Cuppy’s Coffee, Medina Enterprises, Elite Manufacturing Sold
April 22, 2008
The controversial Cuppy’s Coffee franchise has reportedly been sold. Here’s some of the news reported on the Cuppy’s Coffee website.
FranSynergy Inc. Acquires Cuppy’s Coffee, Smoothies & More
Cuppy’s has grown leaps and bounds since our humble beginnings in May of 2006. We currently have more than 231 franchisees nationwide and 73 open stores, with many more stores in the works!
It’s our ultimate goal to see the Cuppy’s brand grow strong and be successful. In order for this to happen, change is inevitable.
With that in mind, we have some really exciting news! We are pleased to announce that FranSynergy Inc., lead by Dale Nabors, CEO, has acquired Cuppy’s Coffee & More, Inc.
Dale Nabors has over 25 years of franchising experience and worked for the Dwyer Group from March, 1995 to August, 2000.
Dale was retained as a consultant for Cuppy’s back in September 2007. He has been instrumental in the leadership, development and implementation of many successful programs including:
- New distribution of products which has equated to 20-30% lower costs on average to our franchisees. This goes into effect May 2008.
- Negotiated changes for our cups which brings an overall savings to our franchisees by eliminating sleeves and minimizing the amount of inventory needed.
- Menu Price Generator which has helped our franchisees determine a more appropriate pricing structure based on expenses and overhead for that specific location.
- Budget Project Sheet which teaches our franchisees how to manage their expenses and determine the necessary sales to be profitable.
Dale’s primary objective is to take our organization to the next level. Dale’s vision for the future of Cuppy’s includes:
- Refocusing internal support efforts towards franchisee satisfaction.
- Working on increasing the profitability for our franchisees.
- Opening the stores we have sold as franchisees to increase national brand awareness, hence increasing brand equity.
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Criston Menz – Cuppy’s Coffee
April 22, 2008
We were immediately impressed with how friendly and family oriented the entire Cuppy’s Coffee organization was…. Once they had our money, everything changed.
Criston’s Story – Cuppy’s Coffee
April 22, 2008
Interview with Criston Menz and partner
Location: Albuquerque, NM
Franchise: Cuppy’s Coffee & More
Other companies involved: Elite Manufacturing, Medina Enterprises
Time period: 11/06 – present
Franchise fee: $15,000 (Waived and payable by Elite Manufacturing if we sent in a 20% build out fee immediately, as the promotion had passed on 10/31/2006. The promotion was to pay the franchise fee and the monthly royalty fee for one year)
Current Status: Trying to get return of our refundable build-out fee, as per our agreement
Total investment to date: $35,900 (not including any interest and incurred fees in trying to obtain our monies back)
UF: What’s your background? What were you doing prior to owning your franchise?
Criston had been in the café business for 26 years; owner/operator of Cheese & Coffee Cafe, General Manager at Einstein’s Bros. Bagels, and manager with Starbucks. At the time of purchase, I was on maternity leave as an Executive Team Lead [Leader?] with Target.
UF: When did you decide you wanted to own your own business? Describe the process you went through to determine which franchise to buy.
At the time, we had a [our first?] baby on the way, so we decided to look for a business opportunity that would allow us more freedom to spend with our new child. I came across a business opportunity [Business or franchise opportunity? Was this JJ at the time?] for a café in the Sunday paper and called. Cuppy’s Coffee gave all the right answers to the questions I had. I followed up and did the research on-line at all the appropriate business bureau’s searching for anything negative. Any concerns I had vanished when I spoke with Morg Morgan, a top executive. Again, he has all the answers to any of my concerns regarding Java Joz, financing, location, contracts, etc. [Java Jo'z reference is not clear. Do you mean it was called Java Jo'z at the time, or the controversy about Java Jo'z]
What did you find appealing about Cuppy’s Coffee?
