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LIBERTY TAX Franchise: Earned Income Tax Fraud?

July 30, 2015

Liberty Tax franchises are running a low income tax fraud exploiting the Earned Income Tax Credit (EITC), and CEO John Hewitt knows all about it, according to Anon Source. What do you think?


Liberty Tax(UnhappyFranchisee.Com)  According to our reader Anon Source, a bunch of Liberty Tax franchisees are running a tax fraud by exploiting the rules around Earned Income Tax Credit.

Anon Source claims CEO John Hewitt knows all about the practice.

It’s not an entirely new allegation.

What IS new if that Anon Source names some of the franchisees he maintains are complicit in this fraud.

These allegations are the opinions of Anon Source and not necessarily shared by the publishers of this website.

We welcome rebuttals and other viewpoints, which can be shared below or by emailing us at UnhappyFranchisee[at]gmail.com.

What do you think?  Share a comment below.

*   *   *   *   *   *   *   *

To Whom It May Concern,
Liberty Tax CEO John Hewitt is hiding information about the following franchisees (and others) who are his biggest in the country and operate in low income areas and have been committing all types of tax fraud to fuel their growth with his knowledge and encouragement.
The newest scheme that they were using this year was putting people with no income and no dependents down for a small amount of fake “household income” on Line 7 of 1040 in order to trigger an earned income tax credit. They used Household Income in order to avoid having to have a W2 which would have been required and would be caught more easily. Then they would give the “client” their $50 cash in a flash money and take the remaining $350 or so of the refund as a tax prep fee through a bank product. Illegally stealing money from the American people and committing tax fraud by helping people to get refunds, which the franchisees and Liberty take most of, that they should not have gotten. John knows about this and has not terminated these franchisees or reported them to the IRS.
John knows about the tax fraud they were doing and even had a conference call with all of them and said that “if” they IRS catches on, he will give them up. Shouldn’t the CEO of a publicly traded company that handles almost 2 million tax returns have a fiduciary responsibility to not undertake in tax fraud? Or is he just trying to keep together his house of cards with hundreds of failing franchisees each year and thousands who aren’t profiting by enabling the bigger ones to keep the revenue rolling to him with this tax fraud. He is an accessory to this and needs to be punished. Many corporate employees know about this fraud as well. They call it the “H Returns”.
He once told a group of his top franchisees at an Elite meeting that as long as the IRS fine for earned income credit isn’t too big, they should look the other way and make the money. When you confront him with all this, he will probably give them all up but he shouldn’t be absolved as he has been undertaking in this kind of fraud his entire career. That is why so many of his franchisees are unhappy (your site has much more info about why and all of the failures they have – approximately 500 store closures last year alone). It seems that most of his business is either fraud, people who don’t make money or people who fail. Churn and burn and commit fraud and abuse low income people with high fees.
This household income scheme is only the latest that these franchisees have used over the years. Others have included abuse of the College Education Credit and of fake Schedule C forms for fraudulent Earned Income Credit and high fees as well as falsifying Schedule A deductions. A large franchisee in Detroit named Ahmed was recently shut down by the Justice Department for tax fraud in his offices. More needs to come to stop this blatant fraud. And other franchisees were recently barred from the tax business for fraud.

Also read:

LIBERTY TAX SERVICE Franchise Complaints (4500+ comments)

Tax Franchise Owners Say Don’t Buy a Franchise!

LIBERTY TAX Franchise Warning Part 1

LIBERTY TAX Franchise Warning Part 2

LIBERTY TAX Franchise Warning Part 3

Are LIBERTY TAX SERVICE Franchise Owners Happy?

LIBERTY TAX JTH Holding, Inc. Receives NASDAQ Notice of Non-Compliance

LIBERTY TAX Leaked Email Exposes Sleazy Sales Tactics

LIBERTY TAX: Are Liberty Tax Franchise Owners Living Their Dreams?

LIBERTY TAX Fraud: Preparer Could Get Prison Time

LIBERTY TAX Scam Exposed by Franchise Owner

LIBERTY TAX Mascot Arrested, Jailed

ARE YOU FAMILIAR WITH THE LIBERTY TAX FRANCHISE OR JTH HOLDING INC.? SHARE A COMMENT BELOW. Contact UnhappyFranchisee.com

Tags: Liberty Tax, Liberty Tax franchise, Liberty Tax franchise fraud, Liberty Tax fraud, John Hewitt, JTH Holding Inc., liberty tax complaints, Liberty Tax franchise complaints, Nasdaq: TAX

Lenders Loan Capital Drops NY Bagel Cafe

July 29, 2015

Howard M. Fichman, Lenders Loan Capital, Lake Worth, FL is listed as one of the NY Bagel Café franchise “approved lenders.”  However, when Fichman and Lenders Loan Capital’s president reviewed the information about NY Bagel Cafe on UnhappyFranchisee.com,  they decided to cut ties with the controversial franchise seller before completing their first deal.



(UnhappyFranchisee.Com)  NY Bagel Café franchise ads promise the company provides “100% financing” of their franchise opportunity as long as the franchisee pays a $17,500 – $29,500 franchise fee up front.

Unhappy franchisees claim that once they pay their franchise fee, franchise salesman Dennis Mason tells them it is THEIR responsibility to find funding.  Despite the representations made in the ads, Mason simply gives them a list of “approved lenders” that the franchisees are responsible for working with to obtain funding.

Lenders Loan CapitalSome who are unable to obtain funding claim the company refuses to return their franchise fee, as promised.

UPDATE:  Howard Fichman has been terminated as an independent contractor of Lenders Loan Capital.  See HOWARD FICHMAN Terminated Over NY Bagel Café Ties

Lenders Loan Capital Does the Right Thing… Without Hesitation

As soon as he learned that NY Bagel Cafe was collecting fees from franchisees prior to them qualifying financially, Lenders President/Partner Joseph Ilardi investigated:

I personally reached out the referrals that were sent to us from NY bagel and they did state that they paid a franchise fee.

No one should charge a fee without having proof of funds to actually start the business, not just the fee.

I also informed them that the right way to start a franchise is to have the funds to start the business and then start spending, not the other way around.

Moments ago, I spoke to Dennis Mason and said I was unaware of them charging upfront fees. He said they have a money back guarantee but I explained it does not matter and people should not be charged a fee without knowing they can afford the business.

