IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?
May 10, 2007 by Sean Kelly
Filed under Business
Read interviews with Butterfly Life franchisees at UnhappyFranchisee.com
We sent out emails to fitness franchise owners, managers, employees, and customers asking which fitness franchise is best, and why. Our first responses were regarding a fitness franchise called “Butterfly Life.”
One commenter wrote:
Butterfly Life is the hottest new fitness franchise to hit since Curve’s… With all 3 aspects of health and wellness under one roof. Diet, Exercise and Well-Being is the combination to SUCCESS!!! Join the movement to make Butterfly Life the #1 Fitness Franchise across the Country!
Phil Gerst said:
The best fitness franchise for Women’s Fitness is Butterfly Life. We’ve been open for 8 1/2 months and have signed over 200 members. Our members are seeing results – losing weight and inches, feeling better and having more energy. The excerise equipment is designed by a women for women and use stacked weight with 12 levels – not the cheap hydraulic stuff. The members really like group exercise classes – and with more than 40 different classes – including step, dance, kick/box, and ball – cardio classes, Pilates and yoga classes and sclupting classes – there is something for everyone. Add BFL’s excellent diet program and nutrition counselling and you have a winning formula for members’ success and ours.
WHAT DO YOU THINK? IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE? LEAVE A COMMENT AND TELL US WHAT YOU THINK!
Butterfly Life Franchisees,
I’m curious, why haven’t you joined
the law suit? What have you got to lose? Haven’t you lost alot all already?
The group has done all the work,
Joined the AAFD, compiled all the paperwork and facts, hired one of the top franchise lawyers in the country,
filed the proper paperwork with the Dept of Corporations & the courts.
Everyone that has purchased a franchise area or sales area will be eligible to join. Don’t miss this window of opportunity to right the wrongs of BFL corporate.
The list of all FranchisePick.com articles & posts on 30 Minute Fitness Franchise news & issues has been updated:
30 Minute Fitness Club Franchises: Blogliography
Links include the Forbes story, FitnessBusinessPro article and links to stories on the Curves franchise, the Contours Express franchise, the Butterfly Life franchise, the 1-2-3 Fit franchise and others.
Feel free to check it out and let me know if there are links I should add.
30-Minute Fitness Centers are a dying fad. Don’t buy one you will lose. There are too many and they have all run their course. This is just another knock off of the Curves franchise that if you reserch you will find they are closing down left and right. Don’t even open any type of gym unless you have experience in the industry I wouldn’t advise going into it. Your established competition will put you out of business so rearch your demographic and your competition. Only so many gyms can survive within a town. You better be the biggest and the best offering everything not just a circle of equipment that will bore your clients and they will drop off after the 1st & 2nd year. That means no money, no clients. This company is no different from the hundreds of others that are losing $$$$$$$. Good Luck.
Jackie, are you still out there?
With only 3 posts in the month of February, I’m wondering if this thing has been settled. Is it settled or just dead?
It’s only just begun….the class action arbitration was filed on January 10, 2008 against BFL and Golob and Gergley personally. We are just waiting for the “boy’s” attorney to pick an arbitrator of their liking. They only have a few more weeks to make a decision. Let the games begin!!!!!! If you or anyone would like further information or to be a part of this class action, please contact the AAFD at 619-209-3775.
I’m a bit confused is there an actual class action suit filed or for that matter any suit filed or is it just going to arbitration?
I’m a bit confused is there an actual class action suit filed or for that matter any suit filed or is it just going to arbitration?