We were immediately impressed with how friendly and family oriented the entire Cuppy’s Coffee organization was. It was so inviting to see a company value their people the way they described they did and what their vision was for the franchisor/franchisee relationship. We had heard horror stories about other franchisors. They seemed completely the opposite.
I had read a great deal on Baskin Robbins and Quizno’s regarding allegations of price gouging the franchisees, and charging excessive service, franchise and marketing fees. Cuppy’s made all of this seem as though they were not going to go down that path and hurt the franchisee. They claimed to be very franchisee oriented.
[Had they received the AAFD Fair Franchising Award when you were in the process of deciding, or was that later?]
What was the company’s sales process? What interaction did you have prior to becoming a franchisee?
What I didn’t seem to realize then, but can comfortably say now, is that they used manipulative pressure tactics to get us to sign and get the money in. The charm of the Cuppy’s Coffee organization was the forefront “lure.” Throughout the application process they made you feel that you had to “audition” to see if you were right for them. Looking back, it was more about was your bank book looked like.
Once “approved,” they sent the paperwork [What was this paperwork? Franchise Agreement? UFOC? Did you have the FA ten days before signing and returning it as required by law? Did they give you any information about what kind of revenue you might make, or what sales of Cuppy's Coffee units do?] overnight to us and called us on the phone to walk us through the signing of the franchise agreement. Once they got that back to them, Elite took over and called religiously to get our down deposit.
[Can you explain who Elite was and their role, as described by Cuppy's? Did they ever say you could use a different vendor for eqpt and construction?] We signed in early November of 2006, and they called at least 2x per day until December 1st, when they electronically received our payment.
The purchase order gave us an “out” if we did not get financing. I thought it would be as easy to get out as it was to get in. Was I ever so wrong!
[Can you explain here about the downpayment being refundable if you did not get financing or secure a location? Also, what the fee was for and that Elite was going to pay the franchise fee. This is important to communicate so it's clear why you're due a refund.]
Was the initial support what you expected?
The initial contact was comfortable with people who knew your name, your background, and made you feel valued and wanted you as a part of their organization. The support was FABULOUS until they got our 20% downpayment of $39,500.
Once they had our money, everything changed. From then on, we were ignored and left wondering what was going on. Trying to get anyone from Cuppy’s to call us back was like waiting for it to snow in the summer time.
Is that when did things started to go wrong?
Things went wrong as soon as the monies exchanged bank accounts. We had little to no contact with anyone in December, and by January 2007, they stated that they were having problems securing our financing. Ironically, one of the initial draws to the company was all the proposed help they offered getting financing from the SBA with their “in-house” financing department.
They were well aware that we had financed the downpayment via a home equity line. At this point, they told us that we should not have taken out an equity line due to our debt ratio. They recommended that we purchase a Kiosk or a mobile kart instead of the café/drive thru that we wanted.
I gave birth the first of February. By mid March, we were thoroughly disillusioned with Cuppy’s Coffee. Our calls were not returned and the run-a-round was getting to be too much. We thought If it’s like this now, what kind of support could we to expect once we began building? [Wasn't the decision to pull out because you couldn't get financing for the Cafe? The refund was contingent on financing, right? It wouldn't be returnable based on being unhappy with the service.] We decided to pull out.
Have you tried to resolve your issues with the franchisor? What was the outcome?
In March, 2007, we sent a letter to [Whom, which company?], requesting the return of out $39,700 refundable deposit, per our agreement. Instead of sending us a check, they sent us a settlement agreement that stated they would keep the franchise fee of $15k and pay us $20,900 in 8 equal installments over 8 months. They stated that they had invested our monies in their “new” company [What company is that?].
We found that unacceptable and unethical. We assumed they had our refundable deposit set aside in escrow, as a prefessional company would have. We retained an attorney and sent a demand letter in May, 2007. We received no response. Our attorney sent a second demand letter, in January of 2008. Still no response.
