FRANCHISE GRAVEYARD: Trendy Franchise Concept Gets Cereality Check, Closes Store(s)

FRANCHISE GRAVEYARD: Trendy Franchise Concept Gets Cereality Check, Closes Store(s) By: Sean Kelly

Originally published Wednesday, June 27, 2007 – 5:19 pm ET

March 28, 2006 the Northwestern University newspaper had exciting news:  The much heralded all-cereal cafe Cereality was expected to open by summer, 2006.  They interviewed Cereality co-founder David Roth about the opening of their second Chicago-area cereal cafe:

“We love Evanston because it has such a different type of cross section of people… It offers us that sort of urban pulse, but also a suburban marketplace as well…. We have an extraordinary amount of demand…. We’re constantly inventing new ways to get cereal to people.”

The suburban Chicago cafe would play a pivotal role in the chain’s expansion:

The Evanston store will also be used to fulfill online orders and train new franchisees.

“It’s not rocket science to instruct people to put cereal in a bowl,” said Roth. “But it’s an art to (successfully run a Cereality cafe). You bring people to your training facility and you instruct them on how to manage and operate a unit. Ours is going to be in Evanston. Evanston is going to play a very key role for us.”

May 23, 2007 the Daily Northwestern story wasn’t so Cheerio:

Just six months after it opened in downtown Evanston’s Sherman Plaza, Cereality Cereal Bar and Cafe has closed its doors and moved out…. The store’s contents were packed up after closing Monday night, according to Jonathan Perman, executive director of the Evanston Chamber of Commerce. On Tuesday afternoon, all food and equipment had been removed from the store’s interior.

For a company that’s been all over the media since the concept was launched in 2003, there seems to be scant information about what’s going on with the company.  According to The Daily Northwestern:

Multiple calls to the company’s downtown Chicago headquarters went unanswered Tuesday. Jim and Marc Klutznick, two of Sherman Plaza’s developers, also did not return phone messages.

When the Evanston location opened in November, Cereality’s president and CEO at the time, David Roth, expressed high hopes for the restaurant.

The company had planned to use the location as a training facility for employees at the company’s other locations.

“We’re very much looking forward to this store,” Roth told The Daily in November. “This is just pregnant with possibilities.”

Both Roth and fellow co-founder Rick Bacher resigned from the company at the end of April. Roth declined to comment Tuesday on the Evanston store’s closing. The new CEO, John Fiorello, did not return multiple calls Tuesday night.

Unanswered Questions:

Why’d Roth & Bacher resign from their brainchild?  Who’s Fiorello? 

Has the public rejected Cereality’s “home away from home” where “every day is Saturday morning” in favor of their real homes where cereal doesn’t cost $4 a bowl?

Is the rumor circulating on the Internet (ok, it’s a single comment on one blog) true that the downtown Chicago location is also closing?

Was The Big Idea’s Donny Deutsch’s pronouncement that he LOVES the concept the kiss of death?

Is it a bad sign that in a ”bazillion” news stories and interviews, the founders expound on the concept’s cleverness and the brand resonance but never about store sales or unit economics?

Comments
By Mike
1143 days ago I’m thinking their Franchise requirements of: at least $212K total commitment, 25K$ franchise fee, $1 million assests requirement and 12-20 employeee requirement might be some of the reason.

c’mon – all THAT just to run a cereal cafe??

By Sean Kelly
Mike:
It’s not like you can buy this stuff in a grocery store… Plus, they have a hollow plastic spoon that you can such the milk through. That must be worth $100K or so.

By Sean Kelly
Laila Fields bet her house that a Cereality cereal cafe franchise would be a hit in Santa Cruz.  FranchisePick.com readers are invited to bet on how soon she’ll realize what a bad, bad bet she made. 

Place your vote on how long you think the Santa Cruz Cereality franchise will survive.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

COLD STONE CREAMERY: Failed Franchisees Attack Doug Ducey Campaign

Doug Ducey, the former Chairman and CEO of Cold Stone Creamery and CEO of Kahala-Coldstone, is campaigning for the position of Arizona State Treasurer. 

Angry former Cold Stone Creamery franchise owners, who claim Ducey knowingly sold a flawed franchise opportunity that cost them their financial well-being and the government millions,  have joined forces with Ducey’s opponent, Democratic nominee Andrei Cherny, to try to melt his hopes of ever reaching office.

