123 FIT: Franchisees Debate Viability of Franchise, 30 Minute Fitness Biz
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“Quiznos of Fitness” 1-2-3 Fit in Financial Trouble
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The 123 FIT organization and franchise concept has taken some heat from commenters on this blog - in part because it is owned and operated by the much maligned (in franchise circles) executives of Quiznos. But 123 FIT is not an isolated target for criticism; the very viability of the women’s 30-Minute circuit training club as a sustainable business model has been called into question. Industry critics and failed franchisees alike complain of high recruitment costs, low retention rates, oversaturation of the market and profit centers that are too limited and too small.
Commenter Pete (anon) claims to be a successful 123 FIT franchise owner. He contends that the 123 Fit company have been given a bad rap, that the 123 Fit concept is sound and, contrary to what many would have you believe, women’s circuit training is “hot.” We invited him to share his view, which he has graciously done. (I’ve edited slightly to delete the side chatter, added line breaks and formatting for readability)
Pete (anon) writes:
Ok. Here are some specifics… these numbers are mine - rounded off… what I will share is tested and true. So let’s get to the business.
Overhead should run $11K - $12K per month. Here is a breakdown.
- Rent $4K.
- Labor (to cover 77 hours - total coverage) $4K.
- Marketing $1000 - $1500.
- Royalities $600.
- Credit card fees and member service fees $600.
- Utilities/insurance $500.
- Eqpt/Debt Service $600 - $1000
Someone had posted they spent $300,000 in 9 months - so they probably paid cash for equipment. If not, add $600 - $1000 for equipment. Either way, this is a good baseline of monthly spending. My experience is that this is accurate month after month after month.
Revenue. For the revenue. I will use 250 members with an average of $33 dollars per member. The avg per member will vary by club. Rough formula for why I am experiencing that. 125 members at full price of $44 and 125 members at $22. The ones at $22 are add ons or members we signed up on special deals whe we first started.
So here is the math -
- $8250 in monthly dues.
- 12 new members per month.
- 10 pay enrollment fee of $100 plus first months dues. That is $1440.
- $2000 - $3000 in personal training.
- 2-3 of the new members prepay $1100 - $1700.
- So you get to $13K - $15K per month this has been my experience.
I know the math is rough. This is where we are but adding the 10 - 12 new members per month. Even if we lose 6 members per month and add 12 we have a net gain of 6 members per month. In 12 months we go from 250 members to 322 members and you can redo the math from there. More monthly dues and more members to sell Personal Training to. So there is the revenue.
Here is where we have found success.
Price. We strictly adhere to the corporate sales tour. It is incredibly effective in showing the value of what we offer. Price is not the issue when the tour is done. So we get full enrollment and $39 plus $5 towel for all new members. The towel program is not optional. We just include it and quote $44. When the towel program was rolled out I can recall several clubs on the call resisted charging for towel service. Most if not all of the big gyms do - the YMCA near us charges $1 per towel. So unlimited for $5 is a good deal.
Advertising. We focus on “weight loss” rather than exercise in our advertising. We do this at the suggestion of corporate. Last spring they launched the weight loss marketing. Once again many clubs resisted it. We embraced it. The respones we get from weight loss ads VS exercise ads is in the multiples.
Employees. Our employees are such a big part of whether we sell things or not. We hire people that are passionate about helping people. They are paid on production. They know they are valued and they belive in our exercise/weight loss programs. Not only does this help us get new members but it helps us sell personal training. People get results, have a positive experience in our club so they spend money with us.
Capital. Fortunately we had the the capital to get through the normal start up and operating period. It took us longer than 9 months to reach where we are. So when I read that someone only gave it 9 months it is important to understand that it sometimes takes a bit to build a business and to get to a tipping point. So I don’t mean berate those that did not have the capital to get to the tipping point - I just assumed people knew it can take some time.
