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Franchise Horror Stories

When one purchases a franchise it is because they want to be business owners and taught by professional business owners (franchisor) who have proven business models that they follow step-by-step. 

Franchisors interview potential franchisee's period.  They know whether that person has experience or not and/or can follow their business model.  The purpose again is to "learn how-to".

Alot goes on behind closed doors after you're into a franchise.  Often too late to get out because of the capital invested.  That is when you find out whether there is a proven business model in place in all areas, especially for marketing, and whether the projected gross revenue is based on actuals or some other calculations.  You also find out if you raise too many questions you are treated like nothing by the franchisor for raising those questions and that you are always to blame for your business not working. 

So to those who again blame the franchisee for their business failure - not every case is based on the franchisee's failure.  Once you become disappointed in your franchisor it is very hard to continue the relationship in a productive manner on either side.  If franchisee's were well versed on starting and operating their own businesses they wouldn't need a franchisor, especially one that is not well known like McDonalds, Burger King, Kentucky Fried Chicken, etc.

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PETER TAUNTON INTERVIEW - ANOTHER CLASSIC

From austin360.com Jan. 1, 2009
Tips for choosing a gym membership

It’s the busiest time of the year for fitness centers. If you’re in the market for a new gym, it pays to take the time to do the research and find a gym that works with your lifestyle. If it’s not close to home, for example, you won’t use it.

Here are some tips from Peter Taunton, founder of Snap Fitness, for picking a gym:

1. Affordability: Don’t add extra strain to your monthly budget my purchasing an expensive, over-priced gym membership that will add increased financial pressure to your monthly budget. Choose a fitness center that offers memberships at approximately $1 a day — less than you’d pay for your daily coffee. (Peter, did you read this straight off a Snap Fitness brochure? $34.95 is a great monthly price for a 2500 sq. ft. club? How about Golds Gym, Planet Fitness or 24 Hour Fitness for the same or less $$$ ?)

2. Flexibility: When choosing a gym, look for facilities that don’t require long-term commitments. Consider a fitness center that offers month-to-month memberships. Some gyms even allow members to freeze their memberships when not in use. (Lots of clubs offer a no commitment membership. Last time I checked, Snap Fitness was offering 12 MONTH CONTRACTS. Most clubs have a freeze option too.)

3. Convenience: Choose a fitness center that is close to your house, your office, your children’s school, etc. You don’t want to spend more time driving to the gym than working out. (An extra mile or two for extra amenities and STAFFING AT ALL TIMES might be worth the extra gas.)

4. Motivation: Look for a fitness center that offers online health and wellness tools designed to keep you engaged in your new lifestyle, even when you’re not at the club. Some clubs offer members a free personal web page that allows them to track workouts, schedule personal training appointments and plan meals. (You'll definitely be using this a lot, NOT. Put in Snap Fitness in a search and you will see the pissedconsumer and blue maumau websites come up before mysnapfitness used by members for the purposes Peter mentioned. That's gotta smart!)

5. Usability: Tour the facility to determine if it has an environment you’d feel comfortable working out in. Many offer free guest passes. Take advantage of one and look for quality, well-maintained equipment. Make sure the club’s operating hours work with your schedule. (All clubs offer free guest passes. All clubs have a cleaning staff, not just management who clean on top of all their other duties. Most people don't work out in the middle of the night. If a member has a medical emergency and the state, county or city requires an AED certified person at all times, but the franchisee was told by corporate "we have come to a result the state was happy with", GOOD LUCK!)

I’ve got one more that’s not on Taunton’s list — you don’t actually need a gym to get fit. Try walking, running or biking. No membership required. (WOW! Even the publication editor who added this last section saw through this obvious steaming pile of advertising rhetoric for Snap Fitness! How'd that feel for you Peter?)

SNAP FITNESS OR SPIN FITNESS

Please read this article/press release carefully. These excerpts will be used from it for calculating SNAP SPIN.
"with about 250 members paying roughly $35 a month." "2008 revenue: $31,716,000" "The company has roughly 1,000 clubs open in 48 states, Canada, Mexico and India."

http://twincities.bizjournals.com/twincities/stories/2009/10/26/focus1.html

Snap Actual 2008 Revenue - $31,716,000, Roughly 1,000 Clubs, Annual Revenue per Club = $31,716

Snap SPIN Revenue - Typical club has 250 members paying roughly $35 month, $35 x 12 = $420 annual dues per member, $420 annual dues x 250 members = $105,000, Annual Revenue per Club - $105,000

SPIN FITNESS DIFFERENCE: $105,000 - $31,716 = $73,284

Just for fun, lets say there were only 500 clubs with the same stated 2008 revenue instead of 1,000. The Annual Revenue per Club would be $63,432. SPIN FITNESS DIFFERENCE $105,000 - $63,432 = $41,568

ANY QUESTIONS?

Snap Fitness - The No Spin Zone

After being involved with Snap Fitness for a few months, I feel very comfortable sharing information with potential franchisees about the company. I have experience in the fitness industry previous to Snap Fitness.

