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STRATEGY

Gary Heavin Is On a Mission From God

His goal: To single-handedly save the world's women from obesity. With Curves, he seems to be pulling it off. And he's built a billion-dollar business along the way.

It's just after 9 in the morning, and 375 people, nearly all of them women, sit at rows of tables in quiet anticipation. In front of each is a bottle of water, a thick loose-leaf binder, and a paper tent printed with their names and hometowns: Boynton Beach, Florida; Kodiak, Alaska; Libby, Montana; Traralgon, Australia; Martha's Vineyard; San Diego.

The room's walls are draped with large boxing match posters--promoting contests like Iron Will vs. Evil Sofa, and Will Power vs. Curly Fries. A large neon sign of the logo for the women's fitness club Curves--the company name, in purple cursive--is mounted on the wall, casting a violet glow on the white metal weight machines that occupy a pride of place not only in each corner of this room, but also in thousands of communities across the United States and, increasingly, the world.

The event is called Club Camp, and each new franchisee of the fast-growing chain of gyms is required to attend. There are enough new franchisees that the company holds a Club Camp almost every month, including sessions in places like Sydney and Tokyo to accommodate the gym's growing number of global franchisees. Janell Gilman, Curves' director of training, is first to take the stage. She delivers a few housekeeping remarks, then introduces the main event. "Get ready to welcome the man who has made this all possible, our CEO and founder, Gary Heavin!" A sea of pastel T-shirts and ponytails rise as one, applauding, cheering, flashing disposable and digital cameras. Some of the franchisees wipe tears from their eyes, others execute a little dance.

Heavin takes the stage, smiling and waving. A 51-year-old Texan with sandy, thinning hair and a blondish close-clipped mustache, he's wearing a lavender shirt with a Curves logo embroidered on it and cream-colored slacks. He's not pudgy, but he's no hard-bodied Jack La Lanne either. He casually leans on a tall chair and begins. "We're going to make you masters of your own fate," Heavin (pronounced haven) tells the crowd. "I'm going to tell you exactly what this job requires to be successful. If you follow my advice exactly, you will prosper. You can't screw this up! But if you want to do it your own way, you're going to have problems. This is an opportunity. People thank me for that opportunity, frequently. But I always say, 'Look, all I did was figure out every wrong way to do this.' I've lost everything I owned, and that's good news for you, because you don't have to suffer and learn things the hard way. I've done it for you."

Since its founding 14 years ago, Curves has grown from one franchise to nearly 10,000. It now accounts for four out of every 10 franchised fitness facilities in the United States, making it the nation's largest fitness chain. Curves can be found in 44 countries, and it's the largest fitness chain in Canada, Ireland, Mexico, and New Zealand. There are four million Curves members worldwide. Curves International, the franchiser, is privately held and family-owned, and employs just over 100 people at its headquarters in Woodway, Texas, a suburb of Waco. The company says it now has systemwide revenue in excess of $1 billion.

But Curves, Heavin insists, is about more than just money. "I personally can't influence the lives of women. I can't get them to go to the gym, watch their weight, and take care of themselves," he tells the crowd at Club Camp. "But me and 10,000 of you, and the 30,000 employees you'll hire? Together we can. In fact, I'll share something with you that came out this past week." Heavin cites a survey published in the Journal of the American Medical Association. Between 2000 and 2004, the survey found, the percentage of men that are obese increased, as did the percentage of children. But the percentage of women who are obese--33 percent--remained flat. "I believe that Curves has single-handedly stopped the obesity rate in this country for women," he says. The room explodes with wild applause.

It's hard to say whether Heavin is correct, but his claim is at least plausible. Experts say that Curves, which has persuaded millions of otherwise sedentary women to get to the gym, deserves some credit for making a dent in the obesity crisis. "Curves has arguably done more to get inactive women exercising than any other fitness trend or organization in the history of exercise," concluded a 2005 report from the American Council on Exercise. Given that, and given the company's rapid growth, it's also hard not to take Heavin seriously when he says that his goal for Curves is to become "the McDonald's (NYSE:MCD) of fitness." It's not as audacious as it sounds. Already, there is one Curves for every two McDonald's in the United States.

