FRANCHISE LAWSUITS: Noble Roman’s Granted Summary Judgment Against Franchisees
February 3, 2012
Noble Roman’s franchise lawsuit news. Kari Heyser, Fred Eric Heyser and Meck Enterprises, LLC, et al v. Noble Roman’s, Inc. et al, lawsuit was filed in Superior Court in Hamilton County, Indiana on June 19, 2008.
The franchisee plaintiffs alleged that Noble Roman’s fraudulently induced them to purchase franchises for traditional locations through misrepresentations and omissions of material facts regarding the franchises.
[Also read: NOBLE ROMAN’S PIZZA: Worst Franchises for SBA Loan Defaults]
Noble Roman’s filed counterclaims for damages for breach of contract against all of the Plaintiffs in the approximate amount of $3.6 million plus attorney’s fees, interest and other cost of collection, or a total of over $5 million.
As a result of the Order filed January 26, 2012, the company’s partial summary judgment motions were granted as to specific types of damages such as past fees, future fees, attorney’s fees and interest.
Here is Noble Roman’s press release on the granting of the summary judgement.
press release Jan. 30, 2012, 5:00 p.m. EST
Noble Roman’s Granted Summary Judgment on Counterclaims Against Plaintiffs
INDIANAPOLIS, Jan 30, 2012 (GlobeNewswire via COMTEX) — Noble Roman’s, Inc. /quotes/zigman/235863 NROM -5.67% , the Indianapolis based, non-traditional franchisor and licensor of Noble Roman’s Pizza and Tuscano’s Italian Style Subs, today announced that in an Order by the Hamilton Superior Court I filed January 26, 2012 in the long-standing lawsuit by certain former franchisees, Noble Roman’s was granted partial summary judgment as to liability against the Plaintiffs/Counter-Defendants on the company’s counterclaims against them. As a result of this partial summary judgment, the Court determined that certain of the former franchisees of Noble Roman’s, Inc. were liable to the company for direct damages and consequential damages, including net loss future royalties, for breach of their franchise agreements. In addition, the Court determined that, as a matter of law, Noble Roman’s was entitled to recover attorneys fees associated with obtaining preliminary injunctions, fees resulting from the prosecution of Noble Roman’s counterclaims and fees for defending against fraud claims against the company and certain of its officers. The amount of the award is to be determined at trial.
The company was a Defendant in a lawsuit styled Kari Heyser, Fred Eric Heyser and Meck Enterprises, LLC, et al v. Noble Roman’s, Inc. et al, filed in Superior Court in Hamilton County, Indiana on June 19, 2008 (Cause No. 29D01 0806 PL 739). The Court issued an Order dated December 23, 2010 granting summary judgment in favor of the company against all of the Plaintiffs allegations of fraud. As a result, the Plaintiffs’ allegations of fraud against the company and certain of its officers were determined to be without merit. Plaintiffs previously filed numerous motions, including an appeal to the Indiana Court of Appeals, in an attempt to get the December 23, 2010 summary judgment order reversed. All of those attempts have failed, including the Indiana Court of Appeals which dismissed the appeal with prejudice. Plaintiffs’ last attempt to get the summary judgment award vacated was their attempt to vacate the Order on the grounds of misconduct of third parties. On December 1, 2011, the Judge issued an Order denying their request and specifically found "that there was absolutely no evidence of misconduct and the Court admonished Plaintiffs and Plaintiffs’ counsel for making such unfounded allegations." The fraud charges against the company and certain of its officers have been dismissed entirely, and Plaintiffs have no appeal rights remaining.
The Complaint was originally against the company and certain officers and institutional lenders. The Plaintiffs are former franchisees of the company’s traditional location venue. The Plaintiffs alleged that the Defendants fraudulently induced them to purchase franchises for traditional locations through misrepresentations and omissions of material facts regarding the franchises. In addition to the above claims, one franchisee/Plaintiff in the case asserted a separate claim under the Indiana Franchise Act as to which the Court’s Order denied the company’s motion for summary judgment, as the Court determined that there is a genuine issue of material fact, but did not render any opinion on the merits of the claim. The company denies liability on the Indiana Franchise Act claim and will continue to vigorously prosecute its defenses against the claim.
The company filed counterclaims for damages for breach of contract against all of the Plaintiffs in the approximate amount of $3.6 million plus attorney’s fees, interest and other cost of collection, or a total of over $5 million. As a result of the Order filed January 26, 2012, the company’s partial summary judgment motions were granted as to specific types of damages such as past fees, future fees, attorney’s fees and interest. The amount of the damages awarded to the company will be determined at trial.
SOURCE: Noble Roman’s, Inc. CONTACT: Paul Mobley, Chairman & CEO 317/634-3377
ARE YOU FAMILIAR WITH THIS CASE AND/OR THE NOBLE ROMAN’S FRANCHISE OPPORTUNITY? SHARE AN OPINION OR INSIGHT BELOW.
Contact the author of site admin at UnhappyFranchisee[at]gmail.com
CURVES: Why Did the Curves Franchisee Association Fail? (Part 1)
February 2, 2012
If ever a group of franchisees needed a strong independent franchisee association, that group would be the embattled franchise owners of Curves International.
Once touted as the fastest-growing franchise in history, Curves has now achieved the distinction of also being the one of the fastest-failing franchises in history.