After looking into NY Bagel Cafe’s business practices, Ilardi sent us an email stating “We will stop doing business with NY bagel effective immediately.”  He announced additional step to ensure that Lenders Loan Capital doesn’t accept clients who charge up-front fees, like NY Bagel Cafe.  He wrote::

I will now implement a disclosure to referring organizations that will specifically state that they are not collecting fees or making any promises or obligating us in anyway. We will also have the borrower sign a disclosure stating that they have not paid upfront fees to get funding or any promises related to funding or we will not accept their application.

While we began this story as skeptics, we were mightily impressed by Joseph Ilardi and Lenders Loan Capital’s responsible and swift reaction.

And we don’t mightily impress easily.

Other Lenders Distance Themselves From NY Bagel Café

When we asked other “Approved Vendors” about their relationships with NY Bagel Cafe, those who responded were surprised that they were on a list… and immediately asked to be removed from it.

Most claimed they had never closed a deal for NY Bagel Cafe franchisees.

Sherri Seiber, COO of FranFund, wrote:

“We were unaware that we appeared on this list of funding sources for NY Bagel, but now the random calls we’ve received from folks interested in funding makes a little more sense… We have never had a funding solution for the 5-6 people who have contacted us as they all had poor credit… We do not know Dennis Mason…”

Sherri asked for contact information so she could demand they remove FranFund from their list.

Jerry Jones from Funding Solutions said his firm has never worked with a NY Bagel franchisee.

He said his firm primarily funds through bank loans and would never go the credit card route because it’s too risky.

When asked if he was aware of the high failure rate (90% plus), Jerry wrote:

If we were aware of these details we would have requested that we be removed from the list of financing sources.

If a prospective franchisee called and we were aware of the above, we would have told them that we do not work with the system.

He quickly sent a note to NY Bagel Cafe President Joseph Smith:

Mr. Smith  —  Funding Solutions is requesting to be removed from the listing of Financial Advisors for the NY Bagel brand.  We have never had a completed financial application with any strength and only 1 or 2 a year.   We were never asked to be on the list.  Our name was found in general listings available to the public such as Restaurant Times or IFA listings.

Now we are aware of materials which, if substantiated,  could be harmful to our company.  Please remove our name and send a revised list that shows we are excluded. We will not be working with any of your future  applicants  and we are not working with any at the present time.

Thank you.
Jerry
Funding Solutions, LLC.

Ami Kasar of MultiFunding wrote:

I do not know how our company got on the list of “approved” financing vendors for this company. We have received several phone calls over the years and never been able to finance any of them or been able to take any of them on as clients. We have never taken a penny from any of these people.

So who is Providing This 100% Financing…?

We know that NY Bagel Cafe is aggressively running ads claiming that they provide “100% financing beyond the franchise fee.”

We know that they are meeting with and signing up prospects and aggressively collecting franchise fees.

Who is providing all this funding if those on their “Approved Lender” list aren’t?

We’ll continue to investigate and report on NY Bagel Cafe and share what we find.

Read what we’ve learned so far here: NY Bagel Café Franchise Scam Overview

Here are some of the other “approved lenders” in the NY Bagel Café network.  Please share what you know about them:

Don JohnsonDiamond Financial262 Hwy 36

Keansburg, NJ 07734

(877)508-2274

(732)787-9191

donj@easysba.com

 

Hemal Patel

First Empire Group

163 Washington Valley Road

Unit #104

Warren, NJ 07059

(732)369-6626

(732)369-6628 fax

(732)261-5735 cell

hemalp@optonline.net

Jim SaiaSeed Capital3037 E. Warm Springs

Suite 400

Las Vegas, NV 89120

(866)988-7333 X111

Kari Aragon, Processor

(866)988-7333 X106

Fax: (866)713-6206

james@seedcapital.com

www.seedcapital.com

 

Kevin Hicks

(646)408-3284

blackmanassoc2@hotmail.com

 

Nicholas Joseph

Leaf Now Funding

Account Manager

njoseph@leafnow.com

(267)402-5310

Ted C. KennedyUnsecured Funding SourceSr Account Manager

(866)475-4254, Ext. 302

(954)416-2929 Direct Line

(888)245-0875 fax

ted.kennedy@theufs.com

Unsecuredfundingsource.com

 

FRANFUND

777 Main St.

Ft. Worth, TX 76102

c/o Jenny

(877)372-6386

www.franfund.com

 

 

 

Red = Have asked to be removed from list

Jerry JonesRandy JonesFunding Solutions

199 N. Main St.

Suite B1

Plymouth, MI 48170

(734)207-0800

(734)207-0815 fax

(248)259-5168 cell

funding-solutions.biz

jjones@funding-solutions.biz

 

 

Ami Kassar

MultiFunding

P.O. Box 356

Ambler, Pa. 19002

1(800)276-0690

1(215)460-1950 cell

1(800)276-2030 fax

akassar@multifunding.com

Note:  We don’t know whether these are legitimate, ethical lenders or not, or what their relationships are to NY Bagel Café, which is why we invite them and others to share information and opinions.

Also read:

NY Bagel Café Franchise Scam Overview (INDEX OF POSTS)

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

NY BAGEL CAFÉ Franchise Graveyard

Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

Is NY BAGEL CAFÉ Ocean City MD an Illegal Franchise?

Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws?

NY BAGEL CAFE Kicked Off Franchise Sites for Deceptive Ads

NEW YORK BAGEL ENTERPRISES INC. Franchisor’s Corporate Status Revoked

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE LENDERS, HOWARD FICHMAN OR LENDERS LOAN CAPITAL?

PLEASE SHARE YOUR OPINION BELOW or

TAGS: Howard M. Fichman, Lender’s Loan Capital, Don Johnson, Diamond Financial, Jim Saia , Seed Capital, Ted C. Kennedy, Unsecured Funding Source,  Jerry Jones , Randy Jones, Funding Solutions, NY Bagel Cafe, NY Bagel franchise, NY Bagel Cafe franchise, Joe Smith, Joseph Smith, Dennis Mason, franchise scam



NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

July 29, 2015

NY Bagel Café CEO Joe Smith and franchise salesman Dennis Mason took her $25,000 franchise fee as a refundable downpayment, a Massachusett’s woman claims, then refused to give it back when she was unable to get funding.   With litigation being cost prohibitive, she is taking to the Internet to warn others about the NY Bagel Café franchise, Joe Smith and Dennis Mason.




(UnhappyFranchisee.Com) In 2009, the Conlons dreamed of opening a sandwich shop.

According to Janet Conlon, she filled out an application for a NY Bagel Café & Deli franchise and was told she had excellent credit and qualified to be a franchisee.

She was told that she needed to pay the $25,000 franchise fee up front and would be connected with funding sources.