Curves gyms can be found in mini-malls and on country roads, in urban centers and suburban shopping plazas. Walk into a typical club, pass an appointment desk, and you'll see a dozen workout machines arranged in a circle. The machines use hydraulic resistance instead of stacked weights, so the faster you work, the heavier the resistance. The idea is to work fast enough to elevate your heart rate into the training zone. Every 30 seconds, the fast-paced music that pumps through the club's sound system is interrupted by a voice that instructs "change stations now." You move from a resistance machine to a "recovery station," where you are encouraged to "move lively" to keep your heart rate elevated. Walk, jog in place, or do a little dance, as most do. In the center of the circuit, a Curves employee encourages and motivates. Gym members--ranging in age from teenagers to septuagenarians--chat about their lives, their kids, their upcoming vacations. There are no mirrors and no men. Go around the circuit twice, and you're done. It takes just 30 minutes. Membership starts at $29 a month.

It's hard not to take Heavin seriously when he says that his goal for Curves is to become "the McDonald's of fitness." Already, there is one Curves for every two McDonald's in the United States.

Circuit training, of course, has been around for decades. But Curves is very much unlike most fully loaded gyms with their banks of cardio machines, schedules of aerobics classes, personal trainers, spa services, juice bars, and other assorted bells and whistles. Indeed, the idea for Curves emerged from Heavin's experience running a traditional gym--and then running it into the ground.

As a child growing up in the mid-1960s, Heavin dreamed of becoming a doctor. After graduating from Sam Houston High School in Arlington, Texas, Heavin worked a variety of odd jobs--a roughneck on oil rigs, longshoreman, waiter, truck driver--while taking premed classes in colleges. His dream ended around the same time he ran out of money to continue his studies. Fortunately, his brother David had a proposal: Would Gary like to manage a fitness center he was planning to purchase in Houston? With little to lose, Heavin went for it.

He was 20 years old and knew nothing about business, and the first year of running the gym was often terrifying. Heavin struggled to find money to pay the gym's electricity bill and often spent his nights on the floor of the facility's daycare center. But in the process, he learned a few things about himself. First, he loved the fitness business. Plus, he was a good salesperson, particularly when it came to dealing with women. He soon limited the gym's membership to women only and named it Women's World of Fitness.

Within a year, the club was doing well enough that the brothers decided to open another location. Over the next six years, they opened another six more throughout south Texas. "By the time I was 26, I had a $1 million financial statement," says Heavin. By the time he was 30, Women's World of Fitness had 14 locations and 50,000 members. Heavin got a pilot's license and flew himself from location to location, keeping an eye on his growing empire. Then things started to fall apart.

In retrospect, the problems were simple. "I let my overhead increase beyond the capacity of the market," Heavin says. Women's World of Fitness clubs were big, which meant high rents. They also offered swimming pools, tanning beds, and kids' programs. Such costly amenities require a large membership base, but aside from Houston, the gyms were mostly in smaller towns. Desperate to bring in more money, Heavin decided to open his clubs to men. "It was logical, but it destroyed my women's business," he says. Indeed, it didn't take long for female customers to grow uncomfortable with the meat-market aspect of a coed gym and drift away. As the business faltered, Heavin's managers grew restless. "I spent all my time flying from club to club trying to keep people disciplined and motivated," Heavin says.

In 1986, about three years after opening its 14th location, Women's World of Fitness was bankrupt. Heavin lost his house, his airplane, and his cars, and was some $5 million dollars in debt. His wife divorced him. Heavin lacked the money to pay alimony and in short order went from being a jet-setting entrepreneur to just another broke guy serving a three-month term in Cameron County Jail in Brownsville. As often happens when people hit bottom, Heavin turned to the Bible for solace. He described the moment he became born again during a 2003 interview on Pat Robertson's The 700 Club. "I finally got on my knees and said, 'God, I lived the first half of my life by my will, and it's a mess. I'm going to turn the rest of my life over to you." His religious beliefs gave him a new way to look at his mistakes--not as failures, but as mere bumps on the road leading to the Lord's larger plan for Gary Heavin.