According to an article last summer in the Wall Street Journal, “Curves now has about 4,000 U.S. locations—half the number at its zenith in 2005.”
WSJ reporter Richard Gibson stated “Last year 833 clubs, or 16% of the chain’s domestic presence, closed across the U.S., turning what many franchisees thought would be comfortable incomes and retirement nest eggs into money pits.
On the UnhappyFranchisee.com website, unhappy Curves franchisees have outspokenly detailed and protested their alleged mistreatment, bullying and harrassment at the hands of Curves International.
Thousands of franchisee comments, ranging from sad to scathing, have been posted at CURVES: Robert Lay’s Story, on the CURVES: Curves Posts on Unhappy Franchisee and on other Curves franchise articles.
Curves Franchisee Association (CFA) 2006-2011. RIP.
The Curves Franchisee Association held its first meeting in October, 2006 and was laid to rest Sept 30th 2011.
Just 2 years earlier before being pronounced dead, Curves International’s funding and support of the CFA prompted the American Association of Franchisees and Dealers to name Curves International, Inc., its Franchisor of the Year for 2009.
According to the AAFD news release: “Notwithstanding the challenges of rapid growth, and dynamic involvement in multiple channels of distribution, [Curves International, Inc.] has embraced a collaborative culture with its franchise network and has enjoyed a very positive relationship with its members as a result.
“AAFD Chairman Robert Purvin cited Curves’ exemplary franchise culture as the primary focus of the AAFD’s recognition. ‘Curves management has encouraged and supported the organization of an independent franchisee association, including a willingness to engage the association’s elected leadership.’”
CFA Autopsy by Attorney Ron Gardner
What killed the much-needed Curves Franchisee Association?
According to CFA attorney Ron Gardner, the fatal wounds were self-inflicted. It was the distractions of franchisee infighting, bickering, and petty politics that rendered the Curves Franchisee Association ineffective. Ultimately, the death blow was that Curves franchisees were unwilling (or unable) to fund their own association.
According to CFA attorney Ron Gardner, a number of contributing factors led to the demise of the CFA, including franchisee infighting, bickering, petty politics and Curves franchisees’ unwillingness (or inability) to fund its franchisee association. In the end, the Curves Franchisee Association simply ran out of steam.
In his final letter (and autopsy report – posted below), Ron Gardner had nothing but praise for Gary Heavin and Curves International management. Not only was CI open to hearing the ideas of the CFA, Gardner praised Curves for “so generously funded the organization through its infancy.”
Do you agree with Ron Gardner that Curves franchisees killed their own organization? Share a comment below.
Here is Ron Gardner’s post-mortem and farewell letter, originally posted on the CFA website:
So Long … For Now
As someone who has practiced franchise law for almost two decades, I could have predicted that this day was coming several years ago.
The reality is that most franchise associations go through a lifecycle quite similar to that experienced by the most recent iteration of the Curves Franchise Association:
(1) lots of excitement by lots of people to get an association formed and to move forward;
(2) a lot of time, effort and hard work in setting the association up by a smaller number of people;
(3) continued hard work as the association tries to find its feet, both in terms of its goal and purposes, and its independent voice – by a smaller number still;
(4) a longer period of time in which a few people continue the work of the association, working hard to make the system better for all franchisees, but increasingly feeling unappreciated by the “membership”; and
(5) resignation by the few remaining members that, given the volunteer nature of the work, it is no longer worth the effort.
Let me be clear – none of the current CFA Board members have expressed to me a “resignation” that their service was not worth the effort. But, to be fair, I could see it in their eyes, hear it in their voices.
On a brighter note, however, it has also been my observation over the last two decades that an association like the CFA has laid too much groundwork for a franchisee voice to simply be ignored by the franchisor. Whether that voice is in the form of the CFA or some successor organization that is most certainly sure to spring up (if it has not already) is something that we will all have to wait and see about. However, during this “lull” in activity by an official independent franchisee association, it probably behooves all of us to take stock of the lessons that we have learned through the lifecycle of the CFA, as well as providing our sincere thanks to those who worked so hard, and quite frankly, accomplished so much, in pioneering this effort.
Among the lessons we have learned: while Curves certainly prefers to do things its way, it is willing to listen to reasoned and rationale viewpoints that are divergent from their own. Look, we all know that franchising is different than most people think it is when they first start – but, having a franchisor that is willing to listen to the concerns of the franchisee, and consider them, is a significant step in the right direction. I am not suggesting that you should not be dissatisfied with your franchisor at times, and maybe even most of the time depending on your situation. But, we know that screaming, yelling and suing each other rarely brings the parties closer to together to gets things moving in a more cooperative direction. One of the most refreshing things that I observed during my work for the CFA was the willingness of Curves senior management, including Gary Heavin, Mike Raymond, Roger Schmidt, and a host of others, to listen when we had something to say. Often times, Curves would agree with our observations, and change their approach, or at least consider serious modifications. We did not win all of our battles, but we most certainly had a lot to say, and Curves is a better system for it.
We learned that, not surprisingly, a collective voice is much louder than an individual one. As you know, Curves has thousands of franchisees, and is broken into several subparts. Just getting the attention of your franchisor can be difficult if you do not have a collective voice to go through. The franchisee association, in its heyday, was a loud voice for franchisee rights, and helped many individual franchisees find solutions to problems that they were not able to find on their own.
