IS SHAPEXPRESS A GREAT FITNESS FRANCHISE OPPORTUNITY?
December 5, 2007 by Sean Kelly
Filed under ShapeXpress Fitness
(FranchisePick.Com) Its marketing materials call the ShapeXpress chain “America’s Upscale Women’s Fitness Clubs.” Is ShapeXpress America’s next great fitness franchise?
The answer depends on who you ask.
ShapeXpress boasts ”almost unprecedented growth and success within the franchise industry.”
According to the ShapeXpress franchise website:
ShapeXpress is one of the most dynamic business models and franchise opportunities in franchising today.
ShapeXpress, founded in September 2002, has had almost unprecedented growth and success within the franchise industry. In just 3 years ShapeXpress has become one of the fastest growing franchises in America. We have sold over 300 franchise licenses, opened over 70 fitness clubs in 27 states and were recently included in Entrepreneur Magazine’s 2005 Hot List of Franchises.
ShapeXpress is a win-win franchise opportunity that can quickly provide positive cash flow and operate with only 3 to 4 employees on staff, while providing you the owner recurring “residual” income from your ShapeXpress business.
What accounts for the “almost unprecedented” success of the ShapeXpress franchise program? ShapeXpress’ own Reasons for Success include “Unparallel [sic] franchise support,” “incomparable training,” “a huge, dynamic and virtually untapped market,” “Competitive advantages,” “Upscale fitness environment,” and “residual income generated from ongoing monthly membership fees” as well as additional income sources including “tanning, sauna, massage and other spa services, nutritional sales, smoothie and other beverage sales, and specialty fitness classes such as aerobics, yoga, Pilates and self defense.”
Franchisee calls ShapeXpress franchise “the worst nightmare of my life.”
The recent Club Fitness Pro article Time’s Up by Stuart Goldman paints a very different picture of the ShapeXpress fitness club franchise. Eric Riess, a franchise attorney in St. Louis, claims that in the past 6 months he’s has been approached by 35 ShapeXpress franchisees who want to sue the company. All of those he’s represented in St. Louis have closed.
“I’ve never seen one fail like this,” Riess says.
Chris Burchard “realized his dream in 2004 when he opened a ShapeXpress franchise in Overland Park, KS.” Burchard’s monthly costs ranged from $10,000 to $15,000. His monthly revenues ranged from $8,000 to $14,000. Burchard closed his ShapeXpress club in May 2006, losing most of his savings. Many ShapeXpress franchisees have similar stories to Burchard’s:
One owner says she lost $375,000, pending the sale of her store and two other franchise licenses. She lived off borrowed funds just to get through the final months of her ownership. Another owner signed her franchise agreement in December 2003, purchased three licenses, opened one club in April 2004 and closed that club in January 2006. Her losses exceed $300,000. An owner in Illinois, who signed a ShapeXpress franchise agreement when the company started in 2002, says she is barely keeping her doors open and has lost all of her investments as well as her two kids’ college education money. She calls owning a ShapeXpress “by far the worst nightmare of my life.”
Reasons for failure cited by Burchard are similar to challenges facing other express fitness franchise chains:
- “The cost model for ShapeXpress is too expensive”
- Labor costs, member attrition and staff turnover were much higher than expected
- Employees not comfortable with aggressive ShapeXpress sales approach
- The challenges of women-only membership
According to Chris Burchard “When it comes to fitness, a lot of women don’t stick with it… Even the ones that had pre-paid memberships stopped coming after a few months. People who were paying monthly would stop paying monthly.”
IS SHAPEXPRESS A GREAT FRANCHISE OPPORTUNITY? WHY OR WHY NOT? SHARE YOUR THOUGHTS. LEAVE A COMMENT.
Recent Blog posts on 1-2-3 FIT FRANCHISE, BUTTERFLY LIFE FRANCHISE, CONTOURS EXPRESS FRANCHISE & CUTS FITNESS FOR MEN FRANCHISE, VISIT: Blogliography: 30 Minute Fitness Franchises
Check out these franchise websites:
TopNewFranchises.Com: America’s Next Top New Franchises
FranBest.Com: The Best in Franchising
Franchise & Marketing Newsletters: Affordable. Stylish. Free.
________________________________________
FREE WHITEPAPER: What’s the best way for companies to respond to online criticism and attacks? A Harvard report with multiple recent case studies compiled and is available for free download.
Sean;
Here is the revealing Item 20 picture.
a) At the end of 2005, 22 had left and 64 were still in. Or a 25% chance of losing your entire investment. Nice.
b) At the end of 2005, there were 222 stores, signed but no opened. Perhaps a Quizno SNO in the making?
Good thing that nobody reads the item 20, eh?