Confused, you need to understand the difference between litigation, mediation and arbitration, and maybe you do. BFL states in their franchise agreement that any legal issues must be remedied through binding arbitration. Rather than a judge and jury, there is a three panel arbitration board that decides the case. This is a binding decision meaning there is NO appeal as with a jury trial. The decision will stand and will be sent to all business and fitness publications as well as being posted on this and other blogs. The Butterfly Life Franchisee Association has already attempted mediation with corporate in 2005 and in Nov. 07 to no avail. The Association asked that corporate stand by their VERBAL promises, improve the support and national branding promised to all franchisees with resistitution to those who were forced to close their doors. The participants of mediation were insulted by Butterfly Life’s lack of concern and disregard for all the franchisees who were failing or soon to fail. Many more have closed their doors since that date. The members of the Association are looking forward to the pending arbitration in order to finally resolve the issues and set the story straight. The investigation by the Department of Corporations in California will also be extremely helpful during the arbitration process. Keep in mind that this is a CLASS ACTION arbitration and anyone who is interested in restitution based on Butterfly Life’s misrepresentations can join in the process. Please contact the AAFD at http://www.aafd.org to join your organization and get the restitution you deserve. Once arbitration has begun, the doors will be closed to any new members. If you believe you were mislead and fraudulently induced to purchase your franchise, please do yourself a favor and join this organization to stand strong with your fellow constituents. As they say….there is strength in numbers…and now we have them! Fulll speed ahead………………..!!!!!!
I don’t have a franchise but I did join a club. I would not recommend it to anyone. I was promised great weight loss results. Instead I gained weight by taking the owners advice. She rather look up things on the internet about buying dogs than help people with equipment issues. I am in the process of trying to get my money back. I tried to cancel but she wouldn’t let me. There is nothing in the contract that states I can’t. The club is in Shakopee, MN. The owners name is Rachel. She is very rude.
I dont feel that comments from customers who had a bad exerience with 1 owner should be allowed on this site. All of my members showed great improvement after their 4 week evaluation, but I don’t sit around & look things up on the web. The title of this site is: “is butterfly life a great FRANCHISE”. That is called slander lady-get a life.
I haven’t posted on this site for a long time but in reading the last 2 posts, I just had to put in my “2 cents”. First, Confused….that’s great that you have successful members but obviously Jen had a bad experience and she’s frustrated. She was voicing her opinion about what happened and in a sense warning others about that particular club. That is not slander it’s merely a statement about what happened. Jen, I’m sorry that you had an unpleasant experience with your particular club. The owner should have coached you about your eating habits and your workout program. There is no possible way that the “equipment” caused your weight gain unless you increased muscle mass ~~ that will give a spike in weight on the scale but that’s because muscle weighs more than fat AND that’s exactly what you want to happen. You may want to re-think that one.
This site is about Butterfly Life being a good franchise option or not. Our club is now closed and it isn’t because of the product, it’s due (in a nutshell) to Corporates’ lack of doing what it promised. We are involved in the class action so I won’t say more than that.
Jen, you did sign a binding contract so I’m going to suggest that you try to talk with Rachel and tell her that you aren’t happy with the program and ask her to go through it with you again and set up a better workout plan for you. Maybe you want to join Weight Loss Express. OR see if you can transfer to another club…if there is one in your area. Hang in there, we believe that the whole company is going to fall.
I understand her being upset. It is just that like you we are trying to do the best we can. If people who are looking for info. about becoming a member at my club reads her blog, they may think that there is something wrong with the product. There is nothing wrong with the product. The is something wrong with the owners of this company. I am sure Butterfly Flying that when you were trying to save your business, that the last thing you would want to see on the web is one person saying bad things about Butterfly Life b/c of a BAD owner. I don’t want to be in the same situation as you & I am trying to keep my head above water. If this site is here to support owners in danger of failing, I think this site needs to focus on Tom & family not one bad owner. Jen, I am very sorry that you are unhappy with your club & owner. If you were a member at my club I would have been more proactive in your weight loss. Unhappy members are very bad advertising. I would make good any way that I can. I would have reviewed your chart, & suggested the WLE program as well. We can’t go home & eat with you or drag you into the gym 3 times a week, but I would call & check on you & make sure that you knew we were here to support you. Butterfly Flying: Please help us not to fail as you did.
confused said: I dont feel that comments from customers who had a bad exerience with 1 owner should be allowed on this site. All of my members showed great improvement after their 4 week evaluation, but I don’t sit around & look things up on the web. The title of this site is: “is butterfly life a great FRANCHISE”. That is called slander lady-get a life.