1. Owners and management are required to sign legally binding and extensive non-disclosure agreements which restrict them from speaking openly about Snap Fitness corporate. This could have a detrimental effect on potential franchisees attempting to perform proper due diligence and acquiring honest and accurate information in regards to the ability of realizing a satisfactory return on investment.

2. Even if there were no profitable Snap Fitness franchises, it is still possible Snap Fitness corporate could continue to benefit financially, increase market share and continue to successfully recruit new franchisees.

3. There was always a constant flow of internal e-mails from Snap Fitness owners soliciting to sell their club and/or franchise license(s) for substantial discounts.

4. The emphasis, expertise and resources of the company are heavily invested in franchising and expanding both nationally and internationally. There were lots of discussion about new programs, technology, campaigns and support but only a small percentage of this was actually delivered effectively.

5. I advise you to research the Snap Fitness clubs throughout the country and you will see there are several that do not provide staff or have very limited hours for employees at the club. Minimal staffing is more prevalent as you investigate clubs closer to corporate headquarters. Remember this if you decide to pursue a franchise.

6. I do not believe their business model is sustainable. The reason for the expedited interest in developing international franchises is certainly motivated by the reality of the lack of success of so many of the individual franchisees here in the USA.

7. Snap Fitness franchise/business model enjoys the same benefits as MLM companies (multi level marketing). The people at the top (corporate) are financially successful while the little guy at the bottom is struggling but still subsidizing those at the top. The Snap Fitness corporate franchising business model is not set up to "share the pain" with their franchisees.

Recommendation: If you enjoy long hours, stress, cleaning, employee turnover, volunteer work and subsidizing your company every month, you will definitely enjoy Snap Fitness.

(Barbara, Keep pounding away! A lot of these people have thick skulls! You are providing a necessary service to the innocent and naive who think the fitness industry is a "piece of cake" or "a great investment". Keep up the great work!)

In regards to Gary Findley from Curves hired to bring his wealth of success and experience to Snap Fitness, just put in "curves for sale" in your web browser and EVERYTHING you need to know about him will come up!

Snap, have now franchising in

Snap, have now franchising in Australia, just looking at the disclosure document it only relates to franchise activity in this Australia. I wonder will they provide a DD for the USA activity??

Various contributions have

Various contributions have made me feel the need to look into the opportunity of investing in a franchise. Relatively low income and long working hours - the office politics, the early starts and not spending enough time with my wife and family ect ect.....testking 70-432 Question is, does anybody have any success stories from running a small manageable franchise that can be run "Husband and Wife with small children?" What is it that you do, what are the main benefits, has anybody made a big loss that so thay have had to "pack up and leave"? testking 352-001 Should I steer clear of the idea and continue on the stability of a monthly wage? testking 646-223 Please be honest, this is a serious step that I am currently looing towards. Go on, see if you can slap a smile on my face! Reply With Quote

If you really want what you

If you really want what you say, starting a business will not be your answer - whether it's your own business or a franchised business. Corporates make it sound easy, but it's a lot of work!! If you decide to do this, be sure you have the energy and time dedicated to making a go of it. I am a successful independent small business owner, but it wasn't without lots of hard, sometimes very dirty work. I happen to love what I do, have lots of energy and a great support system, so it works for me. Just don't go in it thinking your going to make lots of money with little effort. I just simply does not work like that!!

Budget Blinds

An "up and coming" terrible franchise is Budget Blinds. They have consistently lost owners over the last three years - now down below 950 and dropping like a rock; the franchisor refuses to help the struggling franchises in any way - "it's all their fault" - charges a flat royalty fee that is killing most franchises and a national advertising fee that gives most virtually no help or exposure. IF ANYONE IS CONSIDERING PURCHASING A BUDGET BLINDS FRANCHISE, RUN DON'T WALK IN THE OTHER DIRECTION - YOU'LL BE MAKING THE BIGGEST MISTAKE OF YOUR LIFE!! Many are trying to sell and can't even get 1/4 of what they initially paid. A lot of brokers won't even handle them and the franchisor can't even resell the ones that have gone under. But, "it's all the franchisees fault'!

