In Malaysia, Yoga Zone was one of the fitness centers that rode on Yoga craze few years back. It was set up by Tjhin Chee Kun in year 2002. Tjhin graduated as computer engineer in Australia with a scholarship. He quit his corporate job and flew to India to learn Yoga. After a year, he went to Hong Kong for about one and half years before he decided to go for the business venture.
He opened first Yoga Zone in Taman Desa, one of the established residential areas in Kuala Lumpur. Within a year, the number of members has grown to about 1,000. After 6 years, fast forward to year 2008, the with 12 outlets, company claimed that it has about 20,000 members. It has yoga classes at Plaza Damas, Bandar Bukit Tinggi Klang, The Weld, Kepong, Taman Desa, Seri Petaling, Malacca, Cheras Plaza and Bandar Puteri Puchong outlet. Its spa centres are located at The Weld, Seri Petaling and Taman Desa whereas fitness centres (under that name of Y Fitness) are at Klang and Kota Kinabalu. During an interview in year 2006, Tjhin was ambituos and he said that he was aiming at regional market and Indonesia was probably the first country that he would expand his business.
Tjhin receiving one of the entrepreneur award from Malaysian Deputy Finance Minister in year 2005
Unfortunately, things did not go well. As early as June 2008, members have noticed that many regular experienced yoga instructors were no longer teaching there. A month later, many more yoga classes were canceled. Those instructors were frustrared. Staffs were demotivated. Students were puzzled. Customers felt cheated too. Notices were put up stating that the outlets would be closed for a week for a restructuring exercise. The outlet at Taman Desa was even splashed with red paint.
After the cases were highlighted in the media, the founder, Tjhin, has no choice but to speak out. Finally, the can of worm was opened. The company is in deep financial problem. Instructors have not been paid since May 2008. Facilities were badly maintained.
Pictures courtesy from Yogalover88
Tjhin came out to meet the members, staffs and media. He mentioned that some buyers are showing interest to take over the business. He said that he was taking legal actions against his business partners. And he cried too.
During an interview, Tjhin said, “I must say I am a business creator, not a business operator. Yoga is a knowledge combining art and science, I have done the art but I think the science will have to be handled by someone better,” he said.
When I read that statement, I was amazed with such a nicely uttered words. Please call a spade a spade. If I were the customer who pays for the membership, I do not care whether it is an art or an science, just get the centers up and running again. Otherwise, return my money.
You can point the fingers. You can cry. But, Yoga Zone goes bust now and where is the members’ money?
Yoga Zone members have taken initiative to set up a committee to help pay the instructors’ salary by selling vouchers. They have tried. Members will never want Yoga Zone to go into the drain.
Yoga Zone Malacca members gathered in front of the outlet to seek for the truth.
Back in year 2006, I met a friend who knows one of the company top management personally. My friend told me that Yoga Zone has already faced serious financial problems at that time. Instead of taking conservative and prudent approach, the company decided to take big risks to set up more centers. They started to sell membership as early as possible to take the cash upfront from the customers. Membership were promoted 3 to 6 months before any new place was ready to open. Almost every big chain fitness centers do so. Celebrity Fitness does that. California Fitness does that. True Fitness does that too. However, a company must still have a huge coffer of money for cash flow to keep the business alive. Keep opening more and more outlets can only bring you so far. What is more important is the management. You can set up a business, but you must also know how to run a business.
Yoga Zone was charging between $688 and $1,488 for annual membership and the lifetime membership was sold between $3,500 and $4,888. If Yoga Zone really has 20,000 members and let’s assume 10 percent of the members have actually paid for the $4,888 lifetime package, we are talking about $10 million of loss. Let’s not forget others who have paid upfront for 1 or 2-year package and still have many months more to go and also 2 to 3 months of salary of each staff.
The banks continue to charge these members’ credit card when the yoga clubs are no longer operating. Banks will still charge, why? Because once you swapped your credit card, your 1 or 2-year membership fee has already paid to Yoga Zone in one lump sum. Your bank then charges you every month for the next 3 months, 6 months or 1 year depending on the so called “interest free” installment period.
Yoga Zone is indeed the bad apple in the fitness industry. This incident bankruptcy, which involves such a huge amount of money from 20,000 members, has given tougher challenge for its other peers in the industry. Many people will no longer trust fitness centers easily anymore. I myself have bought lifetime membership from True Group (True Fitness and True Yoga). Initially, it supposed to be a good lifetime investment. Now, looking at what have happened to Yoga Zone, I am not so sure. My confidence level has dropped since then . Anything can happen. We never know.
In Malaysia, golf or recreational club industry, which shares the similar concept of getting membership fees settled upfront, are being regulated strictly. Authorities have to approve the membership scheme and the business owners have to pay certain huge amount of paid up capital. Terms and conditions are clearly stated in leaflet or prospectus. We do not see that in yoga or fitness industry yet. In order to protect customers, it is time to regulate fitness or yoga clubs under the same laws.
If you look at comments left at my posts under True Fitness, Celebrity Fitness, California Fitness or Fitness First, many customers ran into problems after they signed the membership contracts. They cannot freeze, transfer or sell their memberships. They get charged more than what have been told. They are denied the chance to talk to the management. I have received many e-mails from readers, be them from Singapore, Thailand or Malaysia, asking for advice how to resolve their cases. If you are the top management from any of the fitness centers I mentioned above and if you still care about your valuable customers, I therefore request you to send me your name and e-mail and I shall publish them here. Let your customers talk to you directly. Hear their problem first hand. Help them.
If you have problems with any fitness centres, please leave your comment here.
Category: Gym Going
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