Doug Ducey calls Cold Stone Creamery “a true Arizona business success story”

Doug Ducey’s campaign strategy is to cast himself as a proven, successful business person who built a successful 1400+ unit franchise chain endowed with a “culture of accountability.” 

According to his campaign website:

Over the last 20 years, Doug Ducey has been a business leader and a business builder. Through his innovation, team-building skills, and results-based managerial style, he has created thousands of jobs in America and worldwide, helped hundreds to realize their dreams of business ownership, and created a culture of accountability and a mission that has become a model of business best practices. 

…As the former CEO and Chairman of Cold Stone Creamery, a true Arizona business success story, Doug discovered that the key to achieving seemingly impossible goals is to set a vision, ignite people to it, provide tools and support, and manage for results. It’s Doug’s proven method, and it’s what he’ll do as Arizona State Treasurer.

Failed Franchisees Want to Melt Ducey’s Political Hopes

According to an article (“Former Cold Stone Franchisees, Cherny Campaign Slam Ducey”) in the Arizona Capitol Times:

A group of former Cold Stone Creamery franchise owners accused Republican state treasurer candidate Doug Ducey, the company’s former CEO, of using a raft of dishonest business practices to perpetuate a revolving-door system that lured in franchisees, bankrupted them and then pushed them aside to make way for new ones.

At an Oct. 7 press conference, hosted by Andrei Cherny, Ducey’s Democratic opponent, four former Cold Stone franchise owners blasted the former CEO. They accused him of attracting franchisees with inflated profit projections, intentionally undermining owners and using Cold Stone’s store evaluation system to bully franchisees who challenged the company’s actions…

“They know they were selling a failed business model to franchisees, yet they continued to do it year after year to the profit of the creamery. Most of us, a number of us here, were just ruined financially,”Ken Gornall said at the press conference, which was held at Arizona Democratic Party headquarters. “He was the CEO. He was responsible for whatever actions took place.”

The Success Story with a 31% Failure Rate

Ducey’s run for Arizona State Treasurer has prompted an aggressive alliance between unhappy ex-franchisees eager to share their feelings about Ducey’s allegedly sleazy business practices, and Andrei Cherny, who is more than happy to give them a megaphone to do so.  Cherny videotaped failed franchisees bashing Doug Ducey and Cold Stone Creamery, and posted the video series both on his website and on YouTube.

See:  Videos for Press Conference about Doug Ducey with Former Cold Stone Creamery Franchisees

According to a Phoenix News Times (Doug Ducey’s Record at Cold Stone Could End Up His Albatross) story:

The ex-Cold Stone hawkers ran through a litany of common complaints regarding Cold Stone’s alleged business practices: promises of profits that rarely materialized; "cannibalizing" sales by placing franchises too close together; forcing franchisees to purchase high-priced goods from favored vendors who provided "remunerations" to Cold Stone; two-for-one coupons that the franchisees had to eat the cost of; and on and on.

One allegation in particular was an eyebrow-raiser. Redd, who operated four stores in Arizona, said on camera that the franchisees were supposed to pay sales tax on the freebie ice cream offered by the infamous two-for-one coupons. He said he was forced to pay this when he was audited by the state. Moreover, Redd claimed he informed Ducey and Cold Stone about the situation.

"We told Cold Stone about it," Redd explained at the press conference. "They told us to just not pay the sales tax, to just, you know, throw the coupons away."

Redd suggested that Cold Stone may not have paid state sales tax on "hundreds of millions of dollars of ice cream" distributed through the promotion.

Also read:

Failure Rates of the 10 Most Popular Franchises

COLD STONE CREAMERY: Bitter Franchisee Alleges Encroachment

COLD STONE CREAMERY: Franchisee Alleges FR “Churning”

Cold Stone Creamery Gets Served by Franchisees

 

ARE YOU FAMILIAR WITH DOUG DUCEY AND THE COLD STONE CREAMERY FRANCHISE?  SHARE A COMMENT BELOW.

Contact the author or site admin at UnhappyFranchisee[at]gmail.com

CAREPATROL: Franchisees Praise the CarePatrol Franchise

CarePatrol is a young, rapidly growing franchise system whose franchisees provide senior care consulting and referral services.

Recently, an anonymous commenter, claiming to be a friend of a failed CarePatrol franchisee, posted a scathing attack on (and warning about) the CarePatrol franchise opportunity. 