So with all that said I now want to offer a sincere apology to Barb and any Sean and any others I offended. Just as you are passionate about your experiences, I am too. And members and potential members do read these blogs. When a potential member came in recently and told me that 123 Fit was being trashed on some sites and that caused them to decide not to join I became engaged in this and other sites. I just want to get the word out that many 123 Fits are experiencing what I am. That the future for 123 Fit may very well be better than the experience Barb had with them.
I can understand the bitterness and hurt from folks that were first in with 123 Fit or many other concepts. Certainly there is a learning curve for any business. Even with experienced and long standing businesses mistakes are made - New Coke? But I am sorry people get hurt in the process.
But several of us are making it. I am just here to protect my business - not hurt or berate others. So you have my sincere apology.
….please know that success or failure with 123 Fit does not make you OR 123 Fit bad people. You mentioned I may be Brooksy Smith. Well I am not. I have no love lost for him just an arms length relationship. Trust but verify. But I have come to learn that he is not evil. He did not start 123 Fit so that he could oversee failure. I believe he is doing his best. And based on recent changes and the profitability of many clubs - they may have actually figured it out…
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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27 opinions for 123 FIT: Franchisees Debate Viability of Franchise, 30 Minute Fitness Biz
Barb
Oct 2, 2008 at 3:30 pm
I find it interesting that the first generation of zees with Curves did very well. I read the first CEO’s book. Why is 123 Fit’s first generation , except a couple, gone? Is it because they used the first generation zee’s money that they made up front to start building their empire? 123 Fit’s empire is not even a foundation yet. They are trying. How many people have to get hurt before they build the walls put a roof on their empire? In my opinion if one person gets hurt that is too many.
Pete (anon)
Oct 2, 2008 at 5:50 pm
Sean - thank you for posting a success story of a real 123 Fit owner. I do have one clarification regarding the idea that woman circuit training is “hot”. I am not denying that I posted that commennt at some point. But for clarification - 123 Fit is Coed. About 30 percent of our members are men and that continues to grow along with family memberships. Rrgarding the popularity of circuit training - I was responding to a posting that claimed circuit training was a fad and was fading. What I would point out is that many popular “big box” gyms have recently added circuit training rooms and are spending TV ad money to promote it and charge extra dues for it. If you watch The Biggest Loser circuit training gets great marks. “Celebrity Trainers” that make appearances on Good Morning America and other shows are touting circuiting training. So my point is that from a pop cultural and general awarness position the words “circuit training” are popular and that only helps 123 Fit locations. I did not mean to defend all of the women only 30 minute concepts. Thanks again for the article.
Barb
Oct 5, 2008 at 11:29 pm
The Fitness business especially the 30 minute circuits have so many zees complaining of losing all their investment. 123 Fit is no different. They only have 28 stores open and several very unhappy. It is not worth going through financial hell all because Pete throws some numbers out there. The fitness business is unpredictable. No matter what they say. Believe me I know. When we opened our 123 Fit they told us all we needed was the circuit. Now they have personel training. They are refining their business on the backs of the hard working people. The CEO couldn’t make it with his own stores. If he can’t what make you believe you can. Call all the former zees and find out what they have been going through. Broken families, bankruptcy and losing all they have worked for.
Pete is a shill of 123 Fit corporate. They are not good people. Remember the fitness business is not predictable.
1-2-3 Fit Owner
Oct 12, 2008 at 10:40 pm
I think that the concept is solid. The original business plan has changed since the inception of 1-2-3 Fit in 2004. Since adding personal training and nutritional consultation in addition to the circuit gives owners more profit centers to utilize.
Fitness is a tough business to be in period, however it is reasonable to expect a 1-2-3 Fit to make money over time. It is important that any business owner has the fundamental aspects of business covered: adequate working capital, consistent marketing plan and a great staff along with a great product and a solid work ethic.
While there is no gaurantee in any business as to its success, being prepared with the appove fundamental aspects gives you a much better chance.
The numbers needed to breakeven are between 10-15K per month depending on rents and what you pay your staff. It is easy to extrapolate how many members you need to breakeven with simple math based upon what you plan to charge. The corporate office has a software program to help with this process.
