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BUTTERFLY LIFE: Interview With Franchisee Matt Wilson

After attending a well-orchestrated sales seminar, Atlanta-area franchise owner Matt Wilson and his wife joined Butterfly Life with the dream of being their own boss, helping women improve their health, and getting a good return on their investment.  Once they opened their club, they claim they received no help or support in overcoming their branding and marketing challenges.  Their club closed in less than a year.

UnhappyFranchisee.com asked Matt to share the lessons of his experience, and his advice for prospective franchise owners.

UF: Matt, what was your background prior to joining Butterfly Life? Did you have industry experience?
MATT: My wife, who owned and operated our BFL franchise, has in excess of 20 years experience in a variety of customer service positions including 10 years with a major cellular communications company. For several years prior to our investment in a BFL franchise she was the office manager for a successful salon. For myself, I have 20 years experience working in a variety of sales, marketing, educational, technical and business management roles. Neither of us had experience in the women’s fitness industry, however, my wife has been a patron of competing club’s and national diet programs having lost 40 lbs as a result.

UF: When did you decide to join Butterfly Life? Describe the process.
MATT: After attending a franchise seminar in August 2006 in Atlanta, GA, conducted by Taylor Golob, Cheryl Hoke and via video conference, Mark Golob. Around the time of the seminar we were actively investigating a Curves franchise and saw a BFL seminar commercial on television. That led us to check out the company web site and sign up for the seminar. Taylor and Cheryl put on a first class, well rehearsed and choreographed sales seminar. Towards the end they incorporated connecting to Mark Golob via video conference, who delivered a rehearsed speech underscoring the points made by Taylor and Cheryl. When all was said and done it appeared the investment was a low risk, high return venture. Especially given that Atlanta was a burgeoning market for the brand and BFL appeared committed to developing the market for the long run.

The appeal for us and we believe with many investors, was with the prospect of being able to help women improve their health while being your own boss. The bonus was there was what seemed to be a good return on the investment. Reality was much different.  CONTINUE READING

Read Other Butterfly Life Franchisee Interviews:

BUTTERFLY LIFE: Jeff Marks, Ex-Franchisee

BUTTERFLY LIFE: Carol King, Ex-Franchisee

BUTTERFLY LIFE: Linda McBride, Ex-Franchisee

BUTTERFLY LIFE: Julie Franco, Ex-Franchisee

BUTTERFLY LIFE: Lisle Head, Ex-Franchisee

BUTTERFLY LIFE: Michael Motes, Ex-Franchisee

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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Visit FRANBEST’s: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and business opportunities.

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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

(FranchisePick.Com) Related Reading:
Fortune Article Spotlights Butterfly Life Franchise Woes

Butterfly Life Franchise Lawsuit in Forbes
Franchise Pick’s Most Volatile Posts of 2007: A Wrap-Up
Franchise Dreams Becoming Nightmares for Many Fitness Club Owners
Will the REAL Butterfly Life Franchise Please Wave Its Wings?
IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?

Read interviews with Butterfly Life franchisees at UnhappyFranchisee.com

In Stuart Goldman’s recent industry article (Lights Out) about struggling 30 minute fitness franchise concepts provides interesting insights into several fitness franchise chains, notably the embattled Butterfly Life.

According to Goldman’s article, Butterfly Life is in litigation with franchise owners, who allege that, among other things, Butterfly Life salespeople made illegal pre-sale earnings claims that underrepresented their costs and breakeven threshhold. Butterfly Life CEO Mark Golob refutes the claim, saying that the failed Butterfly Life franchise owners just want to blame the franchisor for their own failures and lack of hard work.

Here’s an excerpt:

Butterfly Life

Although 1-2-3 Fit franchisees say they have few resources to file a lawsuit, Butterfly Life and its franchisees are in litigation.

Butterfly Life filed an arbitration last fall against one of its franchisees, Beth Tomei of Walnut Creek, CA, for terminating the franchise agreement in the company’s UFOC and changing the name of her club. Tomei and nine other franchisees then filed a class-action counterclaim against Butterfly Life on Jan. 10 in California through the American Arbitration Association.

Mario L. Herman, a Washington, DC-based class arbitration attorney who is representing Butterfly Life franchisees, says 250 franchisees are potential members in the counterclaim. Herman says Butterfly Life misrepresented itself by orally providing illegal earnings claims, such as stating that the break-even point for franchisees was 200 members and that franchisees would make a profit within their first six months of operation. None of the franchisees have made a profit in that time frame, Herman says.

“We believe that there was a standardized pitch that was provided to everyone before they purchased,” Herman says. “It’s fraud in the inducement of the agreement as opposed to any breach-of-contract, post-signature, post-execution agreement.”

Item 19 of the Butterfly Life UFOC, titled Earnings Claims, states: “Butterfly [Life] does not furnish or authorize sales persons to furnish any oral or written information concerning potential sales, costs, income or profit of a Butterfly Life Center. Actual results may vary from unit to unit and Butterfly cannot estimate the results of a particular franchise.”

Golob, Butterfly Life’s president and CEO, refutes the claims by franchisees that they were misled about how much it costs to operate a Butterfly Life club.