In January I reported them to the Better Business Bureau of Florida, the Deptartment of Agriculture and Consumer Services of Florida and the Florida Attorney General. They made one response to the Dept of Agriculture after 2 attempts, claiming their previous secretary lost the paperwork and they were in negotiations to settle. At that time, (March 14, 2008) Elite, Cuppy’s or Medina, had not contacted me since the previous March regarding a settlement.
Another person who was in an identical situation as myself got my name from the attorney general’s office and contacted me by phone letting me know about the negative stories being posted on the FranchisePick.Com and BlueMauMau.org blogs by many others in the same situation. I began blogging about our situation and, low and behold, they actually contacted us!
Cuppy’s Coffee emailed us an offer to get our initial monies back in one lump sum, but before we had a chance to respond they said we missed a “deadline” we knew nothing about. They claimed we were now a prime candidate for “mediation” as we refused to settle(!)
What is your current situation? What would you like to see happen at this point?
I am tired of being bullied by a company that did me wrong. We have asked solely for a return of my initial monies in one lump sum as we paid to them. I told them I would sign their settlement offer and make good on the blogs and to all public agencies. Thus, once I agreed to this, it was too late.
At this point, I would like my monies returned with any extra fees I have incurred, a public apology from them as well and as much negative publicity that will make them accountable for the damage emotionally and financially that they have caused us.
Do you think that the franchise concept is a viable?
I truly believe that this company is a fraud being carried over from its predecessor, Java Jo’z. It is the same people and the same concept doing the same things. There are too many similarities in all the companies under Medina that have made me question the validity of this franchise or any other that they are attempting to create. The people’s names are the same, but the franchise name has changed. I have yet to hear a warm and fuzzy happy ending with this company that has not been “created” by the company.
What mistakes did you make? Looking back, what would you have done differently?
I would have talked my partner out of wanting to go into business for ourselves. I would have not assumed that the purchase order for Elite would be placed in 3rd party escrow and would have insisted that it be done that way.
How has your franchise investment decision affected your life?
Our debt has increased and we have nothing to show for it. We pay monthly on something we do not have. The time that we have invested to get this Cuppy’s Coffee franchise, and the time and stress we have invested to get out of the Cuppy’s Coffee franchise has been a nightmare. It makes it difficult to do our normal day’s work with this hanging over our heads and having to tend to it regularly.
What advice would you give to prospective franchise owners?
Read the blogs. You will find out more information regarding any company by reading the blogs and asking all the right questions there. Be informed, very informed.
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April 16, 2008
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April 16, 2008
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Robyn & Corey Rivera – Java Jo’z / Cuppy’s Coffee
April 13, 2008
“We have been trying to get our $30,000 deposit back for over a year. How can they get away with this? How do they sleep at night?”
Cuppy’s Coffee Originally posted on FranchisorMarketing.Com
April 13, 2008
Greg,
Let me thank you for your nieve veiw of my ablitiy to open, own and opperate a business. I should have consulted you before trying to open a thrid business. Yes you see my husband and I have successfully planed, designed, opened, and run coffee shops for 6 years now. Our choice to invest in a Java Joz was after much consideration and careful planning. Our money problems were not problems at all, you see funding was NEVER the problem finding suitable land at a resonable price however was. We tried for over a year to aquire property that was suitable for a drive thru business after all you would not invest in a location without the possablity of great returns. Sure we could have put it in another area but after all any GOOD business minded person would know it is all about location location location, but I guess our college degrees did not teach us that. Yes we could have used thier leasing dept but did you know they charge you $25k (at that time) for this service which is then sold to a third party (low and behold) your paying double for a lease that is not worth it, but I am sure you knew that. Thank you so very much for your uneducated veiw on HUNDREDS of peoples niave, get rich, easy as pie, unrealistic dream of owning a business (or another business). I am sure with veiws like this you will make it far in life.
Robyn & Corey
Franchisees
April 12, 2008
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