The fitness business will always be around as long as there are people. The question is how well you position yourself in your market and follow through with working your business plan.
While it is true franchises have closed their doors, others are making money and continue to operate. It is not true that the clubs making money bought out a failing club. Every club making money is owned by the original owner. All the closed locations remain that way and no second generation franchise owner came in and re-opened the old location at a cheaper price.
1-2-3 Fit is a great workout and a great place to work. While the business will not be for everyone, there will be closures as in any business.
Best of luck to all!
Barb
Oct 14, 2008 at 9:29 am
The circuit is good. 123 Fit is not good. Is franchising all about selling a business concept and not directing their zees to success? If most of the former zees ever thought for a moment we needed to have $10,000 to $15,000 a month to break even I know most would of never signed he franchise agreement. I also know the reason you do not have second generation zees is most knew how Quiznos grew their empire. I for one did not accept a managerial contract because several of the former zees got screwed big time.
123 Fit is not the only 30 minute circuit that has hurt people. Is it really solid? Your really trying to mislead people. How many clubs are making it? Only 2 or 3? Other’s are not happy. If it is so about having $10,000 - $15,000 a month to break even why wasn’t this disclosed to all the former zees. We were told a lot less. Anything that affects your decision to sign or not to sign has to be disclosed. (Contract Law) Why was several clubs told the build out would be half as much and when it came back it was $50,000 more? I should print out what you said because it was never disclosed to us that is what we needed. In fact the 2006 UFOC said total estimated investment at the most is $115,000 with no capital required. Why is it in the 2007 UFOC they now require $70,000 liquid cash?
Bottom line why are so many 30 minute workouts, Curves, Butterfly Fitness, Contours Express having so many problems? 123 Workout is not bad. I am sure the other’s above have good workouts too. If people believe 123 Fit is exceptional it is just Life Fitness equipment and the YMCA’s and other establishments have it. Stop misleading people. Why did the CEO close 2 of his clubs and the club in the old headquaters on Larimar has been moved? Please stop the BS and be honest. If you were honest with us nobody would of gotten hurt. Just keep writing and giving us more evidence of how dishonest you are.
1-2-3 Fit Owner
Oct 23, 2008 at 12:47 am
All of the UFOC’s have a liquid cash requirement. If you look at yours it is there, I promise.
Yes Life Fitness makes the 1-2-3 Fit Simbio equipment. However, it cannot be sold to any facility less than 3000 square feet. This is to keep it competitive in the small gym market. Yes, a YMCA could get it, however, people leave the larger gyms to go to the smaller ones for various reasons. Not all, but some do. This makes 1-2-3 Fit very competitive in the small gym marketplace. In fact, it is the only co-ed circuit gym that I am aware of, which also differentiates 1-2-3 Fit. 1-2-3 Fit also has a study done by ACE at Swedish Hospital showing it is a great workout.
Yes others may have failed, but you should not assume everyone in the system is also failing.
Focus your energies on something positive rather than bashing others who are doing well.
Thank you.
sean
Oct 23, 2008 at 5:18 am
Let’s look at some that are working.
1-2-3 Fit Owner:
Which 5 or so clubs would you say are examples of 1-2-3 Fit franchise locations that are doing well, are implementing the program properly, and maintaining a decent membership base?
Are they using programs that weren’t part of the initial program?
Barb
Oct 23, 2008 at 6:27 pm
Go to Life Fitness and our circuit is for sell to anyone. In fact they will help you set up your circuit by giving you diagrams of how you can set it up. This is for people who what to open a business that is not a franchise. Who is telling you 123 Fit equipment is exclusive for clubs under 1700 sq. ft.? Go to lifefitness.com. They claim the circuit was never exclusive to 123 Fit. In fact I saw the CEO and his girls from the headquaters peel off the name life fitness and put the Simbio stickers on our equipment.
I have also looked at you tube and saw many of the Butterfly Fitness equipment that look very similar to 123 Fit’s equipment.
