BUTTERFLY LIFE: CA Adds Insult to Injury

Two years ago, I posted the question IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?butterflygirl.jpg

The answer came in a torrent of nearly 500 comments from franchise owners, mostly critical of the franchisor company and owners Mark Golob & Tom Gergely.

Our post Will the REAL Butterfly Life Franchise Please Wave Its Wings? prompted 162 comments, and Troubled Fitness Franchise Butterfly Life Lowers Franchisee Royalties garnered 40+ comments.

The woes of Butterfly Life franchisees were also covered by such publications as Fitness Business Pro (Butterfly Life’s Golob: Failed Franchise Owners Should Blame Themselves),  FORBES (Butterfly Life Franchise Lawsuit in Forbes) and FORTUNE (Fortune Article Spotlights Butterfly Life Franchise Woes).

UnhappyFranchisee.com posted interviews with 7 Butterfly Life franchise owners, who told of hard sales pitches, unkept promises and, eventually, failure and bankruptcy.

It was just a matter of time before California franchise regulators swept into action, right?

UnhappyFranchisee.com has posted the Desist & Refrain Order (see BUTTERFLY LIFE: Cease & Desist Order) issued by the California Corporations Commissioner.  It states that from May, 2004 to May, 2005 Golog and Butterfly Fitness, Inc. violated CA corporations codes by collecting franchise fees prior to training.  It also states that Golob & Butterfly Fitness, Inc. made untrue statements in filing its CA franchise registration renewal.

What’s the penalty?  Golob and Butterfly Fitness, Inc. must “desist and refrain” from further violations of CA franchise registration and must “desist and refrain” from making untrue statements in order to sell Butterfly Life franchises in CA.

That’s it.

Funny thing is, Golob has no intention of selling Butterfly Life franchises in CA or elsewhere.  He’s already cashed out… and sold (what’s left of) the whole shebang to Diversified Health & Fitness.

This is yet another cautionary tale to prospective franchisees:  take due diligence seriously and choose your franchise company wisely.

If you think government franchise regulation will protect you… think again.


graphic:  FranBest.com

Post from: Franchise Pick