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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EDIBLE ARRANGEMENTS: Franchisee Lawsuit Alleges Unfair Practices

Unhappy Franchisee – Edible Arrangement franchise owners are suing their franchisor, alleging that its unfair practices are threatening the survival of many of its franchisees.

(Related Reading:  EDIBLE ARRANGEMENTS, Tariq Farid Franchise Complaints)

Here is the press release issued by EA (Edible Arrangements) Independent Franchisee Association:

“Franchisee Association Files Lawsuit Against Edible Arrangements Claiming Unfair Practices

“NEW HAVEN, Conn., Sept 20 /PRNewswire/ — A lawsuit was filed today in the United States District Court for the District of Connecticut by the EA Independent Franchisee Association against New Haven-based franchise company Edible Arrangements and several affiliated companies. 

“The complaint alleges that Edible Arrangements has altered the business arrangement with its franchisees over the last several years, to the detriment of the Association’s members and all other franchisees in the franchise system, in violation of its contractual obligations and general principles of fairness.  In addition, the complaint charges that Edible Arrangements has unfairly implemented several system-wide mandates, has enforced new mandates on a discriminatory basis and has failed to disclose necessary and required business information to its franchisees in violation of franchise disclosure rules and regulations. 

"’The EA Independent Franchisee Association has been forced to take this action after efforts to discuss these serious business issues with the company were summarily rebuffed,’ said Justin M. Klein, a franchise attorney at the Red Bank, N.J. law firm of Marks & Klein, LLP representing the Association. ‘The Association represents a strong contingent of Edible Arrangements franchisees located throughout the United States who simply want a fair chance at making their businesses as successful as possible. The recently implemented and threatened mandates from Edible Arrangements create a huge obstacle toward that goal for the franchisees.’"

"’We want a fair shot at success and an open line of communication with the company about the decisions it makes that affect our business and our lives,’ added Sherri Vertorano, a North Carolina-based franchisee and EA Independent Franchisee Association Member.  ‘Edible Arrangements makes the best product, offers great customer service and a memorable customer experience.  However, the recent mandates enacted or threatened by the company are making it far more difficult for franchisees to run a profitable store. Ultimately, if the franchisee is not happy, the experience for the customer will suffer as well.  We hope that Edible Arrangements understands that and that this lawsuit can lead to better relations between franchisee and franchisor, which, in the long run, benefits the customer.’"   

SOURCE EA Independent Franchisee Association

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EDIBLE ARRANGEMENTS, Tariq Farid Franchise Complaints

Edible Arrangements, a gift retailer that delivers fresh fruit arrangements and chocolate dipped fruit to business and residential areas, claims its franchise opportunity is The Freshest Idea in Franchising®.

According to the Edible Arrangements franchise website: “Tariq Farid started Edible Arrangements with one goal in mind and that was to make people’s day, every day. Through Tariq’s vision came unprecedented growth and success. Now with $350 million in sales and over 950 locations around the world, the focus remains on our franchisees and on our customers to continue delivering happiness around the world.

“Edible Arrangements® helps people around the world celebrate the times of their lives by training and supporting talented franchisees who provide beautifully arranged, natural, healthy food that makes occasions special.”

However, a recent rise in complaints about the Edible Arrangements franchise may indicate that the sweet franchise deal may be going sour for franchisees.

Are you familiar with the Edible Arrangements franchise?  If so, please share a comment below.

On ComplaintsBoard, 4/29/10 Unhappy Edible Arrangements Owner wrote:

DO NOT BUY THIS FRANCHISE!!! THEY ARE LIARS AND MANIPULATORS!

We currently have 35 stores closed down due to corporate continuing to take more money from us all. Every franchisee worries that they will lose their stores due to corporate greed. They currently take 7% plus another 4% for tv advertising which they contribute nothing to. They put out coupons and do not refund the money back to the stores that accept them. They have now released new hours mandating we have to be open on Sundays, however they allow Jewish owned stores to be closed on Saturday and Muslim owned stores to be closed Friday. Christian owned stores are told they have to be open on Sunday…NO EXCEPTIONS will be made. This is Religious Discrimination!

Corporate does not care about their franchisees at all. Due to their greed and the franchisees concern for their investments 120 stores have entered into a lawsuit against them. These guys will stop at nothing to get you to invest in their concept and then shut you down so they can buy your store on the cheap and then resale it a 3 times what they paid for it. They will take your delivery areas away from you and give them to another store which is either a corporate owned store or the owner is related to the CEO.

Again, SAVE YOUR MONEY!!! Find a franchise that cares about the owners that make it successful! As an owner you will work 60 plus hours and you will not be able to pull a check unless you get rid of all your staff. Sadly, you will tell corporate your problem and they will just blame it on your fruit expense and not on all the rebates they get for you purchasing your product through their supplier. Cost of goods has yet to go down over the past 5 years and we have added 700 stores. The reason why is due to them wanting to continue the rebate and not passing the savings down to the store owners.

SAVE YOUR MONEY, FIND ANOTHER FRANCHISE, ONLY BUY FROM US AND SAVE YOURSELF THE HEADACHE OF OWING ONE.

On Franchisee Law Blog, July 27, 2010, Edible Arrangements franchise owner Tom Downes wrote:

I am a franchisee of Edible Arrangements…  At first the CEO told us that we were critical pieces of the entire franchise system. He was right at the time, we were store #59 and the franchisor gave us much latitude as we built our business to break even and small profit after 2 long years and more infusion of capital. Now, 5 years later all that has changed and the CEO/founder does not care if franchisees make money, he has followed the familiar template offered by IFA* and Michael Seidman** [sic]. Get to a critical mass of stores and start implementing dictatorial measures to extract as much money from their franchisees as possible by mandating capital expenditures for “upgrades” and increasing material costs through vendors.

By the way, the franchisor has established distribution companies that you are mandated to buy all these materials from, adding more money to his cash flows. The franchisor is taught to create as much cash flow into the parent company so that when he sells his company, he will maximize the price. Also, the franchise agreement stipulates that any dispute is dealt with by arbitration only in Connecticut.

On a domain name discussion blog on July 29th, 2010 Edible Franchisee wrote:

Tariq Farid (CEO Edible Arrangements) tries to use the American Legal system to his advantage at every turn. He is a dishonest, unethical criminal who tries to hind behind his so called religious faith. He tries to build a mosque in the middle of a residential neighborhood in CT and when the neighbors cry foul, he claims that his religious freedoms are being trampled by a ‘Sad Agenda” against islam. He continually rapes his franchisees with new fees, mandatory purchases from vendors he owns and unreasonable and unsustainable business models. As EA staores are closing all across the country, he claims the system has never been stronger. He is a snake oil saleman, its as simple as that.

Are you familiar with the Edible Arrangements franchise?  If so, please share a comment below.

* International Franchise Association, a trade and lobbying group representing the political and economic interests of, primarily, franchisors.

** Michael Seid, a pro-franchisor consultant heavily involved with the IFA