8 ms·

Club Pilates, Pure Barre owners say Xponential left them bankrupt

22 points by rayrrr 3y ago

pinewurst 3y ago
https://archive.vn/UAEhx https://archive.vn/UAEhx
hn_throwaway_99 3y ago
As sure as the sun rises in the East, "Suburban Moms (and Dads) Get Suckered By Over-Promised Sales Projections" is the headline that will never go away (see LulaRoe, MonaVie, just about any other MLM scam, not to mention other over-hyped franchises like Quiznos). At the same time, though, the franchisees had plenty of greed of their own. The article states "They also say it promised them the ability to run businesses as investors rather than as hands-on managers." If your only contribution to a business is giving it money, you are essentially always better sticking that money in the stock market. If you have some special talent, skill, connections, etc. that you can leverage, sure, go for it. But the idea that you can beat the market with no special benefit that you bring to the table is a fantasy as old as capitalism.
- hash872 3y ago
  >If your only contribution to a business is giving it money, you are essentially always better sticking that money in the stock market.... the idea that you can beat the market with no special benefit that you bring to the table is a fantasy as old as capitalism I feel like EMH is increasingly becoming a strange & unfalsifiable quasi-religion for some people. I believe even the strongest forms of EMH cover publicly traded stocks, and not investments in privately held companies. Are you saying that it's literally impossible for me to invest in a local gym, real estate development, plumbing company, landscaper etc. and not beat the US equity market's average return of 9% a year? Because that's obviously ridiculously untrue. The main reason why I can't price say Apple better than the stock market can is the absolutely staggering amount of global competition to do so. But there's exponentially less competition to invest in a smaller, privately-held local business- I'm not competing with hedge funds and so on. I'm a Boglehead, and the good parts of EMH have a lot of wise things to say about the impossibility of pricing individual publicly traded companies better than the broader stock market. But super-strong EMH has become a bit of an intellectual cult, and I see people way over-extending it into domains that it was never supposed to cover. It's becoming like a learned helplessness 'it's impossible for anything to be profitable because EMH'
  - gnicholas 3y ago
    In case anyone else was wondering, EMH = Efficient Market Hypothesis (which is a reason people think that investing in an ETF is the best way to go, since trying to pick individual stocks is a losing game).
  - smogcutter 3y ago
    I think you’re missing parent’s point, which is about these sort of “business in a box” pitches sold to the aspirational middle class, and not some kind of statement that it’s impossible to profitably invest money.
  - hn_throwaway_99 3y ago
    That's not what I'm saying. Two points: 1. Obviously some people with zero unique insight or skill in a business will make out big (i.e. "beat the market"), just like some people will win the lottery. But drastically increasing your risk/volatility and then saying "some people beat the market average!" is not actually a counterpoint to EMH, which primarily says something about risk-adjusted returns. 2. More importantly, though, if you do have some special insight into why a private business may outcompete its competitors, by all means, go for it. But TFA is basically highlighting that the vast majority of these people had no special skills in business, marketing, etc. beyond "I like fitness and once took one of their classes!" If you're in that boat, on average, you're better putting that money in the stock market. If you're a gambler and think you can, literally, beat the odds with nothing but luck, again, go for it, but I'm not going to have sympathy for you if you decided to, essentially, put your life savings on double-0.
  - lotsofpulp 3y ago
    > Are you saying that it's literally impossible for me to invest in a local gym, real estate development, plumbing company, landscaper etc. and not beat the US equity market's average return of 9% a year? Yes, without taking additional risk. SP500 is risk free, everything else, you need to be pricing in additional risk OR you need to have an edge other than providing money (which you can do buy buying VOO). hn_throwaway_99’s second paragraph explains it well. One common arbitrage opportunity is to be part of an immigrant diaspora. They won’t have access to credit, but will be willing to work 100 hours per week. You can take advantage of that and basically use the fact that you are getting under minimum wage labor that is very invested in the business to get better than public equity returns.
sema4hacker 3y ago
The article is mostly about franchisees getting ripped off, but I think an important theme is that any business focused on physical fitness often is the fad of the moment, and can be difficult to sustain itself for long because of the need to have customers paying memberships forever. Customers start out thinking they'll always go to the gym or dance studio or whatever, but most inevitably drop out. My advice: stay away from fantasies of owning or investing in membership physical fitness businesses or venues.
- deleted 3y ago
  [deleted]
- gnicholas 3y ago
  I guess this is why it’s so hard to cancel gym memberships. I wonder how these places will be affected by ozempic/etc. On the one hand, people won’t have to exercise to lose weight at much as before. On the other hand, perhaps there will be a cultural change that emphasizes muscle mass/tone more than now. That is, being not-overweight will be the default, and the way people will stand out will be muscle tone, perfect skin/hair/etc. What franchises will pop up to serve these needs?
  - nradov 3y ago
    Gold's Gym and CrossFit already exist to target consumers who want a more toned, muscular appearance. They have been around for a while and should be sustainable as long as they don't do something stupid like take on huge debts to fuel rapid expansion. Any new market entrants will have to come up with a unique angle to compete against those established players. Tonal also appears to be getting some traction in the home strength training market but it's not clear whether they can survive. GLP-1 drugs like Ozempic can be very effective for rapid weight loss but I think (hope?) that consumers will eventually become disillusioned with them. There are significant side effects in many patients, the weight tends to come back when the drug is stopped, and much of the weight lost is lean muscle rather than adipose tissue. There is a growing body of evidence that having a large amount of skeletal muscle is crucial for maintaining metabolic health (glucose sink) and preventing disabling falls later in life (sarcopenia).
ryandrake 3y ago
My parents got suckered into Amway back in the 80s and a lot of their generation repeatedly fell for other "run your own business" scams. I always hoped future generations would prove to be more cynical and less gullible and these kinds of things would die. But the next generations seem to be falling for them too, in even greater numbers, plus the modern versions like leadgen and dropshipping "businesses," NFTs, and other online scams. Not sure what can be done about it. It's not technically illegal for a fool to be parted from his money.
- uoaei 3y ago
  The rhetoric aroung gig work routinely repeats this "be your own boss" language, too.
  - throwaway66023 3y ago
    My country has a list of criteria to distinguish self-employment from closeted employment (which is tax evasion where I live): - use your own tools (laptop, phone, vehicle) - set your own schedule (work hours/days) - get paid for tasks, not hourly - have the ability to decline jobs without losing the customer (within reason) To me it seems like gig work is in the clear. Why is it not?
    - tomjen3 3y ago
      > get paid for tasks, not hourly That would be a problem for a huge number of lawyers in the US.
    - cornholio 3y ago
      "Gig work" when dependent on a single major market mediator, such as Uber, Door Dash etc. is clearly a form of masked employment, your criteria notwithstanding. The fundamental feature of freelance work is that you get your own customers and you are not dependent on a market maker who cuts you in. Some of the other criteria seem arbitrary. Of course companies want to pay their employees per task, only if a customer is present, they love zero cost employees that are available as a reserve workforce to pick up any sudden demand. A monthly base salary is a labour protection for the employee, forcing the employer to take the business risk and distribute revenues from the peak times to the slow times, ensuring a stable revenue for their workforce.
scandox 3y ago
Feeling fat, tired and flat! Milo Janus is where it's at. Keeping trim, healthy and slim, Milo Janus you're in the swim. Your new life is waiting to begin at Milo Janus, Get in shape will see you through thick and thin. Everybody! Start your day, shed pounds away. It's all for your common wealth. The only thing you have to gain is your health!
- bombcar 3y ago
  Hugh is much better and more honest.
deleted 3y ago
[deleted]