Budget Blinds

Budget Blinds is not "Up and coming". They have been around for almost 2 decades. My wife and I had just purchased a franchise and we are very excited. We had other businesses, some good,some not so good. So when we decided do go for a business one more time we knew we needed a franchise. We are also currently property managers so I picked a business, from our home, but along with what we do at the same time. We chose a home improvement based business, and also I did construction for over 10 yrs, so that was an easier choice for us. Also, look for a home based business so you have no lease payments from day 1. We had a liquor store at one time and the lease killed us. We were able to sell it during this last bad recession (TG) but we learned so much at the same time. I will tell you what, Budget Blinds will not convince you to buy just because you might have the capitol to spend. They want you to succeed and make them sound the same way to your family and friends just in case they might want to be business owners some day. They show you the whole operation, ( I know like most franchises) and fly you and room you and dine you all at their cost and then let you decide if this is for you. Because I was a business owner before I just needed to know if this was my thing. I mean, you have to like what you do for a living correct? Most people think they would like a food biz or a gym biz but have no idea from day one or any knowledge of the product and how to sell it. Or, how to be a salesmen, or get over the fact that they are now a salesmen because they HATE salesmen. SO with all that , they FAIL, and hard. Also they have no clue that they need 2x's to 3x's the capitol to pay their bills to survive the first year while they are learning. People think once they buy a business that the money rolls in and the next day their at a BMW dealership picking out their ride. Business ownership is about you, and only you, and how you live your life, and run your business. The greatest thing about a successful franchise is their tract record and your job of investigating it. So never go into one with your eyes closed and go with just the name or the product. Make sure this is for you and you can see yourself doing it for the next 10 to 20 yrs. I had to consider my age, my situation and mostly my family. Budget Blinds was our answer. We work out of our apartment that we run, yes apartment. There's no inventory, low overhead if any, Fedex delivers most of the products so no transportation issues and most important, no lease. Their main office bugged me every week making sure I was okay and doing all the steps to get the business started. I loved it. I was so not ready that I waiting the longest time to have them start my phone numbers. Once we did, the phone was a ringing and I had to go to work. The most frustrating thing in any business is the phone not ringing. They have the best networks working for you with that franchise fee from day one. And it works. We are so happy with the results and we haven't completed half the instructions of what they told us to do, and we're busy and making money. So, if you do what they say, it really works, if you do half of what they say, it works, if you do none of the things they say, it can work, if you do nothing , it won't work. And they even guarantee it, if in the first 3 yrs you do not make 750k, they will wave the franchise fee for like 10 months till you get it all going. No one, but no one does that. I don't even need to make that much but what the hell, I'll do that and more. This is the structure of a franchise that you want to invest in, just make sure its the product you want to sell, and if it is, you will be very successful. PERIOD. Good luck to you, and we are just getting started and its working because we are working it. Call any franchise and they will they tell you too. Good luck!, Tom

Budget Blinds

Best wishes to you Tom. We lost almost everything in our Budget Blinds experience but hope you can be successful. We were in it for years but some things just aren't profitable in certain markets. We were paying over $30K a year to corporate for all fees and it just ate it into our profits, especially with the slowdown in housing.

We also made the mistake of trying to improve on things that corporate had produced. Take what they have and run with it. It has worked in a lot of markets. If you haven't met them yet, there are many great franchisees that will be helpful. Don't fixate on the BB forums as there tends to be a lot of negativity. If you have other franchisees near mystery shop them once a year or so to make sure they aren't stealing sales from your territory.

Good luck to your health and your business.

Granville_Bean's picture

paragraph breaks?

Apparently, paragraphs is hard.

Garlic Jim's sucks too!

14 Garlic Jim's have closed down in the last 8 months. In all cases, it was because the stores were not making money and the franchisees ran out of money. Many of them are having to file for bankruptcy. 8 of these stores are in the Portland, Oregon area.

When some of its franchisees tried to point out that it was against the law (according to WAshington state franchise law) to charge more than wholesale for supplies that franchisees were required to buy from the franchisor (basically all the food products), Garlic Jim's ignored them. The commissary was a revenue stream for them and they weren't going to give that up. Between royalties, advertising coop fees (that any franchisees outside of Seattle never really saw any benefit from), and overpriced commissary supplies, just about none of the franchises are making any profit.

Shame on Garlic Jim's!

worst franchise i can

worst franchise i can imagine. self serving founder who has defrauded hundreds of thousands of dollars from investors and franchise's. if they owe you money, stand in line, because the line is very long.

Galic Jim's

Do they owe you money, stand in line.....

national ad fee's for garlic jims

I question the "national advertising fee's". I used to own a Garlic jims, and the 3.5 percent they take every week should have been questioned. How many stores are there outside of Washington now? Currently, the 2.5 percent local ad fee is a joke as well. No more advo? Buyer beware!

Money Mailer threatening legal action against failing franchise

I made the mistake of starting a Money Mailer franchise 2 years ago. I have invested a large amount of money, and have lost larger and larger sums every month as I followed the franchise growth plan. Little of the promised training or marketing support ever materialized.

Two months ago, my health failed (partially as a result of financial stresses) and I realized I could no longer stay in business.

Last week I was contaced by Money Mailers Legal department that I may be held responsible for all of the royalties and penalties for the entire duration of the remaining 8 years of the agreement, "a sum in excess of $250,000, plus legal fees".

THANKS FRANCHISING SUCKS

We are going to the attorney generals office and to whoever will listen to us. We have lost everything, but our right to revenge.
We will have our revenge. We were not prepared finacnially for this business and the training we got was non existant. We were lied to and tonight my family is cleaning offices for the first time and making real money and guess what we are not paying a vampires royalty. Let them sue us!

Our life has ended! We are destroyed thanks to our Franchisor

We understand we have lost everything. Tonight we are sleeping on an air-bed. We lost our home and our furniture. My husband is so depressed that he is not even able to get a job. I hate the day I was told "we would now be able to live our dream." Dream??? You mean nightmares!!!!!!!!!!!!!!! Franchise sales people should rot in hell. Why should we be subject to sales tatics. You were taken advantage of just like us, buy smooth talking franchisors that could care less if you loose everything! No friendly calls or help now.
We understand.