Of course, not all the lessons that we learned were positives. We learned that franchisee associations cannot function productively if they have to spend a significant portion of their time battling the viewpoints of other franchisees – rather than executing strategies aimed at changing the behavior of the franchisor. To my great dismay, the CFA and the people who committed so much of their time and effort to making the CFA a better organization, spent far too much of their time being victims of unjustified rumors, accusations, and other frivolous distractions. It is my sincere hope that the next time an independent association rises in this system, that those members who choose to disagree or not participate with those who are doing the work, choose to merely sit on the sidelines and/or voice their displeasure at the ballot box, rather than undertaking a campaign of personal attacks that make it certain that nothing productive can ever get done.
Another lesson that is not surprising that an association cannot survive, long term, no matter how much value it is adding to its member, if those members are not willing to fund the organization. Among one of the most remarkable things I will remember about the CFA was the way in which Curves so generously funded the organization through its infancy – never demanding in return that we take their particular viewpoint, or refrain from challenging them on any of their initiatives. Unfortunately, that was an unappreciated gesture by the vast majority of Curves franchisees, and when that money ran out, the value that the CFA was delivering to the members was either unappreciated, or unknown, and members were not willing to step up and contribute even a small amount to keep the organization vibrant. Again, my hope for the future is that Curves franchisees remember this the next time around, and that they might give generously to those who worked so hard to protect their rights.
Of course, the end of the CFA does not mean the end of issues between Curves and its franchisees. Therefore, if you find yourself in a situation in the future where you either have business disputes and/or legal disputes with Curves, it is my sincere hope that you realize that resources were developed over the years that will exist into the future – even if the CFA does not. I am virtually certain that most CFA Board members would be happy to share with you their experiences on particular business issues if you were to reach out to them in a time of need. Likewise, to the extent that you need legal help in your dealings with Curves, my contact information has not changed. You can still contact me at rkgardner@dadygardner.com, and I will be happy to share my knowledge and information with you about my insights into the Curves culture, contracts, and likely responses to particular situations.
In closing, I want to take one moment to extend a personal thanks to the Board members who I have worked with over the years (many of whom became very good friends), and most importantly to the four women who chaired the organization over the last several years, Melanie Schaengold, Mary Ella Young, Teri Bertrand, and Carole Keyes. Their wisdom, insight, leadership, and enormous commitment of time on your behalf can likely never be repaid. Thanks as well to those Board members who participated year after year after year, against difficult odds, giving of their time and sacrificing their businesses and their families, to try and make things better for the system. While I am sure I will forget some, I particularly want to thank Sandie Maddux, Shelly Ronfeldt, Angie Wisler, Darlene Bayer, Brad Steinberg, Don Marshall, and Cheryl Hdarecky. While these Board members did not always see eye-to-eye with each other, I firmly believe they all always had the best interests of the Curves franchisee members in mind as they went about their work.
So, at this point, it is not goodbye. It is so long – for now. I look forward to the day our paths cross again.
- Ron Gardner
In reacting to this post, Mr. Gardner added this clarification:
“While I do think it is likely that WITHOUT committed leadership AND adequate funding (one or the other is not enough), most franchisee associations will ultimately fail, such associations can be widely successful (and there are many examples) when the Association finds a way to groom and foster effective leaders for the future AND finds a reliable and on-going source of funding.”
Are you familiar with the Curves Franchisee Association (CFA)? What do you think? Share a comment below.
Contact the author or site ADMIN at UnhappyFranchisee[at]gmail.com
Related reading: CURVES: Robert Lay’s Story (1000+ comments)
CURVES: Curves Posts on Unhappy Franchisee (Curves story links)
STRATUS BUILDING SOLUTIONS Franchise: Guadalupe Clemente’s Horror Story
February 2, 2012
Unhappy franchisees of janitorial/commercial cleaning franchise companies often share a common complaint.
___________________________
They allege that janitorial Master franchisees use deceptive tactics and dirty tricks to keep from providing the cleaning accounts unit franchisees have paid for with their life savings.
Unit franchisees pay these masters thousands of dollars for cleaning contracts with guaranteed minimum revenue.
But if the franchisees are offered jobs which they decline, the contract states that the masters have fulfilled their obligations.
The masters can keep the fees and the unit franchisee gets nothing.
Sometimes the masters offer jobs that are bid so low, the franchisee cannot profitably service them.
Sometimes the masters offer cleaning accounts so geographically distant, the franchisee cannot profitably manage them.
Sometimes jobs that have been accepted and are being successfully cleaned by the unit are taken away by the masters to give to another franchisee, and then another, a practice called “churning.”
In either of these scenarios, the unit franchisees have lost their franchise investments and have no cleaning jobs, and no cleaning revenue.
According to a class action lawsuit filed in Missouri Circuit Court against Stratus Building Solutions, Ms. Markeeta Rivera (STRATUS BUILDING SOLUTIONS: Markeeta Rivera’s Franchise Horror Story) and Ms. Guadalupe Clemente were two of many victims of these deceptive tactics perpetrated by Stratus Building Solutions and its master franchisees.