Another rediculous knock off of the failing Curves franchise. These 30-minute gyms are dying. Don’t fall for the lies. They are closing down left & right. There is NO money to be made. If you want a gym open a real gym with real equipment and you better have experience in the business because you will have competition that WILL put YOU out of business. Don’t fall for a business that is a fad. The Curves type fitness gyms are a losing proposition. I know many people who lost their business after the 1st year. I even know one who went out of business after the 1st month. RESEARCH THE BUSINESS IT’S VERY COMPETITIVE. kNOW HOW MANY GYMS ARE IN YOUR TOWN. The established ones will put the new out of business for sure.
I am a ShapeXpress franchisee that is making money. It’s not bad for everyone.
It’s funny, the people mentioned in this article were, at one time on the ShapeXpress “hot list” of franchisees, ones that ShapeXpress wanted you to call. When things are going great, ShapeXpress is awesome, but when they aren’t, it must be that ShapeXpress’ business model doesn’t work. I’ve talked to many ShapeXpress franchisees that failed and they will tell me that it is because the business model doesn’t work. Then I ask them what they’ve done (specific things and I can’t share the ShapeXpress avenues of marketing here), and they don’t do them.
The problem is not ShapeXpress, it is that we are in a tough industry. A reasonable and prudent person should have known that before buying a ShapeXpress franchise. The problem is not ShapeXpress.
Hey Kizzan, on behalf of all ShapeXpress franchisees who apparently do not share the same incredible insight and business acumen as you, blow me!
kizzan wrote: The problem is not ShapeXpress, it is that we are in a tough industry. A reasonable and prudent person should have known that before buying a ShapeXpress franchise. The problem is not ShapeXpress.
kizzan, I’ll chime in here since Linden Wood’s subtle, nuanced use of language might not have gone over the heads of some of the less erudite, reasonable & prudent.
My understanding is that one of the fundamental problems of ShapeXpress and similar women’s express fitness clubs is that the business model is dependent upon predominantly industry newbie franchisees appealing to a female-only demographic of “deconditioned” consumers with a simplified fitness approach and low monthly fees.
Two main problems (which would be especially unforeseen by those new to the industry) that arose were the glut of new clubs chasing the same consumer, and the low retention rates (caused in part by potatoes returning to their couches, and others graduating to full service clubs).
While these conditions weren’t invented by ShapeXpress, it was a consequence of the concept, positioning and strategy was it not? I’ve read other factors attributed to the widespread failures of these clubs. Surprisingly, none of these involved franchisees not working hard enough, or not being committed to the success of their clubs.
While blaming the franchisees is fine, time-tested tradition of many a ‘zor who graces the franchise graveyard, don’t you think a reasonable and prudent franchisor in a tough industry would only “award” franchises to franchisees who are reasonable & prudent? Aren’t you saying that the problem was ShapeXpress’ franchise sales strategy?
Amen Sean!
To Sean:
I guess what I am saying is that when the business is starting to fail, the natural thing to do is to run and hide. Nobody wants to face their problems. Nobody wants to follow the system.
I guess that is a mute point now that ShapeXpress has sold to Diversified Health and Fitness. We’ll see if they can change all of the problems.
kizzan: I agree about the urge to run and hide. Many of the less ethical fly by nite cloud merchants count on that - and they can get away selling doomed franchise concepts much longer than they would’ve if franchisees screamed bloody murder if they were sold a bill of goods.
At the same, business owners are always ultimately responsible for the decisions they’ve made. At the end of the day, no one made me leave my comfy job to own my own business. One can still take responsibility for their actions without letting the bad guys off the hook for their misdeeds.
Franchisees should take responsibility for seeking a “hot new trend” rather than a proven business that has stood the test of time, and franchisors should take responsibility if they were not honest about the risks, costs or performance they were aware of, and for targeting and “selecting” inexperienced people then blaming them for it later.
I can agree with you there, that both sides should take responsibility. I do have to say that it’s not like “boys in Tulsa” (as it is now coined meaning the old ShapeXpress franchisor), made money. They sold their business just in time to avoid bankruptcy. There was about 15 franchisees who stopped paying them royalties (out of the 30 clubs that are now open), and, as part of the transfer agreement to the new franchisor, they will not have to pay that money back to them.
I guess what I am saying is that when the franchisees hurt, so does the franchisor.
Maybe I just got lucky, maybe I just followed their system even though it was hard, maybe it was a combination of them both, I don’t know.
Linden Wood is a washed up network marketing wanna-be who focuses now on scamming people. Its a shame to see how everything this man touches turns to crap.
Save the blow me comment… I’m allergic to plastic.
Are things going to be any better now that Roger Wittenberns and Diversified Health & Fitness have taken over ShapeXpress?
Better for the franchisees, I mean. I’m sure Mr. Wittenberns will do fine.
Is it true that for all the clubs that were opened throughout the year only 13 are open today, according to she Shapexpress website?