Another franchise like QUIZNOS is 123 FIT by the same people.

I wish I had read up about all this before I bought a 123 fit franchise. This is a 30 minute circuit training fitness club. Believe it or not this has been started by Rick Schaden, Brooksy Smith, and Dan Demolli, John Gallivan, Michael Grodi, John Fitchett other Quiznos has beens that have bailed from the Quiznos franchise. Seems they are utilizing the same "screw the franchisee concept" with fraud, misrepresentation, blah, blah...to get this supposedly new revolutionary "simbio system" workout going. The same lies, misrepresentations, fraud, errors and omissions as the Quiznos franchise. I am sure they have taken the Quiznos UFOC and replaced the name in there with 123 Fit. DO NOT BUY INTO THIS FRANCHISE. You will lose all!! Approximately 20 clubs have already closed down. Some Quiznos has beens have already bailed on the 123 fit franchise and moved on after losing their money. But 123 fit, Rick Schaden, Brooksy Smith still continue to prey on people and sell this "Simbio system" concept that they lead you to believe is exclusive for the 123 fit franchise. The only thing that is exclusive is the made up "simbio" name that they put on the Life Fitness equipment. AND IT IS NOT EXLUSIVE PEOPLE!! Go to Life Fitness website under the circuit training section. You can buy this same equipment through them. You DO NOT NEED 123 Fit, ex-Quiznos people, to do this. SAVE YOUR MONEY. RESEARCH!!! I dont want you to go through what all of us have been through. It is a nightmare.
Signed 123 fit owner

Cold Stone Creamery

Cold Stone is a sad example of poor marketing and a business model that just does not work for the franchisee. I belive that they started off with something good but then they got greedy, opening too many stores without the proper research and making the stores too expensive to open with the new look that came out in late 2002-2003. Before that, the stores were only about 150K to open, which was reasonable, and the market was not over-saturated with stores so owners were not competing with each other to make a profit. If you talk to top execs at Cold Stone they will ADMIT that the business model does not work and that with current sales, the stores are too expensive to open, but they have known this since 2004 and they have not slowed down selling franchisee agreements - on stores they know will never open -and they have not done anything to lower the cost to open these expensive built-out stores. Their arrogance and marketing failures have been a disaster for the franchisee community and yet they still blame failure on the franchisee and do their best to portray every failed store owner as a poor operator. Very similar to the problems with Quiznos, the area developers for cold Stone were pressured to sell as many agreements as possible and also were compensated for it. That led to people buying up agreements on locations that were never opened and losing their franchisee fee (now up to $40K) and also a lot of stores opening in poor locations or too many stores opening up too close to one another.

Journalist Seeks Disgruntled Franchisees in South Florida

I am a journalist, and am writing a general readership trade book that touches on the politics of the franchising business. I am looking for franchisees who have had a bad experience with their franchisors, and who are willing and able to speak about what happened. I work out of Washington, DC, but for a variety of reasons, I especially want to speak with franchisees in South Florida.

Please contact me at (202) 431-6066 or lynn@newamerica.net.

Thank you,
Barry

Use caution Findley Group

THe Gary Findley group is taking money for franchises that are not market able. Most malls will not allow the Showcolate kiosk's so check with your local mall before you send money.

123 fit The latest update

Clubs are closing their doors faster then they can open. As of date, they have 29 clubs that are open with 4 of them closing here in the next month or two. That adds to the 28 or so that have closed their doors. So if as many clubs have closed that are open, shows you the 123 fit Franchisor DO NOT KNOW WHAT they are doing and it is BROOKSY SMITH'S fault.

If you are looking into this franchise, really look. If you dont want to commit a financial suicide then stay away from them.

this tops the cake

Crawl back into your Washington, DC hole where $$$$$ determines your decision. Attorney? the White House is full of attorney's and where are we now? Clean your own yard first, that will keep you busy. Although not very popular with the politicians.

this tops the cake

Crawl back into your Washington, DC hole where $$$$$ determines your decision. Attorney? the White House is full of attorney's and where are we now? Clean your own yard first, that will keep you busy. Although not very popular with the politicians.

Money mailer

So what ended up happening? I am in the same boat now.

sounds similar to elements

sounds similar to elements therapeutic massage "If you talk to top execs at Cold Stone they will ADMIT that the business model does not work and that with current sales, the stores are too expensive to open, but they have known this since 2004 and they have not slowed down selling franchisee agreements - on stores they know will never open -and they have not done anything to lower the cost to open these expensive built-out stores. Their arrogance and marketing failures have been a disaster for the franchisee community and yet they still blame failure on the franchisee and do their best to portray every failed store owner as a poor operator."

Findley Group franchises

Yes, be very wary of them. Findley is no longer running the Findley Group. They have basically closed their office in Waco and Gary Findley has resorted to working as a salesman for Snap Fitness in MN. Findley lost quite a few of their franchise concepts because of mismanagement. Young Chefs Academy bailed long ago.