When her son Eric asked whether the $25,000 fee was refundable in the event they couldn’t get funding, franchise salesman Dennis Mason responded, in writing: “Absolutely.”

The Conlons weren’t able to procure funding.

CEO Joe Smith (who sometimes goes by Joe Bagels online) has refused to refund the $25,000.

Six years after New York Bagel Café took her $25,000, a Twitter battle broke out between Conlon and Joseph Smith.

Tweet:  “Joe Smith Scammed Me Out of $25,000”

New York Bagel Cafe ScamMarch 17, 2015 Joe Bagels (as @NewYorkBagelCafeDeli) tweeted “Happy St. Patrick’s Day.  We’ll see you soon.”

Smith was referring to the supposed re-opening of the River Vale, NJ location, one of many failed New York Bagel franchises (See  NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]).

Janet Conlon tweeted:  “Joe Smith scammed me out of $25,000.”

Joe Smith replied:  “Nobody scammed you you paid a franchise fee and you couldn’t obtain financing because of your credit.”

New York Bagel Café & Deli deleted the exchange.

Janet responded with a barrage of Tweets on her own page:

“My credit is excellent. You ran my SSN# and I was qualified because my credit was excellent.”

“Joe Smith New York Bagel Enterprises Inc. gives misleading, fraudulent and incomplete information in his sales pitch.”

“Joe Smith is a fraud, gives negligent misrepresentation about his NY Bagel franchise and breached our franchise contract.”

Dennis Mason Email Seems to Back Up Franchisee Claim

Joe Bagels claims the franchise fee was non-refundable.

However, an email exchange between Janet’s son Eric and New York Bagel franchise salesman Dennis Mason (also read DENNIS MASON Franchise Complaints ) provided to UnhappyFranchisee seems to validate Conlon’s claim.

The emails are dated 7/13/09, while Dennis Mason was still trying to close the sale and the Conlons were deciding whether to move forward.

The email exchange reads:

Eric Conlon:  “Hi Dennis, my mother was wondering if she does not get the loan from the SBA, is the 25,000 refundable?”

Dennis Mason:  “Absolutely”

Here is a screenshot of the alleged Dennis Mason smoking gun email:

New York Bagel Cafe Franchise

Are Joe Smith, Dennis Mason & New York Bagel Harvesting Franchise Fees for Profit?

Are Joe Smith, Dennis Mason & New York Bagel Café collecting franchise fees as a profit center, knowing that the franchise stores will never open?

The practice is, unfortunately, more common than you’d think

It’s hard to know how many franchise fees New York Bagel Café is collecting each year, since Joe Smith has refused to provide us with his Franchise Disclosure Document (FDD) in which franchisor’s are required to state how many franchises have been sold but not yet opened (SNOs).

The New York Bagel Café disclosure documents we have seen do not include the required information in Item 20 regarding SNOs or the number of franchises that have closed in the previous three years.

Have You Paid New York Bagel Café a Franchise Fee?

If you have paid New York Bagel Café, Joe Smith or Dennis Mason (who also goes by the name “Keith” or “Ken”) a franchise fee, please email us in confidence at UnhappyFranchisee [at] Gmail.Com.

We would like to hear your story – positive or negative.

Also read:

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

TAGS: New York Bagel Cafe, NY Bagel Cafe, NY Bagel Cafe & Deli, NY Bagel franchise, NY Bagel Cafe franchise, NY Bagel Cafe and Deli franchise, New York Bagel franchise, New York Bagel Cafe, NY Bagel complaints, NY Bagel lawsuits, Joe Smith, Joseph Smith, Dennis Mason, Keith Samuels, Ken Mason, franchise scam, franchise failure rates, bagel franchise

NY BAGEL CAFÉ Franchise: Where to File a Fraud Complaint

July 28, 2015

NY Bagel Café franchise complaints – If you feel that you have been taken advantage of by NY Bagel Café, Dennis Mason and/or Joe Smith, you should file a complaint with as many of these state and federal agencies as is appropriate.

(UnhappyFranchisee.Com)  The more people filing complaints with multiple agencies (especially the FTC and your state Attorney General’s office), the better the chance of getting an investigation going, and ultimately justice for past victims and protection to prevent future victims of the NY Bagel Café franchise scheme.

Share your story with us, UnhappyFranchisee.Com

We are compiling a confidential list of people who have paid franchise fees to NY Bagel Cafe, Joe Smith or Dennis Mason and who feel they got little or nothing in return.

Your participation will aid investigations and considerations for potential refunds, if possible.

NY Bagel Cafe Franchise

Contact ADMIN of UnhappyFranchisee.Com at UnhappyFranchisee[at]gmail.com

Tell us about your experience and forward any documents you received for our confidential review.  Please include the state you reside in and the approximate date you signed the agreement.

File A Complaint with the Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) established the franchise regulations known as The Franchise Rule in response to problems with deceptive and predatory practices by franchise sellers.

Go here to File an FTC Complaint

What you might want to include:  From what we have seen, the required Franchise Disclosure Document used by NY Bagel Café contains false or misleading information especially in Item 20 (which may represent there are no franchise failures claims there are many as listed here: http://www.unhappyfranchisee.com/ny-bagel-cafe-franchise-many-closed/), “Exhibit 3” which likely does not include full contact information for all current and recent franchisees as required,  and if the FDD states that the franchisor is New York Bagel Enterprises, Inc. a NJ corporation, that corporation’s status  was revoked by NJ.  Additionally, if NY Bagel Café made representations regarding potential sales or profitability to you before you signed the franchise agreement, that may be a violation of the FTC rule regarding Financial Performance Representations and should be mentioned.

File a complaint With Your State Attorney General

Search for your state’s Attorney General website and find the online complaint form.  Be sure to include this link in your complaint:  http://www.unhappyfranchisee.com/ny-bagel-cafe-franchise-scam-overview/

Here are some state Attorney General links:

New Jersey Attorney General Complaint Form

Note, for the New Jersey Attorney General, you may want to include this line “”NJ Superior Court Judge Alexander Carver stated in the Order for Judgement in Mohamed Elsaid vs. New York Enterprises, Inc., Joseph Smith & Dennis Mason that ‘NY Bagel representatives violated the [New Jersey] Consumer Fraud Act by inducing Elsaid to procure a loan to pay the required fees.’  Like Elsaid I paid a franchise fee after being told I would receive financing.”

