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CELLAIRIS Franchise Complaints

October 22, 2015

Cellairis Franchise Complaints:  Are you familiar with the Cellairis franchise opportunity?

Please share your opinion and experience – good or bad – with a comment below.

CellairisCellairis franchise kiosks sell cell phone covers, chargers and other accessories, many manufactured by the company.

The company is reportedly expanding beyond kiosks to in-line stores that will also offer smartphone repairs.

Cellairis Franchise Costs & Investment

Total Investment: $36,810 – $375,000

Franchise Fee: $7,500 – $25,000

Ongoing Royalty Fee: Varies

Term of Franchise Agreement: 5-10 years, renewable

Required Net Worth: $150,000 – $300,000

Required Liquid Cash Available: $50,000

Cellairis has reportedly grown from 618 U.S. locations in 2012 to 639 U.S. franchise locations in 2013.

According to the Cellairis franchise marketing, the advantage of its franchise opportunity include:

    Proven concept – over 12 years in business.

Dramatic growth – closing in on 1,000 units in 2013.

Modest investment, with reasonable franchise fees and royalties.

No national franchise competition in the mobile accessory & phone repair specialty retail segment.

Very easy to operate, with low labor and product costs.
Clean, upscale retail environment.

Incredible corporate support, with in-house R&D and graphics team.

    Celebrity endorsements and partnerships.

Dual income streams – cell phone/tablet accessories AND phone repair.

Buying power of a major corporation aligning with warehouses all over the U.S.A.

Support system second to none, with experienced field support personnel and in-house customer service.

Turnkey business – be in operation within 30-90 days (interactive kiosk sites) and 90-150 days (full store experience).

WHAT DO YOU THINK?  ARE YOU FAMILIAR WITH THE CELLAIRIS FRANCHISE OPPORTUNITY?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com





tags: Cellairis, Cellairis franchise, Cellairis franchise complaints, Cellairis complaints, Cell phone franchise, mall kiosk franchise, Cellairis franchise costs,

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

October 16, 2015

John Caristi and Debra Caristi are the owners of the NY Bagel Café franchise in Middletown, New Jersey.  John Caristi is reportedly an instrumental part of Dennis Mason’s franchise sales process, and possibly receives lucrative commissions for providing glowing recommendations and earnings claims to victims of the allegedly fraudulent and unlawful franchise scheme. John & Debra Caristi are invited to provide corrections, explanations or rebuttals.

(UnhappyFranchisee.Com)  A growing number of victims are coming forward, reporting that they paid $17,500 – $19,500 franchise fees to a franchise salesman named Dennis Mason for a fraudulent NY Bagel Café franchise opportunity.

Debra & John Caristi NY BagelThe victims felt reassured handing over the checks to Mason, in large part, because of the positive endorsement and earnings claims provided by an allegedly happy and profitable franchisee named John Caristi.

John Caristi and his wife Deb Caristi own the NY Bagel Café franchise in Middletown, New Jersey.

John & Deb Caristi’s franchise location seems to be an integral part of Dennis Mason’s and NY Bagel CEO Joe Smith’s cash-collection process.

According to a complaint filed with the New York Attorney General, two New York residents allege that Mason & Smith sold them a franchise despite not being legally registered to sell in the state:

On March 16th 2015 Dennis Mason sent us applications to see if we quality for the franchise (Exhibit B). After filling it out and sending it back, we received a quick response saying that we are qualified and he asked to set up a meeting.  We met Dennis Mason and Joe Smith at 10:30 am on March 21st, 2015 at one of their NY Bagel locations (490 Rt. 45, Middletown, NJ).

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There we met John Caristi, the owner of that store. Joe and Dennis both told us that their locations make on average $1000-1500 a day in sales. John confirmed that he makes about $1500 on average a day. Dennis also spoke about their “Master Points Program” that stated that we would receive $3000 for every new franchisee that they sign at our location, and $2000 for every new franchisee that undergoes training at our location.

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Dennis then stated that they plan to make our location the main meeting store for all of their potential franchisees from Connecticut and New York – and this would generate us another $5000 – $10,000 a month.

In part because of the recommendation of franchisee John Caristi, the two individuals paid Mason $17,500.  Despite not having provided the promised financing nor proof that NY Bagel Café has met the legal requirements to sell them a franchise, Joe Smith and Dennis Mason have refused to refund their $17,500.