The word on the street is that Snap Fitness is wondering if they inherited a huge liability with Findley.

He was simply lucky with Curves and was never able to do anything with the other franchise concepts. So now he is on the lowest rung of the ladder; reduced to calling people onthe phone and giving them a sales pitch.

Luck is hard to duplicate and Gary has found out that his Curves experience has not helped him make any money now.

The Findley Group

You are wrong.

1. Gary Findley is the COO of Snap Fitness 24/7.
Gary also handles International franchise development for Snap Fitness 24/7.

2. The Findley Group made the decision to relinquish their relationship with Young Chef's Academy.
From what I have heard, The Findley Group did so well polishing & tweaking the Young Chef's Academy franchise, Disney purchased the Young Chef's Academy master franchise rights.

3. There are many other franchise concepts The Findley Group consulted & assisted development for. Some franchisors listened and have done very well. Some franchisors did not listen to the advice from the professionals.

4. Who else on Earth has taken a franchise concept from one to over eight thousand locations in the time frame Gary Findley did with Curves?

5. Just for the record, the day Gary Findley retired from Curves was the day Curves decided to sell all of the territories Gary denied. Without the guidance of Gary Findley, Curves lost it's edge.

The Findley Group - Gary Findley - COO - BEWARE!

Gary Findley is with Snap Fitness and that is the rebuttal to the negative postings about him? That seems a bit ironic........Go to "Anytime Fitness or Snap Fitness" on Blue MauMau to get the facts. Gary and Peter are a match "made by heavin", no pun intended. haha It appears Snap Fitness may be experiencing their own set of problems now that the state laws and regulations have been exposed to their franchisees. It is only going to get worse when the letters mentioned in the "Brace Yourself" post above reaches the desks of each state's hierarchy. Below are a few select posts to learn more about the new COO COO at Snap fitness.

And Gary, please sign your name the next time you post here.

Gary Findley spent eight years at Curves being "mentored" by Gary Heavin. Snap Fitness current and POTENTIAL FRANCHISEES need to take note. Gary Findley and Peter Taunton? Would it be prudent to leave your checkbook laying around with these guys in the vicinity? BE CAREFUL!

Date: 1/19/2010
Fitness Franchise Snap Fitness Promotes Gary Findley To Chief Operating Officer.
FranchiseWorks.com | Fitness Franchise Snap Fitness Promotes Gary Findley To Chief Operating Officer.
MINNEAPOLIS, Minn. – Snap Fitness, the world’s fastest growing fitness franchise featuring compact, state-of-the-art fitness centers, announces the promotion of Gary Findley to Chief Operating Officer. Findley, who joined Snap Fitness in October 2008, has more than 15 years of experience in the franchise industry, including an eight-year tenure at Curves International. As President of Curves, he played an integral part in turning the chain into one of the fastest growing franchise companies in history.

Feedback from another forum:

wise owl says: April 7, 2009 at 6:36 pm we owned 4 curves since 2002 and for 3 years, made more money than you could ever imagine. Have you ever heard the expression “in life timing is everything”? Well, you are 8 years late to the party. As well, Howie G.Heavin is evil incarnate. Hiding behind his constant
proclamations of Christianity, he announced at our club camp in Jan 2002 that “his wealth was God’s way of telling him that he was doing the right thing” Think hard on that statement in the context 2009. Turn 180, and run as fast as you can from him!

another3gone says: February 23, 2009 at 6:16 pm Just closed my 3rd club, reading all this, all I can say is back in 99 I thought I felt like we were being given that great glass of Gary Kool-aid, now I’m waiting for all the chips to fall, lost everything too. I’m at such a low, sorry don’t have many words, lot’s of story’s much like what was already posted, well it’s good to know we’re not alone. So happy to have found these postings, thanks :(

February 23, 2009 at 9:44 pm Well I just looked at the snap fitness locations for Connecticut, seems funny that 4 out of the 7 were also the same 4 locations that first opened for Curves in Connecticut. Gary Findley who was the president of Curves is now pushing a new fitness program in our locations, seems like conflict of interest to me??? No wonder we’re closing, just a note a very brief look at Connecticut over 25 Curves have closed. This whole picture is a true change stations now!

Wipedout says: April 2, 2009 at 2:13 am The numbers are in. Nearly 14 percent of Curves closed in 2008, according to Entrepreneur magazine.

Gary left in 2004

Curves didn't start closing until late 2006. Chief Legal Counsel Ran Curves (some say in the ground) in the 3 years after Gary's departure. Gary was beloved by franchisees.

New Update on 123 Fit

These guys are really turning it around. After many of the low performing clubs closed and with a shake up at HQ, things are looking better. As a group, club owners had a good summer - traditionally a slow period. Revenues are up thanks to new pricing structures, better selling support material, and new nutritional services. My heart goes out to those clubs that did not make it. But new clubs are opening in different areas of the country with a new breed of owners. Good luck to you all!

Are you kidding?