Actually, by definition it’s not “slander” if it’s true. An owner publicly telling a customer that she should not be allowed to express her dissatisfaction and to “get a life,” rather than showing concern for her situation, does a lot more damage than her complaint, IMHO.
Do you have 100% retention from all of those successful members? If not, did those who left openly share with you why they were leaving? I’m sure they each eventually told 10-20 others why they quit, if even for indifference.
I don’t say this to be hostile or critical – just to offer a little perspective. It’s hard to keep up the cheerful enthusiasm and customer service you had when you first opened. But owners have to be careful not to let their own frustration make their situation even worse. Your customers are paying a monthly fee for services promised to them. Your profitability, sales levels and frustrations are not their problem. If you tell them to take their opinions elsewhere, their business, referral power and your good name with go with them.
Jen, share your dissatisfaction with the owner. Sometimes people lose perspective when working long hours. At least email her a link to these comments anonymously. As you’ve read, these guys are under a lot of stress and it wouldn’t hurt to give her a second chance before bailing.
Oh Sean, I am very kind to my members. I would never tell someone to take their frustrations somewhere else. That is not how I work! And yes, I do know the defintion of slander! I guess I am just more frustrated with this site. You seem to pick & choose what is placed on this site. If someone states that they are successful you ream them or it is not posted! Very interesting! I am not a Tom fan by all means. I have used this site to educate myself, but there doesn’t seem to be much help for those in trouble. If you want to post a positive response-it doesn’t make it on. Why does a negative comment about 1 person seem to get posted? You guys just want everyone to fail, b/c it helps your cause that much more. Jen, I am sorry for tellilng you to get a life! I should have directed my frustrations to another place. Like I said, I would have never treated you like your club owner did. I respect my members & I would want to make you happy. That was way out of character for me. So Sean, the only way to get you to respond is by pushing buttons. Why don’t you help those in need not to make bad mistakes. How about some free advice. Directing those of us who are poor to the AAFD (?) doesn’t help. We don’t have the money to participate in this group.
Wait a minute! Hi, I just checked my email and on my email are some comments that are said to be posted by me. I have not asked any questions from this site in a long time. It seems to be very easy to get people’s name(confused) and there email address. I have no comments for this site. I am indifferent to what is going on. If a member want to be angry at another owner, it make zero difference to me. Maybe she will come over to my club instead. I would give her great service. It sounds to me like someone is starting some trouble. I want my name & address removed from your information.
If any of you want to save your club, you should rebrand asap. Anyone associated with the name Butterfly Life will have a difficult time being profitable based on the negative publicity in publications and the blogs. If your members love your dedication in helping them, are receiving success and are happy with your club, they will continue to be members. It’s not the name they are coming for. What has the name done for you as a franchisee….maybe taken $1000 a month in royalties….oops, this year it’s $800…..next year it’s back to $1000 with ALL of it going into corporate’s pocket. Remember, you’ll be on your own as far as advertising goes. You all need to rebrand now if you want to maintain your credibility. The association with the BFL name will have a very negative impact. After the class action begins, the BFL name will be ruined. Members will come to you if they believe in you….do you believe in (corporate) Butterfly Life? Have they provided you with everything they promised? Take a hard look at what you wish for your future. I truly wish everyone who has an active club great success. You’re doing a great deed for women, but remember, you’ve done it on your own. Contact AAFD.org if you would like information regarding the class action arbitration. By the way, Confused, spoken defamation is call “slander” and written defamation is called “libel.” People shouldn’t ruin others’ lives by telling lies, but on the other hand, they should be able to speak freely without fear of litigation over every insult, disagreement, or mistake. Social disagreement is important in a free society. Obviously, we don’t all share the same opinions or beliefs. Jen is stating her experience with Rachel’s club, which may save others from the same problems at that particular location. The Butterfly Life Franchisee Association is trying to save others on a larger scale….from buying a franchise or receiving restitution for what was promised you. Good luck to you all.