The two NY individuals have filed a formal complaint with the Franchise Division of the NY Attorney General’s office.  UnhappyFranchisee.Com has confirmed that NY Bagel Cafe is not and has never been registered to sell franchises in New York state.

John Caristi and his Middletown, NJ franchise are also part of an investigation by the Maryland Attorney General in connection with the unlawful sale of a NY Bagel Café franchise in Ocean City, Maryland.  According to the initial findings of the MD AG’s investigation:

At about the same time Mike H purchased his cafe, he saw an advertisement on Craigslist to purchase a franchise for a New York Bagel Cafe & Deli. Mike H called the number listed in the Craigslist advertisement and spoke to Dennis Mason. Mason told Mike H that by purchasing a New York Bagel Cafe & Deli, his cafe could earn $1,500 per day… On or about April 19, 2015, Mason met with Mike H in [John Caristi’s franchise location in] Middletown, New Jersey to discuss the purchase of a New York Bagel Cafe & Deli.

We spoke to franchisee Mike H., who is also seeking a return of his $17,500 franchise fee, and he confirmed meeting John Caristi at his Middletown, NJ location.

Taking $19,500 From a Blind Man

Brian Delacruz is another a franchise victim, and is a NJ resident.  Brian Delacruz is legally blind.  Brian paid Dennis Mason & Joe Smith $19,500 after meeting with franchisee John Caristi and touring the Middletown, NJ store.

John Caristi allegedly told Brian he could expect to make $1200 – $2500  per day.

Despite having never provided the promised financing, and despite the fact that the disclosure documents provided to him appear to include major misrepresentations and violations of the FTC Franchise Rule, Joe Smith and Dennis Mason have continued to refuse to return Brian Delacruz’s $19,500.

Is Middletown, NJ Franchisee John Caristi Setting Up Scam Victims for Mason?

We invite John & Deb Caristi to contact us about these allegations, to confirm their earnings claims and share why they recommend the NY Bagel Café franchise.

On their Facebook pages, John Caristi & Debra Caristi appear to be devout Catholics, devoted parents & upstanding citizens.

John Caristi NY Bagel CafeIn fact, Debra Caristi recently posted a Certificate of Recognition awarded to her husband John Caristi by the local police department for chasing down and detaining a purse thief.

Is it possible that these long-time franchisees don’t know that most NY Bagel Café franchise owners either never open a store or end up closing?

Would they recommend the franchise if they had read NY BAGEL CAFÉ Franchise Graveyard or the list NY BAGEL CAFÉ Franchise: How Many Have Closed? [UPDATED]?

Would they still recommend the NY Bagel Café franchise if they knew that the disclosure documents Joe Smith & Dennis Mason provide include false statements, claim that no franchises have closed, and are not legally compliant… and that Dennis’ earnings claims are prohibited by the Federal Trade Commission?

Would John & Debra Caristi still offer their café as a sales tool to Dennis Mason and accept commission checks if they knew that the money they received was from people who were tricked into paying, who would not receive promised financing nor open a store and would be denied refunds?

In addition to the questions above, we’d like to ask the Caristis:

  • Can they provide documentation that their NY Bagel Café generates $1500 per day ($540,000 annually)?
  • How many commissions for new franchisees have they received in the last year? Past 3 years? What is the dollar amount?
  • Of those franchisees they helped close, how many attended training? How many actually have stores open?
  • Having reviewed our information questionable legality and ethics of the NY Bagel Café franchise, will they still help Dennis Mason sell franchises?
  • Would they be willing to help repay the victims they helped sell by sending them the portion of their franchise fees they received as commissions?
  • Do they have any regrets, or do they stand by their endorsement of the NY Bagel Café franchise and Dennis Mason?

Is John Caristi Making $5,000 – $10,000 per Month From Deceived Franchisees?

Each month, the NY Bagel Café franchise ads on Craigslist claim that the company wrote 3 commission checks to a franchisee for help selling franchises the previous month.

It seems likely that they are referring to John Caristi.  If so, that could mean $6,000 per month, or $72,000 per year in commissions received by John & Debra Caristi.

Dennis Mason reportedly told the two NY victims (in the presence of John Caristi) that they could make more than $5,000 – $10,000 per month if their store served as the showcase for the region.

