Contours Franchise Failure

This page is to list the growing number of contours franchise failure in Australia. To be correct franchisee failures. While there are many that are already gone, there is an even bigger list of for sale. Businesses fail, franchises fail. There is nothing wrong with that, it is a fact of life. What is wrong is when failure rates are not disclosed. As of Feb 28th 2009, there are currently 15 Contours franchisees for sale, that can be found on the web. Update June 26th 2009, now 19. Update February 18th 2010, now 35. This information can easily be found on the Internet. There are also several that have closed down.

Franchisors never like to disclose the number of closed down stores or re-sold stores. This information is never made public because if it was then people would be able to make an informed decision and we can't have that can we, that would be franchisor suicide. A store that is re-sold three times and sends the first two owners bankrupt or broke should be classified a failure. Yet as far as the public sees and franchisors advertise, it is a success because it is still open.

The franchise agreements don't require disclosure and neither does the law. The best way to get an idea is to simply search on the web, look at the number of franchisees up for sale. People don't usually sell something that is making them decent money.

Search for the name of the company and franchise for sale or even just the name of the company and "for sale."Try a few diffrent word combinations, search google, yahoo and msn live to get a good mix. The number of Contours franchise failures is growing.

Ex franchisee owned Contours studio's that have closed Current count 17 on Sept 30 2009 (at least 2 more before Christmas 09)

Bankstown
Moorebank
Kotara NSW
Castle Hill NSW
Parramatta NSW
Wallsend NSW
Dandenong VIC
Willetton WA
Mitcham VIC
Tuggerah NSW
Erina NSW
Liverpool NSW (3rd owner)
Wyoming NSW

The following were originally owned by franchisee's who sold back to HO. Then Head Office closed them down for not being profitable.

Corporate owned and closed:

Newmarket NSW
St Ives NSW
North Manly NSW
North Rocks NSW

Current studios for sale found on web search 27 Sept 2009

NSW (6)
QLD (5)
SA (2)
VIC (6)

A telling sign this franchise is in big trouble......

UPDATE: 18/2/2010 Now 35 Studio's for sale, in less than 6 months an extra 16 studios have gone on sale. Source: http://contoursfranchise.net.au/sitesavailable Current number of open studios 162. This number is dropping rapidly.

If you know of others please contact us here so we can post it up on this page. The whole concept has a serious flaw. It is said that they are targetting women who would not normally go to a regular gym. 90% of the population. A bigger market than the 10% regular gym goers. Bringing you a larger group to draw on. There is a problem with this - and that is the fact that those 90% of people are not at the gym because they don't want to go to a gym of any sort. You are targetting a market that a)doesn't want to be there b)if they do join, they look for the easiest and quickest way out. Even though only 10% of people go to a regualr gym, those 10% are committed and will actually stick out there memberships. Contours type members are very temporary indeed. This is why Contours in general is a franchise failure.
Let's look at their so called successful studio who they like to get testimonials from. Penrith. Fact is, owned by relatives of high level staff in head office, get preferrential treatment and help from head office. Secondly pay very little in rent, less than $20,000 per year. Considering in most cases rent is actually double this. This studio cannot be used as a guide. Does head office tell you when you investigate that you need to get less than $20,000 rent to have a remote chance of success.

In another instance another studio owner insisted the reason for their success was the amount of money they have poured into and continue to pour into their business and they suggested other studios should do the same and not complain. Problem with this is that if I or you put more money into something, than the return I get, there is NO profit. Making the whole point of it a waste of time. No one invests in anythnig to lose money. If I am finally making $200,000 profit a year, but to do that I have to invest and spend $300,000 in the same year, I have MADE NOTHING. For some reason franchisors and franchisees who are supporters DO NOT understand this point. UPDATE See IP AUstralia for information on Intellectual Property.

The case of Bacchus Marsh Concentrated Milk Co Ltd v Joseph Nathan & Co Ltd. demonstrates that, ?general skill and knowledge? that a person of ability necessarily acquires in your business is NOT a trade secret. It isn?t knowledge that can be regarded as property: Bacchus Marsh Concentrated Milk Co Ltd v Joseph Nathan & Co Ltd. Therefore ?general skill and knowledge? that the person or employee gains from you isn't protected in a Confidentiality Agreement. All information presented on this website is available in the public domain. Home from Contours Franchise failure