CarePatrol CEO Chuck Bongiovanni responded with a point-by-point rebuttal of the complaints (read both complaint and rebuttal at CAREPATROL Franchise Complaint – Updated), and angrily criticized UnhappyFranchisee.com for writing about the complaint.

Since Mr. Bongiovanni’s response, 3 CarePatrol franchise owners have posted comments praising the CarePatrol franchise and rejecting the anonymous critic’s contentions that most of the young chain’s franchise owners are struggling.

CarePatrol franchise owner Paula Vaughn of Tucson wrote:

As being one of the first franchisees with CarePatrol I totally disagree with the comments made by the anonymous submission posted on Sunday, August 1, 2010.

This franchise model is proven, works and is extremely successful. CarePatrol is based upon many years of hard work, experience, honesty and above all ethical practices when servicing our senior population. There is extensive support and training offered and required for each franchise owner. CarePatrol promotes success and is always available to assist with any issues we may have.

I am very satisfied with the growth and anticipated growth of my franchise. My greatest reward is the heartfelt thanks that I receive from my many clients when I have helped them solved their eldercare need.

CarePatrol franchisee Mike Messer wrote:

I purchased two CarePatrol franchises and ended up purchasing another a few months later. All three are profitable and growing every day. There are many negative people in the world who do more complaining then working. The anonymous posting lacks creditability. I have nothing but great things to say about CarePatrol…Well let me say 100′s of my clients have nothing but great things to say about CarePatrol.

CarePatrol franchise owner Sandy Messer wrote:

My husband and I currently own three franchises of this company. We purchased the first two in April of 2009 and then, because things were going so well and we were so pleased with our experience, we purchased the third franchise in June. I was amazed by the letter your Web site received from an anonymous coward. I personally take strong exception to anyone who doesn’t take responsibility for their own words, but that is only the first issue I have with this person.

My second issue is my franchises are not failing; we have made a steady income and rather than feelings of stress and sleepless nights, I go to sleep every night knowing that I have helped people. I have countless letters from families we have worked with thanking us for the blessing of finding our services.

As to a steady stream of free leads, we do receive a steady stream of leads. We don’t pay any fees until a placement is made and then the costs of those fees is minimal in comparison to other franchise opportunities. Apparently, the author of the letter has never worked with our corporate office; it has always gone above and beyond to answer my questions and offer support.

It is most disturbing to me that this Web site would post anonymous letters from a person committing libel. It is truly sad that a company that has helped countless seniors and their families is being attacked by a nameless coward who knowingly and aggressively lies.

ARE YOU FAMILIAR WITH THE CAREPATROL SENIOR CARE FRANCHISE OPPORTUNITY?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Company responses, clarifications or rebuttals welcome.  Contact the author/site admin at UnhappyFranchisee[at]gmail.com.

KUMON Announces Aggressive Northeast Franchise Push

Kumon franchise owners in the Northeast United States have complained that the company is overselling and oversaturating their markets, creating encroachment issues and hardship for Kumon franchise owners.  

Their concerns and complaints are the subject of several posts on UnhappyFranchisee.com:

KUMON Franchise Owner Complains of Overexpansion

KUMON: “Why I Sold My Kumon Franchise”

KUMON: NJ Franchise Owner Shares Concerns

KUMON: Franchisee Association Pushes for Change

Despite their franchisees’ protestations, Kumon has announced an aggressive franchise sales effort specifically targeting the Northeast.  The full company press release appears below. 

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Kumon Franchise Expands in Northeast

Boston, Philadelphia, New York — Fast-Growing Markets for Entrepreneurs in Education
Press Release Source: Kumon On Tuesday October 12, 2010, 8:30 am EDT

TEANECK, N.J.–(BUSINESS WIRE)– Kumon, the world’s largest after-school enrichment program, identifies Boston, Philadelphia and New York City as top priority markets and launches aggressive expansion plans to meet the growing demand for supplemental education services in these cities. In the past five years, Kumon student enrollment increased by 39 percent in Boston, 34 percent in New York City and 32 percent in Philadelphia. Kumon offers attractive business incentives to new franchisees in these priority markets.

“We are seeking franchise candidates who have an entrepreneurial drive and the desire to work in the rewarding field of education,” said Joseph Nativo, chief financial officer, Kumon North America. “We offer franchisees business incentives up to $27,500 and quality-of-life flexibility. Our $2,000 franchise and materials fee is the lowest in the industry.”