The test at Swedish Medical Center never said that 123 Fit had the World’s Best Workout. I am sure many of the fitness clubs have good or even better workouts. I do love the workout. I still workout on my circuit.
If you are doing well I know there are concrete reasons for any success. Low build-out cost, low rent and help from family members. Even clubs with low build out cost are now having problems. Stop misleading people.
Barb
Oct 23, 2008 at 6:35 pm
Our UFOC is 2006. There is no $70,000 liquid cash requirement. Interesting in the 2007 UFOC there is a $70,000 liquid cash requirement. I wonder why.
1-2-3 Fit Owner
Oct 24, 2008 at 12:47 am
Many issues to address:
Q. Barb said: “If it is so about having $10,000 - $15,000 a month to break even why wasn’t this disclosed to all the former zees. We were told a lot less. Anything that affects your decision to sign or not to sign has to be disclosed.”
A. It is illegal for any franchise to give a breakeven point in any dollar amount. I do not believe anybody told you it would be a lesser amount to breakeven, because they cannot do so legally. 1-2-3 Fit has a software program which allows potential franchise owners to input all data (costs and reveunes) such as pricing, number of members joining, number quiting etc… It is designed to allow potential owners to plug in their own numbers to decide where their potential breakeven would be. This is given to all potential owners.
Q. Barb said: “Go to Life Fitness and our circuit is for sell to anyone. Who is telling you 123 Fit equipment is exclusive for clubs under 1700 sq. ft.? Go to lifefitness.com. They claim the circuit was never exclusive to 123 Fit.”
A. Go to the Life Fitness website get their contact information and call or email them and try to purchase the equipment for a gym larger than 3000 sq feet. You will be denied. Life Fitness re-brands their equipment with the Simbio logo for 1-2-3 Fit. Other companies can also private label equipment. It is a common practice with many retial items. Nobody else can get Simbio private labeled equipment from Life Fitness, making it exclusive to 1-2-3 Fit. That is where it comes from.
Q. Barb said “The test at Swedish Medical Center never said that 123 Fit had the World’s Best Workout.”
A. The test at Swedish Medical Center said that the 1-2-3 Fit workout burns more calories and is better for your body than other workouts tested such as aerobics, weight lifting, running, Curves, pilates, yoga etc… The test was performed at Swedish Hospital at the Cardiovascular Wellness Center under the direction of the American Council on Exercises Chief Science Officer, Cedric Bryant. It was a truely a scientific test done professionally and will withstand scrutiny if challenged.
Q. Barb said: “If you are doing well I know there are concrete reasons for any success. Low build-out cost, low rent and help from family members. Even clubs with low build out cost are now having problems. Stop misleading people.”
A. Of course there are concrete reasons for success. These include hard work, great product and marketing and location among others. How have I mislead people in anything I have said. I have been very forward and upfront in everything I have posted. What I find interesting is that you mention how you have contacted all the owners and have this great inside information and I never recall hearing from you. Why dont you contact the clubs doing well and hear from them? Get a fair and balanced set of facts before siding with others in your same position. Doing so is just plain ignorance.
YOU are misleading people with untrue statements and not backing up what you say with facts as I have pointed out.
As always, I wish everyone the best of luck in all endeavors.
Barb
Oct 24, 2008 at 7:05 am
What location are you from? Are you aware of how many clubs never opened or closed? The equipment is not exclusive to clubs under 3,000 sq. ft. Besides why would the CEO close his clubs? The system is not working. I have not talked to current new owners. I have talked to many former owners. I talked to many existing club owner when I was in the club. All the clubs that closed previously before we signed were either very hard to get a hold of or were still on the honeymoon stage of opening their own business. That is why calling all the zees before you buy is not the best investigation. People when they are open have to stay positive. When things go bad though they are willing to face the reality of what is going on. Some will be open and some will still be evasive. All the people we went to training with have closed their doors except for Rich. I assure you there are unhappy zees still running their clubs. You make it sound like everyone is making it. I hope they are because financial hell is horrible.