Ms. Guadalupe Clemente’s story below is an excerpt from the lawsuit Markeeta Rivera And Guadalupe, Plaintiffs -vs- Simpatico, Inc, And Stratus Franchising, LLC, Defendants.
* * * * *
GUADALUPE CLEMENTE’S STORY
79. The story of Guadalupe Clemente is even more outrageous and a perfect example as to how the system developed by Simpatico has been used to blatantly take advantage of the Unit Franchisees.
80. Ms. Clemente discovered Stratus Building Solutions in a magazine called Segundo Mano. There were advertisements in Spanish concerning Stratus. The advertisements make no reference to the existence of the Master Franchisee and direct the reader to the Stratus website. (See Advertisements attached hereto as Exhibit “17”).
81. Stratus also advertised on radio station 105.9 in Phoenix, Arizona.
82. Ms. Clemente speaks little English, but Stratus provided a salesperson who spoke Spanish.
83. Ultimately, Plaintiff decided to purchase a Stratus franchise at the level which would generate revenue of $36,000.00 per year or $3,000.00 per month.
84. Plaintiff asked how long it would take to generate the revenue and was told it would occur immediately after she completed her training.
85. In order to pay for her franchise, Ms. Clemente had to sell her car.
86. She delivered a check for her franchise fee on April 4, 2011, signed her Franchise Agreement with PHSCCH SBS, LLC, doing business as Stratus Building Solutions of Metro Phoenix, the Master Franchisee, and completed her training. (A copy of the Franchise Agreement is attached hereto as Exhibit “17”)
87. Based on the representations made to her, she expected to be offered accounts by mid-April.
88. She was offered her first account on April 28, 2011. However, the account was too far away and would not have given her the profit she needed to make it feasible to accept the account.
89. When she refused the account, Stratus had her execute a form entitled “Non Acceptance of Account.” (See Exhibit “18”)
90. Plaintiff was not offered another account until September of 2011.
91. Prior to visiting the account, Plaintiff contacted a woman named “Martha” who had gone through training with her.
92. Martha informed Plaintiff that she had only been given three accounts and that they had just taken one of the accounts away.
93. Further discussion revealed that the account being offered to Plaintiff was the account that had been taken away from Martha.
94. Plaintiff visited the account but felt bad that it was the account taken away from Martha.
95. Plaintiff was not willing to participate in the “churning” of accounts.
96. Plaintiff informed Stratus that she did not want any part of the system and asked for her money back.
97. Instead of getting a refund, Plaintiff received a letter informing her that her rejection of the account in April fulfilled Stratus’ obligations under the contract. (A copy of the letter is attached hereto as Exhibit “19”)
98. The letter further admitted that since Stratus only offered her accounts with total monthly revenue of $1,500.00 within the time prescribed in the Franchise Agreement, she would be entitled to a refund of the difference in the value of the franchise plans. However, since Stratus alleged she did not make full payment, they gave her no
refund.
99. Plaintiff has had to borrow money to purchase a vehicle and she has never been given sufficient accounts to be profitable.
100. Plaintiff lost all of her savings as a result of the fraudulent actions of Stratus.
Read all related stories here: Stratus Building Solutions Franchise
Read and comment here: STRATUS BUILDING SOLUTIONS Franchise Complaints
STRATUS BUILDING SOLUTIONS FRANCHISE OPPORTUNITY: WHAT DO YOU THINK? SHARE A COMMENT BELOW.
To contact the author or site admin, email UnhappyFranchisee[at]gmail.com
STRATUS BUILDING SOLUTIONS: Markeeta Rivera’s Franchise Horror Story
February 1, 2012
Many contend that commercial cleaning / janitorial franchise opportunities like those offered by Stratus Building Solutions, Coverall and Jan-Pro are blatant scams.
___________________________
The text of a recent lawsuit filed in the Circuit Court of the County of St. Louis, State of Missouri, against Stratus Building Solutions contains the horror stories of two alleged franchise scam victims, Markeeta Rivera And Guadalupe Clemente.
Both alleged victims are women.
Both are Hispanic.
Both were allegedly tricked out of their savings by a cold and calculated technique that has been used and refined by janitorial franchise sales sharks for decades.
Here is an excerpt from the actual lawsuit document:
* * * * *
MARKEETA RIVERA’S STORY
70. In April of 2010, Plaintiff Rivera entered into an amended “Unit Franchise Agreement” with Impressive Cleaning Solutions, Inc., doing business as Stratus of Upstate New York. (A copy of that franchise agreement is attached hereto as Exhibit “15”.)
71. Pursuant to the FDD, Plaintiff purchased a franchise plan that was to provide her projected gross annual revenue in the amount of $30,000.00.
72. Pursuant to the Unit Franchise Agreement, if the Franchisor fails to offer accounts that satisfy the projected revenue within 120 days of the execution of the Agreement, Franchisor is required to refund a pro rata portion of the initial franchise fees.
73. However, Franchisor’s obligation to refund any portion of the initial franchise fee is deemed waived if the Unit Franchisee rejects any customer accounts offered by Franchisor or subsequently discontinues service to any customer accounts offered by Franchisor.
74. Plaintiff was offered accounts that required Plaintiff to travel such distances that it was economically not feasible to accept the account.