New York Attorney General Complaint Form

North Carolina Attorney General Complaint Form

Pennsylvania State Attorney General

Florida State Attorney General

 

File a complaint with the FBI Internet Crime Complaint Center (IC3)

As the NY Bagel Café franchise is being promoted over the Internet, it’s appropriate to file with the FBI if you feel fraud has been committed.

File a complaint with the FBI Internet Crime Complaint Center (IC3)

 

File a complaint with the US Postal Inspectors Service

This might be surprising, but the US Postal Inspectors Service is a very aggressive and competent investigator of fraudulent business practices.

The US Postal Inspectors Service investigates, and the US Department of Justice prosecutes, if appropriate.

According to the website:  “U.S. Postal Inspectors investigate any crime in which the U.S. Mail is used to further a scheme–whether it originated in the mail, by telephone, or on the Internet. The use of the U.S. Mail is what makes it mail fraud.”

File a complaint with the US Postal Inspectors Service

 

If you live in a Franchise Registration State, Contact Us

13 states require franchisors to register with them prior to selling franchises in their state.  Two more have franchise laws, but do not require franchise registration.

NY Bagel Café is being investigated for possibly selling franchises in states where they are not registered.  In some cases, rescission and refunds could be ordered.  If you live or were going to open your franchise in any of the states below, contact us at UnhappyFranchisee[at]gmail.com and we’ll connect you with the appropriate agency.

The states are:  California, Hawaii, Illinois, Indiana, Maryland, Michigan (notice only), Minnesota, New York, North Dakota, Oregon (no filing), Rhode Island, South Dakota, Virginia, Washington and Wisconsin

 

Also read:

NY Bagel Café Franchise Scam Overview (INDEX OF POSTS)

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

NY BAGEL CAFÉ Franchise Graveyard

Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

Is NY BAGEL CAFÉ Ocean City MD an Illegal Franchise?

Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws?

NY BAGEL CAFE Kicked Off Franchise Sites for Deceptive Ads

NEW YORK BAGEL ENTERPRISES INC. Franchisor’s Corporate Status Revoked

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

TAGS: NY Bagel Cafe, NY Bagel franchise, NY Bagel Cafe franchise, NY Bagel Cafe franchise scam, New York Bagel Cafe, NY Bagel Café scam, New York Bagel franchise, New York Bagel Cafe, NY Bagel complaints, NY Bagel lawsuits, Joe Smith, Joseph Smith, Dennis Mason, franchise scam

NY Bagel Café Franchise Scam Overview

July 27, 2015

This NY Bagel Café Franchise Scam Overview page provides an index to our ongoing expose of the illicit NY Bagel franchise scheme, our advocacy for NY Bagel franchise victims, and our plea to state and federal law enforcement authorities to stop allowing this company to rob trusting individuals and families. Law enforcement and regulatory agencies are encouraged to use this page as a reference tool for their investigations. 

(UnhappyFranchisee.Com)  In our opinion, two individuals named Joseph Smith and Dennis Mason (who also goes by the name “Keith Samuels” and other aliases), aided and abetted by a network of complicit 3rd parties, are running a lucrative franchise scam by promising trusting individuals the opportunity to join a young, successful franchise chain and own their own bagel café for an upfront fee ranging from $17,500 – $29,500.

NY Bagel Café claims that they provide 100% financing for the rest of the approximately $100,000 – $200,000 investment, and that the initial franchise fee is refundable if the franchisee turns out not to be creditworthy.

Our research indicates that the vast majority who sign franchise agreements with NY Bagel Café are neither provided funding nor have their initial fees of $17,500 – $29,500 refunded.  Dennis Mason & Joe Smith, we believe, simply keep their money, knowing that they can’t afford to hire a lawyer and won’t be able to collect a judgement even if they are awarded one.

Those who ARE able to obtain funding and manage to open a NY Bagel Café will likely lose dramatically more than just their franchise fees.

Our research indicates that more than 90% of the NY Bagel Café locations that opened have shuttered their doors, and the franchisees’ investments were lost.

Despite being provided proof of numerous violations of franchise and business opportunity laws and anti-fraud statutes, so far the Federal Trade Commission (FTC), state franchise regulators, state attorney generals and the FBI have failed to protect citizens from this (in our opinion) predatory scam.

NY Bagel Café continues to run deceptive ads on Craig’s List, continues to harvest franchise fees from undercapitalized franchisees, and continues to brag about store openings even in states where they cannot legally sell franchises.

NY Bagel Café franchise’s estimated 90% failure rate

NY Bagel Cafe FranchiseNY Bagel Café has provided prospective franchisees with “disclosure documents” that indicate they started franchising in 2012, and have had no closures or terminations.

Our research shows that NY Bagel Café has opened and closed more than 30 failed locations… some of them more than once.

Here is the list of locations NY Bagel Café doesn’t want you to know about:

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

The Franchise Graveyard shows the storefronts of the many dead NY Bagel Café franchises, providing indisputable proof that the NY Bagel Café is an extremely high-risk venture – and those risks are not disclosed as required by law:

NY BAGEL CAFÉ Franchise Graveyard

MD Attorney General Investigation of NY Bagel Cafe Franchise Fraud

The Maryland Attorney General recently determined that NY Bagel Cafe, Joe Smith and Dennis Mason are violating both state and federal franchise laws. See the Attorney General’s findings here:

NY BAGEL CAFÉ Franchise Fraud Investigation by MD Attorney General

NY Bagel Café franchise’s dirty little (and big) secrets

From the number of lawsuits Smith and Mason have been hit with… to the fact that the franchisor’s corporate status has been revoked… to the fact that they sold an illegal franchise to a military veteran and widowed mother of three which closed in months…  here are 10 things about NY Bagel Café everyone should know:

JOHN CARISTI DEBRA CARISTI NY Bagel Café Franchise Owners, Middletown, NJ

Are franchisees being paid to create an illusion of success?

Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know

A lawsuit brought by West Chester, PA franchisees all the way back in 2011 contains very specific allegations that we have heard from other alleged victims as well, including violations of franchise disclosure laws and illegal earnings representations made during the franchise sales process:

NY BAGEL CAFÉ & DELI Franchise Complaints

Dennis Mason has a long and terrible track record of franchise litigation, bankruptcies and franchisee failures.  Read the comment section here:

DENNIS MASON Franchise Complaints

Dennis Mason wrote to Janet Conlon in an email promising to return her $25,000 franchise fee if she couldn’t get funding.  She couldn’t get funding, but they refused to return her money.  Read Dennis’ email here:

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

NY Bagel Café “Approved Lenders” Disavow Relationship:

NY Bagel Cafe gives franchisees a list of their 17 “Approved Vendors.”  We tried to contact each one and found most of the contacts were no longer reachable and those who were said NY Bagel Cafe prospects were too unqualified for them to finance.  Many asked to be taken off the NY Bagel Lender List.