You haven’t read the archives in the Seattle Times. It said the test at Swedish Medical Center was filled with equipment from 123 Fit. The company simply took magazines like Diane from Curves and compared it. Now Curves claims it burns 500 calories.
I have talked to the former zees. Do you want me to specific? Then you get specific on your location and who you are. If you want an all out debate than tell me who you are. We know who lies in this corporation. Stop painting a rosy picture about this company. They have hurt people from Quiznos and 123 Fit. They are the same people.
1-2-3 Fit Owner
Oct 26, 2008 at 9:32 pm
In your above statement you said:
“The system is not working. I have not talked to current new owners. I have talked to many former owners.”
How can you claim the current system is not working if you have no contact with current owners? Of course if your only point of reference is closed club owners, then you will hear it did not work. However, if you were to contact existing club owners you would find people who are happy and making money.
You are being very one side, which is misleading. Please do everyone a favor and try to see both sides, not just yours.
You also said:
“You haven’t read the archives in the Seattle Times. It said the test at Swedish Medical Center was filled with equipment from 123 Fit. The company simply took magazines like Diane from Curves and compared it. Now Curves claims it burns 500 calories.”
How do you know what I have read or not? I have read the archives to the Seattle Times, as well as talked to the Dr. from the Cardiovasculary and Wellness Center (Dr. Tipps) who ran the study as well as talke to Dr. Cedric Bryant, Chief Exercise Physiologist from the American Councel on Exercise who oversaw the study. Please do not insult me by assuming you know what I have read or not read.
Regarding the study, yes 1-2-3 Fit equipment was used and filled the space during the study. This was done so they could do the study, duh! When comparing to Curves, they used a study ACE had done using the same metrics a few years earlier. ACE is in the business of verifying health and fitness claims.
If you believe Curves burns 500 calories, I question you knowledge of fitness. When ACE performed their study, they showed Curves burn approximately 160 calories. If you are better equipt and knowledgeable than ACE and the Cardiovascular Wellness Center at Swedish Hospital, then I will defer to you and your claims. Until you can prove otherwise, I will go by their studies and results, which most of the fitness world does recognize as an authority on such matters.
Does this mean franchisees were not hurt early on? No, but it also doesnt mean that your experience is true for every single solitary 1-2-3 Fit franchise forever.
You should start a blog for all closed club owners who dont have any consideration for those who are making a go at it.
I feel for you and your loss, however, you have nothing but negatives for the remaining club owners trying to make it work. Please be considerate of others and remember your experience is not how everyone elses is or was.
Best of luck!!!
Barb
Oct 27, 2008 at 12:10 am
How do you know I don’t know more? There are unhappy current zee owners. That is as far as I will disclose out of respect of those owners. I am happy you are making it. I want everyone to be prosperous.
I just hate people who are unethical in their business practices. There are current owners that feel the same way.
I believe I am being honorable by disclosing the truth.
I am not the only former zee posting comments. You must know that.
123 Fit is not the only zor that has unethical business practices to entice people into signing a franchise agreement. Haven’t you studied the World Of Franchising? I haven’t only studied 123 Fit but other franchises. There are some good zors out there. The good one’s do not gouge their zees. They are there to guide them and help them reach success. You make it sound like the zor hasn’t any responsibility in branding the name or anything except to cash our checks. You are misleading people again that all the zees today are indeed happy and making money or close to breaking even. I may get my information second hand but I know the information is from good honest people. I have talked to current zees. Again out of respect I will not disclose any of them because I am a person of my word. They tell me not to say anything I will not. It will be interesting what will happen in 6 months to a year. 123 Fit is losing clubs. They are losing members . I understand another bit the dust recently. That makes 27 left. I understand some of the clubs aren’t selling that many vitamins. This is not negative this is reality.
Good luck to you. I do not want anyone to suffer financially. Just stop misrepresenting people and hurting others. It will come back on you.
Best wishes to the current zees. Prepare for the worst case scenario. Make sure you have enough money for a year and leagal fees to reorganize if something happens. Have a backout plan. This is information that the first generation zees did not have. If I did not care I wouldn’t be telling you this.