Heavin began putting his life back together. He found work selling fitness equipment and consulting with gym owners and settled into life with a new wife. Heavin met Diane Piller during the waning days of his gym business. Diane, who had model-perfect features and the physique of a lifelong fitness fanatic, worked in newspaper advertising. Women's World of Fitness was not only one of her accounts, it was also the place she went to get her aerobics fix. The relationship grew as the business collapsed, and in 1990, the couple married, just before Gary went to jail. "It's kind of a neat thing that we married then because he knew I really loved him," she says. "He didn't have a lot of material things."

The couple soon began plotting their return to the fitness business. Their new gym would be different. Overhead would be kept as low as possible. Rather than investing in every manner of workout machine, the gym would offer a simple fitness circuit that would be quick and easy for members to complete. Instead of operating as close to 24-7 as possible, a common practice in the industry, the gym would close early. Showers, de rigueur at most gyms, were also deemed expendable. And most important of all: It would be women only. Diane came up with the name--Curves--and sketched out a cursive logo on a piece of paper.

If everything worked out, the Heavins figured they'd be able to earn about $100,000 a year. With $10,000 they'd managed to scrape together, they opened the first Curves in 1992 in Harlingen, Texas, where they lived, with Diane as manager. It was immediately clear that the simple formula would work. The couple had estimated it would take 90 days to sell 100 memberships--the amount they'd need to break even. Diane sold that amount in the first week alone. In 1994, they opened a second club in McAllen, and it also did gangbusters. To Heavin, still fired up from his jailhouse religious awakening, the newfound success made perfect sense. "It's kind of like Moses in the Bible," he says. "I spent 10 years in Egypt, which was the old health club business. And then I spent 10 years in the desert; I was a consultant, I was in the equipment business, I traveled around. And then at age 40, it all just came together. Everything we tried, worked. We entered into the Promised Land."

By 1995, the Heavins had far exceeded their wildest dreams. "We had two Curves, a brand-new baby, and we were earning a quarter of a million a year," says Gary. "We were going to live happily ever after." Then he had an epiphany.

Heavin was giving a talk on weight management to a group of women when he realized he'd been scanning the crowd for the face of his mother, who had died when he was 13. "She had just turned 40 and died in her sleep," he says. "My two little brothers and I found her. It was a real traumatic experience." Doris Joy Heavin had suffered from obesity, high blood pressure, and depression, all of which were treated with medication rather than the recommendation that she get more exercise. Heavin grew furious when he thought about it. Perhaps this explained why he wanted to be a doctor, why he enjoyed the fitness business so much. "I had the epiphany that what my life had been about was healing women because of my mother," he says. "And that was what my destiny was going to be."

"I believe you can teach a manager to care enough to make a pretty good cup of coffee," Heavin says. "But it's hard to make a manager care enough to run a fitness club. Only an owner will care enough to do the job."

Heavin would heal women before they got sick. Curves would be the vehicle, and he needed to spread it as far and wide as possible. The question was how to do it. He didn't want to expand by opening more gyms and trusting strangers to manage them; managers, he felt, had served him poorly at Women's World of Fitness. "I want to franchise this thing," he told his wife. Diane, who had come to enjoy her new lifestyle, thought the move was way too risky. "I didn't feel like eating beans again," she says.

Gary understood her fears, but pressed his case. Franchising, he said, made perfect business sense. "I believe you can teach a manager to care enough to make a pretty good cup of coffee," Heavin says. "But it's hard to make a manager care enough to run a fitness club. Only an owner will care enough to do the job." There were spiritual concerns, as well. "We've been given this gift and if we don't use it, it will be taken away," he told Diane. He reminded her that they were required to use the gifts they had been given and to bless others as they'd been blessed.

After sleeping on it, Diane came around. "Okay," she asked, "how do we do this?" Neither of them knew a thing about franchising. Heavin turned to an acquaintance, Gary Findley, for advice. Findley was vice president of franchise sales at the Dwyer Group, a well-established franchiser of residential services such as Mr. Rooter, Glass Doctor, and others, and was a fount of information. Heavin ran a $250 ad in The Paris News in Paris, Texas, and quickly sold his first franchise. After he sold his third franchise, Heavin called Findley. "I've got a little money coming in now," he said, "and I can pay you to come onboard." Findley became Curves' first employee and was soon named president.

