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."