Lenders Loan Capital Drops NY Bagel Cafe

HOWARD FICHMAN Terminated Over NY Bagel Café Ties

SEED CAPITAL Jim Saia Financing Complaints

NY Bagel Café:  Franchise More Legal Issues

We have reported NY Bagel Café for advertising & selling franchises in states that legally require registration.  Read the status of those state investigations here:

Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws?

Despite not being registered to sell franchises in Maryland, NY Bagel Café brags about the opening of their illegal Ocean City, MD location:

Is NY BAGEL CAFÉ Ocean City MD an Illegal Franchise?

One lawsuit even alleged that the franchisor’s corporate status has been revoked cannot, legally, transact business.  We checked and also found it revoked:

NEW YORK BAGEL ENTERPRISES INC. Franchisor’s Corporate Status Revoked

Our one small victory:  We got NY Bagel Café franchise ads banned from the largest franchise advertising network due to fraudulent misrepresentation and violations of their Terms of Service.  Yay for us!  Though it came to late to save some victims.

NY BAGEL CAFE Kicked Off Franchise Sites for Deceptive Ads

NY Bagel Café Victims: File a Complaint

If you have given any money to NY Bagel Café, Joseph Smith or Dennis Mason, contact us here confidentially:

NY BAGEL CAFÉ Franchise Refund Help

NY BAGEL CAFÉ Franchise: Have You Been Scammed?

We also encourage anyone who feels they have been defrauded to file complaints with multiple state and federal agancies.  Links are provided here:

NY BAGEL CAFÉ Franchise: Where to File a Fraud Complaint

Law enforcement and attorney generals can contact us for victims willing to share their stories and experiences.

Check back for new posts being published on an ongoing basis.

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

TAGS: NY Bagel Cafe, NY Bagel franchise, NY Bagel Cafe franchise, NY Bagel Cafe franchise scam, New York Bagel Cafe, NY Bagel Café scam, New York Bagel franchise, New York Bagel Cafe, NY Bagel complaints, NY Bagel lawsuits, Joe Smith, Joseph Smith, Dennis Mason, franchise scam

NY BAGEL CAFÉ Franchise: Have You Been Scammed?

July 27, 2015

Have you paid a franchise fee for a NY Bagel Café franchise, and were then unable to get financing or a suitable location?  Did Dennis Mason and Joe Smith refuse to return your franchise fee?  You may be the victim of fraud.  Contact UnhappyFranchisee.Com for help.

(UnhappyFranchisee.Com)  NY Bagel Café franchise advertisements promise that you can open your own sandwich café for an upfront payment of only $19,500 (sometimes $29,500, sometimes $17,500).

NY Bagel Cafe claims they are a successful, up-and-coming new franchise company and will provide “100% financing” for everything other than the initial franchise fee.

Alleged victims claim they were promised a full refund by NY Bagel CEO Joseph Smith and salesman Dennis Mason in the unlikely event that they didn’t qualify for financing.

Alleged victims tell us that once they paid their $17,500 – $29,500 franchise fee, salesman Dennis Mason gave them a list of very questionable lending sources, and were told that the franchisees – not NY Bagel Café – are responsible to get funding.

Some of these questionable lenders simply sign the franchisee up for a bunch of credit cards at interest rates likely to sink any start-up in the low-margin sandwich cafe sector.

We have been told by alleged NY Bagel Café franchise victims that Dennis Mason and Joe Smith refused to return their franchise fees, even when they were clearly unable to get financing for the $100,000 – $200,000 investment.

Many of these victims are surprised to learn that not only is NY Bagel Café likely violating multiple Federal franchise disclosure laws, but that more than 90% of the NY Bagel Café franchises end up closing their doors within a year or two.  (See NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED] and NY BAGEL CAFÉ Franchise Graveyard).

Most NY Bagel Café victims can’t afford to hire a lawyer to get back some, all or none of their money, so they simply just walk away from thousands of hard-earned dollars.

Have you paid a franchise fee to NY Bagel Café?  We want to hear from you!

If you have paid NY Bagel Café a franchise fee and received nothing in return, please contact us immediately by emailing the administrator of this website (confidentially) at UnhappyFranchisee[at]Gmail.Com.

Depending on the state you live in and other circumstances, you may be eligible for a refund and/or a cancellation of the agreement.

We will assess your individual situation at no cost to you, and provide action steps for helping you file a complaint (if warranted) and a request for a full refund of your franchise fee – even if you failed to meet the criteria for a refund as stated in the franchise agreement.

We will also share with you some of the experiences others have had with NY Bagel Café, Dennis Mason and Joseph Smith.

Have you had dealings with Dennis Mason & Joseph Smith but didn’t pay them a franchise fee?  We want to hear from you also.  Email us at UnhappyFranchisee[at]Gmail.Com or leave a comment below.

Also read:

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

NY BAGEL CAFÉ Franchise Graveyard

Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

Is NY BAGEL CAFÉ Ocean City MD an Illegal Franchise?

Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws?

NY BAGEL CAFE Kicked Off Franchise Sites for Deceptive Ads

NEW YORK BAGEL ENTERPRISES INC. Franchisor’s Corporate Status Revoked

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

TAGS: NY Bagel Cafe, NY Bagel franchise, NY Bagel Cafe franchise, NY Bagel Cafe franchise scam, New York Bagel Cafe, NY Bagel Café scam, New York Bagel franchise, New York Bagel Cafe, NY Bagel complaints, NY Bagel lawsuits, Joe Smith, Joseph Smith, Dennis Mason, franchise scam

DVD Vending Kiosks at Fire Sale Prices (Don’t Buy New!)

July 20, 2015

DVD vending pros know better than to pay outrageous prices for new DVD vending kiosks when there are so many available at deep, deep discounts on the secondary market.  Here are some of the deals our readers have posted on our website.

(UnhappyFranchisee.Com)  DVDNow reportedly sells its DVD vending kiosks for more than $20,000 each.

We’ve received dozens of messages from DVDNow owners who want to unload new and used DVD vending machines – complete with inventory – for less than $5,000

We have set up this informal page as an inexpensive bulletin board for buyers and sellers to connect.

If you would like to advertise on this page, go to our contributions page for pricing and options.

You can send your content or ask questions by emailing ADMIN at UnhappyFranchisee[at]gmail.com.