The tutoring business is growing at a rate of more than five percent a year according to the Education Industry Association, making it a viable business for entrepreneurs seeking personal, professional and financial satisfaction. Since opening the first U.S. Kumon Center in Larchmont, N.Y., in 1974, Kumon is a highly desirable career opportunity for entrepreneurs. New openings of Kumon Centers increased by 80 percent this year and Kumon plans to sign an additional 50 franchise agreements by the end of the year, expanding its current 1,334-franchise community.

“Despite the economic slowdown, parents continue to invest in education and their children’s academic success is their top priority,” said Savio Rebelo, senior vice president, Kumon North America. “These cities have a high number of potential customers with an increased interest in supplemental education services and we have choice openings to fill to meet the demand.”

Supplemental education continues to be the fastest-growing franchise industry, and Entrepreneur magazine’s annual Top 500 ranking of franchises ranked Kumon as the No. 1 franchise in the United States for the ninth consecutive year. The ranking is considered the best and most comprehensive franchise ranking based on objective, quantifiable measures of franchise success.

Individuals seeking a lucrative source of additional income and successful business professionals in search of satisfying second careers working with children can submit applications online at www.kumonfranchise.com to open a center in the greater Boston area, Philadelphia or in one of the five boroughs of New York City: Manhattan, Queens, Brooklyn, the Bronx and Staten Island.

About Kumon Math and Reading Centers:

Kumon [Koo-mon] is an after-school math and reading enrichment program that unlocks the potential of children so they can achieve more on their own. Founded in Japan in 1958, the learning method uses an individualized approach that helps children develop a solid command of math and reading skills. Through daily practice and mastery of materials, students increase confidence, improve concentration and develop better study skills. Kumon has 26,000 centers in 46 countries and more than 4 million students studying worldwide. The company’s North American headquarters is in Teaneck, N.J. Visit www.kumon.com or call 800-ABC-MATH.

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ARE YOU FAMILIAR WITH THE KUMON TUTORING FRANCHISE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Company responses, clarifications or rebuttals welcome.  Contact the author/site admin at UnhappyFranchisee[at]gmail.com.

CAREPATROL Franchise Complaint – Updated

UPDATED 10/12/10 CarePatrol Senior Care franchise has touted its aggressive growth as an indication of the success of its franchise offering.

A CarePatrol Senior Care press release in 2009 boasted of four franchise sales in its first month of franchising.  A recent press release boasted that, only in its second year, CarePatrol has 16 operating franchises, 6 corporate owned stores and 70 additional territories on contract.

CarePatrol was in Denver in September, 2010, “speaking to 40 potential franchisees for the 2 remaining territories in the Denver area.”

However, CarePatrol Senior Care franchise has been the target of a scathing complaint on RipoffReport.com, where Anonymous wrote:

Care Patrol

625 N. Gilbert Rd.
gilbert Arizona
United States of America
Phone:  480-632-0005
Web Address:  www.carepatrol.com

Category: Franchises Submitted: Sunday, August 01, 2010

Posted: Sunday, August 01, 2010

A friend of mine and his wife were unfortunate enough to come across this pathetic excuse for a franchise last year and have now lost well over $30,000 and many nights of sleeps due to stress.

This company claims to work in the senior care industry providing assisted living placement services to families.

They promise to provide a steady stream of leads for free but what they send are useless saturated leads and come in very infrequently. The system itself is laughable and completely useless.

Anyone with an ounce of intelligence could develop a much more successful method. There is no support given and the only time they heard from the corporate office was when they requested their “licensing fee”.

The most pathetic thing is that this company knowingly and aggressively sold franchises while involved in a class action law suit with another franchise company without informing any prospective franchisees. Most likely a violation of the law.

From what I’ve heard most of the franchises this company has sold have failed, are failing or have been abandoned.

These people should be in jail!!

Stay away

While anonymous comments should be taken with a grain of salt and independently verified, the statement “most of the franchises this company has sold have failed, are failing or have been abandoned.” is especially disturbing.  UnhappyFranchisee.com invited clarification and/or rebuttal of the Anonymous RipoffReport complaint from CarePatrol.

CarePatrol CEO Vigorously Denies the Allegations

CarePatrol CEO Chuck Bongiovanni vigorously denied the allegations, stating on RipoffReport that the complaint “was written by a lazy franchisee that were [sic] terminated just prior to this report showing up by an anonymous writer.”