75. Under the terms of the Franchise Agreement, Franchisor could offer an account hundreds of miles away from the Unit Franchisee that Franchisor knows the Unit Franchisee will reject to relieve the Franchisor of its obligations under the contract. Such actions have occurred throughout the United States.
76. Plaintiff has never been provided accounts which total the projected annual revenues in that amount, had accounts taken from her without just cause or excuse, had excessive and/or unauthorized fees assessed against her, and has never been able to attain the business level represented to her by the Master Franchisee.
77. That the Master Franchise engaged in the practice of “Churning.”
78. That the above-referenced fraudulent actions set forth by Plaintiff, were first undertaken by the Defendants who passed their practices, policies, procedures, and methods to the Master Franchisee to utilize.
* * * * *
Also read:
STRATUS BUILDING SOLUTIONS Franchise Lawsuits Ahead? STRATUS BUILDING SOLUTIONS: Markeeta Rivera’s Franchise Horror Story
Read all related stories here: Stratus Building Solutions Franchise
STRATUS BUILDING SOLUTIONS FRANCHISE OPPORTUNITY: WHAT DO YOU THINK? SHARE A COMMENT BELOW.
To contact the author or site admin, email UnhappyFranchisee[at]gmail.com
STRATUS BUILDING SOLUTIONS Franchise Lawsuits Ahead?
February 1, 2012
Attorney Jonathan Fortman filed suit in Missouri yesterday seeking certification of a nationwide class of all Stratus Building Solutions unit franchisees who have agreements with the master franchisees.
Fortman’s petition to the court on behalf of Stratus franchisees Markeeta Rivera and Guadalupe Clemente (and those similarly situated) does not seek monetary compensation. According to Fortman, “We are simply asking the court to declare that under Missouri law, the Stratus Master Franchisees are captive agents of Stratus (based on Stratus’ level of control) and not independent contractors.”
Fortman says “We are also asking the court to declare that Stratus Building Solutions and its franchising company have conspired to defraud both the master and the unit franchisees into purchasing into a system they knew, based on their experience in St. Louis, could not be sustained.”
The Stratus Master Franchise Agreements require that the agreement be interpreted under Missouri law. If the Missouri judge rules in Fortman’s favor, he will be well-positioned to file group action lawsuits throughout the country on behalf of Stratus Building Solutions franchise owners.
The lawsuit includes the sad stories of the Plaintiffs, two Hispanic women who lost their savings through the alleged “churning” and other deceptive practices of the Stratus Building Solutions franchise sales machine. As soon as they are posted, you can read their stories here:
STRATUS BUILDING SOLUTIONS: Markeeta Rivera’s Franchise Horror Story
STRATUS BUILDING SOLUTIONS Franchise: Guadalupe Clemente’s Horror Story
Read all related stories here: Stratus Building Solutions Franchise
STRATUS BUILDING SOLUTIONS FRANCHISE OPPORTUNITY: WHAT DO YOU THINK? SHARE A COMMENT BELOW.
To contact the author or site admin, email UnhappyFranchisee[at]gmail.com
WINDOW WORLD Lawsuit Alleges Illegal Franchise Sales
January 27, 2012
Window World, Inc.®, headquartered in North Wilkesboro, N.C., claims to be America’s largest replacement window company with stores and offices in more than 200 cities nationwide.
Window World has grown to more than 200 cities by selling what it termed “license agreements,” not franchises. In an October, 2011 letter to Window World “licensees,” Window World CEO Tammy Whitworth and Window World President Dana Deem admit that their “license,” according to the Federal Trade Commission (FTC) and some state agencies, actually meets the definition of a “franchise.”
Since Window World has not complied with franchise registration and disclosure laws (which includes providing prospective franchisees with a Franchise Disclosure Document, or FDD), Window World has in essence admitted to having sold illegal franchises for several years.
The letter offers Window World “licensees” one of two options: sign the new Window World franchise agreement and (assumedly) let Window World off the legal hook, or rebrand as an independent, and turn over all Window World manuals, forms and proprietary stuff. If a “licensee” opts for the latter, Window World will pay them back their initial fee minus any profit they derived from their business.
Window World “licensee” David Hampton and his Window World of Chicagoland, LLC (“WWC”) is opting for a third option: file a lawsuit in US District Court against Window World, Inc., Tammy Whitworth and Dana Deem.
According to the lawsuit:
This is an action for rescission and damages based on Defendants’ violations of the Illinois Franchise Disclosure Act, 805 ILCS 705/1 et seq. by, among other things, failing to register as a franchise under the Illinois Franchise Disclosure Act (“IFDA”) and making fraudulent representations and omissions in connection with the sale of an unregistered franchise. Plaintiffs also seek damages for Defendants’ breach of contract arising out of Defendants’ denial of Plaintiffs’ right of first refusal by establishing a new territory adjacent to Plaintiffs’ territory. As a result of Defendants’ wrongful conduct, Plaintiffs’ customer base has dwindled and the once thriving business has over night been devalued causing Defendants substantial monetary damages entitling them to recover damages and/or rescission under Illinois law.
David Hampton and Window World of Chicagoland, LLC are seeking rescission of the License Agreements and/or an award of damages, including their reasonable attorneys’ fees and court costs, in an amount in excess of $75,000, and for an award of punitive damages.
