BEAUTIFUL BRANDS Franchisee Questions for David Rutkauskas

David Rutkauskas, CEO of Beautiful Brands International (BBI), franchisor of Camille’s Sidewalk Café, Freshberry Frozen Yogurt, and reseller of several partner franchise brands,  is supposed to be interviewed by Tulsa World retail reporter Kyle Nelson this week.

To help Mr. Nelson prepare an insightful and hard-hitting interview, UnhappyFranchisee.Com invited former Camille’s Sidewalk Café franchise owners to provide questions they would like to see David Rutkauskas answer.

We were inundated with tough questions for David Rutkauskas, and we couldn’t help but add a few of our own.  Here are the questions we’ve provided to Kyle Nelson and his business editor John Stancavage, though Mr. Rutkauskas is welcome to answer them directly in the comment box below.

Camille’s Franchise Sales Strategy & Practices Questions for David Rutkauskas

– When Franchisees attended the Discovery Day sales presentation, did BBI flood the area with heavy discounted coupons to make the restaurants look busier than they normally were?

– “When we visited BBI to be ‘approved’ as franchisees, David showed us a map with several hundred colored pins on it, telling us these were restaurants  “under development.”  In reality, these pins represented nothing more than franchisee commitments, required by David in order to buy a franchise.  We were required to buy multiple locations, only one of which was ‘under development.’  I would like David to be asked why he intentionally misled franchisees to believe all these restaurants were under development when , in fact, they were not.”

–  Related question:  In 2008, it was reported that nearly 900 Camille’s franchises had been sold.  Why did Beautiful Brands require payment for hundreds of stores that never opened?  Did you ever offer these franchisees a refund for unopened stores?

–  What was the need to sell multiple franchises to individuals in distant markets before knowing if Camille’s would be successful outside Tulsa?

–  What was the purpose of expanding nationally in such a short time before testing different markets to determine their likelihood of success?

–  By expanding so rapidly and broadly (and not clustering units) how did you anticipate negotiating food contracts that would allow the franchisees in remote markets to remain solvent?

–  Why did you continue to sell franchises when the current franchisees were failing?

–  When was the last time a new Camille’s opened in the US?

–  Why did you expand to franchise multiple brands when one was already failing?  Why not concentrate on one brand and make it successful rather than sell franchises for additional questionable and unproven enterprises?

Camille’s Franchisee Support Questions for David Rutkauskas

–  How often does Beautiful Brands visit each Camille’s store for onsite visits and coaching?

–  Why doesn’t Beautiful Brands have franchisee meetings, a convention or ongoing training?

–  Does Beautiful Brands provide any accounting of how franchisees’ Ad Fund dollars are spent?

–  Why is there no “quality control” or no enforcement team overseeing franchise operations to ensure operators are abiding by approved procedures and maintaining quality operations?  I’ve seen none of this.

–  When your national distributor (US Foods) does not service a particular franchisee’s market,  what alternative arrangement does Beautiful Brands make for the franchisee?  Or is that franchisee left to source food and supplies locally on their own?

–  When most of the franchises were failing in the Midwest, why didn’t you personally visit these or send a representative to determine the cause of failure?

–  How were you planning on monitoring and offering cost effective products and foods to franchises a thousand miles away?

–  When franchises were struggling for survival, did you offer any temporary relief?

Beautiful Brands Franchise Failure Rate Questions for David Rutkauskas

–  Can you name 5 franchisees who have made real money from Camille’s or any of your other brands?

–  You claimed that you sold 14 Coney Beach franchises before even opening the first one.  When the Coney Beach franchise flopped and was discontinued, did you offer these 14 their money back?

–  Why do you refer to Camille’s Sidewalk Café as a success story when more franchises closed than remained open, when the SBA lists your franchisee default rate as one of the highest in the country, and when hundreds of franchises that were paid for never opened?

–  Did Beautiful Brands sell a Freshberry franchise in Grand Rapids, then sell 2 competing CherryBerry frozen yogurt franchises to directly compete with her in the same market?

–  How do you sleep at night?

Beautiful Brands Legal Threats and Intimidation Questions for David Rutkauskas

–  Is it true that you preach openness and transparency on your blog, but when former franchisees shared their experiences with Beautiful Brands on UnhappyFranchisee.Com, you had your attorney send them threatening legal letters?

–  Has Beautiful Brands prohibited and even threatened legal action if Camille’s franchisees organize or convene meetings amongst themselves?

–  Are Camille’s Sidewalk Café and other BBI franchisees prohibited from forming an independent franchisee association?

–  Are former Beautiful Brands partners free to share their opinions of or experiences with the BBI partnership program?

Beautiful Brands Partnership Program Questions for David Rutkauskas

–  How much do franchise companies pay to be Beautiful Brands partners?  What do they receive for that investment?

–  Have any of the current BBI partners (such as Ludger’s Bavarian Cakery, CherryBerry Self-Serve Yogurt Bar, Roxberry Juice Co., Smallcakes A Cupcakery, Hard Knox Pizzeria, Fresco Italian Kitchen, Yard Sheriff) expressed a desire to have their brands removed from the BBI portfolio?

–  There seem to be more “former” BBI partners than “current” BBI partners.  Why is that? Does BBI sell “partner” companies on franchising when they are not suited or not ready for franchising?

–  Why is Blazing Onion Burger Company no longer a BBI partner? You wrote that you decided to franchise it in 2010, but their website lists 5 locations and no mention of franchising or BBI.

–  Why are The Bread and Butter Bistro, The Crusty Croissant Bakery & Café,  and Le Beau Rouleau Crepes and Croissants no longer BBI partners?  Are they still in business? Were they the same company, listed as three different partners?

–  Why is Caz’s Chowhouse no longer a BBI partner? Their website lists a single location and no mention of franchising.

–  Why is Café Ole no longer a BBI partner?  They have 1 location listed on FB and no mention of franchising.

–  Why is Dixie Cream Donut Co. no longer a BBI partner? Their website lists no US locations and a few in the Middle East.

–  Why is Greenz Salads no longer a BBI partner? They seem to have the same 3 locations they did when they first partnered with BBI.

–  Why is In the Raw Sushi no longer a BBI partner? They have 4 locations and appear to be franchising, but not with BBI.

–  Why is Kyro Pizza no longer a BBI partner? They have 1 location and are offering franchises, but not with BBI.

–  Why is St. Michaels Alley no longer a BBI partner? Their website lists a single location and no mention of franchising.

–  Why is Sonny Bryan’s Smokehouse no longer a BBI partner? They have 11 locations in Texas and Utah and are franchising without BBI.

–  Why is Sushi Freak no longer a BBI partner? In February, 2012, BBI claimed via QSR “Sushi Freak is poised to expand rapidly and sign at least 100 franchise agreements in the first nine months of 2012. BBI expects 50 stores open and operating by the end of the first quarter 2013.”  The Sushi Freak website lists one (1) location and they seem to have dumped BBI as a partner.

–  Why is Top That! Pizza no longer a BBI partner?  In January, 2011, BBI claimed it signed a “200-unit, three-state deal,” which David Rutkauskas characterized as “a landmark accomplishment for our company.”  Two years later, Top That! Pizza has only 9 locations and seems to be disavowing any connection with Beautiful Brands International.

–  Is it true that the newest BBI partner, NYPD Pizzeria, was founded by conman Lou Pearlman who is in a federal prison for perpetrating the largest Ponzi scheme in Florida’s history?  Why did you state that NYPD Pizza has the “perfect formula for franchise success,” when the franchise chain has shrunk nearly 60% since 2008?



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