Mr. Bongiovanni provided a point-by-point rebuttal (see comment section below), which are excerpted here:

RE: the allegation that a CarePatrol franchisee lost $30,000: Mr. Bongiovanni states “I do not know of any franchisee who has lost $30,000 due to the CarePatrol Franchise System… NO CarePatrol franchisee has mentioned, stated or alerted us of ever losing over $30,000 due to the CarePatrol system.”

RE:  That CarePatrol promises to a steady stream of leads but they’re useless: Mr. Bongiovanni states “CarePatrol never promises to provide a steady stream of leads to anyone…The way our franchise royalty works is that we only get paid for leads that we provide that are serviced by our franchisees. If we do not provide leads for our franchisees, we do not get paid….”

RE: Lack of support: Mr. Bongiovanni states “Our support is outstanding. We are available 24/7 for our franchisees and I am positive that they all will attune to this.”

RE:  That the company did not disclose involvement in a class action lawsuit: Mr. Bongiovanni states “CarePatrol has NEVER been involved in a Class Action Lawsuit ever.”

RE:  Claims of franchise failures: Mr. Bongiovanni states “…this is absolutely false. None of our franchisees have EVER failed… We had one franchisee abandon his franchise after he moved out of the continental United States to be close to his daughter.”

See the full rebuttal comments from Mr. Bongiovanni below.

Also read: CAREPATROL: Franchisees Praise the CarePatrol Franchise

ARE YOU FAMILIAR WITH THE CAREPATROL SENIOR CARE FRANCHISE OPPORTUNITY?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Company responses, clarifications or rebuttals welcome.  Contact the author/site admin at UnhappyFranchisee[at]gmail.com.

JACKSON HEWITT Franchise Complaints

UnhappyFranchisee.Com – Are you familiar with the Jackson Hewitt tax franchise opportunity?  What do you think?  You’re invited to share a comment below.

According to the Jackson Hewitt website, Jackson Hewitt Tax Service Inc. (NYSE: JTX) is an industry leader providing full service individual federal and state income tax return preparation through more than 6,400 franchised and company-owned offices throughout the United States.

After its rapid rise to the #2 position in the industry, Jackson Hewitt has had some rough years and myriad problems.  According to Wikipedia:

“The 2007 Department of Justice investigation, poorly constructed financial products, and a company-wide tax law compliance initiative that many insiders believe did more harm than good combined to erase nearly 50% of the company’s market share over merely four years.

“Additionally, the company negotiated out of a default on its debt in May 2009 and technically defaulted for several days in May 2010 (though an agreement with creditors was announced within one week of the ‘default’).

“During the 2010 tax season, Jackson Hewitt was not able to provide its flagship refund anticipation loan product in 50% of its stores, placing it at a operational and marketing competitive disadvantage. The company’s current agreement with creditors requires that it secure refund anticipation loan funding adequate for 100% of its stores by September 30, 2010 and that written commitments from lending institutions be made available to creditors by November 15, 2010.  Failure to do either will place the company once more in default.

“Finally, in July 2010, the Internal Revenue Service announced its intention to discontinue the provision of the debt indicator to tax return preparers.

“The debt indicator is a significant part of the provision of refund anticipation loan funding and its lack of availability is expected to increase the cost of such products to consumers and decrease the level of their availability.

“This IRS change significantly reduces the probability that Jackson Hewitt will be able to comply with its renegotiated loan covenants as discussed above. The stock currently trades below one dollar*.”

* The Jackson Hewitt stock price is listed at $1.11 today

Unhappy Franchisee has received numerous complaints about the rival Liberty Tax Service (see LIBERTY TAX SERVICE Franchise Complaints).

Is Jackson Hewitt franchise have worse problems? 

How is the franchisor doing in helping Jackson Hewitt franchisees weather the storm of operational & marketing challenges, and adverse publicity?

Is this simply a franchise (Stock?  Tax preparer?) to avoid at all costs?

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Company responses, clarifications or rebuttals welcome.  Contact the author/site admin at UnhappyFranchisee[at]gmail.com.

ALAN FEIFER, Franchise Con-sultant, Convicted of Fraud

Alan Feifer, using company names Robert Ames Business Development Co. and Innovative Franchise Systems, sold phony franchise dreams to dozens of trusting restaurant owners.

According to the restaurant owners, he offered to franchise their restaurants and even, in some cases, provide their first franchise buyer… all for only $2500. If they didn’t have $2500, he’d take $1250 upfront and collect the other $1250 "after the first franchise was sold."