Since you have posted this blog Brian Keene - I hear you are now experiencing the full wrath of Brooksy Smith and Rick Schaden. So, hmmmm, they're not answering your telephone calls. Hey dumbass, it's because they're out of business. The got evicted from their office complex months ago and moved their equipment to a storage shed in their attorney's office. I have no sympathy for you - you were just as big a liar about this whole franchise as anyone else. How many people did you lead astray with your lies about the "successful" club you were running. These people will never be stopped because the justice system is just as crooked as the people selling these businesses. No one in the US is interested in helping the poor morons who lost everything.

What about you Zarc?

TROLLING FOR VICTOMS..UH HUM..I mean plantiffs? How did the Curves lawsuit work out for you? I hear you did well, but your clients didn't do so well.

123 fit

Believe me, if there is ever a positive comment regarding the business practices of 123 fit, it is being made by a paid corporate employee. There are about 30 that have closed, including 2 of Brooksy's OWN establishments. He lets his poor Dad, Bob take the financial fall for his unprofitable business models. Tells ya what kind of guy you're dealing with huh? These people prey on innocent, naive people who used to have equity in their homes and are now facing financial ruin. He'll always make sure you call certain franchisees - like Brian Keene in Washington, Brian is one of the biggest liars out there, his membership hasn't changed in 4 years, now no one can really think that club membership doesn't significantly change by the hour - even the large establishments. Just be careful about entering into ANY financial agreement that is linked to the names of Brooky Smith or Rick Schaden.

Barbara Jorgensen's picture

It is not me writing above

There are many people out there that won't write because they want to forget and their full of fear.

People write your stories. It is not whining it is reality. I am not afraid of 123 Fit. If I write nothing but the truth I have nothing to be afraid of. What can I be afraid of? Becoming homeless? In that case will Rick Schaden help me? Will I have to move to Denver to be part of his homeless project?

People write your stories. If anything happens to me you know why. If I stop writing you definitely will know why. I don't have a computer. :

123 Fit Profitability

I would estimate that half or more of clubs are at or near positive cash flow. So much depends on the operator and how they manage labor and other expenses. A few clubs are making BIG money and a few are probably not going to make it. But it looks to me like 123 Fit has re-set and is now operating with a good group of owners and will make it just fine. They have really put together a good package of services including exercise, nutrition, and weight loss and they are marketing it to a group of consumers that are not currently going anywhere else to get this. If you consider that many experts will advise that a new business owner should expect and plan for 2 years or so for the business to generate positive cash flow and that many of the newer 123 Fit owners are at or near positive cash flow in a year or less - that is pretty impressive. As comments on this board reflect, 123 Fit may not have done a good job in screening prospective owners in the past. That is probably a flaw very common in the franchise world.

Barbara Jorgensen's picture

I will believe it if I saw their business profiles

Half are making it? Prove it? I don't believe it. 28 clubs is not enough proof that 123 Fit is making it. 123 Fit have lost many clubs due to gouging and no support from the zor. Stop misleading the public. Stop telling future zee wannabees the former zees are all bad business people. Our biggest mistake is trusting you. Scamming people with your lies was your mistake. They screened people to see if they could open a franchise. How much money they had. Lied to them and caused alot of pain for people who have worked hard all their lives. Was Ray Wilson there? Was the equipment exclusive? Did you use real people and battle tested your system on them?

Your comment, "123 Fit may not have done a good job in screening prospective owners in the past." Turn that comment around. "Did the zees do a good job in sreening the zor and all his sales reps?" This is a very common flaw with future zee wannabees. The zor makes sure you have assets and money to start the business which I believe people should not do until a FBI type of investigation is done. If they don't give their financial profile to the zor they will not accept you. This is be the best thing that can happen to you. You would be enjoying the fruits of your labor and not the zor enjoying it for you.

If any 123 Fit clubs are making it there are concrete reasons. Low over head is the main reason. Again is 28 clubs proof that 123 Fit is a good investment? They started selling clubs in 2005. 3 years later there is many failed zees and only 28 opened? I am sure many are not breaking even or close to it. Again prove it.

123fit, a Great Fit!

"If you don't Use it, You lose it." It is a quote heard throughout
the fitness world. It also can be used in the business world.
The 123fit concept is a very very good one, but when owners don't
want to Use the advice given, why be surprised when they are not
succeeding... When a franchise is successful, it is "the owner"
when they fail, it is "the company or concept" shame on the owners that just don't want to listen. I am successful, thanks to the 123fit company.

Barbara Jorgensen's picture

After a month or so in the business of 123 Fit

Our area director said, " You are on your own." When you buy a 123 Fit you are in business by yourself. LIsten to whom? Their in the business of selling franchises and not helping you reach success. I guess you have to steal as much money from the first generation as you can? 123 Fit is growing? More lies. Haven't you hurt enough people with the Quiznos franchise? 123 Fit will not make it because lies eventually catch up with people. After 3 years how many clubs are making it? 2 or 3? Wow you guys are so successful. Yes you made money off of good people. The smart one's never opened their doors.