Confused:
“on my email are some comments that are said to be posted by me. I have not asked any questions from this site in a long time.” “I want my name & address removed from your information.”
Now I’m confused. Email me one of the comments that are not yours so I can clear it up. Also, where is your name and address posted? email me: info[at]ideafarm.net.
FYI: I don’t knowingly block or delete comments. feel free to email anything you think didn’t get posted. It’s probably on a different post than you remember. It could have gotten caught in a spam filter. But I don’t edit for one side… in fact, I like debates and would rather have both rather than one side.
Sean, I’m sorry. I guess because I get these emails from AAFD all the time with my address I assumed that my address can be obtained very easily. I have access to others address because of this. I am wondering if someone wants to be funny. All of this is extremely sad. Do you guys make this stuff up?
This is a silly conversation.
I did all of this. There isn’t even a poster named confused. I am signing off. sorry
Sounds like a troll. Mad
sorry/confused: Sean, I’m sorry. I guess because I get these emails from AAFD all the time with my address I assumed that my address can be obtained very easily.
Only the administrator (me) can see your email address and I don’t share it with anyone unless you specifically ask me to. If you post a website address when leaving a comment, people can click on your name and it will link there. If you do have a website, leaving comments helps boost your traffic.
I’m confused… but thanks for boosting the comment count. Also, the exchange inspired a couple of posts:
http://www.franchiseemarketing.com/?p=63
And
http://www.franchisepick.com/the-self-fulfilling-prophecy-of-small-business-failure/
Well, I am sorry for any confusion Sean. I would like to know how to remove my address from your files. I keep getting emails from franchise pick. I posted a question a long time ago & I have not taken part in any of the comments since then. I didn’t say that you gave out my email address, but I continue to get new comment notices & info. from the AAFD. I know that you are not the AAFD, but a lot of the people who post here are. This may be a way to stir up trouble. My email is posted on the AAFD info. for all of the world to see. It is interesting that you would post confused’s negative comment, but you wont post his/her I sorry comment on the other site. Once again, keep doing what you are doing. God Bless you & those who have had trouble. But, please take me off.
confused?: Well, I am sorry for any confusion Sean. I would like to know how to remove my address from your files. I keep getting emails from franchise pick.
We’re not sending out emails. You may have subscribed to receive comments from a particular thread. See the text below the comment box that says “You are subscribed to this entry.” Click the link next to it that says “Manage your subscriptions” It’s on a post-by-post basis, so you may have subscribed to others as well.
I am sorry if I upset you confused. I was just expressing my frustration with Rachel and how she runs her club. I went last night to talk to her and she wanted to call the cops because I wanted to talk to her outside. I won’t post anymore comments on this website. Thanks for all your consideration.
I hope Jen reads the following: The 2 criteria’s for a person to purchase a BFL Franchise is 1. The check clears, 2. Is the person alive. There are no background checks, financial verification, Credit Check, etc. It is harder to purchase a home then it is to purchase a BFL Franchise. A BFL franchise owner does not have to have any history or fitness background at all. A customer has no idea who the owner of a BFL is. Anyone can purchase a BFL Franchise and I mean anyone. Jen hang in there and keep your head high. Do not let this experience put a negative spin on your ultimate goal of wanting to be healthy by adding a fitness program to your life. I hope your situation works out to your benefit and you are able to find a workout club that you will be happy to be a part of.
Anyone know what happen to the Club in Arlington, Texas? It is no longer on the BFL Website. Did they close or debrand? That was the first one in Texas to open. I am sorry the second one in Texas to open. I almost forgot there was one in Irving in 2005/2006 that closed in Aug. 2006.
Looks like Butterfly Life and Contours Express will both be recruiting new franchisees at the International Franchise Expo in Washington D.C. this weekend.
http://www.ifeinfo.com/exhibitorlist.cfm
Sean,
Well it will come as no surprise to some, but Butterfly Life has begun to export their “opportunity” to other countries. A few weeks back at the IFA EXPO in Washington DC they had a booth set up and were conducting franchise seminars in a private meeting room. In attendance were their top propaganda agents, Mark Golob, Cheryl Hoke and Janet Lossick. It seems Mark has come out from hiding and is again taking an active role in the spread of their failed concept.