22 points by rayrrr 3y ago

https://archive.vn/UAEhx https://archive.vn/UAEhx

As sure as the sun rises in the East, "Suburban Moms (and Dads) Get Suckered By Over-Promised Sales Projections" is the headline that will never go away (see LulaRoe, MonaVie, just about any other MLM scam, not to mention other over-hyped franchises like Quiznos). At the same time, though, the franchisees had plenty of greed of their own. The article states "They also say it promised them the ability to run businesses as investors rather than as hands-on managers." If your only contribution to a business is giving it money, you are essentially always better sticking that money in the stock market. If you have some special talent, skill, connections, etc. that you can leverage, sure, go for it. But the idea that you can beat the market with no special benefit that you bring to the table is a fantasy as old as capitalism.

hash872 3y ago
>If your only contribution to a business is giving it money, you are essentially always better sticking that money in the stock market.... the idea that you can beat the market with no special benefit that you bring to the table is a fantasy as old as capitalism I feel like EMH is increasingly becoming a strange & unfalsifiable quasi-religion for some people. I believe even the strongest forms of EMH cover publicly traded stocks, and not investments in privately held companies. Are you saying that it's literally impossible for me to invest in a local gym, real estate development, plumbing company, landscaper etc. and not beat the US equity market's average return of 9% a year? Because that's obviously ridiculously untrue. The main reason why I can't price say Apple better than the stock market can is the absolutely staggering amount of global competition to do so. But there's exponentially less competition to invest in a smaller, privately-held local business- I'm not competing with hedge funds and so on. I'm a Boglehead, and the good parts of EMH have a lot of wise things to say about the impossibility of pricing individual publicly traded companies better than the broader stock market. But super-strong EMH has become a bit of an intellectual cult, and I see people way over-extending it into domains that it was never supposed to cover. It's becoming like a learned helplessness 'it's impossible for anything to be profitable because EMH'
- gnicholas 3y ago
  In case anyone else was wondering, EMH = Efficient Market Hypothesis (which is a reason people think that investing in an ETF is the best way to go, since trying to pick individual stocks is a losing game).
- smogcutter 3y ago
  I think you’re missing parent’s point, which is about these sort of “business in a box” pitches sold to the aspirational middle class, and not some kind of statement that it’s impossible to profitably invest money.
- hn_throwaway_99 3y ago
  That's not what I'm saying. Two points: 1. Obviously some people with zero unique insight or skill in a business will make out big (i.e. "beat the market"), just like some people will win the lottery. But drastically increasing your risk/volatility and then saying "some people beat the market average!" is not actually a counterpoint to EMH, which primarily says something about risk-adjusted returns. 2. More importantly, though, if you do have some special insight into why a private business may outcompete its competitors, by all means, go for it. But TFA is basically highlighting that the vast majority of these people had no special skills in business, marketing, etc. beyond "I like fitness and once took one of their classes!" If you're in that boat, on average, you're better putting that money in the stock market. If you're a gambler and think you can, literally, beat the odds with nothing but luck, again, go for it, but I'm not going to have sympathy for you if you decided to, essentially, put your life savings on double-0.
- lotsofpulp 3y ago
  > Are you saying that it's literally impossible for me to invest in a local gym, real estate development, plumbing company, landscaper etc. and not beat the US equity market's average return of 9% a year? Yes, without taking additional risk. SP500 is risk free, everything else, you need to be pricing in additional risk OR you need to have an edge other than providing money (which you can do buy buying VOO). hn_throwaway_99’s second paragraph explains it well. One common arbitrage opportunity is to be part of an immigrant diaspora. They won’t have access to credit, but will be willing to work 100 hours per week. You can take advantage of that and basically use the fact that you are getting under minimum wage labor that is very invested in the business to get better than public equity returns.