To all those that buy into a 123 Fit just remember you are buying a fitness center runned by people who know very little about fitness. If they mention Ray Wilson he left in 2005. Ray Wilson did not put the circuit together. When they mention Ray Wilson ask to see where his office is or insist on talking to Ray Wilson.

The circuit is now called revolutionary. They told all the first generation it was exclusive. It is Life Fitness equipment and ANYONE can buy it. The circuit is now sold to anyone that wants to buy it for a business. It is in many YMCA's and other clubs. Turn whatever they say around and you will get the truth.

Talk to all the first generation. Many have been in sales most of their lives. People do not stick to the program. They get tired of the circuit. I understand the sales people are saying most of us that went out of business were poor sales people. Wake up talk to all the first generation. Many have gone bankrupt and have been suffering tremendously. Their like Quiznos. It is called GOUGE,GOUGE and GOUGE. They are not to be trusted. The zees I have talked to outside of 123 Fit that are successful get support from their zors. I understand some of the new zees have opened with 100 members. You have a long way to go. The one's that are making it have very low rent and help from family members. Watch out for new fitness clubs opening up. That may be your demise. Too much competition.

To date there are 29 clubs open. When we opened in April of 2007 there was 39. Sure they sold some new clubs. Let's wait for 6 more months or so. I talked to one in Texas that was excited about opening a pre-existing club. Today he is out of business. Even pre-existing clubs aren't making it. Good luck to all the new clubs. I am not worried about the zor. It is the existing clubs. Families that will have their lives ruined all because of greed. Out of the 29 clubs 1 club is the former headquaters of 123 Fit. Should we count that too? That means 10 clubs closed since we opened in 2007. On the 2007 FDD it says 12 closed. That means more closed in 2006. The people we went to training with only 1 club hasn't closed. His club is in Colorado. He isn't happy. There has been a significant number of clubs closed. If we had known about this I know we would of never touched it. Lies all lies and more lies. All the stories of former zees are consistant. Don't let them make up your minds. 123 Fit is a sure way to financial disaster. Please listen to those who have been on the front lines of this franchise.

I hope and pray the hurt zees will get recourse for all the misrepresentations, puffing material facts and defrauding people about the equipment being exclusive. If you decide to invest in this failing system I hope you have lots of money. Watch your money go down the drain. All they will say is other's are doing it. (Another lie.)

Barbara Jorgensen's picture

After a month or so in the business of 123 Fit

Our area director said, " You are on your own." When you buy a 123 Fit you are in business by yourself. LIsten to whom? Their in the business of selling franchises and not helping you reach success. I guess you have to steal as much money from the first generation as you can? 123 Fit is growing? More lies. Haven't you hurt enough people with the Quiznos franchise? 123 Fit will not make it because lies eventually catch up with people. After 3 years how many clubs are making it? 2 or 3? Wow you guys are so successful. Yes you made money off of good people. The smart one's never opened their doors.

To all those that buy into a 123 Fit just remember you are buying a fitness center runned by people who know very little about fitness. If they mention Ray Wilson he left in 2005. Ray Wilson did not put the circuit together. When they mention Ray Wilson ask to see where his office is or insist on talking to Ray Wilson.

The circuit is now called revolutionary. They told all the first generation it was exclusive. It is Life Fitness equipment and ANYONE can buy it. The circuit is now sold to anyone that wants to buy it for a business. It is in many YMCA's and other clubs. Turn whatever they say around and you will get the truth.

Talk to all the first generation. Many have been in sales most of their lives. People do not stick to the program. They get tired of the circuit. I understand the sales people are saying most of us that went out of business were poor sales people. Wake up talk to all the first generation. Many have gone bankrupt and have been suffering tremendously. Their like Quiznos. It is called GOUGE,GOUGE and GOUGE. They are not to be trusted. The zees I have talked to outside of 123 Fit that are successful get support from their zors. I understand some of the new zees have opened with 100 members. You have a long way to go. The one's that are making it have very low rent and help from family members. Watch out for new fitness clubs opening up. That may be your demise. Too much competition.

To date there are 29 clubs open. When we opened in April of 2007 there was 39. Sure they sold some new clubs. Let's wait for 6 more months or so. I talked to one in Texas that was excited about opening a pre-existing club. Today he is out of business. Even pre-existing clubs aren't making it. Good luck to all the new clubs. I am not worried about the zor. It is the existing clubs. Families that will have their lives ruined all because of greed. Out of the 29 clubs 1 club is the former headquaters of 123 Fit. Should we count that too? That means 10 clubs closed since we opened in 2007. On the 2007 FDD it says 12 closed. There has been a significant number of clubs closed. If we had known about this I know we would of never touched it. Lies all lies and more lies. All the stories of former zees are consistant. Don't let them make up your minds. 123 Fit is a sure way to financial disaster. Please listen to those who have been on the front lines of this franchise.

Wait until the 2008 FDD comes out. Many more went out of business. Including us. Las Vegas, Redmond, two in North Carolina, Mass., Florida, Kansas City, Missouri, Texas, 2 which the CEO Closed. I am sure more have closed. I know of some who never opened. (Good for them.)

