CURVES FOR WOMEN: Paradise Lost as Hawaiian Curves Franchise Closes

As the recent closing of the Kailu, HI Curves for Women fitness center shows, a failed franchise location is a loss for many involved.

In this case, franchise owner Robbi Ugini must deal with the personal and financial agony of defeat.  Her 5 employees are suddenly jobless.  Her 270 members are without a fitness club.  Her landlord has a vacant space, and her lender will, most likely, have a defaulted loan.  And the franchisor will not be receiving future royalties, revenue from purchases or advertising contributions.

What started as a dream ended in disappointment

According to the story by Nina Woo in the Honolulu Star Bulletin, Ugini opened her Curves franchise in 2005.  The initial location in the Enchanted Lake shopping center was doing well with 435 members.  Her lease was up just two years later, and Ugini relocated to another location last year, above Agnes’ Portuguese Bake Shop. The business struggled in the new location, with just 270 members.

Ugini tried selling her Curves for Women franchise for the fire sale price of $15,000, but could get no takers.  Part of what hampered the sale was the additional equipment investment the new owner would have to incur, per the franchisor’s requrements.  When a prospective buyer recently pulled out at the last minute, Ugini decided to close the doors and liquidate.  According to the article:

The closure was abrupt, leaving some 270 members in the lurch. Five staff members also lost their jobs.

“I made sure my staff was paid,” said Ugini. “I had the very best staff in the world.”

Ugini said she is working on notifying everyone of their options. She said members’ payments made on Oct. 5 have all been canceled.

Qualified members can request a travel card, she said, which allows them to use another Curves on Oahu for up to 20 days after they have been issued.

Some have gone to the Curves in Kaneohe, which is owned by a different franchise owner, but it won’t be able to take everyone.

“I am going to contact everyone,” she said. “It’s just going to take me a little more time to get to everybody.”

Some members paid on a monthly basis, some prepaid for three months and others for the entire year.

VR Business Broker calls Curves a fad and the franchisor uncaring

A business broker named Mark Heilbron, a business broker at VR Mergers & Acquisitions, had some harsh words both for the Curves franchisor and the Curves franchise fitness concept, which he categorized Curves as “a trendy kind of business.”   Heilbron said he sold a couple of Curves franchises in recent years, but has listed many that never sold (the glut of Curves resales on the market, some priced at $1.00, has been reported here.  See How to Open a Health Club for Half the Cost, and How to Buy a Curves Franchise for $1.00… or Less!).  According to the article:

“It’s a faddish type of business,” he said. “They made a lot of money and then when the trend went out, people who were still in them lost a lot of money.”

While buyers are more cautious in these economic times, Heilbron said they are still out there, with money they’d rather invest in a business than in the volatile stock market.

“Most people get talked into buying a franchise, and you’ve got to realize, depending on who the franchisor is, that most don’t care whether the franchisee makes it or not,” he said.

With the closure, Curves now has 17 locations on Oahu.  According to Curves International, the Texas-based chain has more than 7,000 locations in the U.S.

Related story (Unhappy Franchisee):  CURVES FOR WOMEN: Business Broker Slams Curves Franchise and Franchisor





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Photo:  Bobu.  Licensed by Creative Commons.

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