David Hampton and Window World of Chicagoland, LLC are represented by Alice A. Kelly of Chicago-based The Kelly Law Group, LLC.
Window World Franchise Lawsuit Documents (pdf format)
WINDOW WORLD Franchise Complaint (Legal Complaint)
Window World Letter to Franchisees (Exhibit C)
Window World Final Judgement & Consent Decree (Exhibit D)
ARE YOU FAMILIAR WITH WINDOW WORLD? WHAT DO YOU THINK? SHARE A COMMENT BELOW!
To contact the author and site admin, email UnhappyFranchisee[at]gmail.com
COLD STONE CREAMERY Franchise Complaints
January 27, 2012
According to the leading source of franchise misinformation, Entrepreneur magazine, Cold Stone Creamery is one of the world’s top 50 franchises.
According to many who believed the deceptive advertising hype and bought a franchise, Cold Stone Creamery is one of the worst franchise investments in recent history.
In addition to UnhappyFranchisee.com, websites like BlueMauMau.org and ColdStoneFacts.org contain numerous franchise horror stories.
We’ve included some of the Cold Stone Creamery franchise complaints below.
[Read more Cold Stone Creamery franchise stories]
Allegations include franchise churning, vendor kickbacks and under-the-table “rebates,” excessive discounting and couponing, lack of franchise support, and a broken, unsustainable business model.
What do you think? Do you have a Cold Stone Creamery franchise complaint or horror story to share? If so, please leave a comment below.
Cold Stone Creamery Franchise Complaints
Current franchisee wrote:
The problem with Cold Stone is its management. Dan Beem and Kevin Blackwell are the worse managers in the history of franchising. They have allowed this thing to get so far out of control that it is now impossible to save. (BMM)
David wrote:
I am a Cold Stone franchise owner with three stores and no one knows better than me of the misery that comes with being a Cold Stone Creamery franchisee. There are stores planning to close across the country. I am planning to close my stores as well. Despite having a very high volume of sales, we cannot make a profit in these stores because of Kahala’s kickbacks. My wife and I cannot even pay our mortgage Me and other franchisees will lose millions, our homes, I even had to pull my kids out of college because I spent their college fund trying to keep my stores open.
Cold Stone Creamery is among the most unsuccessful franchises in the nation and everyone should know that!
http://blogs.roanoke.com/storefront/2011/01/warm-treats-on-the-way-to-cold-stone/
Unfortunately Still a Franchisee wrote:
Cold Stone is quick to point the finger at you if you are not profitable. They will actually accuse you of not reporting all your sales so you could get away from paying royalties. This franchise is nothing but a pyramid scheme aimed at taking advantage of hard working individuals with entrepreneurial spirits. We pray that those like us who are still in this nightmare persevere and those that are out mend their broken lives and find a way to get this behind them.
ex-Cold Stone franchisee wrote:
As an ex-Cold Stone franchisee, I also had to withstand the onslaught of the Kahala regime. I called myself being a nice guy and giving them forewarning that I would be closing my store in two weeks. For some odd reason, I expected them to send me a letter thanking me for my dedicated service. Instead they sent me a termination letter and then began to call and harass me to turn over my keys to them. They began showing up at my store unannounced to (“inspect”) verbally harass me. When I told them I planned to remove my equipment and sell it, they became even more hostile, telling me they had a right to the equipment and that they would sue me if I didn’t turn over the equipment and get out immediately. This went on for two agonizing weeks. They stood out in front of my store for a full hour to watch me load my equipment onto the truck and to harass me about what I was removing from the store…
In a letter to CNBC’s Darren Rovell, another Cold Stone franchisee wrote:
[Kahala/Cold Stone] were not there when we began to keep us on the right track, they were not there when we were failing, and they were not there to help us when we failed. They assigned us a trainee area developer who didn’t help us with ordering and inventory, they had us report sales and income daily and we expected feedback if we were doing anything to lead to failure and after we closed our store, they were still taking out franchise fees. They were terrible to us and to 400 plus franchisees.
…We were promised that there is so much money to make but we lost all in six short months.
… We learned a very expensive lesson about payroll taxes, high taxes in general, Kahala fees being ridiculously high and Kahala kickbacks. We used our retirement and our children’s college funds hoping to make our $500,000 and get us on the road to retirement. We were forced to walk, bankruptcy and nearly lost our home… (BMM)
Another Kahala Cold Stone Creamery franchisee wrote:
Kahala has gotten so greedy that the kickbacks received by them in 2010 were $13 Million. Franchisees like myself, invested $350,000 and saw no support to be successful. They got our money, made their profit, and continued making profit. We closed our doors after six short months. Kahala continued taking franchisee fees and advertising fees from our accounts even after we closed the store. Readers, please don’t buy into this rosy picture. Kahala and Dan Beam are thieves and they will have to restore losses to all the 400+ franchisees who lost their stores, believing in this company cared about them. " (BMM)
Current franchisee wrote:
Me and my husband are losing everything we’ve worked for and all these people care about is having franchisees sell more ice cream. It’s all very upsetting what’s happening to us and so many others and I really want this nightmare to be over. I can’t take it anymore. I regret the day I ever heard the name Cold Stone. Cold Stone has cost me and my family so much pain and we have lost everything. And all Cold Stone cares about is us turning over our stores to them so they can resell them to another innocent family.