Once the checks cleared, Alan Feifer got harder and harder to reach. In the end, the restaurant owners ended up with no franchise program and no franchise buyers. According to the Journal Star:

U.S. Attorney Deborah Gilg’s office says Alan Feifer, 61, pleaded guilty Monday to one count of mail fraud as part of a deal with prosecutors.

Feifer, who is from Airmont, N.Y., ran Robert Ames Business Development Co. and Innovative Franchise Systems.

Prosecutors say Feifer created documents with false statements in them and mailed them to business owners between 2003 and 2006. As part of the misrepresentation, Feifer would tell business owners he could find buyers of the franchises.

He remains free on bond and is scheduled to be sentenced on Jan. 10.

Sean Kelly warned about franchise con-sultant Alan Feifer in the post He Put the Con in Franchise CONsultant on the Franchise Pick blog back in October, 2007.  A number of commenters recounted their experiences with Alan Feifer and Robert Ames Business Development Co.

Norleen wrote:

After receiving the letter from Alan Feifer saying my candy store had been visited and would make a good franchise, I spoke with Mr. Feifer, and he said one of his representatives had been in the store. I spoke with him several times and asked if he couldn’t take the $2500.00 when the first franchise was sold. He said they would have to have $1250.00 now and the rest would be added to their fee after the first franchise was sold.

I received all the papers (very professional looking), and talked with him several times. The time between my calls and his returning them seemed to take longer and longer. He then told me he had had a serious medical problem and would be back to his office two days later. I tried and tried to contact him and then found that both the New York and Ramsey, N.J. phones had been disconnected. That was in 2007. I’ve even checked the Social Security Death Index to see if he had died. After reading these forums, I guess I was lucky to only have lost $1,250.00!

I am so disappointed, as he seemed to be a very nice, professional person, and a caring human being, as I was going through a very difficult time due to the loss of a son, half way through our negotiations.

Lynne H. wrote:

I have been biten by the Alan Feifer con man bug. I have my own business, and I was one of the suckers that paid the $1250 and the rest would be out of the first franchise. I to found where the phone calls that I was receiving were few and far between. I would call his Florida number and it would be weeks before he would call me back. I just recently received a call from Mr. F and like today, he told me that business is bad and with the economy and all. It is either one story or another, he is either in the hospital with some kind of problems, or on vacation or some lame excuse. I have asked for my money back, but he avoids answering the question. I don’t know what to do. Am I going to see my $1250 back??

Pat wrote:

Yeah he got me for $2500 also! He told me he had a heart attack and his employees had left him thinking he was closing the business?
Who knows maybe he will have a heart attack, Karmas a bitch!

Kudos to CBS Channel 6 WOWT for breaking the story and the United States Attorney, District of Nebraska for pursuing fraud charges against Alan Feifer and Robert Ames Business Development Co..

Author and site admin contact:  unhappyfranchisee[at]gmail.com.

ARE YOU FAMILIAR WITH ALAN FEIFER OR ROBERT AMES BUSINESS DEVELOPMENT?  SHARE A COMMENT BELOW.

LIBERTY TAX Offers Franchise Test-Drive Opportunity

Liberty Tax has unveiled its latest franchisee recruitment promotion, a try-before-you-buy program it calls the hands-on “Franchise Boot Camp.”

According to an October 4, 2010 company press release, “Prospects will be put through Liberty’s franchise operational paces and paid a salary. After operating an office, the candidates can apply this newly gleaned experience to purchase the office, or finish the job with no further obligation.”

The Liberty Tax press release continues:

“In response to the economic climate and financing obstacles of opening a franchise, Liberty Tax Service announces a new ‘Franchise Boot Camp’ program that puts prospective franchisees through the paces of owning a tax franchise while they collect a salary to run the office. Candidates can choose to ‘enlist’ for seven weeks of extensive franchise operational training and real-time management responsibilities of running a retail store front during tax season.

“’The approved candidates will receive in-depth instruction on marketing, management, hiring, budgeting, tax preparation and other aspects of running a Liberty Tax office. After operating an office, the candidates can apply this newly gleaned experience to purchase the office, or finish the job with no further obligation.

“Liberty Tax will accept applications for ‘Franchise Boot Camp’ at recruiter(at)libertytaxemail(dot)com.