I have been reflecting on what is actually wrong with their business model and why so many clubs seem to fail. Not just Butterfly Life clubs but the 30-minute workout concepts. In my opinion there are two problems.
One is competing with Curves is like trying to open a hamburger stand in a McDonalds parking lot. My product may be better, but hey they’re McDonalds. I know what I’m getting, my friends go there, they like the burgers and they are the reigning king of fast food. Curves is no different in the 30-minute women’s workout concepts. They could raise prices, lower service and would still get 90% of the available market just on brand name alone. Now this is not to say market share can’t be had, but a company must approach this very methodically, with a clear strategy and with defined achievements along the way. This leads me to my second point.
The franchisor must deliver on what they promise to the franchisee’s. Once a franchise is open, they will provide the SERVICE an individual club is expected to provide. If corporate looses track of their responsibility, building brand equity around the clubs, then it will all come falling down. It is a bit of a yin and yang relationship.
As a former BFL club owner, we tried everything to develop the brand on our own. We did newspaper ads and feature articles twice a month, direct mail at 2,000 pieces a week, 8 weeks of TV ads (yes, thousands of dollars a month), offered discounts to neighboring businesses, produced door hangers and take one fliers for schools, on cars, churches, senior centers, apartment complexes and even gave away annual memberships to prominent individuals in the community. There were other things, but you get the idea. Even if we had a 90% closing rate on sales we would have had a very hard time reaching the 300 member breakeven point.
Now there are those that will say this is more ranting from a disgruntled franchisee and that there are successful clubs out there. That may be true, but I have my doubts. The fact is BFL has closed or just plain not opened more clubs than they have ever had open. You wouldn’t know that reading the highly suspect figures published in their UFOC, but that’s another story.
In retrospect and the advice I give anyone looking to open BFL club…….. buy and IRA, your retirement years will be spent much more comfortably.
BD
I see that BFL has finally posted Martha Stewart’s picture and Magazine on their website. Do you think this was the big venture BFL talked about for sooooooooo long to induce franchisees? It seems to me that it’s just an offer for franchisees to sell her magazine. I can’t imagine her attorneys would allow her get involved with Mark and Tom after they find out the real background of these two. She can’t afford to tarnish her reputation any more than she already has. I bet you could buy her Magazine at Costco for a greater discount than throiugh BFL and turn a better profit. BD – You’re right about the UFOC. It’s difficult to maneuver through, but once you figure out what to look for, there are so many misrepresentations regarding open and closed clubs that it would completely overwhelm a potential franchisee….that was probably their intentions. I thought the point of the UFOC was to inform the public…..with accurate, updated information. I believe the Department of Corporations would agree. Can’t wait for the outcome of their investigation or for arbitration to go forth! I think they’ll be surprised at the number of particpants in the class action……maybe that’s why they’re trying to stall us. Also, I noticed that the number of open clubs on the website haven’t changed greatly in many, many months. Well, I guess that’s why they decided to sell abroad……no one knows their tactics yet……but they will! BD – I am also a former club owner and will definitely agree with you that without the service promised from BFL and the branding, this franchise is going to die a slow death…..but the end will come. The next wave is already upon us with more closures. The public can’t afford to be so oblivious and naive if they want to get involved with these scammers. The sad part is, the area reps are the ones who are going to lose big time!!! SEAN – do you know where ex franchisees can post sales of their equipment? If you have access to any sites who are providing this service, please let us know. To all of you who are open…..I wish you the best of luck…..and again I ask……please let us know if you are making a good profit…..if so, buy an IRA like BD says…..cause it won’t last long.
Yes, I saw that too. I agree, I’m sure it’s just a ploy to make new people think that BFL is great and doing so much to help brand the name. It’s a bunch of bs if you ask me.