These people are evil. (BMM)
Are you familiar with the Cold Stone Creamery franchise? Please share a comment, opinion or observation below.
To contact the author and site admin, email UnhappyFranchisee[at]gmail.com
DAYS INN Franchise Complaints
January 24, 2012
Days Inn franchise owners are invited to share their complaints, frustrations and advice with prospective franchise owners below.
Sometimes getting to the truth behind the franchise hype is difficult.
Despite the fact that the number of Days Inn domestic franchises has been declining in recent years, Entrepreneur magazine has been giving Days Inn progressively higher rankings in its much hyped Franchise 500.
2012 Ranked #5 of the top 500 franchises (# US units not broken out)
2011 1,662 (Ranked #6)
2010 1,677 (Ranked #21)
2009 1,681 (Ranked #22)
2008 1,706 (Ranked #31)
Days Inn Worldwide is part of the Wyndham Worldwide family of hotels which also includes Baymont Inns & Suites, Hawthorn Suites, Howard Johnson Int’l., Knights Franchise Systems, Microtel Inns & Suites, Ramada Worldwide, Super 8, Travelodge Hotels, Wingate by Wyndham, and Wyndham Hotels and Resorts.
While the number of U.S. Days Inn franchises has been declining, Entrepreneur magazine keeps increasing its ranking.
Is the Days Inn franchise really improving every year?
Does Days Inn franchise provide the training, support, marketing and systems it promises?
Is Days Inn franchise and parent Wyndham Worldwide genuinely dedicated to the success of its franchise owners?
Please share a comment, opinion or insight below.
ARE YOU FAMILIAR WITH THE DAYS INN FRANCHISE? WHAT COMPLAINTS DO DAYS INN FRANCHISEES HAVE? PLEASE SHARE A COMMENT BELOW.
To contact the site admin, email UnhappyFranchisee[at]gmail.com.
7-Eleven Franchise Complaints
January 24, 2012
7-Eleven franchise owners are invited to share their complaints, frustrations and advice with prospective franchise owners below.
UnhappyFranchisee.com believes that no franchise system is perfect, and that it benefits everyone when new franchisees sign on with realistic expectations and advance knowledge of the challenges and frustrations they may face.
7-Eleven franchise website promises its franchisees world-class support: “Because we want you to spend your time operating your store and growing your business, we provide you with a level of support that is not just among the best in the convenience store industry—our support goes above and beyond, setting standards for franchises across all industries.”
7-Eleven franchise website boasts that it provides support by sending a business consultant to each store twice per week:
In order for 7-Eleven® to be successful, you have to be successful. That’s why we provide a personal Business Consultant to help you with all the challenges involved with running your own business.
We provide personal support to help you succeed
What are Business Consultants?
A Business Consultant is a 7-Eleven employee assigned to your store and who visits your store twice a week.
Here are just a few of the things your Business Consultant can do for you:
- Assist in the development of budgets and business plans for your store
- Provide advice, coaching and assistance on how to improve the business
- Assist with the analysis of your store’s sales data
- Provide continual training and guidance on our ever-improving system
- Promote efficiency to help maximize your store’s profitability
7-Eleven named the #1 franchise in Entrepreneur magazine’s 2011 Franchise 500. (See the UnhappyFranchisee.com discussion here: Top 100 Franchise Opportunities 2011: Behind The Hype) and has now been named the #3 franchise in Entrepreneur magazine’s 2012 Franchise 500 as well.
Are the accolades well-deserved?
Does 7-Eleven provide the training, support, marketing and systems it promises?
Is 7-Eleven genuinely dedicated to the success of its franchise owners?
Please share a comment, opinion or insight below.
ARE YOU FAMILIAR WITH THE 7-ELEVEN FRANCHISE? WHAT COMPLAINTS DO 7-ELEVEN FRANCHISEES HAVE? PLEASE SHARE A COMMENT BELOW.
To contact the site admin, email UnhappyFranchisee[at]gmail.com.
SUBWAY Franchise Complaints
January 24, 2012
Subway franchise owners are invited to share their complaints and frustrations, as well as advice for prospective Subway franchise owners, below.
Anonymous comments are encouraged, and all email addresses and other information is treated with strict confidentiality.
Around the Internet, complaints have arisen from many Subway franchise owners who feel that they are being victimized by their franchisor, and by founder Fred DeLuca in particular.
Ex-Subway franchisee Jim Eddie claims “whole subway system is a scam,” and called his time as a Subway franchise owner “the worse year of our life.”
Another Subway franchise owner writes “Subway use to be a great opportunity for all but now it’s like doing time each and every time I walk through my doors…”
Subway franchisee Debra claims “subway ownership is hell on earth.”
Here are some comments posted on the Complaints Board website:
ConcernedSubwayOwner wrote:
I was a 3 store owner with Subway. I was franchisee of the year for my region. Then our Development Agents changed and with in 14 months I was forced to sell all 3 locations because I was all of a sudden considered a bad operator. All the while, my stores out performed the market, and the stores of my new Development Agent. In a period of 14 months over 40 stores in our Southern California Market were flipped. All were forced to sell due to "compliance" issues. Most of the stores were above market average. The new Subway Development Agent, the Marwaha Group, in its role of Development Agent has the responsibility to do the Compliance Inspections. Interestingly, they or their immediate Family members were the only approved "buyers" in the 40 locations that flipped.