“’This is a win-win for both parties: our approved candidates can try us before they buy, and Liberty Tax has a report card on their ability to run a successful tax office before they enter our franchise ranks,’ commented CEO John Hewitt on this inaugural franchise training program.

“Residents of California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin must comply with the specific state applicable presale registration and disclosure requirements.”

What do you think?  Is the Liberty Tax “Franchise Boot Camp” an innovative, risk-free way to enable franchise prospects to make more informed decisions regarding the Liberty Tax franchise opportunity?

Or is Liberty Tax “Franchise Boot Camp” simply another slick franchise sales ploy meant to turn employment seekers into Liberty Tax franchisees?

WHAT’S YOUR TAKE?  SHARE YOUR OPINION WITH A COMMENT BELOW.

Company rebuttals, clarifications or statements are always welcome.  Contact us at UnhappyFranchisee[at]gmail.com.

TACO DEL MAR Franchise Co. Sold at Bankruptcy Auction

Bankrupt Taco Del Mar was sold at auction last week, and Connecticut-based Franchise Brands had the winning bid of $3.25 million.

The sale of the Mexican food chain operator and franchisor must still be approved by a bankruptcy judge.  Taco Del Mar has lost money for several years, and now has debt in excess of $3 million.

Taco del Mar is an example of an aggressively promoted franchise concept that grew fast and crashed hard.  The Seattle-based quickservice restaurant chain grew from 74 locations in 2003 to 270 locations in 2008.  More than 200 shops closed between 2005 and 2009.

According to a filing in U.S. Bankruptcy Court, Taco Del Mar owns roughly 22 corporate stores in the U.S., Canada and Guam.  According to a recent company press release, “Taco Del Mar can be found in more than 200 locations.”

According to its website, Franchise Brands was founded “To acquire an interest in a diverse portfolio of businesses and expand them
through franchising.”

According to FranchiseBrandsLLC.Com:

Based in Milford, CT, Franchise Brands, LLC was created in 2005 with the support and guidance of the founders of SUBWAY^® restaurants. It was founded on a basic principle: to invest in small and mid-market companies with experienced management. Companies may currently be franchising or demonstrate the potential to do so.

ARE YOU FAMILIAR WITH THE TACO DEL MAR FRANCHISE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Sources:  Seattle Times, FranchiseBrandsLLC.Com

Contact UnhappyFranchisee.com:  UnhappyFranchisee[at]gmail.com

EDIBLE ARRANGEMENTS: Franchisor Responds to Franchise Lawsuit

Edible Arrangements franchise owners filed a lawsuit last week, alleging that, over the past few years, the Edible Arrangements franchisor has systematically made changes that are extremely detrimental to their franchise businesses.

(Read EDIBLE ARRANGEMENTS: Franchisee Lawsuit Alleges Unfair Practices, EDIBLE ARRANGEMENTS, Tariq Farid Franchise Complaints)

The company vehemently denies the allegations, and vows to “defend the complaint vigorously.”

In response to reports of the lawsuit, which was filed by the EA Independent Franchise Association representing 170 Edible Arrangement franchises across the United States, Edible Arrangements issued the following statement:

Statement Regarding EAIFA Lawsuit

Edible Arrangements International, Inc. has received a copy of the EAIFA lawsuit
filed last week and strongly disagrees with the EAIFA’s characterization of the
facts and conclusions. The Company plans to defend the complaint vigorously
and is very confident its strategies to build and evolve the Edible Arrangements’
system are expressly allowed and have been undertaken in good faith.

Since its inception, the Company’s main objective has been and always will be
to continuously improve the business opportunity for our franchisees and the
customer experience.

Some of the changes that Edible arrangements franchise owners object to include:

• Requiring individual franchises to use approved produce vendors, even if a franchisee has a long-standing arrangement with a local vendor.
• Making all franchisees have Sunday hours.
• Requiring franchisees to buy new computer and software system directly from Edible Arrangements rather than another vendor offering a lower price.
• Requiring franchisees to share their customer lists with Edible Arrangements.
• Reducing the franchisee’s revenue share of online orders from 100% to just 20%.

Franchisees also allege that the Edible Arrangements franchisor is engaging in “virtual encroachment,” and unfairly competing with them via an ecommerce site at DippedFruit.Com.

EA Independent Franchise Association is represented by Justin M. Klein, a franchise attorney at the Red Bank, NJ law firm of Marks & Klein, LLP

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