DVD Vending Machines & Kiosks For Sale

8 DVD Kiosks for Sale – 5 S250s & 3 S110s (Austin, TX)

Seller Name: Craig Cummings
Location: Austin, TX  (7801 N. Lamar, Suite C-47  Austin, Texas 78752)
Description:
 5 (purchased new) S250s  and 3 (purchased used) S110s. TV monitors included on four of the S250 kiosks as well as artwork display panels on all 250’s and 110’s.  All with updated inventory. Seller wraps for shipping.  Buyer provides shipping or picks up.
Asking Price: $8k/each for S250’s  and  $3k/each for 110’s
Disclaimer:Ad Expires: UnhappyFranchisee.com does not endorse or vouch for sellers or buyers, or the accuracy of any representations.  As always, do your own research and be cautious when transacting business online. For large transactions, we recommend using an escrow service. 10/22/15
Contact: Email: esr0128@msn.com

.
Additionally, a number of readers have posted machines they want to sell in the comments of our DVDNOW DVD Vending Kiosks  discussion page.  These kiosks may or may not still be available.  If interested, email ADMIN at UnhappyFranchisee[at]gmail.com 
.

Location Description Asking Price
Dallas, TX s250 fully stocked with all new releases.  No tv or side panels but works fine. Paid $8500 + $3000 DVDnow set up fee.   Asking $5000.  (GG)
Shreveport, LA S250 kiosk comes with 100 DVD’s, including new releases, and with 2 side advertising panels & tv and mount $3000 (negotiable) (AJ)
Gainesville, GA Two kiosks for sale.  Inventory included at least $2k worth. $10,000 each OBO
Augusta, GA I have 2 S250 kiosks for sale Best offer (CJ)
Washington, DC 10 outdoor kiosk with 10 illuminated side panels. We will pack them but you will be required to handle the shipping from Washington DC to your location. $50,000 or best offer for 10 Kiosks and 10 side Panels. (MR)
Austin, TX I have 8 dvd now kiosks for sale still in operation, producing revenue.Willing to sell the entire business name, model, locations, machines and inventory. Negotiable (CC)
Columbia, SC I have one S250 that I’m willing to sell. Negotiable (TA)
Chandler, AZ Two 110 Kiosks that are sitting in my garage while my wife and I continue to pay for them. Cheap (RJ)
Plano, TX 6 DVD NOW KIOSKS for sale. One S250 and 5 S110s. The S250 is a year old. Negotiable (HC)
Chicago, IL S250 with full inventory. TV mounted on top that can run ads for surrounding businesses. Excellent location in Chicago! Negotiable (DO)
Phoenix, AZ Two DVDNow S250 machines. Only 2 years old and in perfect working condition. Negotiable (JR)
Ashland, KY I have a S250 for sale. Excellent condition and full of current movies. Located in Ashland Kentucky. Make offer! Negotiable (TH)
Alberta, Calgary CA Two S100 and One S250 for sale. Make me an offer (NB)
Austin, TX Five kiosks plus everything else you need to get started (battery backups, monitors and brackets, etc.) Negotiable (PM)
Manhattan, Kansas S250 with side panels for sale in KS. Negotiable (LA)
Oklahoma Two used kiosks. a s250 and a s110. Make me an offer  (JR)
Hendersonville, TN S250 with side panels less than a year old Negotiable (MR)
Cicero, IL I have a Kiosk for sale $3000  (DVDI)
New York, NY Five S250 DVD Now kiosks $25,000 (DS)
San Diego, CA Four S250 DVD Now Kiosks less than a year old. Two have 32 inch monitors attached. $5500 each (DH)
Ft Lauderdale, FL 10 kiosks plus current inventory $6500 each (JC)
Washington, DC Two S-100 kiosks $5,000 for two kiosks (JB)
Pasco, WA 5 kiosk for $25K contact me $25,000 for five kiosks (KO)

WarningWe do not endorse nor have we researched those posting advertisements.  As always, be cautious when doing business online and do your due diligence when starting any business venture.  We are not responsible for the actions of advertisers or respondents.  Buyer beware.

 

DVD Vending Machines & Kiosks Wanted

No listings yet – be the first.  Sign up here.

ALSO READ:

FRANCHISE DISCUSSIONS by Company

DVDNOW DVD Vending Kiosks: Scam or No Scam?

ARE YOU FAMILIAR WITH THE DVD VENDING BUSINESS?  WHAT DOES IT TAKE TO BE SUCCESSFUL?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: DVD Vending Machines,  Used DVD Vending Machines,  DVD Vending Kiosks,   DVD Vending Machines For Sale,  DVD Vending Kiosks for Sale,  Used DVD Vending Kiosks for Sale,   DVD vending franchise, vending franchise opportunity, vending machines for sale, unhappy franchisee

NY BAGEL CAFÉ Franchise Graveyard

July 14, 2015

NY Bagel Café franchise sellers Joe Smith & Dennis Mason, apparently tell prospective franchisees that the first NY Bagel franchise opened in 2012 and the chain grew to 14 franchises by 2014 with zero failures. Sadly, the NY Bagel Café Franchise Graveyard tells a MUCH different story.

(UnhappyFranchisee.Com) The NY Bagel Café franchise opportunity sounds too good to be true:

Just pay a $17,500 (sometimes $29,500) franchise fee and you could get in on the ground floor of a fresh new franchise concept with zero franchise failures.

Don’t worry… If the franchisor fails to get you financing for the $112,500 – $194,500 investment, they promise to give you your franchise fee back.

Best yet… their failure-free track record & practically risk-free deal is documented in an official looking document called their Franchise Disclosure Document (FDD).

Only one problem:  None of it is true.

UnhappyFranchisee.Com has identified  30 NY Bagel franchise locations that have opened – and closed.  Several have failed and been sold to new owners – only to fail again.

Behold the NY Bagel Café franchise graveyard.  These are pictures of actual NY Bagel Cafe locations that we found on the Internet

Those we couldn’t find pictures for are marked with an asterisk (CLOSED*).