As their Middletown, NJ store serves as the franchise showcase for the chain, are John & Debra Caristi pulling in $60,000 – $120,000 yearly – or more – in commissions from prospective franchisees like the NY partners, like Mike H. in Ocean City and like the legally blind Brian Delacruz… who will never get a store open?

We hope that Debra Caristi and John Caristi can restore our faith in mankind by either refuting these allegations, or by saying they’ve decided to stop participating in Dennis Mason’s sales scheme.

And if John and Debra Caristi received a $3000 cut of the franchise fees paid by the NY partners, Mike H. and Brian Delacruz, we would hope that they’d be willing to return that money to its rightful owners.

We’ll be happy to provide them with address to send the checks.

ALSO READ:

NY BAGEL CAFÉ Franchise Graveyard

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

NY BAGEL CAFÉ Franchise Fraud Investigation by MD Attorney General

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

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

ARE YOU FAMILIAR WITH JOHN CARISTI, DEBRA CARISTI, NY BAGEL CAFÉ MIDDLETOWN NJ, THE NY BAGEL CAFÉ FRANCHISE OPPORTUNITY, JOE SMITH OR DENNIS MASON?

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com




TAGS: John Caristi, Debra Caristi, John and Deb Caristi, John and Deb Caristi Middletown NJ, NY Bagel, NY Bagel Café Middletown NJ, NY Bagel franchise, NY Bagel Café, NY Bagel Cafe franchise scam, New York Bagel franchise, New York Bagel Cafe, NY Bagel complaints, NY Bagel lawsuits, Joe Smith, Joseph Smith, Dennis Mason, franchise scam

Attorney Robert Zarco Battles Angry Online Critic Cecil Rolle, RobertZarcoFacts.Org

October 15, 2015

Robert Zarco is a prominent franchisee attorney.  Cecil Rolle is a former Cold Stone Creamery franchisee who is on a mission to expose attorney Robert Zarco as a liar and cheat who exploits the franchise owners he is supposed to serve and protect.  As their litigation intensifies, will Cecil Rolle’s allegations withstand a court’s scrutiny? Can Zarco defeat this former franchisee without severely damaging his reputation as a franchisee advocate?

(UnhappyFranchisee.Com) by Sean Kelly  Attorney Robert Zarco has described Cecil Rolle as a disgruntled and vindictive former Cold Stone Creamery franchisee out for revenge.

Cecil Rolle has described attorney Robert Zarco as a “repeated liar” who “betrayed the trust” of his franchisee clients “in the interest of serving his own selfish financial interests.”

Cecil Rolle was unsuccessful in suing Robert Zarco,  Zarco’s law firm, the Cold Stone Creamery franchisor and its franchisee association for defamation.

Now it’s the franchisee attorney’s turn.

Robert Zarco, his partner Alejandro Brito, and their law firm Zarco, Einhorn, Salkowski and Brito, P.A. are suing Cecil Rolle and his company, Sedna Consultancy, Inc. for making allegedly defamatory statements on Rolle’s websites RobertZarcoFacts.org and ZarcoLawFacts.org and elsewhere.

Truth is an Absolute Defense for a Defamation Claim. Are Rolle’s Allegations Truthful?

Robert Zarco recently won a victory when circuit court Judge Monica Gordo granted a Motion for an Order to Show Cause Why Defendants Should Not Be Held in Contempt for Their Failure to Comply with the Court’s Order Dated September 16, 2013 [The Ruling is published in its entirety here:  Robert Zarco Critic Ordered to Remove Defamatory Statements ].

In that Order, Judge Gordo ruled that Cecil Rolle was in violation of a Preliminary Injunction that required him to remove all defamatory statements from his website.  The original Preliminary Injunction did not specify which statements were defamatory, and on October 3, 2013, Rolle filed an affadavit stating that he had reviewed the www.robertzarcofacts.org, website and determined that “there are no false statements of facts.”

In this recent ruling, the Judge listed specific statements she found to be false and misleading, and directed Rolle to remove the defamatory statements from his websites within 5 days.

Judge Gordo ruled that Rolle had made false statements and misrepresentations against Zarco regarding a Moe’s Southwest Grill franchise lawsuit (“Massey”):

“The Court finds that the assessment offered by Defendants… pertaining to the order entered in the Massey case is false and misrepresents the contents and nature of the order. In particular, Judge Story never criticized or chastised any lawyers in the Massey case for anything, let alone Mr. Zarco who did not actively participate in the case, or Mr. Brito who never appeared as counsel in the case and had no involvement in the case whatsoever.”

