CLARK, NJ -- Cuts Fitness bought out the franchise agreements of each of its franchisees and closed its franchise business in June, according to Steven Haase, managing director of Cuts Fitness. Former franchisees continue to operate under the Cuts Fitness name, but they cannot open new clubs under that name. Haase says he and the other founding members of the company maintain the franchise as a corporate business.
Six former franchisees have gone coed, and some are now open 24 hours a day, seven days a week.
“We released our franchisees of a significant long-term obligation,” Haase says about the buyout of the 38 Cuts Fitness for Men facilities and the two Cuts Fitness for Women facilities. “On the surface, it cost us lost long-term revenue, but given the struggles at a local franchise level, we determined that this was the right thing to do for all involved.”
Former New Jersey Cuts franchisee Shelly Bowden chose to go coed and 24/7 after the buyout and has reaped the benefits so far.
“[It’s] the best move we’ve ever made,” Bowden says. “Everybody has different schedules.”
Haase says many of the former franchisees became coed facilities because they were struggling and needed to reach a larger market of prospective members.
A former franchisee in Pennsylvania, who asked not to be named, now operates his club on a 24/7 schedule, adding security cameras and a key card access system. He staffs the clubs with a part-time trainer for some of the late-night hours.
Bowden, who used to operate as a men-only club and now is coed, has seen her member numbers increase. In the first months after going coed, 15 out of 40 new members have been women.
“A couple of people questioned [the change], but then their wives joined.” Bowden says. ‘[It’s] worked out well.”
With all the changes that have occurred in the last few months for Cuts Fitness, Haase says he wishes all the franchisees the best in their endeavors.
“Right now, I can say that the male-only model was not successful for us from a profit perspective,” Haase says. “Most of our franchisees were struggling getting to break even and that’s a tough environment to be in regardless of how effective the workout routine is. That being said, our franchise network changed thousands of lives for the better, and there is much to be proud of all around although it has been very frustrating for all involved.”