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Curves had tremendous growth between 2002 and 2005. They sold so many franchises during that time it is mind boggling. The problem was that many who purchased were investors looking for a quick buck. And to capture the market Curves sold them as many as they wanted. Being a service based business, health clubs need a passionate owner present. The first two years of any health club are pretty easy. With a 12 month contract you don't see any attrition until year 2 and really that doesn't start to kick in until month 18 or so, when people realize that their check drafts are still being deducted from their accounts, and they have to send in a written letter of cancellation.
So for Curves (or other health club) they will grow the first two years with little effort. Year three comes around, and if the owner is an investor and absentee, they are in for a surprise. In the first two years they have marketed out the wazoo and now it becomes more of an uphill climb. Most clubs have neglected the retention programs because they were only focusing on enrollments and have not been faced with the problem of attrition. Problem is by the time they see attrition exceeding sales it is a problem that takes months to correct and year 3 is when most fitness centers see membership dipping.
One person her posted here that 600+ curves locations were on the Curves for sale by owner board. It just so happens I USED to work for the company hosting that site. I have brokered over 30 Curves transactions and valued literally hundreds (approximately 300) Curves franchises. The owners that work them day in and day out do very well, for the most part.
During 2005 and 2006 there were many compeditors coming into the market. You have Butterfly Life, Ladies Workout Express, and one that I haven't heard of Fit 123 or 123 Fit. Who the heck knows. The bottom line is that I have seen these places (Curves COMPEDITORS) close all over the country. The rule in economics "He (or She) who gets there 1st generally wins." Curves got there first. Curves just has too much market dominance and too lean of a business model. Sure there are clubs out there with more features, spinning, treadmills, weights, etc., but the fitness market is changing. But with lean, mean franchises like Curves and Snap Fitness, the bigger clubs are falling. Remember the bigger they are the harder they fall. The pie is getting sliced and diced and the 10,000 sq/ft centers are going bankrupt. That’s a whole different article. Back to Curves.
At the end of 2007 Curves had just over 7,000 locations. Someone here posted that there were 600 listed FSBO. That's 9%. Now some are listed by other brokers and some never listed anywhere at all, they just sold to someone wanting to buy it. Remember this number. THE AVERAGE LIFE OF A FITNESS CLUBG OWNER IS 5 YEARS. So with that being said 20% of the curves franchises (or any fitness club) for that matter should turn over every year as an INDUSTRY AVERAGE. I'd say that Curves is probably just below the industry average. 12% -15% of the Curves are on the market at any given time.
People on here say that Curves are closing. Some Curves have closed. There is no doubt about that. Part of that is due to the multi club owner growth of the 2002 to 2005 era. Some markets WERE OVERSOLD. There were just too many there. Some were sold in markets too small to support Curves. Curves raised their population requirements a few years back if I am not mistaken. The franchise is at the tail end of an adjustment phase related to the growth of 2002-2005, compounded with a weaker economy. On the upside, there is Curves Smart, affiliates like the AARP, General Mills and Curves Foods, 60+ insurance companies paying for Curves, the list goes on and one. Curves has achieved ECONOMIES of SCALE and strong Brand Name Recognition. They will NEVER DIE.
I am an independant broker that sells Curves. I do this because I know what kind of franchise it is. They have tremendous support for their franchisees. We are in the tail end of a buyers market for Curves. There is so much happening with Curves it is too much to list here. Go to www.fitnessfranchisebrokers.com/outsideresources.asp to see what I am talking about. Also, if you want an interesting read about the other copycats and the future of the circuit training clubs read this article.
http://fitnessbusinesspro.com/forprofits/lights_welko_mastrov_golob/index.html
Tom Garmon
www.curves4sale.com
