"How do Businesses Like Contours Express Survive?" (guest post)

(FranchisePick.Com)  FranchisePick.Com reader On A Mission left a comment referencing a web story of a woman’s unhappy experience as a Contours Express franchise owner.  After a little searching, I found the post, titled  How do Businesses Like Contours Express Survive? on Matthew Wilson’s Vasocreta blog.  Matthew, who kindly allowed me to post his story in its entirety, recounts his mother’s regrettable experience as a Countours Express franchise owner.

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How do Businesses Like Contours Express Survive?

Guest post by Matthew Wilson,  Vasocreta

Imagine that you purchase a franchise location for $16,000. Then you purchase the software to manage your computer systems for an additional $500. You then go to negotiate rents in your area and find that the market research given to you by the parent company was VERY inaccurate and you are not able to open. So, you feel like you are up sh*ts creek without a paddle. Then one day you find a great location, great rent and the address falls within the market that you purchased. So, you call your parent company to take the next steps, and the parent company tells you that you did not open your location in the time frame laid out in the contract and they let you know that you lost that location because you are a few months late in opening.

On top of all of that, the market is still open, nobody else owns it and there is real market potential.
Well, this is what happened to my mom. She is a charismatic, outgoing, compassionate woman in her 50’s who has a heart for seeing people grow and develop. Having been a single mom for nearly 15 years, she especially has passion for encouraging other women to discover themselves and summon their inner-strengths. Opening a gym for women seemed to be right up her alley.
She sought out locations, found a decent rent and then purchased her market from Contours Express. When my mother went to sign the lease, the rent had gone up…significantly. Apparently the landlords felt that that my mother and husband’s household income could handle a bit more than the initial rent quote. Well, the new quote did not allow for the business to ever be viably profitable.
So, my mom hunted and hunted. And in Fairfield County, CT you have to hunt a VERY long time to find a good rent. Afterall, it is the richest county in America.

My mother was about to call her investment lost, when she encountered a new development that offered her a location and rent that would allow her to run a profitable business. She contacted Contours Express and they told her that they would not allow her to open the location unless she re-purchased the market!! Folks, that is another $16,000!!

Now, to be fair, I understand contracts. Contracts are protection mechanisms. They protect consumer AND seller. They have there place and are necessary. However, contracts should never keep us from doing what is right. What is morally right. The market is still open, you see a person who has already given you $16,500 (not chump change) trying hard and making headway in establishing their business, and then…you dump them and take their money!!

This is the sort of crap that gives Americans a bum wrap. This is the kind of behavior that chips away at the source of strength of free-market business: INTEGRITY! When you chip away at integrity long enough, you get ugly business. You get companies that end up in the news for all of the wrong reasons. i.e Enron, Wal-Mart and their hiring practices, McDonald’s and their hot coffee incident. OK, strike McDonald’s from the list; that was a joke. But you get the point: businesses that compromise their integrity turn “crappy”.
Just to further my argument against Contours Express (so you know that this post is not prompted solely by the fact that the victim is my mother), take a look at these stats.

Contours Express has just about 300 US locations. Last year there were 520 markets purchased (let’s say that they each cost $16,000) and only 6 opened. 6 out of 520! And Contours Express is the #2 most profitable women’s fitness company behind Curves. However, Curves seems to be doing just fine with regards to location growth. They have well over 10,000 locations world-wide. Oh, and based on inquires made directly to Curves, they will turn down potential franchise owners if their research tells them that the franchisee will not be successful in a particular market.

So, I wonder where all of the profit comes from for Contours Express! Maybe it comes from the simple collection of franchise fees and not from an investment in what should be their greatest asset: their franchise owners!

What goes around, comes around. And I hope that when it comes around it lands right on top of Bill Helton’s fat head (now I am writing purely on emotion)!! Maybe the new CEO, Jose I. Perez, Jr., can knock some sense into this company.   (09/14/2007)

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