NY BAGEL CAFÉ Franchise Graveyard

NY Bagel CafeTracy, CAClosed 2014 NY Bagel CafeAurora, COClosed 2012 NY Bagel CafeNewark, DE (Capitol Tr.)Closed 2013 NY Bagel CafeNewark, DE (Churchm)Closed 2012, 2013**
NY Bagel Cafe FL Doral
Doral, FL – OPENFranchisee:  Ervin Cruz
NY Bagel CafeSinger Island, FL
Closed 2012 Reopened
NY Bagel CafeCoeur d’Alene, IDClosed 2013 NY Bagel Cafe

Houma, LA – OPEN

Franchisees: Ohlmeyer, Hebert

NY Bagel CafeBrick, NJClosed 2013 NY Bagel CafeCherry Hill, NJ Closed 2013 NY Bagel Cafe Jackson NJJackson, NJClosed 2014 NY Bagel Cafe Jersey City NJ

 Jersey City, NJ – OPEN

Franchisee: Patel 

NY Bagel CafeLivingston, NJClosed 2012 NJ Middletown 150

 Middletown, NJ – OPEN Franchisees:  John & Debra Caristi
NY Bagel Cafe Newark NJNewark, NJ Closed 2013 NY Bagel New Brunswick NJNew Brunswick, NJ Closed 2011
NY Bagel CafeParsippany, NJ Closed 2011 NY Bagel River Vale NJRiver Vale, NJClosed 2015, resold 2X NY Bagel RockawayRockaway, NJ Closed 2013 NY Bagel CafeRoselle, NJ Closed 2012
NY Bagel Waldwick NJWaldwick, NJClosed 2012 NY Bagel CafeLagrangeville, NY Closed 2009 NY Bagel Cafe Newburgh NY
Newburgh, NY – OPEN Company store
NY Bagel CafeWashingtonville, NY Closed 2011
NY Bagel Cafe Cary NCCary, NCClosed 2013 NY Bagel Cafe Morrisville NCMorrisville, NC Closed 2013 NC Wesley Chapel 150.1Wesley Chapel, NC Closed 2013 NY Bagel CafeFairless Hills, PA Closed 2012
NY Bagel Cafe glen mills PAGlen Mills, PA Closed 2011/2012 NY Bagel closed Lititz PALititz, PA Closed 2013 NY Bagel Closed Philadelphia PAPhiladelphia, PA Closed 2013 NY Bagel Closed West Chester PAWest Chester, PA Closed 2012
NY Bagel Closed Franklin TNFranklin, TN Closed 2013 NY Bagel Closed El Paso TXEl Paso, TX Closed 2013 NY Bagel Closed Huntington WVHuntington, WV Closed 2013 Recently Opened: NY Bagel Ocean City MDOcean City, MD – Open Opened July, 2015Franchisee: Robyn Fox (?)
* Actual location picture not available ** Believed to have closed & been resold once or more Updated 7/9/15

 

Disclaimer:  We have pieced together the NY Bagel Franchise Graveyard and the list of NY Bagel closed locations from public documents, Internet searches and archived versions of the company webpage.  As we have had to source this information from a variety of sources with no help from NY Bagel Café (they refuse to respond), so some of the dates or other details might be incorrect.

NY Bagel Franchise Fraud

 

NY Bagel Café Franchise: Buyer Beware

If you are considering investing in a NY Bagel Café franchise, read all of our posts listed below and do your own research.

Ask Joe Smith & Dennis Mason to explain the many closed stores.  Ask why their ads promise 100% financing but franchisees claim they only receive a list of sketchy lenders that they must contact.

Is NY Bagel Café franchise a scam?  It’s our opinion that after achieving a 90% failure, Joe Smith and Dennis Mason  came to realize that the NY Bagel Café franchise concept is simply not a viable business model.

We believe that they now focus their energy on collecting up-front franchise fees through any means possible, and reneging on their promise to either provide funding or return the up-front franchise fees.  (See Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know )

Before you buy any franchise, do your homework and make an informed decision.

Joe Smith & Dennis Mason’s response to these allegations:  None yet received.

Also read:

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

Is NY BAGEL CAFÉ Ocean City MD an Illegal Franchise?

Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws?

NY BAGEL CAFE Kicked Off Franchise Sites for Deceptive Ads

NEW YORK BAGEL ENTERPRISES INC. Franchisor’s Corporate Status Revoked

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

TAGS: Franchise Graveyard, NY Bagel Cafe Deli, NY Bagel franchise, NY Bagel Cafe franchise, NY Bagel Cafe franchise graveyard, New York Bagel Cafe, NY Bagel Cafe, New York Bagel franchise, New York Bagel Cafe, State franchise laws, franchise registration states, NY Bagel complaints, NY Bagel lawsuits, Joe Smith, Joseph Smith, Dennis Mason, franchise scam

Is NY BAGEL CAFÉ Ocean City MD an Illegal Franchise?

July 14, 2015

NY Bagel Café proudly announces the opening of its Ocean City, MD franchise.  Does the new franchisee know NY Bagel Cafe is not legally registered to sell franchises in Maryland?  Does he/she know about the company’s 90% failure rate?

(UnhappyFranchisee.Com)  NY Bagel Café continues to collect franchise fees and announce new store openings, despite what we believe to be a 90% franchise failure rate and a disregard for state and federal franchise laws.

The company has announced the opening of its newest NY Bagel Café franchise located at 401 Atlantic Ave. (4th and Boardwalk), Ocean City, Maryland.

It appears that the Ocean City franchise is a conversion from what was the OC Café, which opened in June, 2012 and was owned by Robyn Fox.

In an earlier post, we indicated that NY Bagel Café was unlawfully advertising its franchise scheme in Maryland, despite not having registered its franchises in the state (read Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws? ).

NY Bagel Ocean City MDIn blatant disregard of Maryland franchise law, Joe Smith and Dennis Mason of NY Bagel Café ran Maryland-specific franchise ads on BizBuySell and Craig’s List.

The NY Bagel Café franchise ads contained a number of misleading and untruthful statements regarding profitability, 100% financing and the chain’s success.

Since reported on by UnhappyFranchisee.com, NY Bagel Café has been kicked off the BizBuySell network and has ceased running Maryland-specific ads on Craig’s List.

Do you know Robyn Fox or the current owner of the Ocean City, Maryland NY Bagel Café franchise?  If so, please ask her to contact us at UnhappyFranchisee[at]gmail.com or to call the Securities Division of the Maryland Attorney General at 410-576-7050.

If you have had any dealings with Joe Smith, Dennis Mason or the NY Bagel Café franchise, contact us in confidence at UnhappyFranchisee[at]gmail.com.

Joe Smith & Dennis Mason were invited to respond to these allegations 7/14/15:  No response yet received.

Also read:

NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]

Joe Smith, Dennis Mason & NY Bagel Café Franchise Exposed: 10 Things You Should Know

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

Is NY BAGEL CAFÉ Violating Multiple State Franchise Laws?

