Can Curves For Women Get to 10K Again?

(From Katie@ Flickr.com)

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.

4,000

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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Filed Under: franchise brands, franchise consultants, Franchise News, franchises for women

About The Franchise King®

My name is Joel Libava, and I'm the author of Become a Franchise Owner! In addition, I'm a franchise ownership advisor. I teach people how to properly choose, research, and buy franchises.

ennovy73

I think you would be surprised at the number of business-educated franchisees in the Curves system. The corporate office would prefer the scapegoat of ill-prepared owners versus the truth of a franchisor with poor leadership and vision. As a current owner of the MBA variety vs. “bored housewife,” I can tell you the system is flawed when the advertising is non-existent and our sole source of growth is supposed to be “buddy referrals.” Every new program over the past 8 years has been designed for the franchisee to “invest” in a product or equipment with the commitment that once a percentage was on board, the program would be advertised. When the advertising didn’t happen, corporate claimed that not a high enough percentage of clubs invested in the new technology/system/insert-money-slush-for-franchisee-here. Of course, the franchisor sold systems that generated as much as $9000 per club in the meantime, never mind that the public never found out how great and cool our $9k upgrade WAS. There is so much more to the tragic Curves story than you will ever know. As of right now, there are actually just over 2900 clubs in the US. So first, who vetted these “business deficient” owners if that were true? And second, could there really have been THAT many bored housewife owners if over 60% of all US clubs have already closed? And just wait….the biggest growth year for Curves was 2003 and 2004 on 10 year agreements. That means a LOT of franchisees will be free to exit the system in the next year to two years. The decline will most definitely continue. I don’t know if NCP can resurrect the dead, but I guess we’ll find out.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Thanks for that info.
  
  I appreciate it.
  
  Most of the “bored housewife” franchisees were the ones who bought Curves early on.
  
  Now?
  
  If they get it together, maybe more MBA types like you will buy them.
  
  JL
  - Curves Fan No More
    
    LOL … What is this fixation with MBAs? I know an MBA owner who lost his shirt after buying multiple Curves. Lost his entire retirement and had to go back to work in a corporate environment as a high level executive. And his story is not unique. But he cut his losses fast. Most men think like that. They don’t hang around because “poor ol’ Mary Lou won’t have a place to exercise.” (Too many owners in the Curves system think like that.)
    
    NON-MBA owners is not the reason Curves failed. Curves failed and will continue to fail because women don’t value what they’re selling. Curves allowed itself to be re-branded as a place for old, fat women. Once that happened they never did a thing (marketing/advertising) to change that image. Even if that’s who’s attending Curves, no woman wants to self-identify as an old, fat lady. So even if you resemble that person, you’ll choose a fitness center that doesn’t put you in that box.
    
    Personally, I think the current owners and highly educated men in charge don’t understand women. I think the men need to step aside and allow women who understand women make the decisions. They can survey and poke and prod all they want – but the fact is – the male MBAs don’t think like women. And until they hire an ad firm filled with women who are not Madison Avenue but Main Street USA they have no hope of ever recapturing the original spirit and fun of Curves.
    They are just about to dip below 2500 Curves in the USA. Still shrinking. They’ll probably end up with around 1900 US locations which will still be a nice business in the portfolio of the new owners. Never mind that 5000 owner/operators with an assortment of experience failed (from MBA to lowly house wife). The problem is apparently that not enough MBAs gave it a try. (Consider that people with an MBA, with all their smarts, look at the current model and decide they can make a LOT more money doing something else.)
    
    Curves used (and still uses) franchisees as piggy-banks for the corporation. The Corporation succeeds even if the individual locations don’t because they get their royalties no matter what. The company has 2500 US members (locations) … and the clubs only average 150 members. If owning a Curves was so lucrative the company would make them all company stores.
    - http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
      
      WOW. You don’t sound like a happy franchisee.
      