She also ruled that Cecil Rolle had made false statements regarding alleged judicial criticism of Zarco in other cases.  Gordo wrote that Rolle’s allegations that “other Federal judges” had made “unflattering assessments of Attorney Robert Zarco’s and Attorney Alejandro Brito’s mistake-riddled court filings”  were not supported by the legal orders he cited.

Judge Gordo also enumerated other false statements of fact and “mixed opinions that omit important facts or misconstrue the actual underlying facts.”

She ordered Cecil Rolle and Sedna Consultancy to remove the defamatory statements or face civil contempt sanctions.

However, the judge did not mention many of the most incendiary accusations Cecil Rolle’s website Robertzarcofacts.org  accuse Robert Zarco of, which include:

  1. Allegedly telling numerous lies;
  2. Allegedly taking $800,000 in legal fees from Curves franchisees while stringing them along and doing little or nothing in return;
  3. Allegedly taking money from adversely interested parties of numerous firm clients presumably without disclosing those payments to his clients;
  4. Allegedly stealing $130,000 from a client;
  5. Allegedly taking a $1 million bribe from an adversary to impending litigation in exchange for telling his own clients they had no case and
  6. Other lapses in professionalism and ethics.

Robert Zarco: Have Franchisees Lost Their #1 Badass?

Up until 2010, Robert Zarco was widely known to franchise industry insiders as a fierce legal champion of franchisees in litigation against their franchisors.

(He was also known for his $20 million mansion and appearance on the Joan Rivers-hosted How’d You Get So Rich?).

It was comforting for franchisees – often the picked-on little brothers in franchise disputes – to believe they had a tough, cocky, larger-than-life older brother who might emerge at any moment and send the bullies running in fear.

Robert Zarco’s golden image suffered in 2010 when he helped kill a CNBC expose in which Cecil Rolle made scathing accusations against the Cold Stone Creamery franchisor, and parent company Kahala.

Many in the industry were surprised when Zarco, who represented Cold Stone Creamery franchisees at the time, took payment from Kahala and seemed to switch allegiances.  (See the comment firestorm on the BlueMauMau.org story:  CNBC Shelves Cold Stone Story after Zarco Attacks.)

Some felt Robert Zarco betrayed his franchisee clients by attacking and successfully suppressing the CNBC expose, which highlighted problems facing Cold Stone franchisees and alleged improprieties by the franchisor (an allegation Zarco vehemently disputes).

In his successful attempt to crush the CNBC criticism of Kahala Corporation, Zarco attacked Rolle in a strongly worded letter to CNBC execs:

Rolle is neither indicative nor representative of the typical Cold Stone franchisee. He has, for years, demonstrated a vindictive and willful intent to harm, maliciously defame, and consistently interfere with Cold Stone, its franchisees, and the Cold Stone brand…

According to Zarco’s Emergency Motion for Temporary Injunctive Relief in the current lawsuit:

As a result of Zarco’s involvement in connection with the revised CNBC documentary… Rolle became agitated and developed a vindictive obsession with Plaintiffs, who were counsel to the [Cold Stone Creamery franchisee association] and several Cold Stone Creamery franchisees. He thereafter commenced a retaliatory campaign to intentionally hurt and damage the business and professional reputation of Plaintiffs. Among  other actions, Rolle maliciously filed a frivolous lawsuit for defamation against Plaintiffs. That lawsuit has since been dismissed with prejudice by the trial court.  Rolle has also engaged in a vindictive and spiteful internet and e-mail campaign to publish defamatory  statements about Plaintiffs to other attorneys, the franchise bar, as well as the overall national franchisee community.

Cecil Rolle is the Defendant, but Robert Zarco’s Reputation is on Trial

For Cecil Rolle, this is personal.

He refuses to back down or compromise, despite overwhelming pressure to do so.

Rolle obviously believes that Robert Zarco is a wolf in (very expensive) shepherd’s clothing and is determined to warn the flock not to trust him, lest they get the kind of shearing the Cold Stone Creamery franchisees, Curves franchisees and others have allegedly received while under his care.

But while Rolle is the defendant in this lawsuit, Robert Zarco and the law firm of Zarco, Einhorn, Salkowski and Brito, P.A. arguably have the most to lose.

