When I joined my late father’s franchise consulting firm in 2001, Curves For Women was a hot franchise concept. Thousands of franchises were up and running all over the US. By 2005, there were around 8,000 of them. But now?
Being Gary Heavin
Can you imagine what it must have felt like to cash 8,000 franchise royalty checks every month?
Let’s have some fun with math…
Let’s say that in 2005, each franchise location averaged annual sales of $200,000, which breaks down to around $16,000 monthly. Currently, Curves charges a royalty of 5% – of gross revenues. So, based on that, Curves for Women founder, Gary Heavin, would have been receiving a check for $800 every month from 8,000 franchises.
Are you picking up what I’m putting down? Do you get the math?
Based on my numbers—which are an estimate, each and every month, Heavin was getting checks in the mail totaling $6.4 million. Not bad.
By 2011, Curves only had about 4,000 locations in the US. What happened?
Curves management started selling franchises to the wrong people is what happened.
Franchise industry insiders told me that fairly-bored housewives were convincing their husbands to buy Curves For Women franchises for them, so they could have a shot at small business ownership.
It’s not that a fairly-bored housewife makes a lousy franchisee. It’s that they had no small business management experience, and they allowed themselves to get sucked into what I call, “Franchising’s Black Hole.”
The black hole I’m referring to is the “Business in a Box” ease of ownership mentality.
And, a lot of these women failed.
A New Chapter?
North Castle Partners is a leading private equity firm focused on investments in consumer product and service businesses that promote Health, Wellness, and Active Living. North Castle is a hands-on, value-added investor in high-growth, middle market companies in the beauty & personal care, consumer health, fitness, recreation & sports, home & leisure and nutrition sectors, among others.
North Castle Partners just purchased Curves International Inc.
“As a firm focused on businesses that promote Health, Wellness, and Active Living, an investment in Curves was natural for us,” said Chip Baird, North Castle’s Founder and Managing Partner. “We are excited to partner with the company’s founders, Gary and Diane Heavin, to reinvigorate this world renowned company by applying our knowledge and experience in fitness and wellness from our current and prior investments, including International Fitness, Equinox Fitness, EAS and Octane Fitness.”
According to an article in The Franchise Times, the new owners have big plans for this once dominant brand. As in lots of cases in which franchisors are bought out, there will be some pushback by existing franchisees.
The attorney for the Curves franchisee association said news of the sale has caused some uncertainty in the system as to whether this is a good or bad situation, but for the most part, he hasn’t heard a lot of comments about it. Read The Franchise Times story.
I’d love to hear from you? Can Curves For Women regain its place at the top of the fitness franchise food chain?
Better yet, I’d love to hear from current and former Curves franchisees.
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