Sean, we too have BFL equipment to sell. It’s the newer version and in perfect condition! Do you know of a place to advertise it? Besides Craig’s List?
Thanks!
Butterfly Life Fitness in Dublin, CA has a for sale listing on Craigslist as of April 17th, 2008 but the club is still on the website.
Hey, ? for all – I received an email from Butterfly Life this week advertising I could own 10, yes 10, BFL locations for 65k. Are they giving these away?
$65,000 plus the joy of having them take $1000/mo royalties (by automatic payment) times 10. Sounds like the deal of a lifetime – Don’t forget you’ll be profitible in 6 months.
How could you turn them down?
How could I turn that down you ask? Easily ;)
Someone shared the same email with me. I have posted it here for your review and expert opinions:
Butterfly Life Franchise Offer: 10 Franchises for $65K.
This is an Area Representative offer, correct? Correct me if I’m wrong: They will be pitching this prospect that he/she will sell these 10 franchises to others, keep half the franchise fees and half the monthly royalties?
You are a cynical bunch, but AR Mary Bauer appears in the email and she’s delighted with the corporate team, which has been there for her every step of the way.
Any updated closure list yet? I notice 2 in Texas are gone from the BFL website. Arlington and Granbury. 2 of the first ones that opened in Texas.
All locations are closed in Colorado (including area reps locations)except one. Unfortunately, the area rep didn’t disclose to this new franchisee that she also was closing! AR’s…..remember that you are as responsible as BFL corporate for disclosures before selling any franchises. You could be the next in line for arbitration!
The last I heard (through the grapevine) there are Area Reps getting together against BL Corp.
Does anyone know about this? I can see how it would happen since many are club owners too.
This is only my second post to this web-site. The first was in May, 2007 after our membership hit 200 members. We were quite excited at the time. Unfortunately, it was all down hill from there. Today, our BFL gym is closed and we have lost well over $200,000.
In our region, there have been more clubs that have closed than remain open. The few that are still open aren’t making any money. In fact, not a single club I am aware of is making money.
BFL corporate would like you to believe that the failed clubs are the result of the owners. But, there are far too many failed clubs to accept this as anything more than corporate’s covering its own ass.
All things being equal, in a decent franchise concept and implementation you might expect 1/3 of the franchiees to fail, 1/3 to do mediorce, and 1/3 to succeed. In a great franchise concept and implementation, the precentage of successes would be much higher than 33%. In the case of BFL, it appears that 2/3 or more fail, 1/3 does mediorce, and no clubs are truly succeeding (making money).
If you are considering a BFL franchise, make sure you do your due diligence or you will be like so many of us, sorry we were ever sneared by Butterfly Life.
Dear PMG,
I’m so sorry about your club…..you are now in OUR club, BUTTERFLY LOSERS!!!!!!
Have you joined AAFD? If so, great! We did and are very happy. If you haven’t then you may want to check it out!
PMG……..many of us feel your pain and loss. We are all on the same road, just some of us are ahead of you….by weeks, months and a couple of years.
You were one of the few lucky ones to every reach 200 members. You did not say where your region is, but it truely does not matter because it is the same story in every state. I used to tell the ladies-I love hanging out with “losers” all day and that we make “winners out of losers”. Many of us have lost our clubs, our homes, our retirement, our savings, and in some cases our family….but that DOES NOT make us “Losers”. Together in the end, if we accompolish nothing more than stopping the “powers of being” at what is now referred to as “BUTT FLIES”, we will be winners. As a group (members of the AAFD and those that are not) we have the desire and hopefully the ability, to stop them from ruining any more lives while they try to line their pockets with gold. I rejoice in knowing that so much of that “gold” is now being spent on their attorneys fees. How does it feel M and T?? Let me answer that for you on behalf of all of us…..IT SUCKS! WE HOPE YOU BOTH SUFFER IN WAYS THAT WE ALREADY HAVE AND ARE TODAY.
PMG:
Condolences on the passing of your club. Considering the life span of a butterfly is two weeks, you hung in there pretty well. Remember the saying What doesn’t kill me makes me strong. If your workouts didn’t make you strong, I’m sure this experience will.
