CURVES FRANCHISE: Negotiating Closing Fees
October 12, 2009 by Sean Kelly
Filed under Business
Struggling, failing, soon-to-close and closed Curves franchise owners regularly share information, advice and mutual support to each other on the Unhappy Franchisee website.
One of the frequent topics is the club closing procedures, and how to negotiate with Curves International in regard to their demands for a $10,000 “failure fee,” often tens of thousands of dollars for “future royalties,” and the Curves International policy that forbids Curves franchisees from selling their own equipment.
From the post CURVES: Robert Lay’s Story, here’s a recent exchange regarding the $10,000 closing fee:
Donna Submitted on 2009/10/08 at 2:41pm
HELP!!! I have read some of the horror stories listed. I to have to close my club. I can not get anyone to return my calls from CI. I do not know what to do. I have had my club almost 7 years and have paid my dues. I do not have 10,000 dollars. Because of
the recession I have to close. I love my members and hate to dissapoint them but I have no choice. The closing packet was sent to me but I’m scared to send it in. Is there any help out there? I have to do what I need to do today. Will they let me out without the 10,000 fee. Has anyone out there been in my shoes. Please someone respond as I need advice and help NOW.
Read the Curves franchisees’ responses and advice here:
CURVES: Negotiating the $10,000 Closing Fee
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Image: FranBest.com Franchise Information
Hi Sean, I’m a memeber and am thankful to say that my Curves was sold by the money-grubbing idiot who owned it to a great woman who immediately updated it. She replaced the stained ceiling tiles from the leak 2 years ago, fixed the handle on the bathroom that was falling off, painted the club, etc. Since that was done in April we’ve gained more than 50 new and returning members. The place is clean, happy and a joy to attend.
CI definitely has the worst sort of money-grubbing attitude, which I find hilarious considering they are ‘Christian’ claim to be run on ‘Christian values’.
Apparently, Curves International has been very successful at playing the game of selling new franchises out of the front door and old and failed franchisees out of the back door of their system, and at the same time.
Franchisees just don’t understand that franchising is all about standing up the franchisor and the franchisees who thrive in the national and international systems, and those who don’t thrive are just “meat to eat.”
The failure fee in the franchise agreements does give the upper hand to franchisors who can intimidate their failing franchisees, and the terms are in the franchise agreements for this purpose. But would the courts really uphold these fees if the franchisee can show the court that they were operating at a loss and had to close down to avoid bankruptcy if this was possible.
But, of course, it is federal regulatory policy to protect franchisors. Isn’t this why the AAFD gave Curves “The Franchisor of the Year Award?” They are survivors.
When Curves goes before the court, they will, as always, show the judge all of their “standing” franchisees and the judge will rationalize that public policy favors the franchisors and their thriving franchisees and that the failed franchisees have no rights under the contracts they have signed –even if they may have been fraudulently induced to contract by franchisors who do not disclose material risk factors to “founding” franchisees.
Any “Christian values” and “democratic values” in franchising are preempted by federal regulatory policy that deems that the greatest good for the greatest number rules the day when the health of interstate commerce is involved. Apparently, the “means” that does enable the sellers of franchises to not disclose material risk factors to the buyers of franchises does justify the “end” in terms of producing a healthy economy, if not healthy “founding” franchisees, in the eyes of our Congress who are educated by the lobbyists as to public policy that serves the grestest good.
I responded directly to the poster above as to her terrible circumstances on The Unhappy Franchisee site.
I have Curves club in Missouri. I love curves and love to help strengthen women. I love my members and hate to dissapint them, but what should we do? I work all the hours at my club and a job and my husband works 2 job to help pay the bills at the club. I have owned the club now for just at 3 years. What happed to me was that O’Sullivan closed I went from 197 members down to just at 50 and falling. I know because I am in the club I have burn out bad. I do not see a light. Just like anything when it is good it’s good and when bad It’s BAD. I love Curves but I just do not know how much more I can take! Would you like to buy a Curves. Call ME LOL