After several semi-successful tries at the health club industry, Curves International Founder, Gary Heavin, decided to concentrate on the 100-million strong “niche” of the women's fitness market. In the 11 years since opening the first Curves, Heavin has seen his niche club grow into a chain of close to 6,000 franchises open worldwide, with no slowdown in sight.
Ci: How did you get started in the industry?
I went to college a couple of years pre-med, waiting tables trying to get through school and I realized that I wasn't going to be able to go to med school waiting tables. I saw an opportunity to take over a health club in Houston that was going out of business, and with the help of my brother — I think we paid $10,000 for the place — I went in and started to run it hands-on. I didn't know anything about running a health club, but I knew about people and caring about people and I had a good physiology background, so I was able to approach the exercise and the weight loss from a perspective that was teachable. I found out very quickly that I was good at it.
The club was an alternate club. One day it was men, and one day it was women. I realized that women's days were a heck of a lot more fun and we also produced 70 percent of the revenue on women's days. So as fast as I could I threw the men out and became a women-only facility, and it was called Women's World of Fitness. I almost starved to death the first year. If I didn't sell a membership they turned the lights off. I didn't have a car. I slept in the nursery and it was a struggle, but that's how you learn. You are highly motivated when you are going to lose everything if the next sell doesn't happen. But while dealing with the first year, I had built up a pretty good membership, had figured out some effective methods and scripted some sales presentations that were pretty reliable and were successful enough to take over another facility nearby under a management agreement.
Then, by the time I was 26, I had six locations. I had a million-dollar financial statement and was providing fitness services to tens of thousands of women. At age 30, I had 14 locations, 50,000 members, I'd written my first book and had developed a method to raise metabolism either following a diet or after reaching a goal for women who had been yo-yo dieting. That was a profound tool that I was able to bring to the marketplace as a weight loss counselor. So that was many years ago, and of course, my new book is based on that formula.
Then, at about age 30 I lost everything. What I had done was expanded markets that were too small to support the conventional women's facility. What I mean by conventional is the 5,000-square-foot club that had an aerobic room and a sauna and a steam. And I also went into the men's fitness business, which was a mistake. So I lost it all. As I began to rebuild I looked at the mistakes I made and learned from them and began to do it differently.
Ci: Is that where the Curves concept was founded?
It took me until about age 40 to perfect the Curves formula. At age 40 I really felt that I had the solution to meet the needs of the niche. And I like the word niche because people used to say, “Oh, your niche is the women-only market,” well that niche is 100 million women. It was my little secret that this niche had the potential to become what it was. So my wife and I opened the first Curves in 1992. We really perfected this formula. It was really the smallest denominator of what was working out there — 30-minute total fitness. It sounds too good to be true, but if you understand there are only three parts to a total workout. There's cardio where you raise your heart rate, you do some kind of work that raises the heart rate to training level and keeps it there for 20 minutes or so. There is strength training, which means you move a resistance that's heavier than what the muscles are accustomed to in reps and sets, and then there's stretching, which shouldn't take very long. Now, we use technology, hydraulic resistance, to allow us to use strength training as the work of cardio. That's the magic. It's not a gimmick, it's the toughest 30 minutes of your day, but it's efficient.
Ci: Why does that formula work?
Seventy percent of women across this country are not exercising on a regular basis, according to the National Institute of Health. The two complaints women have were time and not feeling comfortable in the co-ed club. Your conventional workout is an hour and a half. You do your cardio for 30 minutes, then you go on to the weight room. So 30-minute fitness was medicine these women would take. And the other thing was the atmosphere. In the conventional gyms across the land, the equipment is designed to fit the average man and the environment was comfortable only for men. Women were welcome, but they weren't comfortable there. So they didn't go. Women used to tell me, “Before I can go to that gym I've got to lose 10 pounds.” We focus on meeting the needs of women who really felt like second-class citizens in the gyms across the land.
Ci: Why the decision to franchise rather than grow the chain internally and through corporate build-out?
I knew that this business was perfect for a local owner that had passion for the community — so it had to be done as a franchise. But the business model had to be so simple that you could teach these women — many of them housewives — to close a sale, generate a lead, be a personal trainer and a nutritional counselor. It had to be simple enough, much like the workout and my weight loss method — effective and simple.
Ci: It has been a successful formula for you, and it seems that there's more interest in women's, especially at the weight-loss end of the market, with some of the traditional health clubs expanding that role. Is that something that still has growth potential for you and other companies?
Well, it's one of those little secrets that they're catching on to. Well, you just let the cat out of the bag right now. The weight-loss business is bigger than the fitness business. The people that are in the weight-loss business have produced a 95 percent failure rate in long-term weight loss. If ever there was an opportunity for growth for all of us, fitness has to be a part of successful weight loss. There are people who are teaching weight loss, you know Jenny Craig has dropped 200 to 300 locations in the last 24 months; its program fails and it's defective. I mentioned this method of raising metabolism that I developed well over 20 years ago. It's a paradox shift in the way weight loss is delivered in this country. My book outlines the method that changes weight loss in this country. Every weight loss program, whether it is Atkins' For Life, Jenny Craig, Weight Watcher's, etc is an ongoing program. The Curves approach to weight loss is to raise metabolism so you don't have to be stuck with a maintenance diet — that has failed for Americans time and time again. I plan on doubling the memberships in our facilities by taking over the weight loss business in this country. We are uniquely positioned to do that with 6,000 locations in every market in this country that offer a better mousetrap for approaching weight loss. We use a temporary diet that produces permanent weight loss. Curves franchisees are very successful — we have about a 96 percent success rate.