The troubles that continue to plague circuit club companies also extend to business-savvy franchisees who trusted the reputations of some of the biggest names in the industry.

“Whatever they were told was in that franchise circular,” Golob says. “If one of my employees told somebody something that wasn’t true — and I do not believe they did — they still had the numbers.”

The numbers don’t look good for Butterfly Life. In an unaudited financial statement dated Aug. 31, 2007, the company listed losses of $815,255 and pretax losses of $771,361…

* * * * *

…Golob would not provide details about the number of Butterfly Life clubs in operation. He did, however, say that franchisees should be responsible for their failures.

“People think when they buy a franchise, they’re automatically going to make a lot of money,” Golob says. “They don’t realize it takes a lot of hard work. Very few people ever blame their failures on themselves. If for any reason a franchise is struggling, it’s always the franchisor’s fault.

“You really have to feel bad for anybody that invests money in anything that doesn’t make it. But how many health clubs have you known to close their doors for whatever reason? There’s not a franchise out there today that doesn’t have franchises that close.”

Read the article: Lights Out

WHAT DO YOU THINK OF BUTTERFLY LIFE, ITS FRANCHISEE CLAIMS AND MARK GOLOB’S STATEMENTS? YOUR COMMENTS AND INSIGHTS ARE APPRECIATED.

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Visit FRANBEST: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and and business opportunities.

Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

Stuart Goldman of Club Industry’s Fitness Business Pro, a leading health club industry trade publication, has written an extensive and well-researched article on the struggling 30-minute fitness franchise chains and some of the powerful names that were instrumental in putting the match to this “hot new franchise” phenomenon.

I plan to look at particular points of this article in upcoming posts. Please share your initial comments below.

Here’s an excerpt. Click a link to read the entire article:

Source: Lights Out by Stuart Goldman, Managing Editor, Fitness Business Pro

The troubles that continue to plague circuit club companies also extend to business-savvy franchisees who trusted the reputations of some of the biggest names in the industry.

1-2-3 Fit, Denver, was founded in 2005 by Quiznos restaurant executives Rick Schaden and Brooksy Smith, who combined their efforts with fitness legend Ray Wilson. The 1-2-3 Fit Web site lists 27 stores open in 11 states, with seven more stores opening soon. One franchisee says 22 stores have closed since the company’s inception.

It sounded so simple. It made so much sense. Experienced, knowledgeable people banked on the marriage of a well-known sandwich chain and a fitness industry legend to create an exciting new circuit club franchise. At another promising company, people counted on the experience of a group of investors that included the founder of the biggest revenue-producing chain in the industry.

1-2-3 Fit, Denver, which opened in 2005, was the brainchild of Rick Schaden and Brooksy Smith, two men who made Quiznos a successful national restaurant chain. Schaden and Smith called upon fitness legend Ray Wilson, whose background includes opening several club companies, to help them with their venture into the fitness industry.

“It was the perfect mixture of franchise team and fitness team,” one former 1-2-3 Fit franchisee says.

Butterfly Life, San Ramon, CA, opened in 2003 and had the initial backing of Mark Mastrov, the founder of 24 Hour Fitness who resigned last month as chairman of 24 Hour. Mastrov’s colleagues, Mark Golob and Tom Gergley, had operated Linda Evans clubs in California before opening Butterfly Life.

“With Mastrov’s name, how could you go wrong?” one former Butterfly Life franchisee says.

But according to many franchisees at the two companies, plenty did go wrong…

READ THE REST OF THE ARTICLE

SHARE YOUR OPINION BELOW

Visit FRANBEST: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and and business opportunities.

Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

(FranchisePick.Com) Read interviews with Butterfly Life franchisees at UnhappyFranchisee.com

Failed, failing and still-struggling club owners of the Butterfly Life women’s fitness chain have not been shy in voicing their displeasure with BL President/CEO/Founder Mark Golob and Chairman/Founder Thomas Gergley [pictured, below].

On recent FranchisePick.Com BL posts (see here and here), Golob gets the most blistering comments, with some characterizing him as “a glorified used car salesman” and “con artist” who recently sold his home for close to $2 Million and is now building his retirement home on 40 acres “with all the dead and/or dying butterflies’ money.”

Thomas Gergley does not inspire comments quite as venomous as Golob’s, but it’s clear that the co-founder and long-time Golob associate is regarded with serious distrust. One commenter characterized Gergley as “good Christian… spewing a bunch of lies.”

Allegations of fraud & misrepresentation

Franchise owners contend Golob, Gergley and Butterfly Life sales reps gave them unrealistic information during the sales process, including cost estimates and profitability threshholds they knew were too low. Franchisees complain that much-hyped branding and advertising campaigns they were promised never materialized. A group of Butterfly Life franchise owners have enlisted the help of the American Association of Franchisees and Dealers (A.A.F.D.), but Gergley and Golob have refused to officially recognize the fledgling franchisee association.

