plans, exit strategies, cash flow, staff management, time management, workflow efficiency……….difference with earnings and profits……
It’s too easy and simple to say, i’t my own fault for not having a plan – NO it’s my own fault for one thing alone, I made only one mistake, signing a contract I or my solicitor did not understand, and believing I would be trained in these things by the franchisor
They have since removed that from their website as I pretty much exposed it on my franchise fraud website but here it is…. easy to find an archive online….. *if you have no knowledge or background in then they need to take responsibility……..
WHATS CONTOURS CLAIMS!
“Do I need a fitness background to start a Contours studio? No! When you purchase a Contours franchise, we assume that you have no background or knowledge in business or in the fitness industry. Our extensive training is organised accordingly. You will have all the tools, materials and support necessary to open and operate your new Contours Studio! ”
http://web.archive.org/web/20070113033839/www.contours.net.au/franchise.html
That is the premise I joined under, and that’s why people join franchises……………..
I’m East Coast NSW not too far from Sydney.
yes I am in Sydney….so thats 3 of us plus I nkow 2 more ex owners here in sydney making 5 of us…..do u guys wana meet up somewhere for some coffeee and a chat? if so email me and we cna find a central locations, im sydney south west, so are the other 2 ppl I know.
Hi Nick, I’ve emailed you a couple of times thru your website and have received no response. How do I email you otherwise?
try this one
grafos@unwired.com.au
Hello excontours, I take it you are not involved in the lawsuit in the US. Did you manage to sell your studio, if so, is it still open? Or did you close and if so, how long were you open for and do you have to continue paying the royalty on a closed studio?