Ci: Do you plan on doing that by adding locations, growing the size of the clubs to allow more members or other methods?
There are only about 8,000 to 9,000 potential locations in the United States, Canada and Mexico. We are already at about 7,000 locations sold with 5,500 open and another 250 opening every month, which is about one every four hours. By this time next year we will be sold out. We now constitute about 25 percent of all health clubs in America. We grew steadily and own the markets. We did this by word of mouth, as we did with our memberships. We became the largest fitness franchise in each of the 50 states before anyone knew we were there. We are also the largest fitness franchise in Spain, Mexico and Canada. We are now open in England, Ireland, Scotland and Portugal. We have some advantages in foreign cultures because the government makes it difficult to build-out and it takes traditional facilities far longer to get open than a Curves franchise.
Ci: How about growth among the individual franchisees?
The individual locations are expanding, in some instances. Overall, our sales average last month was 94 percent, so if 10 women walk into a Curves anywhere in America, 9.4 of them bought. It's hard to believe, but we track these numbers very closely and three years ago it was only 75 percent — which is good — so we've had great, sustained growth.
Our top franchise in St. Louis is 2,300 square feet and has 1,600 members and the owner pays $2,300 in rent, and has a big circuit with 26 stations. We have a fixed royalty, which is rare in the franchise business. She paid 20,000 for the franchise, which includes equipment and another $15,000 or so for build-out. In all, I'd say she has $50,0000 total in this business. She is open five days and a couple of hours on Saturday, so all told her expenses run about $12,000 a month. She has 1,600 members at $29 each and signs new people up all the time, so in all she does about $50,000 a month in revenue. She nets $500,000 a year off of a $20,000 franchise and now owns a second franchise down the street with 1,000 members. And you know what, she didn't go into this to make money; she went into it because she had a passion to help people. Unfortunately, our industry has attracted people that are founding their businesses on profit and we are a service business. If you serve people the profits will come. That's the message that I'd like people in this industry to get hold of, they have their priorities wrong.
Ci: To what do you attribute that spike in sales success overall at Curves?
I think our commercials helped because women got to see Curves before they walked in the door and knew it was a safe place that provided comfort and effective results, so they were walking in the door with their checkbooks out. You have to remember that these are housewives that have been trained to sell memberships and they are selling 94 percent, which is top-level professional performance.
Ci: So the basic demographic of the Curves staff and owner is the housewife going back to work?
As a matter of fact, almost every franchise sale comes to us as a former member. We are the fastest-growing franchise in the world according to Entrepreneur magazine and we don't advertise. That is a testament to a number of things. First, it works for the franchisee, the investor in this opportunity. They do get a great return on their time and money, plus it is gratifying for them. It also works for the members. They are getting off the couch and doing strength training, cardio, stretching, and they are getting results. More than that they are telling others about the experience, who are then buying memberships and franchises.
Ci: Many see the Curves 30-minute workout plan as a stepping stone for the demographic that makes up your memberships to a more conventional fitness facility. Is this the case from your perspective?
I get that question all the time from so-called experts who think we are only going to get to a certain level of success with our formula. What makes Curves fun isn't the equipment, the music, etc. It is the culture. The social aspect allows us to maintain a fun environment because of the way the product is used from the circuit, to the trainer coaching members along. Members will do basically the same thing every time they come in but the environment will always be more fun than going from a treadmill to a stepper, by yourself. As for the workout, it is a misnomer that you can't get in shape by doing the same workout every time. As members get in more shape they will encounter greater resistance and move at greater speeds so their heart rates will elevate and their muscles will become stronger and they will always stretch. So they will get an optimum quality of workout and can live the active lifestyle that should complement a Curves workout. And if the women want to go join a traditional facility, do longer workouts and maybe meet some men, we don't mind that either.
Ci: What about competitors in the women's marketplace? It seems as if there is renewed focus for that 100 million-strong niche you mentioned. Could this affect Curves' expansion pace?
We're limited in our openings because we don't want Curves locations competing with each other. We have carefully sculpted out markets that give our franchisees the ability to build and sustain a reasonable membership. We have been careful not to leave gaps that would allow competitors to come in. But we really don't see us as having true competitors. We have people that copy what we do. We have about 6,000 locations and Lady of America is probably the largest one of these and they only have 500 locations because they bought out Ladies Workout Express. So, over 20 years they have built 250 locations and we do that every month. We are the McDonald's, but they are really no Burger King or Wendy's. There is still potential in this market. We are comfortable because it is really about the service and not the money. We, as fitness providers, are about the only hope in this country in the battle against chronic disease and rate of obesity, so there is really a lot of opportunity for everyone. What's unique about Curves, though, is that you can copy the equipment but not the culture. We have grown totally by word of mouth so we have attracted people with the right priorities — people with a passion for service. It is the Curves culture that is empowering women to become exercisers with support and encouragement from someone that has experienced it themselves.
Ci: Do you feel you may be missing out on a large segment of women that are looking for more amenities, such as day spa services, massage, etc. that they don't find at Curves?
For the most part, the majority of women have been too busy to go to those places and invest the hour and a half that it takes. Or many have been too uncomfortable. Let's face it, men stare at them and hit on them that's just the way it is. Those conventional gyms have been splitting up the men's fitness pie and the women's fitness pie from 18 to 32 years old. We realize that some percentage of our members become exercise fanatics and want to do other stuff or want the pampering, but there are 100 million women and when enough of them enjoy 30-minute fitness they will see the typical workout as a waste of time.