Failing at anything is a blow to self esteem, but BL franchisees should remember you had 3 strikes against you. In addition to BL itself, the concept itself is suffering from too much competition and member attrition. Additionally, you’re struggling for survival in the worst economic climate in recent history. Discretionary income is becoming a myth for many. Despite what appear to be valid gripes with the visionaries at the top, Curves, Contours and every 30 Minute Workout concept I know is struggling too.
At least when you’re struggling in this economy, you’ve got lots of company.
Well said Sunshine….they need what’s coming to them, and I don’t mean more $$$$!!!!!
I am praying that AAFD will get their day in court!
Has the AAFD been effective thus far?
I’ve been pretty tough on Bob Purvin for awarding and defending Cuppy’s Coffee, which seems to be operating the roach motel of “refundable deposits” (Check goes in, but a check don’t come out).
I’m hoping that’s just an isolated blindspot. Hopefully, he won’t have Golob & Gergely singing a duet and handing out fair franchising awards at the next AAFD golf-fest.
I’ve heard the 2 of the three arbitrators have been chosen, does anyone know when this case will be heard? It’seem’s that this is taking forever.
Sean –
At the moment, I’m not feeling too strong. I should have closed the club at least six months before we did but we had invested so much money and time and the thought of giving up and flushing it all away was paralyzing. It didn’t help that we had 4 years left on our lease or that corporate still expected their cut. Despair and false hope (stoked by corporate – with things like the rumor regarding Martha Stewart) kept us going – and pissing away the balance of my retirement trying to reach a goal that, in hindsight, was always unreachable: profitability.
Your comments about ‘3 strikes’ from our experience are pretty much dead on. Our membership high was 222 attained by mid-June ‘07. But of this number, 62 were paid-in-full. While the cash from PIF’s was desperately needed when it came in, it meant that we had not truly reached the magic 200 break-even number. That number, of course, was based on $39.95/mo originally presented by corporate. After the recommendation by corporate to reduce the monthly membership price to $29.95 to be more competitive, the goal posts, the break-even number, was moved farther away. Not by corporate per say, but by competition.
By the 3rd week in June ‘07, our new membership sales crashed (the competition from summer is tough even if expected). What we didn’t expect was the high attrition. Not only from non-renewals (August was our 1 year anniversary) but also from the number of members requesting medical freezes, or asking to be let out of their agreement for medical reasons, or with declined checks and credit cards that we had to chase. Before we knew it, the summer lull of new memberships combine with higher than anticipated attrition to put our net membership (and our monthly revenues) is steep decline.
The most frustrating thing was that even members who were successful in toning and losing weight, and with whom we thought we had good relationships with, were not renewing.
New competitors opened within a few minutes of us – one selling its memberships for $19.95/mo and the other for $14.95/mo – and didn’t help matters. The latter club ran a special in September for $9.99/mo and took a full page ad in the same clipper magazine we were in on a half page with $29.95 pricing special. A few of our most consistent members defected to these competitors – which were not supposed to be competition because they were co-ed clubs.
I could have matched the price but I remembered what Denny said about not giving it away. When I couldn’t convince these members to stay – and pay a small premium for our beautiful women’s only club, my spirit (and delusion) was finally broken.
PMG
Your story…..I know we’ve heard it before but it still brought tears to my eyes. I did have a chuckle when I read the old line about 200 members being the “break even” point WELL…that depends on where you are. Our break even would have been 350 members and we couldn’t get passed 60!!! The whole thing makes me sick everytime I read these broken stories….so so sad!!
Well, PMG, have you joined AAFD yet? It would sure be worth looking into!!
Good luck, no matter what you decide to do…and God Bless you too!
MARTHA STEWART! Are MG and TG actually telling their franchisee’s and area reps this is a possibility?! The business savvy & corporate empire Martha Stewart has and built, I just can not imagine she would get involved with MG and TG, who have no business savvy & do not know how to build a corporate empire. What the……! It just does not make any sense.