Franchisees and franchisee associations are Robert Zarco’s and ZESB’s professional bread and butter.

Destroying an already beleaguered and disaffected franchise owner with their obviously superior legal firepower will likely not come across as conduct becoming a law firm that is supposed to champion beleaguered and disaffected franchisees.

Even if Cecil Rolle does not have the unanimous support of the franchisee community, and even if it appears that he is leaving Robert Zarco no other choice but to vigorously defend his reputation, it’s a sticky situation for Zarco, Einhorn, Salkowski and Brito, P.A.

In my opinion, to truly come out of this lawsuit a winner, Robert Zarco will not only need to disprove the legitimacy of the allegations against him, but will need to re-establish his reputation as the foremost champion of underdog franchisees.  To do this, Zarco must not simply prove that Rolle’s allegations are untrue, he must publicly demonstrate how he acted in his clients’ best interests in each of the controversies Rolle raises, including the Curves and Lady of America litigation.

Zarco’s inclination to fully discredit and obliterate his opponent – an approach that may have served him well in the past  –  could result in a legal win but a huge public relations loss in his case against former franchisee Cecil Rolle.  The inclination to bludgeon his opponent may too powerful for Mr. Zarco to resist.

Brilliant attorneys are sometimes their own worst publicists.  This may end up being the lesson to be gleaned from the feud between Robert Zarco & Cecil Rolle – a feud which Mr. Zarco could have prevented with a little less bludgeoning early on.

That’s my take… what do you think?

ALSO READ:

FRANCHISE DISCUSSIONS by Company

Robert Zarco Critic Ordered to Remove Defamatory Statements

COLD STONE CREAMERY Franchise Complaints

Cold Stone Creamery Gets Served by Franchisees

 

ARE YOU FAMILIAR WITH ROBERT ZARCO, ZARCO EINHORN SALKOWSKI AND BRITO PA, OR CECIL ROLLE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: Robert Zarco, Attorney Robert Zarco, Franchise attorney Robert Zarco, Alejandro Brito, Zarco Einhorn Salkowski Brito P.A., Cecil Rolle, Cold Stone Creamery, Kahala, Online defamation, Internet defamation, online defamation lawsuit, online defamation litigation, internet defamation law

Robert Zarco Critic Ordered to Remove Defamatory Statements

October 14, 2015

Attorney Robert Zarco, his partner Alejandro Brito and his law firm Zarco Einhorn Salkowski & Brito, P.A. are suing former Cold Stone Creamery franchisee Cecil Rolle and Sedna Consulancy LLC for defamation.  A circuit court judge has ordered Cecil Rolle to remove defamatory statements from his sites www.robertzarcofacts.org and www.zarcolawfacts.org  websites.

(UnhappyFranchisee.Com)  In the online defamation lawsuit  ZARCO EINHORN SALKOWSKI & BRITO, P.A., ROBERT ZARCO and ALEJANDRO BRITO, Plaintiffs, v. CECIL ROLLE and SEDNA CONSULTANCY, LLC Defendants,  back in September, 2013 Cecil Rolle and Sedna were prohibited by a Preliminary Injunction from publishing false statements of fact relating to or concerning Robert Zarco, Alejandro Brito, or ZESB on the www.robertzarcofacts.org website (or elsewhere).  Cecil Rolle was ordered to remove any defamatory statements (ie “false statements of fact”) from his website.

On October 1, 2013, Mr. Rolle submitted an affidavit stating that “Defendants have reviewed the www.robertzarcofacts.org, website] and determined that there are no false statements of facts. Defendants will continue to refrain from publishing false statements of fact relating to or concerning [Robert] Zarco, [Alejandro] Brito, or ZESB as instructed.”

Two years later, on October 5, 2015, Circuit Court Judge Monica Gordo has ruled that a number of statements made on Cecil Rolle’s www.robertzarcofacts.org and www.zarcolawfacts.org  websites violate the Preliminary Injunction, are defamatory, and must be removed.

View the complete ruling below, or view it as a PDF.

What do you think of the court’s ruling, or of this lawsuit in general?  Share a comment below.