The early days of Curves were far from glamorous. Using Heavin's pickup truck and an open-bed trailer, the two Garys would bring equipment to franchisees. They'd scrape bugs off the machines before delivering them, and always carried white spray paint to cover up the dings and scratches that cropped up during transport. Diane created marketing and training materials. She also began developing merchandise, including T-shirts and water bottles with the company's logo. When the company decided to create a glossy magazine for members, Heavin named it Diane.

From the outset, Heavin was looking for a different kind of franchisee--someone who was looking less for a business opportunity than for a mission. The typical franchiser, he says, "looks for people who want to run a business and tries to teach them passion. We're looking for people with passion, and we'll teach them how to run a business." So rather than plastering the franchise trades with ads like most franchisers, Curves has found nearly all of its franchisees through word of mouth--as often as not from its own membership base. Many share Heavin's Christian faith. Franchisees are not required to have any background in entrepreneurship or experience in the fitness industry, but Heavin says that the company is selective: Applicants must display a willingness to work hard and, more important, have a passion to serve.

Amy and Randy Sims, for example, had owned two Subway locations. Amy joined a Curves gym and now the couple, who are married, own one in Batesville, Arkansas. "We like Gary's philosophy," says Randy, "and we like the idea that it's for women's health." Adds Amy: "With Curves, you're one-on-one with people. At Subway, you do have your regular people that come in and out, but you're not affecting their health, and that's really motivating to me, to be able to help other ladies like that."

The Simses also like the way Curves handles financial matters. In most franchising arrangements, franchisees pay the franchiser a franchise fee at the outset (at Curves, the current fee is $39,900; opening a Subway franchise, by comparison, can cost more than double that amount), plus a percentage of sales, on a weekly or monthly basis. That's how it worked at the Simses' Subway franchises. "The more you make, the more you pay," says Amy. "It's very, very frustrating. Your hard work is paying off and you're making money, but you're also giving a lot of it to them." To Heavin, this made no sense. Not only does it serve as a kind of tax on successful franchisees, it creates bad blood between the franchisee and franchiser. "You tend to become adversaries over the issue," Heavin says. He decided to cap the monthly 5 percent royalty--it's currently $795 in the United States. "If they do fantastic, bless 'em," Heavin says.

Of course, the cap limits the income that Curves International stands to get from franchisees. On the other hand, clubs that outgrow the royalty cap still provide additional revenue to Curves through product sales. Franchisees are required to purchase all of their Curves T-shirts, water bottles, vitamin supplements, and so on from Curves; such products currently are a $25 million-a-year business. (That business, a separate company called Ideas in Action, is run by David Heavin.) What's more, the royalty cap made it a cinch to attract new franchisees. "The more money our franchisees would make, the happier they were, and they'd shout about it," Heavin says.

And shout they did. In 1996, there were 44 Curves gyms. In 1997, there were 247. The Heavins decided to move their headquarters from their home to a proper office. They rented two offices and soon added a third. The next year, the number of Curves franchises doubled again, to 537, and the Heavins moved Curves headquarters from Harlingen to Waco, to a low-slung building across the street from a waste-treatment facility. They had five employees and never thought they'd outgrow that building. In 2000, there were more than 1,200 franchises. In 2001, Curves doubled in size again. By 2004, the company had more than 8,000 franchises, and Curves moved again, to its current capacious headquarters: a rustic, ranchlike building in Woodway, with working fireplaces and hallways lined with prints of ducks in flight and cowboys taking aim at Indians.

Heavin credits Curves' rapid growth to the low-overhead business model, which allows the company to open profitably in towns too small for other gyms. "We created an efficient business model that could go where no one else could," he says. Indeed, the average Curves club today has only 400 members--which, according to a formula the company has developed, is what a town with a population of about 10,000 can sustain.

Targeting smaller towns and cities had several strategic advantages. For one thing, it made it easier to attract members, because Curves often was the only fitness option in town. It also made it easier to attract new franchisees: The territories were small enough that an enthusiastic Curves member could open a gym one or two towns over without poaching business. The low-overhead model also meant that the buy-in for a franchisee wasn't steep--a little under $20,000 in those days, including the equipment. And franchising in out-of-the-way places gave Curves at least one more edge: The gyms were largely hidden from rivals, which allowed the company to sell hundreds of franchises without arousing competition.