      JL
Gary Staples

Hi Joel,
Good read.My Wife and I have owned a Curves since they came to Canada(one of the first north of the border)When we started the interview process was in person with Gary and Gary Findlay(CEO)in a local Denny’s.Many people met with them and we got a call later to say we were what they were looking for to run a Curves(we never asked what we could expect to make)
Times were good and Curves management were understanding and so personable(you just wanted to do good)
Then I heard of area sales persons(due to the increased interest)these people were payed by signing a franchise and boy,did they sell(too big,too fast)I don’t know the financial agreements that were made to these Area sales people but heard it was quite lucrative.So sell your brains out and make that money but nobody(Curves international) was really watching if the demographics could support a club or two or three.I saw where some of the clubs landed around here and really there is no way I would have put a club in some of these towns.I was told by a Area sales person,that one of the towns we are in now could support six clubs?We have two in there now and am I glad my gut said”NO WAY”
We own four clubs now and we are excited to see what North Castle is going to do and see some new ideas.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Thanks for that update.
  
  Your’re right: Sometime franchisors get a little too aggressive with the salespeople they hire.
  
  I’m glad that your 4 Curves franchises are doing well in spite of things!
  
  JL
Former Curves Fan

I think you’re description of ‘bored housewives’ is sexist and demeaning to women. First, it insinuates that women who choose to be at home with their families are un-educated nitwits who never accomplished anything prior to marriage/family. Second, that the job (yes – it’s a job to manage family finances, personalities, and schedules) of ‘housewife’ takes no skill. Odd that no position or life station that a man holds is ever described in the same manner. Would you ever say, “The franchises were sold to bored mid-level male executives who were unfulfilled by their corporate drone job.” Only women are ‘bored’ or ‘incapable’.

I know men who abandoned their Curves who had substantial resumes. Guess the guys just couldn’t handle the pretty franchise do-it-yourself box that Curves handed them. Pity the fools. Some lost everything. Others got out before they did.

One thing that did happen: Curves took advantage of the caring natures of women who kept their Curves running even when they shouldn’t have. If you want to make a gender distinction regarding Curves operation and failure, consider that men are more likely to shut it down when it begins to lose money whereas women use their emotion and continue to care for their members even at great risk to themselves. If anything, had Curves not sold to so many women, the entire system would have crashed 5 years ago.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Thanks for stopping by.
  
  You make some good points.
  
  However….
  
  Women in business that know me, will say the opposite. They’ll tell you that I am pro-women business owners…heck, I’m pro-equal rights and equal pay for women.
  
  Big time.
  
  In fairness, I should have chosen better wording.
  
  I apologize if i offended you.
  
  JL
  - Former Curves Fan
    
    Apology accepted. Words mean things afterall. The insinuation of ‘bored housewife’ is that Curves collapsed due to the dumb-girl owners — which couldn’t be further from the truth. As I said, if anything, dedicated women kept a dying brand alive by working for free for years – and many of them still do. Odd as it seems, most are working for little to no profit.
    - http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
      
      Thanks.
      
      Personally, I think Curves-like a lot of franchisors, needs to really define who their perfect franchisee looks like.
      
      All would benefit.
      
      JL
Cat

I owned a Curves for 5 years. My club was profitable for 4-1/2 years until a Snap Fitness opened offering my members 24 hour access and the opportunity to work out with their significant others. If CII had kept up with newer trends and not nickeled and dimed their franchisees to death, the franchise would still be a viable one IMO. The concept is still good but the general mismanagement of CII caused a lot of bankrupcy and grief.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Thanks for that info.
  
  Today’s franchisors MUST keep up with business trends.
  
  JL
Rich D.