Also read:  Attorney Robert Zarco Battles Cecil Rolle, RobertZarcoFacts.Org

*     *     *     *     *

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT, IN AND FOR MIAMI-DADE COUNTY, FLORIDA

ORDER ON PLAINTIFF’S MOTION TO SHOW CAUSE WHY DEFENDANTS SHOULD NOT BE HELD IN CONTEMPT OF COURT AND DEFENDANTS’ MOTION TO DISSOLVE TEMPORARY INJUNCTION

 

ZARCO EINHORN SALKOWSKI & BRITO, P.A., ROBERT ZARCO, Case No.: 13-25737 CA 06 and ALEJANDRO BRITO,

Plaintiffs,

v.

CECIL ROLLE and

SEDNA CONSULTANCY, LLC

Defendants.

THIS CAUSE having come before this Court on May 15, 2015 and September 28, 2015, on (i) Defendants’ Motion to Dissolve Temporary Injunction (“Motion to Dissolve”); and (ii) Plaintiffs’ Motion for Order to Show Cause Why Defendants Should Not Be Held in Contempt for Their Failure to Comply with this Court’s Order Dated September 16, 2013 (“Motion to Show Cause”), and the Court having considered the Motion to Dissolve and Motion to Show Cause, having heard the testimony of the parties and witnesses and the argument of counsel, and being otherwise fully advised in the premises, hereby finds and declares as follows:

I. Findings of Fact

1. Sedna Consultancy, LLC (“Sedna”) is a Florida limited liability company. Cecil Rolle (“Mr. Rolle”) is the managing member of Sedna.

2. Mr. Rolle is the registrant of the domain www.robertzarcofacts.org, which was registered on February 22, 2013.

3. On September 16, 2013, a Preliminary Injunction was entered by the Predecessor Judge, pursuant to which Mr. Rolle and Sedna were preliminarily enjoined and restrained from directly and/or indirectly, verbally or in writing, publishing, disseminating, mailing, delivering, or circulating any type of communication throughout the United States through any medium including, but not limited to, the www.robertzarcofacts.org website and Internet, which contains false statements of fact relating to or concerning Robert Zarco, Alejandro Brito, or ZESB. In addition, Mr. Rolle and Sedna were ordered to perform all acts necessary to remove all false statements of fact from the www.robertzarcofacts.org website concerning Robert Zarco, Alejandro Brito, or ZESB. Further, Mr. Rolle was to file an affidavit within ten (10) days of the Preliminary Injunction providing a detailed account of the manner in which Defendants complied with the Preliminary Injunction. Importantly, no appeal or Writ was sought from the appellate court based on the Court’s order.

4. On October 1, 2013, Mr. Rolle submitted an affidavit stating that “Defendants have reviewed the www.robertzarcofacts.org, website] and determined that there are no false statements of facts. Defendants will continue to refrain from publishing false statements of fact relating to or concerning [Robert] Zarco, [Alejandro] Brito, or ZESB as instructed.” Rolle Affidavit, ¶36.

5. On November 17, 2013, after submitting the aforementioned affidavit, Mr. Rolle, on behalf of Sedna, registered another domain name: www.zarcolawfacts.org. Thereafter, Mr. Rolle published much of the same content that appeared and continues to appear on the www.robertzarcofacts.org, website on the www.zarcolawfacts.org website.

6. Mr. Rolle, on behalf of Sedna, regularly updates and maintains the www.robertzarcofacts.org, and www.zarcolawfacts.org  websites.

7. At present, the www.robertzarcofacts.org, and www.zarcolawfacts.org websites contains various statements concerning Plaintiffs with respect to the case styled: Massey, Inc. et al. v. Moe’s Southwest Grill, LLC et al., Northern District of Georgia, Case No. 07-00741-RWS (“Massey”).1 In particular, the www.robertzarcofacts.org, website states “the highly respected Federal Judge presiding over the case issued an order that highlights Attorney Robert Zarco’s and Attorney Alejandro Brito’s poor professional performance” and “[t]he judge clearly communicated that he was underwhelmed with Attorney Robert Zarco’s and Attorney Alejandro Brito’s shoddy legal practices[,] as well as Attorney Robert Zarco’s and Attorney Alejandro Brito’s lack of attention to the responsibilities owed their Moe’s [f]ranchisee clients.” Similarly, the www.zarcolawfacts.org  website states “[i]n a scorching opinion in the case, United States District Judge Richard W. Story criticized Robert Zarco, Alejandro Brito and their firm for their poor professional standards.” The websites both contain a hyperlink to the order entered by Judge Richard Story that Defendants have selectively highlighted and misconstrued.

