August 15, 2012
UnhappyFranchisee.com’s list of the WORST FRANCHISES IN AMERICA (by SBA loan defaults) includes two franchise concepts that are part of United Franchise Group (UFG): EmbroidMe and SIGNARAMA.
In our post EMBROIDME Franchise Complaints, we reported that data released by the Small Business Administration (SBA) indicates that EmbroidMe franchise owners who qualified for SBA-backed franchise loans have an outrageously high loan default rate of 40%.
Additionally, we pointed out that the number of EmbroidMe franchise units declined by 125, or 33%, between 2008 – 2012.
In our post SIGNARAMA Franchise Complaints, we reported that the Small Business Administration (SBA) indicates that SIGNARAMA franchise owners who qualified for SBA-backed franchise loans have an disturbingly high loan failure rate of 26%.
The number of SIGNARAMA franchise units declined by 112, or 19%, between 2008 – 2011.
Message from Erin Crawford, Director of Franchise Development, United Franchise Group
Of all the referenced definitions listed below, including one defined by the Franchise Tax Board of California, for the phrases ‘ceased operations,’ ‘closed store,’ ‘out of business,’ and/or ‘terminations’ I have yet to find a one that includes the word ‘failure.’
I could keep going, but I think my point is clear. The fact that a business is no longer operating by no means does not mean it has failed.
In many instances a small business owner may decide to cease operations because he is retiring, moving, or not wanting to sell his business for other various personal reasons.
An article published by CNN Money in 2011 reported increases in small business failure rates by state listing the following top rates:
- California 69%
- Nevada 65%
- New Hampshire 38%
- Tennessee 36%
- Colorado 33%
The article also sites [sic] reasons for these failure rates because of real estate markets, tourism business, and manufacturing industries all hit by the recession. I couldn’t find one reason attributed to a franchisor.
Further, your interpretation of a failure rate for both EmbroidMe and SIGNARAMA actually make franchising look like a better option in comparison to the national failure rates of small business quoted by the article, “Across the United States, small business failure rates rose by 40% between 2007 and 2010.”
United Franchise Group and our family of brands took a proactive approach when signals for economic declines appeared in 2007. We shifted our focus and resources to help our existing stores with sustainability and scaled back on the sales of new stores. We invested our resources into top-notch marketing and training programs unparalleled in the industries we represent.
Thus in response to your questions:
[Question #1: Does UFG acknowledge 36%-37% as the EmbroidMe failure rate?]
#1- Absolutely not
[Question #2: Has UFG initiated a plan or coordinated effort specifically designed to stem these franchise failures?]
#2- See the answer to question 1.
Erin Crawford, MBA
Director of Franchise Development
United Franchise Group
ARE YOU A UNITED FRANCHISE GROUP FRANCHISE OWNER OR FORMER FRANCHISEE?
ARE YOU FAMILIAR WITH THE EMBROIDME FRANCHISE OPPORTUNITY OR THE SIGNARAMA FRANCHISE OPPORTUNITY?
PLEASE SHARE A COMMENT BELOW.
April 24, 2012
EmbroidMe franchise marketing claims “Entrepreneur magazine has named the EmbroidMe Franchise as the leading franchise provider of embroidery, promotional products, printed apparel and personalized gifts services and we have helped hundreds of people just like you find success doing what they love.”
Are you familiar with the EmbroidMe franchise opportunity? Please share a comment below.
“We have used our experience to develop a business model that have led hundreds of EmbroidMe franchisees to success and helped us grow to become the world’s largest embroidery franchise.
“As part of our family you get the full support and services of the EmbroidMe team – a group that is committed to providing you with the training, consulting, equipment and resources you need to make your EmbroidMe store successful.
“The franchise fee for EmbroidMe is $44,500 and the total initial investment ranges between $174,000 and $178,000, with financing available.
“As the world’s largest embroidery franchise, every EmbroidMe franchisee enjoys the benefits of being part of a large network which provides negotiated pricing with vendors, marketing materials, financing options, unrivaled training and support, a professionally designed store and a recognized and respected brand name.
EmbroidMe Franchise Marketing Claims
According to EmbroidMe Franchise Marketing:
When you become an EmbroidMe franchisee you enjoy the support provided by a global company combined with the independence of owning you own business. In addition, every EmbroidMe franchisee enjoys the benefits of being part of a large network with perks such as:
- High Volume Buying Power:With over 300 stores worldwide, EmbroidMe has an economy of scale that enables us to negotiate exceptional prices with vendors; thus, giving you a chance for huge savings on all your supplies.
- Internet Advertising Programs: EmbroidMe participates in an aggressive pay-per-click program that not only keeps us on top of our competitors, but also is strategically designed to drive traffic to your store.
- Free Marketing Materials: As part of an EmbroidMe franchise you receive marketing support in the form of professionally designed marketing and direct-mail materials.
- Professional Store Design: Every EmbroidMe franchisee has the advantage of a retail design expert who will help make the most of a store’s layout.
EmbroidMe claims to provide extensive franchise support
EmbroidMe franchise materials claim:
We don’t leave you high and dry when you open the doors of your store. As an EmbroidMe franchisee, you will have access to the ongoing support from a team of trained individuals to assist you in all areas including training, consulting, marketing, equipment, research, and technical support.
As an EmbroidMe franchisee, you gain the full resources of a team committed to helping ake your store a success through continued training, consulting, marketing, research and technical support. Join our family and experience the satisfaction of owning your own business while enjoying the benefits that come from being part of a global brand people know and trust.
ARE YOU AN EMBROIDME FRANCHISE OWNER OR FRANCHISEE? ARE YOU FAMILIAR WITH THE EMBROIDME FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.