NY BAGEL CAFE Kicked Off Franchise Sites for Deceptive Ads

NEW YORK BAGEL ENTERPRISES INC. Franchisor’s Corporate Status Revoked

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

ARE YOU FAMILIAR WITH NY BAGEL FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

TAGS: Ocean City NY Bagel Café, Bagels Ocean City Maryland, NY Bagel Cafe Deli, NY Bagel franchise, NY Bagel Cafe franchise, NY Bagel Cafe and Deli franchise, New York Bagel Cafe, NY Bagel Cafe, New York Bagel franchise, New York Bagel Cafe, State franchise laws, franchise registration states, NY Bagel complaints, Joe Smith, Joseph Smith, Dennis Mason, franchise scam

DICKEY’S Franchise Lost A $1M Sale Today. Here’s Why.

July 1, 2015

Dickey’s Barbecue franchise team lost a potential franchise deal that could have brought the company over $1,000,000 in franchise fees, royalties and vendor rebates.  We’re confident they’ll lose more and more lucrative franchise deals as word spreads about the deal-killer lurking in their franchise agreement.

(UnhappyFranchisee.Com)  Dickey’s Barbecue just lost a potential $1,000,000+ in franchise fees, franchisee royalties and vendor rebates… and they don’t even know it.

The would-be franchisee was an ideal franchise prospect:  Well-capitalized…  Experienced….  With a history of success in multiple ventures.

The prospective franchisee loves Dickey’s products and business model.

He knows of a restaurant space with a great location and reasonable rent.

But he was troubled by the negative publicity the franchise was getting on the Internet (namely UnhappyFranchisee.Com).

He asked a franchise advisor if the criticisms were valid or just sour grapes.

After reviewing our blog posts, the advisor pointed out that the Dickey’s franchise agreement has a termination clause that says that if Dickey’s terminates a franchisee for any reason – even if the franchisee’s restaurant is not yet open – the franchisee must immediately pay the franchisor royalties on the remainder of the 20-year term.

In essence, said the advisor, the franchisee is on the hook for $600,000+ as soon as they sign the Dickey’s franchise agreement.

In the opinion of this experienced franchise advisor:  “No sane or rational person would sign such an agreement.

Being neither insane nor irrational, the prospective franchisee decided to pursue other opportunities.

Dickey’s Termination Clause:  A Franchise Deal Killer?

Dickey's BarbecueHere’s the Dickey’s termination clause from its franchise agreement:

ARTICLE 17. OBLIGATIONS UPON TERMINATION OR EXPIRATION

Upon the termination or expiration of this Agreement, all rights granted hereunder to you shall terminate and:

.

… you must pay to Dickey’s in a single lump sum payment, as liquidated damages and not as a penalty, after early termination of the Franchise Agreement, liquidated damages equal to royalty fees for the number of months remaining in the term of the Franchise Agreement (or the renewal term, if applicable) based on the monthly average of the royalty payable to us. If the Franchise Agreement terminates after the second year of the term, then liquidated damages shall be calculated based upon the average monthly Net Sales of your Restaurant reported for the 12 months preceding termination…

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… If your Restaurant has not yet opened, or has not been open for at least 24 months at the time of termination, the average monthly Net Sales used to calculate Liquidated Damages will be based upon the average monthly Net Sales of all Dickey’s Restaurants for the preceding fiscal year as determined from the audited financial statements of Dickey’s published in its Franchise Disclosure Document.  An example of these calculations is included in the Operations Manual.  Both assume an aggregated monthly average of the Royalties paid each week.

Question: Would Dickey’s actually try to enforce such its draconian Dickey’s Franchise Termination Clause?

In a word:  Yes.

Take the sad case of 54-year-old James Neighbors, a franchisee who was admittedly woefully undercapitalized and inexperienced.

Only three months after his Grand Opening, Dickey’s sent James Neighbors a termination letter because he had fallen $1205.58 behind in his royalty payments.

Dickey’s demanded that Neighbors close his new restaurant and immediately pay them liquidated damages of $675,122.25.  Neighbors received this demand:

Dickey's franchise

In other litigation against franchisees, Dicky’s is demanding $966,891.38 from a failed franchisee named Joseph Mathieu.  Here’s an excerpt from the termination notice included in Dickeys vs. Mathieu:

Dickey's franchise

Dicky’s is also demanding $320,930.52 from another franchisee named Eric Mulkey in the suit Dickeys vs. Mulkey.  Here’s an excerpt from the termination letter sent to that franchisee:

Dickey's franchise

A lawsuit filed by multiple Dickey’s franchisees in California (see DICKEY’S Franchise Class Action Lawsuit Filed in CA) claims that Dickey’s is a predatory franchise organization interested in making as much money off its franchisees as possible.

The Dickey’s Franchise Termination Clause certainly doesn’t seem to disprove that serious allegation.

Also read:

Dickeys logoDICKEY’S BARBECUE PIT Franchise Complaints

DICKEY’S BARBECUE PIT Franchise Warning

Is DICKEY’S BBQ Hiding Franchise Failures?

DICKEY’S Franchise Owner Claims he was Burned by Dickey’s, Roland Dickey, Jr.

Are DICKEY’S BARBECUE PIT Franchise Owners Being Exploited?

DICKEY’S BARBECUE PIT: How to Lose Everything in 5 Years or Less (Part 1)

DICKEY’S BARBECUE PIT: How to Lose Everything in 5 Years or Less (Part 2)

DICKEY’S BARBECUE Franchise, Jerrel Denton, Roland Dickey Jr. Sued for Fraud

DICKEY’S Franchise: Open Letter to Roland Dickey, Jr.

DICKEY’S BBQ Is Dickey’s Overselling its Franchise Opportunity?

DICKEY’S BARBECUE PIT Franchise: Roland Dickey Sells to, Then Sues, Registered Sex Offender

DICKEY’S BARBECUE PIT Makes an Unhappy Franchisee Happy… Then Sues Him

 

ARE YOU FAMILIAR WITH THE DICKEY’S BARBECUE PIT FRANCHISE OPPORTUNITY?  SHARE A COMMENT BELOW.

 

Contact UnhappyFranchisee.com

Tags:  Dickey’s Barbecue Pit Class Action Lawsuit, Dickey’s class Action Lawsuit, Dickey’s franchise lawsuit, Dickey’s franchisee lawsuit, Dickey’s Barbecue Pit, Dickey’s Barbecue Pit franchise, Roland Dickey Jr., Roland Dickey, Dickey’s franchise termination clause, James Neighbors, Joseph Mathieu, Eric Mulkey

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