8. Importantly, a review of the docket indicates that Alejandro Brito had no involvement, and never appeared as counsel, in the Massey case as clearly implied by Defendants. This fact unequivocally establishes the falsity and defamatory nature of the statements on the www.robertzarcofacts.org, and www.zarcolawfacts.org websites regarding Mr. Brito and his conduct in the Massey case.  Moreover, Mr. Zarco testified that he never played any active role in the trial or pretrial proceedings in that case.

_____________________________

1 Plaintiffs filed a Request for Judicial Notice pursuant to Florida Statutes § 90.202(6), requesting that the Court take judicial notice of the docket in the Massey case when considering the Motion to Show Cause, which the Court has done.

_____________________________

9. The www.robertzarcofacts.org, website continues on to state that “[i]t should be noted that [Judge Story’s] harsh criticism is entirely consistent with unflattering assessments of Attorney Robert Zarco’s and Attorney Alejandro Brito’s mistake-riddled court filings made by other Federal judges in entirely separate cases.” The previous sentence contains hyperlinks to an order in the case styled: Cold Stone Creamery, Inc. v. Nutty Buddies, Inc., District Court of Arizona, Case No. 12-0420-PHX DGC (“Nutty Buddies”), and an order in the case styled: Zarco Marine Group, LLC v. Westerbeke Corporation, Southern District of Florida, Case No. 13-20082- JLK (“Zarco Marine”). The orders cited by Defendants in the Nutty Buddies and Zarco Marine cases do not contain “unflattering assessments” of Plaintiffs and make no mention of “mistake- riddled court filings” as Defendants suggest on the www.robertzarcofacts.org, website. Defendants have mischaracterized and failed to adequately represent the orders entered in the Nutty Buddies and Zarco Marine cases.

10. The following statements are also currently published on www.robertzarcofacts.org, website:

  • “A familiar refrain is that Attorney Robert Zarco is the one walking away with his pockets full of cash and it is others, particularly his very own clients, who are left complaining he has taken financial advantage of them.”
  • “Here you have five cases than form the genesis of a Florida Bar investigation, and then expand from there.”
  • “Numerous clients and potential clients have complained that Attorney Robert Zarco violated their trust by undertaking activities that financially benefitted Attorney Robert Zarco at the client’s expense.”
  • “When Attorney Robert Zarco gets involved, it seems that others are often left complaining that he, and sometimes his family and or friends, have walked away with an undeserved amount of cash while some clients and non-clients are left complaining they have little or nothing.”
  • “This attorney who only several years ago was regarded by some as one of the top 100 franchise attorneys, has fallen so far so fast and has now also been exposed as a repeated liar who is willing to intentionally mislead the public—all for the sake of generating substantial attorney’s fees to fuel his extraordinarily lavished lifestyle.”

11. The following is currently published on the www.zarcolawfacts.org  website:

More recently, the United States Trustee’s Office’s filed official papers against Attorney Robert Zarco, his partner Attorney Alejandro Brito and [ZESB].

The United States Trustee’s Office’s documents filed against Attorney Robert Zarco, Attorney Alejandro Brito and [ZESB] include numerous charges and raise serious concerns as to the conduct of Attorney Robert Zarco, Attorney Alejandro Brito and [ZESB] on several legal and ethical topics. Among those charges is an allegation that Attorney Robert Zarco, Attorney Alejandro Brito and [ZESB] engaged in money transfers with the ‘intent to hinder, delay, or default’ numerous individuals. The United States Trustee’s Office is seeking financial recovery of nearly $300,000 from Attorney Robert Zarco, Attorney Alejandro Brito, and [ZESB] on behalf of perhaps dozens of alleged victims.

12. The “official papers” referenced on the www.zarcolawfacts.org and · websites were not filed by the United States Trustee Office.

Instead, the complaint was filed by a court-appointed trustee responsible for overseeing the consolidated estates of Claudio Osorio and several related entities formerly owned or controlled by Mr. Osorio. The court-appointed trustee was seeking to recover or “claw back” certain transfers made by Claudio Osorio and Innovida Services to ZESB for legal services. The description of the lawsuit on the · and www.zarcolawfacts.org websites is misleading and does not accurately represent the nature of the proceeding.