Marketing also proved easy. Curves promised a fast-yet-effective workout, along with a sense of community with like-minded women. This promise was particularly attractive during the mid- to late 1990s. Aging boomers were being urged by their doctors to spend more time at the gym. But few women are able to put this advice into practice: Some 66 percent of women say they never get 10 minutes or more of any kind of vigorous physical activity a week, according to a 2004 report by the Centers for Disease Control and Prevention. What's more, Heavin's frank talk about religiously inspired values could not have been timed better. Not only were megachurches on the rise, but the family-friendly aspect of Curves ownership--hours that allow you to be home to have dinner with your family--also had a strong appeal and stood in stark contrast with the around-the-clock service required by other franchisers.

To be sure, Heavin's unabashed religiosity has alienated some. In 2004, for example, news broke that the Heavins had given generously to an anti-abortion group, sparking a moral dilemma for many pro-choice Curves members. The issue even surfaced in The New York Times Magazine's column The Ethicist. The column's author, Randy Cohen, suggested that pro-choice Curves members who value their reproductive rights more than their figures should relinquish their memberships. Very few members actually left, however, and Curves continued its rapid growth. The numbers are indisputable. "It took McDonald's 25 years to reach 6,000 locations. It took Subway 26 years," says Heavin. "And it took us eight."

Back at Club Camp, Heavin wraps up his remarks and opens the floor to questions from the franchisees. How can I inspire teamwork among my employees, one wants to know. Will Curves authorize a price increase anytime soon, asks another. Then Heavin gets this question from a franchisee in Colorado: "Hi, Gary. I know what you do for women is amazing, but what about men? Have you done any testing in consumer markets? I've been asked this question by my own members."

"Here's the answer so you can tell your members," Heavin replies. "When hell freezes over." Raising his voice to be heard over the applause and cheers, he explains himself. "Compared with women, men don't seem to be that loyal. For five bucks off the dues, he's going to go down the street. Also, in a gym environment, men don't bring their friends. When you're sitting at a table with several people, does Bob get up and say, 'Come on, Jim and John, let's go the bathroom together?' Men don't work that way." After the laughter dies down, Heavin turns somber. "The men's fitness business is a terrible place to go--and I've been there, by the way. Will the Curves equipment and physiology work for men? Sure. Would the business model work? No. I'm approached constantly to do this. Maybe someone else will figure out a smart way to do it. But we're going to take care of the women." He gets another robust round of applause.

Some CEOs might at least take a moment to consider a brand extension idea offered repeatedly by franchisees and customers. But not Heavin. "When it comes to women's fitness, just by sheer numbers, I'm the world's undisputed expert. I'm the visionary," he says. "We certainly get a lot of good ideas from members and franchisees. But the big ideas, they come primarily from me." He points to this fact: Of the nearly 10,000 Curves locations that have opened, only 300 have closed. Of those, 200 have reopened successfully.

The question, of course, is whether Heavin's faith in his own judgment, and the credence he puts in lessons learned from past mistakes, will continue to suffice as Curves makes the transition from a fast-growing upstart to a global enterprise. There are signs that not everybody thinks so. Gary Findley, for example, began suggesting to Heavin that with growth slowing--the chain now opens about 1,000 new franchises a year--the company needed to begin opening complementary businesses under the Curves umbrella. "In order for Curves to maintain its spot ahead of the competition, it needs to provide some additional income opportunities for franchisees," he says. "At some point, they're going to reach their maximum income potential." Heavin, on the other hand, was adamant about keeping the focus squarely on 30-minute circuit training for women. Indeed, new franchisees are warned that if they deviate at all--by adding, say, treadmills or tanning beds to their clubs--they'll be in violation of their franchise agreements and run the risk of losing their businesses.

