The Gold’s Gym debacle in Cusco

I don’t work out, I probably should but I stay pretty active walking to the office, taking the kids to school, lifting my coffee cup, etc. Soon I’ll do a post on where to work out in Cusco, for all you fitness fanatics out there.

Mamacita Linda had been working out at the Gold’s Gym in Cusco, which turned into a hot mess here recently. Mamacita Linda worked out at the Gold’s Gym because it was the biggest, nicest gym in town. Had new machines, nice looking trainers and above all, it was located in a prime space in the only real mall in town, Real Plaza.

As all gyms do, Gold’s Gym in Cusco was quite aggressive at selling long term memberships. Mamacita Linda re-upped her membership for another year just 2 months ago.

Then word got out a few days ago that the Gold’s Gym franchise in Cusco was closing effective Sept 30. Mamacita Linda went to the gym to see what arrangements were being made for members only to find a mob of angry customers. So far there has been no agreement from Gold’s Gym to refund any partial contracts or transfer the contracts to the new gym that is set to take over the location. The next nearest Gold’s Gym is 8 hours away, so that’s not exactly an option for existing customers either. Some customers had signed 2 year agreements with Gold’s Gym Cusco as recently as 2 weeks prior to the announced closing. Surely the gym management knew they were signing customers up and taking payment up front for services they had no intention of delivering.

Every customer who came to the gym to see what arrangements were being made only ended up being hounded by Gold’s Gym staff to sign the piece of paper below, effectively saying “I acknowledge my membership is being terminated and I have no complaints with respect to the above.” In return for signing said piece of paper, the customers got a few discount coupons to the gym franchise that is set to replace Gold’s Gym. Of course, since no gym memberships ever sell at full value the discount coupons you get for giving up your entire Gold’s Gym contract are effectively worthless.

Should Gold’s Gym change their mind and do right by their customers I’ll let you know but for now it’s not looking good.

Update 10/3/2016: The new gym at Real Plaza, Smart Fit has offered Mamacita Linda a comparable membership to her previous Gold’s Gym membership at no cost for the remainder of her original Gold’s Gym contract. It’s not clear to anybody to what extent, if any, Gold’s Gym facilitated this or if it’s just “good business” on behalf of Smart Fit. The perception among customers is the latter. I’m glad that Gold’s Gym customers aren’t left with nothing but the transition was handled very poorly by the Gold’s Gym Peru franchise.

golds-gym-cusco

2 thoughts on “The Gold’s Gym debacle in Cusco

  1. I could write a 10-page essay on this kind of story, but suffice to say that American and European multinationals have to take EXTREME CARE when choosing who they work with and how that will affect their brand in markets like Peru. Domino’s is just trying to emerge from a similar problem.

    It is very important for people like you to publish these stories on the web, so the Gold’s gringos back in the States see there is a problem. Maybe you want to add a few SEO touches, such as putting “Peru” in the title and URL so it comes up for “Gold’s Peru.”

    • You’re absolutely right Colin, as a franchise your brand is your main asset and you have to be very careful whom you entrust with your brand. Too often corporate and legal think protecting their brand revolves only around protecting logos and trademarks, without proper regard for how their franchisees are doing business, treating customers, employees, etc.

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