sema4hacker 3y ago

The article is mostly about franchisees getting ripped off, but I think an important theme is that any business focused on physical fitness often is the fad of the moment, and can be difficult to sustain itself for long because of the need to have customers paying memberships forever. Customers start out thinking they'll always go to the gym or dance studio or whatever, but most inevitably drop out. My advice: stay away from fantasies of owning or investing in membership physical fitness businesses or venues.

deleted 3y ago
[deleted]
gnicholas 3y ago
I guess this is why it’s so hard to cancel gym memberships. I wonder how these places will be affected by ozempic/etc. On the one hand, people won’t have to exercise to lose weight at much as before. On the other hand, perhaps there will be a cultural change that emphasizes muscle mass/tone more than now. That is, being not-overweight will be the default, and the way people will stand out will be muscle tone, perfect skin/hair/etc. What franchises will pop up to serve these needs?
- nradov 3y ago
  Gold's Gym and CrossFit already exist to target consumers who want a more toned, muscular appearance. They have been around for a while and should be sustainable as long as they don't do something stupid like take on huge debts to fuel rapid expansion. Any new market entrants will have to come up with a unique angle to compete against those established players. Tonal also appears to be getting some traction in the home strength training market but it's not clear whether they can survive. GLP-1 drugs like Ozempic can be very effective for rapid weight loss but I think (hope?) that consumers will eventually become disillusioned with them. There are significant side effects in many patients, the weight tends to come back when the drug is stopped, and much of the weight lost is lean muscle rather than adipose tissue. There is a growing body of evidence that having a large amount of skeletal muscle is crucial for maintaining metabolic health (glucose sink) and preventing disabling falls later in life (sarcopenia).

ryandrake 3y ago

My parents got suckered into Amway back in the 80s and a lot of their generation repeatedly fell for other "run your own business" scams. I always hoped future generations would prove to be more cynical and less gullible and these kinds of things would die. But the next generations seem to be falling for them too, in even greater numbers, plus the modern versions like leadgen and dropshipping "businesses," NFTs, and other online scams. Not sure what can be done about it. It's not technically illegal for a fool to be parted from his money.

uoaei 3y ago
The rhetoric aroung gig work routinely repeats this "be your own boss" language, too.
- throwaway66023 3y ago
  My country has a list of criteria to distinguish self-employment from closeted employment (which is tax evasion where I live): - use your own tools (laptop, phone, vehicle) - set your own schedule (work hours/days) - get paid for tasks, not hourly - have the ability to decline jobs without losing the customer (within reason) To me it seems like gig work is in the clear. Why is it not?
  - tomjen3 3y ago
    > get paid for tasks, not hourly That would be a problem for a huge number of lawyers in the US.
  - cornholio 3y ago
    "Gig work" when dependent on a single major market mediator, such as Uber, Door Dash etc. is clearly a form of masked employment, your criteria notwithstanding. The fundamental feature of freelance work is that you get your own customers and you are not dependent on a market maker who cuts you in. Some of the other criteria seem arbitrary. Of course companies want to pay their employees per task, only if a customer is present, they love zero cost employees that are available as a reserve workforce to pick up any sudden demand. A monthly base salary is a labour protection for the employee, forcing the employer to take the business risk and distribute revenues from the peak times to the slow times, ensuring a stable revenue for their workforce.

scandox 3y ago

Feeling fat, tired and flat! Milo Janus is where it's at. Keeping trim, healthy and slim, Milo Janus you're in the swim. Your new life is waiting to begin at Milo Janus, Get in shape will see you through thick and thin. Everybody! Start your day, shed pounds away. It's all for your common wealth. The only thing you have to gain is your health!

bombcar 3y ago
Hugh is much better and more honest.

deleted 3y ago

[deleted]