Your opinion that in 2011 franchises were down to 4,00 because they were sold to the wrong people is a grossly misleading statement. In the beginning THEY (Howie Heavin) was selling to ANYONE, including those who didn’t know the difference between a balance sheet and a balance beam if they had “cash”. Yet, they succeeded because it was new. Now the shine is off the penny, most owners are broke, broken and would lock the door and walk away if they could. Owners, with and without business skills are losing EVERYTHING! The stormtrooper bullying corporate attitude towards THIER customers (the individual owners) with both the current and former corporate owners presents an ever increasing negative feeling. This franchise is a fraud and will be non-existent of unrecognizable in 5 years or less. Just look at the previous comments. They represent what I would estimate is 70-90% of all owners are FAILING and just counting the days (literally) till they can be free from the Curves mess.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Hi Rich,
  
  Thanks for chiming in.
  
  But, how is my statement misleading.
  
  Don’t the “wrong” people include ones who didn’t qualify in the 1st place?
  
  JL
  - Curves Fan No More
    
    I think your premise is misleading because the theme continues to be that if Curves had only sold to ‘smart’ people the brand wouldn’t have fallen so far (and so fast). The business model is flawed and their relationship to the franchisees is lopsided (as in everything they do offers protections and profits for the company at the expense of the franchisee).
    
    Prove that the owners weren’t experienced or smart enough to run a Curves. You can’t. If you only knew the experience and education of the majority of owners you wouldn’t presume to think the problem was inexperienced owners, especially ‘housewives’. (The assumption being: housewife = uneducated, frivolous.) Many Curves were owned by women, some were housewives, some were bankers, some were nurses, etc. Running a Curves is not hard. Managing income/expenses is not hard. Building and maintaining a membership at a gym is hard when you only offer one service and the same workout for 20 years. Once it was tagged as ‘old lady’ central it became more difficult to overcome that reputation and it became a self-fulfilling reputation.
    
    The company wants to blame former owners because it lets them off the hook for their many, many, failures to save their own brand.
    
    The new owners of Curves International have a long, hard, hill to climb. The brand is weak and the business model is not foolproof (or I should say MBA proof.)
    - http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
      
      Thanks for the info.
      
      And, some of the “Owners” were 6-figure job husbands who bought those $50k Curves franchises for their inexperienced spouses.
      
      Did Curves management hurt the business model?
      
      I have no idea.
      
      Again, thanks for popping by.
      
      JL
      - Curves Fan No More
        
        Of all the owners I’ve known, I can honestly say I don’t know a single one with a wealthy husband who bought her the business. Not a single one. Owners were dedicated, hard working, middle class, and committed. They were/are educated. Almost every one that I knew had business experience prior to purchasing their Curves. They also had resumes which would rival the original owners of Curves.
Anna

As a former franchisee, I can tell you a big part of the problem was the ever diminishing territory size. When I bought in 2004, I think you had to have 30,000 total population to constitute a territory. By 2007 or so. Curves was selling territories with as few as 5,000 total population. I went from having 1 or 2 other Curves in the area, to having 5 or 6. Then they tacked on supposedly lucrative revenue streams to make up for the fact that membership numbers declined, as members joined new clubs closer to home. I was told to sell tee shirts, workout gear, even travel! Plus, there was NO quality control. “Area” directors sat in Waco. I had my first visit from an area director in 2007. And, as one of the guys selling franchises said to me when I asked him what info Curves would want on me before I bought, he said the only thing they cared about was whether or not I had the money. And when I did my training in Waco, the guy next to me (another new franchisee) was a fat guy from Texas whose background was as a chicken farmer. The then head of legal was a storm trooper who viewed franchisees as the enemy.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Darn chicken farmers.
  
  Kidding.
  
  Territories should not be messed with; it’s not fair to existing franchisees.
  
  Thanks for sharing…
  
  JL
CJ

I have a question. Why has the downfall of the Curves Franchise NOT been investigated and reported on by the media? Curves clubs are still closing at an alarming rate. I would think this would be a story many would be interested in.
- http://thefranchiseking.com/about-joel-libava-the-franchise-king The Franchise King
  
  Hi CJ,
  
  Not sure.
  
  But, since a lot of us are creating our own “media,” ….
  
  JL