When Subway Corporate was questioned, the response was that the old Development Agents (who were DA Market of the Year in 2001), Subway Corporate said that the old Development Agents were scumbags, lazy, etc.… Subway was not only aware of the problems, but actively condoned the following potentially ilegal behaviour: Price Fixing, Racketeering, Fraud, and Forgery…
doingtime wrote:
… I was told by my business consultant that all of the "twenty year" people should very worried about our stores. That Fred Deluca and his cronies want us out so they can turn the stores over to make money on the start up costs. He suggested that I start keeping a journal about my inspection experiences, which by the way have gotten horrible. They are so bad that I have started to video tape my stores after each inspection to protect myself.
I have a couple of stores that do way, way over the territory average in sales. Fred makes a lot of money off of me in royalities every year. So instead of giving me a pat on the back and a "good job" I get this… You have syrup on your trash can, the handle to your toaster oven has sauce on it, the pvc pipes under your three bain sink has dust on it, your microwave is dirty your bathroom smells, there are straw wrappers on your floors, etc… all of this during a lunch time where the customers are line up into our parking lot!!!
…It is not enough that I work all day everyday, that I have higher sales than most others in my territory, that my customers go up to this twit as he sits in my handicapp seating typing crap that he is making up half the time, telling him that my stores are the best that they have ever been to (by the way he doesn’t mention that in his report). What he does mention is that my places are dirty and marks me out of compliance. I then get a letter from the legal department threating to take my stores. I for one am sick and tired of it. I’m stressed all the time.
Way back when Subway use to be a great opportunity for all but now it’s like doing time each and every time I walk through my doors…
debra wrote:
Owning a subway. They don’t even use the Vaseline when they screw you. They do want to ditch u at 20 years. They are killing me literally health wise. U can never keep them (subway world headquarters) happy… Subway world headquarters in Milford conneticut owned by Fred Deluca, makes it impossible for Subway owners to even break even with THE $5 ft. Sub, let alone certificates & coupons added on it.
…owners work 7 days a week, r exhausted n r constantly harassed by Subway, they r punished to the point where we either die of subway-itis or they take everything we worked for away.
… So if u now made the mistake of buying into " the #1 Franchise" I also advice, get a good attorney on retainer to read the phone books of information u r required to read. Get a good doctor, because they run u to the ground until u r dead or take that store away, n give u nothing for it while they resell it for $250, 000.00 Minimum. You DAI & Fred Deluca r the ones making money.
I wish I never got into Subway, I hate this company, I don’t have long to live according to my Doctors, thanks directly to the stress subway world headquarters, their arbitrators, their inspectors n their little spools that come in at busy lunch time with their laptops, praise u verbally, but are required to write you out of compliance. That is a fact… They r trained to do that…set u up. Just ask any ex-inspector.
…They have ruined my family life my health and are destroying, annihilating my stores knowing im to weak to fight back, so, here it is. No retirement, no health insurance because we are self employed & due to the stress from Subway the doctors concur i have less then 1 year to life.
So hey Fred, see u in hell, u cant n wont take it with you, you lousy ba$tard. Your no italian, your a pig! Keep having your little spies do their thing, your gonna rit in he’ll for what you have done to franchisees and the deception to the customers. Hey, why don’t you shove one of those $5.00 subs up your arse.
Also those defending Subway. They are liars. They are totally lying. In the name of God & all that is Holy, they are lying. subway ownership is hell on earth. No wonder we look like nazi concentration camp survivors, Mussolini is back & his name is Fred Deluca.
Dr. Gus wrote
Our DA Office has clearly demonstrated unethical behavior for years.
What has been demonstrated so far to our local area franchisees, is that the DA Office and Subway Corporate are the "same entitiy".Some franchisees value integrity and honesty far above money. Those few will not stay once they experience the unethical behavior.
The rest who compromise their values for the money, will stay, and will stay quiet about it.
This is just a microcosm of what America at large has come to recently exceedingly suffer from. Excessive greed, above all else.
Jim Eddie wrote:
My wife and I owned a Subway in 1993. Once a week we still talk about the misery we suffered. It sounds like things got even worse since then. I always had a feeling the success of the company was on the back of the hard work of store owners. We only owned the store for less than a year and it was the worse year of our life. I do feel the whole subway system is a scam and if you already own one, it’s too late but if you are thinking of buying one speak to current owners. If they are honest, they will talk you out of it.
What do you think? Are the accolades of Subway as a top franchise deserved?
Does Subway franchise provide the training, support, marketing and systems it promises?
Are Subway and founder Fred DeLuca genuinely dedicated to the success of their franchise owners?
Please share a comment, opinion or insight below.
Also read: SUBWAY: What Do Franchisees Make on $5 Footlongs?
Are SUBWAY Franchise Owners Happy?
SUBWAY: Send Jared to Gitmo! Parody Press Release
ARE YOU FAMILIAR WITH THE SUBWAY FRANCHISE? WHAT COMPLAINTS DO SUBWAY FRANCHISEES HAVE? PLEASE SHARE A COMMENT BELOW.
To contact the site admin, email UnhappyFranchisee[at]gmail.com.