Barb
Oct 27, 2008 at 12:30 am
I love the circuit. The product is not the issue here. It is the business side. In fact I still workout on the circuit in my basement.
The study at Swedish Medical Center said it was good for the time pressed. You get a good workout in a half an hour. It worked better for me when I did it for an hour. Everyone is different. Curves worked for me. I worked harder than most. I saw members in my club that worked harder than others. I assure you some just glided through the circuit. I loved my club. I still talk to the members.
Many zors have special studies on their products. Many zors have icons and famous people endorse their products. I would be more impressed to have franchise attorney’s endorse good franchises instead of the zor telling us how great they are. That would mean more to me than having Ray Wilson endorse a circuit in which he was there for a short time. By the way we opened our club on April 20th, 2007. Ray was gone since 2005. At our opening corporate and the area directors mentioned Ray’s name alot. Ray put the circuit together with physiologist and cardiologist. They even said the equipment was made in Hungary. I say they were hungry for our money. Why was Ray mentioned so much during our opening? He was gone a long time.
I could write a book.
1-2-3 Fit Owner
Oct 27, 2008 at 1:00 am
Lets agree to the following issues:
1. You and other closed clubs harbor tons of resentment towards corporate office and feel you were lied to.
2. Some clubs which are still open like their business and are profitable and others are on their way to profitablility and have no problems with corporate office.
3. Some franchisors are bad and some are good, but that the franchise laws favor the franchisor in not having to disclose unit sales/statistics, which helps selling more franchises.
4. Ray Wilson endorsed the product and helped to design and implement the basics which became 1-2-3 Fit. His endorsement in the fitnesss world is huge and important, whether or not he was with the company when you opened your store.
5. Not every 1-2-3 Fit owner will have the same negative experience as you did, nor will they have the same positive experience I am having.
6. Anybody considering a franchise needs to perform investigation and hire a good franchise attorney before engaging in any contractual agreement.
7. Regardless of your beliefs, Obama is leading in every national poll thus far, however, McCain continues to say the battle is not over yet.
8. 2012 election could have the first women running for president (Clinton v Palin)
9. Sacramento, Silverdale, Moses Lake, Cantonment, Pensacola, Oro Valley and Spokane all rock and serve as a beacon to us all of what is good about 1-2-3 Fit.
Best of luck!!!
Barb
Oct 27, 2008 at 8:50 am
Good zors insist on killer due diligence. The tide in many of the lawsuits for zees seem to be changing. Haven’t you read how many judges have allowed the Quinos, UPS cases reversed. They will have their day in court. Lady of America lost in a jury trial. There is so many franchise complaints across our country I believe our government will do something to change the one sided agreements. Time will tell.
Barb
Oct 27, 2008 at 8:56 am
Correction Lady of America zees won in a jury trial. With all the complaints about fitness centers I am sure this will have an impact in court cases. When all the complaints are consistant from all former zees about misrepresentations and puffing material facts the courts cannot ignore it.
1-2-3 Fit Owner
Oct 27, 2008 at 1:47 pm
As I have stated many times, I am all for changing the laws in franchising to better protect the franchisees and forcing the franchisors to be more transparent with their numbers.
I never questioned your hurt and that you were mislead. In fact you were mislead, there should be consequences.
The issues I have with your statements revolve around your thoughts that any and all franchisees with 1-2-3 Fit were screwed royally. This simply is not true. There are franchisees who are happy with 1-2-3 Fit and you just cant seem to acknowledge that.
We acknowledge you were hurt emotionally, financially and possibly legally and support your efforts to right the wrongs.
Best of luck!!!