Gergley letter promises “upgraded franchise system in 2008″

On December 11, 2007, Gergley distributed a letter to current Butterfly Life franchise owners. “Dear Valued Butterfly Life Franchise Owner:” the letter begins. “I am writing with exciting news for Butterfly Life franchise (BLF) owners in 2008.”

In the letter, Gergley announces that franchise owners will have the opportunity to enroll in an “upgraded franchise system in 2008.” The benefits for those who enroll include a $200/month reduction in royalty fees, group training schools, workshops and membership programs designed to boost revenue and member results. It doesn’t say what the requirements for enrolling in the upgraded system might be. (Why, one might ask, aren’t these simply improvements to the same system?)

Additionally, Gergley announced the formation of a 7 Member Franchisee Advisory Council (FAC), a 7 Member Area Representative Council (ARC), and assistance in selling franchisee clubs and equipment at no commission, and sharing 50% of the franchise fee from resold territories with the franchise owner who previously failed there.

Call me a cynic, but when the “exciting news” from your franchisor is that after you lose $150K they’ll cut you in on the action when the next, er, franchisee comes along… well… you know it’s going to be another one of them years…

YOUR COMMENTS, AS ALWAYS, ARE WELCOME.

Related Posts:

Butterfly Life Chairman Gergley Offers Commissions to Ex-Franchisees

IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?

Will the REAL Butterfly Life Franchise Please Wave Its Wings?

Franchise Dreams Becoming Nightmares for Many Fitness Club Owners

Franchise Pick’s Most Volatile Posts of 2007: A Wrap-Up

Photo Credit: Anon.Rosie licensed via Creative Commons. Used by permission.

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Visit FRANBEST: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise opportunities.

Top New Franchise: Who’s hot. Who’s not.

(FranchisePick.Com)  Read interviews with Butterfly Life franchisees at UnhappyFranchisee.com

Finding reliable information on a given franchise opportunity can be a challenge. Sometimes you have to sort through wildly conflicting views and accounts.

For example, we sought out information on a fitness franchise opportunity called Butterfly Life in our post IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE?

The comments seem to be describing two different companies.

Mary Says: …the corporate staff has always lacked competence and professionalism from the beginning.
Kathy says: …There are many clubs all over the US that find a year or two later they are not even close to breaking even.
Linda says: the owner only believes in money and gets it by harrassing potential franchisees with verbal lies…
Claire says: I have heard of so many closures and personal bankruptcies from former franchisees… They take your money and ignore you!! Don’t go there.
Leigh says …run, run, run away!

However…

Phil says: The best fitness franchise for Women’s Fitness is Butterfly Life… a winning formula for members’ success and ours.
Susan & Jamie say: …we are very grateful to corporate for all the support you have shown. I feel that you care and want us to succeed and are doing everything you can to help us make it happen.
Cynthia says: … if I need something or have a problem I know that I call or e-mail someone from corporate office and I am going to get a response right away, often within the hour… I could not ask for a more supportive environment than the one provided by the corporate office at Butterfly Life.

Hard to believe these people - all supposedly franchisees - are talking about the same company. The lesson is that if you only speak to a person or two you may be getting only one side of the story. Hear only the negative, you may miss out on a great opportunity. Hear only the positive, you may buy into a financial nightmare.

The moral of the story? Keep asking and keep digging until you get a sense for the truth of the situation and the opportunity you’re considering.

ARE YOU FAMILIAR WITH BUTTERFLY LIFE OR SIMILAR FRANCHISE OPPORTUNITIES? HAVE YOU EXPERIENCED CONTRADICTORY ADVICE ON FRANCHISE OPPORTUNITIES? SHARE YOUR EXPERIENCE; LEAVE A COMMENT.

More about Fitness franchises at FranBest Fitness blog

Discover the best new franchise opportunities at TopNewFranchises.Com

Get the straight scoop on how to find the perfect franchise opportunity at FranBest.Com

Read interviews with Butterfly Life franchisees at UnhappyFranchisee.com

We sent out emails to fitness franchise owners, managers, employees, and customers asking which fitness franchise is best, and why. Our first responses were regarding a fitness franchise called “Butterfly Life.”

One commenter wrote:

Butterfly Life is the hottest new fitness franchise to hit since Curve’s… With all 3 aspects of health and wellness under one roof. Diet, Exercise and Well-Being is the combination to SUCCESS!!! Join the movement to make Butterfly Life the #1 Fitness Franchise across the Country!

Phil Gerst said:

The best fitness franchise for Women’s Fitness is Butterfly Life. We’ve been open for 8 1/2 months and have signed over 200 members. Our members are seeing results - losing weight and inches, feeling better and having more energy. The excerise equipment is designed by a women for women and use stacked weight with 12 levels - not the cheap hydraulic stuff. The members really like group exercise classes - and with more than 40 different classes - including step, dance, kick/box, and ball - cardio classes, Pilates and yoga classes and sclupting classes - there is something for everyone. Add BFL’s excellent diet program and nutrition counselling and you have a winning formula for members’ success and ours.

WHAT DO YOU THINK? IS BUTTERFLY LIFE A GREAT FITNESS FRANCHISE? LEAVE A COMMENT AND TELL US WHAT YOU THINK!