You must sell 123fit franchises

"when they fail, it is "the company or concept" shame on the owners that just don't want to listen."

What bullshit.
This is the lie used by every franchisor.
(Like people would invest tens of thousands for guidance THEN NOT LISTEN???)
You MUST be a 123fit salesman.

Barbara Jorgensen's picture

If this is true

I really am happy for you.

Success in any system has to do with many factors. You may have very low rent, your build out was hardly anything and you were one of the few that had the support of the company.

I understand there is only 19 clubs left. When we opened there was 39 stores. Do you think it was all our fault? 123 Fit at the end of 2006 was suppose to have 190 stores. Alittle behind aren't they? How long do you have on your lease? 7 to 9 years? I hope you have continued success because you have a long ways to go.

I understand the club in Kansas City, Mo. closed last week. It hit the news. Was it their fault too?

You need help! Money Mailer ZOR Is Ugly Example!

Sorry for your bad experience with Money Maker. These ZORS are ugly in their attempts to extort money from failing ZEES.
Unfortunately, you will have to get an attorney to extract you from this bad situation ----Make sure you get one who has worked with franchise termination and law.
Depending on the State you live in, there may be relief. This term in the agreement you signed may be unconscionable under some State laws.
Good Luck to you and remember that your health comes first and don't let anyone take your health from you. Start documenting your case, gather up your records, your "ill health" etc.. and get yourself a good attorney. Call your State/Federal Representatives and Senators and complain, etc... This won't hurt.
Good Luck and remember that you are not alone.

From another sad 123fit owner!

Our experience with 123fit has been a horror story from the beginning. I have to admit that I personally love the circuit and the business. I love the people who come into our site. I feel like I am letting them down. The people I have grown very fond of. Unfortunately only 5% of the population are dedicated to excercise and really taking care of themselves. The area directors claim we have 95% of the population to market. Human nature is to be lazy. What happens is many quit because they get tired of the circuit or can't motivate themselves to work out.
The 123 fit franchise came up with a brillant circuit. If only the people who got us started were honest and cared about our welfare. We had no representation from the beginning and that is why we have ran out of money and can no longer afford to carry on. our area director has been supportive. If only he was there from the beginning. I know he would of advised us better. Maybe I'm wrong because I tend to be too trusting. I still want to believe there is good in people. It doesn't change the fact we have used all our equity lines. We are going broke even when my husband and I have never hired an employee. If you buy this circuit you will have a great circuit. Cover your ass and have 3 to 5 years capital to make sure you don't have to go through what we are going through. Most of all know your market. (One area my husband and I failed at.) If we had known about having 3 to 5 years capital to insure against the obvious we would never had gone into this business. I felt a responsibility to write something. We have never spent so much money in such a short time. There goes our retirement and dreams. We just have to regroup get out and build new dreams. Dreams that envolve a life more simple. Oh well I came into this world with nothing and I will leave this world with nothing. But as long as I have life I will fight to succeed. But if something is not working it is pure insanity to continue. Perhaps we didn't have enough time to succeed. The truth is we didn't have enough money.

A very sad 123 fit owner!

RichardSolomon's picture

It's starting

I'm already getting 123Fit calls. This is going to be another mess. It brings up an important due diligence point. Some people's names appearing anywhere - whether in the UFOC or elsewhere, written or oral - are such a due diligence red light that the name alone should make the proposal a good FranWhack candidate.

Lawyers who advise about franchise purchases might start accumulating a Rogue's Gallery of bad franchisor names for reference.

Many of the bad guys aren't widely notorious, and just a few of us may know of many of them. We might be doing the entire BMM community a great service to have a listing page where people could find the names of franchisor personnel who's names alone would cause us to recommend against doing business with them. Inasmuch as that would be like a Dunn&Bradstreet sort of opinion reference based upon their known history, this would not be a slander issue, though many of them would claim it is a slander issue, and it might be that we have to defend against such a claim and actually win one to make the point. If other lawyers who strongly support this forum site would join in, I would happily participate in a group of lawyers willing to defend against actions brought to intimidate BMM - pro bono.

BMM is too valuable to the franchising community to allow it to be intimidated by the bad guys. 

Richard Solomon
www.FranchiseRemedies.com

Baskin Robins Australia has Same Problem

While Cold Stone has not tried (yet) to enter Australian market. the operators of Baskin Robbins stores in Australia have problems almost exactly like you describe in the USA. Stores here are much too expensives (and they are built with used equipment often from failed stores) and because of the high cost of imported product (ice cream, cones, paper, virtually everything) very few of the stores make any kind of reaonable profits. The company owned by Allied Brands and has NO business model for new stores - none. Australian people are suckers so easy to find people wanting to own their business without doing good checking. The company is being run by finanancial people as a stock market company with only concern for stock price going up. The market has almost same number of Baskin Robins stores after 15 years - a few successful locations in high tourist areas and the rest struggling and failing to be profitable. Company blames all problems on franchisees - a standard technique for shutting them up. Almost no regulation by government and Australian people don't use court system like USA, so company can get away with screwing everyone without any punishment.

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About JCDooped

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Franchise Operations