Barb
Oct 27, 2008 at 3:45 pm
The zees’s you say are happy are only a handful. Interesting most of them are area directors and one is now Vice President. Silverdale is very tight with corporate. He was our area director. Contonement is a a area director. Moses Lake is now Vice President of 123 Fit and an area director. Pete (Anon) sounds happy. I never said all were unhappy. Heck if our rent was $1200 we would still be in business. It seems the one’s or the majority of the clubs doing well have low rent and low build out. If our build out was $50,000 we would of been able to hire employees and not go out so soon. I know a lady in Mass. whose area director set up on a 10 year personal guarantee lease for $6800 a month. A club that closed after we signed the agreement has a club for $9,000 a month. (There were 2 partners.) $4,000 a month is too month for a business like 123 Fit. The lower the rent and build out the better a chance of breaking even.
The biggest challenge is to get people to committ to a exercise program.
There you have it. A few are completely happy with their businesses. If 123 Fit was great why did the 11 Ray Wilson Exercise Clubs not want to go with 123 Fit?
I did some research to verify what 123 Fit disclosed to us verbally. Exclusive equipment, Rick Schaden and Ray Wilson was suppose to be a part of the company. There are newspaper articles verifying their comments. We did take our UFOC to a lawyer. Not all lawyers and some franchise lawyers know about vetting franchise systems. Not all lawyers know how to spot the misleading statements. People need to do their due diligence on the lawyers.
Someone mentioned about buying a house and if buyers buy a house and sign off on the inspection it is the buyer’s fault. I am a realtor. Seller’s have disclosure laws that if not met they could and their realtor could be sued. In real estate it is disclose, disclose and disclose. When in doubt disclose. Here in Wa. there are disclosure documents that seller’s have to fill out. Anything visible that is wrong with the house or anything known about the house has to be disclosed. Even before the inspection. I have a liscence in Ca. The same laws in Calif. apply there when you sale a house.Realtors also have to take an Ethics test. There is a Code of Ethics we have to follow or we can be fined.
Perhaps less people will misrepresent people in franchising if the same laws applied. Even when there are regulations there will always be the bad that will work in the gray areas and rationalize right and wrong. I am so cautious of what I say and how I say it and I make sure my clients understand the contracts. Maybe franchising since many cost as much as a house or even more should have that law that zors have to go over their disclosures. People also need to know the franchise agreement and FDD is negotiable. Most do not know. I understand people are suppose to understand the franchise agreement and the FDD. 123 Fit just mailed our UFOC to us. I do know how to spot the misleading statements now after extensive studying. Estimate, may, shall, projected should are words in the UFOC that are often times over looked by future zees.
Also a $150,000 estimate investment could turn out to be a million dollar investment if projected out after 10 years. I assure many people do not think like this. Why would they?
Barb Jorgensen
Nov 4, 2008 at 12:05 pm
Update on 123 Fit.
1. Another club bit the dust. (That makes 2.)
2 A club opened in the south. A former zee talked to her. She is so excited because she has been told that she will be making $10,000 a month. (How did she get those numbers?)
3. Former zees getting sued by Landmark for up to $88,000 for the lease of the equipment. They are charging for storage, transporting of equipment and getting charged up to 24% interest. When will the bleeding stop?
4. I got information about Swamscott. He is the area director who set the lady in Mass. up on a 10 year personel guarantee lease for $6800. When she went out of business they offered her a dollar for her club. He opened another club down the street. I understand he is sueing her for $54,000. More bleeding.
Barb
Nov 4, 2008 at 2:33 pm
Lady in Florida should be lady in Mass. Sorry.
1-2-3 Fit Owner
Nov 5, 2008 at 10:46 am
Yes a club closed. Are you aware of the circumstances of the club closure? Because if you were, you would not be so smug about it. It is always tragic when one has to close a club.
In these troubling economic times, people are cutting out their expendable income items and this is effecting everybody, not just gyms.
The people who just closed owned another business, construction, which as you know being in real estate, has been brutal. With their construction business struggling, they had no choice but to look to close their club.
Perhaps now that Obama is president-elect, he can “spread the wealth” to all those who have had to close the doors or continue to struggle.
Best of luck to all in their continued success and to those yearning for success.
I heard Obama is going to choose Palin to replace Biden as his vice president. This is only second hand like your info Barb, so it might not be true. That is the problem with second hand information!