In 2004, at the age of 43, Findley retired. His plan was to devote his time to a ministry for men, centered around hunting. But the retirement didn't last long. Findley was quickly approached by a Curves franchisee who noticed that a day spa next to her club was doing brisk business with her members. Intrigued, he decided to invest in a membership-based day spa called Facelogic, which has sold 29 locations in less than a year. It's hard not to notice that this easily could have happened under the Curves umbrella. Findley remains close with Heavin and his sister-in-law still holds an executive position at Curves. But he thinks that Heavin's focus on what's worked for Curves in the past may impede the chain's future growth.

Heavin sees little reason to change course. Of the 41 franchise systems in the adult fitness sector, Curves boasts a 40 percent market share. But 10 newcomers have emerged in the past two years--a large number of newcomers, says Darrell Johnson, president of FRANdata, a franchise research consultancy in Arlington, Virginia. None of these newbies are likely to knock Curves off its perch, says Johnson. But collectively, they threaten to whittle away at the leader's market. While Curves is pitched to women generally, these new franchisers are slicing the market into ever smaller segments, appealing to upscale women, or women over 50, or younger women. "The fitness segment has moved from a one-size-fits-all model to a very specialized model," Johnson says.

Consider Cuts, a 30-minute fitness franchise for men that recently launched Cuts Women. Many Cuts Women customers are former Curves members who are sold on the idea of a 30-minute workout but are bored with Curves' routine and want something more intense, says John Gennaro, founder of the franchise, which is based in Clark, New Jersey. With 90 locations and 15,000 members, Cuts is puny compared with Curves. But that doesn't bother Gennaro. He's happy to let Curves educate women about 30-minute fitness--and even happier to provide an alternative when they grow restless.

Maturity has created other problems, as well. There are very few new territories available in the United States, so most new domestic franchisees are those who have purchased an existing club. Resales are much more expensive than new territories. The average new club today costs about $40,000; a resale, $120,000, and many new franchisees wind up borrowing heavily. Curves recently created a department dedicated to the specific issues that crop up during the resale experience, but there are other operational issues to confront. The company has a ways to go before it truly can be considered the McDonald's of fitness, admits Mike Raymond, the company's former director of marketing, who became president after Findley stepped down. "McDonald's has a well-defined management structure, well-defined methods of operation in different countries, with levels of autonomy worked out, and information technology systems," he says. "We're working toward that now."

If any of this concerns Heavin, you'd be hard-pressed to notice. As confident as ever, he splits his time between his office and the new 6,000-square-foot home he and Diane just built. It's on a 1,000-acre, tree-studded ranch in Crawford, not far from President Bush's spread. Rustically decorated in what Texans call "Hill Country elegance," it has two kitchens and plenty of plush, oversize furniture. Out of sight from the main house are the smaller homes of many in the Heavins' extended family. Gary's brother Paul lives in one. Three others are occupied by Diane's parents; her sister and niece; and her brother and his family. Like many large-scale compounds in the area, the ranch has a name: Almost Heaven. The couple belong to two nearby churches, Highland Baptist Church in Waco and Mound Cowboy Church in Gatesville, and are active in a number of philanthropic efforts.

Heavin plans to expand Curves in two ways. The first is through a weight-management plan, the Curves 6 Week Solution, which is designed to appeal to women who prefer dieting to exercise. The six-week course costs $69 and is taught by franchisees. The idea is to expose the dieters to the Curves workout during their weekly classes, which will be held right in the club itself. Heavin also is developing partnerships with health insurance companies. Curves has a presence in almost every community in the United States. As a result, Heavin says, the company is an ideal partner for insurers, which have begun boosting their wellness programs, including offering policyholders rebates if they regularly attend a gym. Heavin estimates that eight million Americans are eligible to have some or all of their Curves memberships paid for by their health insurance. If even a fraction of those millions sign up, it could represent an enormous opportunity.

And if it doesn't? Sitting in his office with his cowboy boots up on his desk, Heavin says this: "For a lot of people in my position, the position defines who they are. For me, I was as happy flat broke as I am flying my Learjet. I don't define myself by my quarterly profits. I define myself as a child of God that's been created in His image for eternity. If that becomes your defining image, there's extraordinary power in it." He pauses for a minute. "I'm not afraid of losing my money or my business; I'm going to wake up every day and do the right thing. And if I were to lose everything I own, I'd just rebuild again."

Contributing editor Alison Stein Wellner wrote for the June issue about the art of apologizing.

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