WACO, Texas (Legal Newsline) - A group of former franchisees of the fitness chain Curves has filed a lawsuit against the parent company, alleging breach of contract as the franchise chain collapsed.
In all, 32 different former franchise holders filed the suit on Feb. 7, along with a civil RICO charge alleging the investors who bought the Curves company in 2012 schemed to collect advertising and franchising fees, knowing that the company would fail.
At the highwater mark, more than 10,000 Curves locations existed around the U.S. Today, only 600 remain in operation.
The franchisees claim the investors never shared the results of a consultant study that predicted further collapse of the Curves franchises, and refused to invest money in the brand. The franchisees said they were never informed of the study, which predicted a failure rate of at least 15 percent a year unless significant changes were made.
The lawsuit was filed in U.S. District Court for the Western District of Texas.