Best of luck!
Barb Jorgensen
Nov 5, 2008 at 2:27 pm
If I was smug about it I would mention the name of the club. I do not wish ill will on anyone. My information I get some is second hand. Some isn’t. When one opens a business and has to close it is a lost. You go through the stages of grief.
Remember businesses close even when we are not in a recession.
Barb
Nov 15, 2008 at 9:57 pm
Update on 123 Fit:
1. We know of at least 5 clubs struggling.
2. The club that closed would of blown away the viability of 123 Fit debate. One of the clubs that a 123 Fit owner claims is a beacon to that 123 Fit’s new system is making a difference went out.
3. First hand information claims that they do not sell many vitamins and they do not make that much for a session with personal training.
4. 2 new clubs in Florida and 1 in Mississippi. When will they acknowledge that the new system is not working except for a very few. Pete Anon I do not believe your numbers.
5. Future 123 Fit owners need to get a killer Franchise lawyer to explain the misleading things stated in the FDD. Remember may, shall, estimate, projected, intend are not words that are concrete. The FDD is to their disclosures to protect themselves. There is nothing there to protect you. Remember the FDD is negotiable and find the things you want to negotiate in the FDD and agreement. If they do not want to negotiate things that will protect you or put things in writing say bye-bye.
6. If they have your best interest at hand they will insist on killer due diligence and insist you do it. They will respect the fact you worked hard for your money and help you reach success.
7. They will not gouge you knowing you need the money to reach success.
8. Go by your gut feelings. If your gut feelings tell you, you are dealing with a rat, listen. You will sense you are danger. If you sense it, you are.
9. If they rush you to sign or tell you need to sign the agreement right away tell them stop. Do not act like an employee. First rule in business is to protect yourself and your family.
10 If your area director says you are on your own after a month in business- get out as soon as possible. They will not be there for you.
11. If your area director says he’ll do everything for you. Do not go with it. Take everything in your own hands.
12. Look for a lease for 2 years. Negotiate an agreement for as long as the lease. If they say no, run away as fast as possible.
13. Rent should not exceed $1200 and no more than $1500.
14. Look for a place where you have little or no build out cost. If you can’t find one don’t go forward.
15. Put enough money away for a back out plan. A year at least. Check out legal fees.
16. Do not quit your job. Do not let your husband quit his job. Unless you have money for your living expenses to cover two to three years. Remember your family expenses come first. If you don’t have money to cover your family business forget about opening a business.
17. If the marketing isn’t working the first month what makes think it will work ever? It is pure insanity to continue marketing when you have proven over over it is not working for you. All wasted money.
trying to survive
Nov 16, 2008 at 5:27 am
Truth is, nobody has profited from this anywhere. Zees or Zor. Nor should they be, they are about 2 years old…a baby in business terms. I will bet any amount of money most new franchises are not profitable in two years. If anyone is thinking of investing in one…go work in one for a week.
Case closed.
Barb
Nov 16, 2008 at 7:21 am
Lawyers say to work in your choice of business for 6 months. I know of a zor that insist on his future zee wannabees work in their club for a year.
Barb
Nov 16, 2008 at 9:46 pm
Another important point is good zors battle test their system for years. (On their buck not yours.) I have read you should not get into a frachise system unless they have 10-15 successful units. Good zors will allow you to be in a franchise association. Make sure there is a franchise association seal of approval. 123 Fit has neither. Do not be their guinea pig to get to a proven system. You will end up getting robbed of your good credit, life style, loose your home and end up in bankruptcy court. Remember there is such a thing of staying in too long. Smart business people know when to close. Dreams are fun but there is a time to face reality. The time to close is when you have a year of money to reorganize and legal fees. I know it sucks when you see the truth. Keep your ears open and when you hear contradictions and read consistant stories of people getting hurt it is time to focus on facts. The dream is an illusion. The dream is only true when you see the money coming in and making a living. Business decisions are based on facts NOT hope.
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