13. At present, the www.zarcolawfacts.org website also contains the following statements:

  • “Robert Zarco, his partner Alejandro Brito and their firm have lost one ruling, after another, after yet another.”
  • “Not only has Zarco failed to live up to his obligation under the Florida Rules of Ethical Conduct, he has also failed to fulfill his own promises.”
  • “Not only did Zarco fail to come forth with the truth, but outrageously he showed a complete lack of deference towards the court when he, Brito and ZESB produced a fake bank statement in what clearly appears to have been an attempt to lend credibility to Zarco’s earlier false statements to the court.”
  • “I believe Zarco’s complete mishandling of the CNBC documentary exposed him as an attorney of questionable integrity, questionable ethical standards and poor professional standards. This attorney who only several years ago was regarded by some as one of the top 100 franchise attorneys, has fallen so far so fast and has now also been exposed as a repeated liar who is willing to intentionally mislead the public—all for the sake of generating substantial attorney’s fees to fuel his extraordinarily lavished lifestyle.”
  • “It was all too tempting for Zarco and consequently, he took the large payday from Kahala Corp and abandoned the same franchisees he claimed he so dedicated to.”
  • “Zarco went against everything he told our franchisees and sold out when Kahala waved a suitcase full of cash in his face. Under these circumstances, how does anyone come to a conclusion other than: Zarco is a liar who will sellout his clients if the opportunity to earn more money is dangled before him? With that in mind, why would any Zarco Einhorn Salkowski & Brito, P.A. (ZESB) franchisee or franchisee association ever put trust in anything Zarco says— particularly given that there are highly reputable law firms to choose from?”

II. Conclusions of Law

 

A. Motion to Dissolve Injunction

14. If a motion to dissolve an ex parte temporary injunction is filed and a hearing on the motion is held, “the party who obtained the injunction bears the burden of going forward with evidence to establish a prima facie case to support the injunctive relief.” Thomas v. Osler Medical, Inc., 963 So. 2d 896, 900 (Fla. 5th DCA 2007).

15. “The well-established requirements for the issuance of a temporary injunction are: (1) the likelihood of irreparable harm and the unavailability of an adequate remedy at law;

(2) a substantial likelihood of success on the merits; (3) that the threatened injury to the petitioner outweighs any possible harm to the respondent; and (4) the entry of the injunction will not disserve the public interest.” Biscayne Park, LLC v. Wal-Mart Stores East, LP, 34 So. 3d 24, 26 (Fla. 3d DCA 2010). The Court finds, based on the record at the time of the hearing on Defendants’ Motion to Dissolve the Preliminary Injunction and the evidence presented, that Plaintiffs have sufficiently established the requirements for the issuance of a preliminary injunction.

16. First, the Court finds that, based on the allegations in the Verified Amended Complaint and the testimony of Mr. Robert Zarco, Plaintiffs have demonstrated irreparable harm because the www.robertzarcofacts.org and www.zarcolawfacts.org  websites have interfered with actual and potential customers of ZESB. Marine Turbo Engineering, Ltd. v. Turbocharger Services Worldwide, LLC, 2011 WL 6754058, at *10 (S.D. Fla. Dec. 22, 2011) (finding plaintiff demonstrated irreparable harm because loss of customers and goodwill is an irreparable injury); Southeastern Mechanical Services, Inc. v. Brody, 2008 WL 4613046, at *15 (M.D. Fla. Oct. 15, 2008) (loss of customer and goodwill is an irreparable injury and is difficult to measure); Tiffany Sands, Inc. v. Mezhibovsky, 463 So. 2d 349, 351 (Fla. 3d DCA 1985) (irreparable harm found from damage to goodwill and business reputation).

17. Second, the Court finds that, based on the record and the evidence presented, Plaintiffs have a substantial likelihood of prevailing on the claims for tortious interference with advantageous business relationships and defamation per se. To prevail on a tortious interference claim, a plaintiff must establish five elements: (1) the existence of a business relationship under which the claimant has rights; (2) the defendant’s knowledge of the relationship; (3) an intentional and unjustified interference with the relationship; (4) by a third party; and (5) damage to the claimant caused by the interference. Sloan v. Sax, 505 So. 2d 526, 527–28 (Fla. 3d DCA 1987). In this instance, Plaintiffs have sufficiently established the existence of a business relationship with existing and prospective clients of ZESB, and that Mr. Rolle is well-aware of this relationship. Plaintiffs, through the testimony of Mr. Robert Zarco, also established that Defendants have unjustifiably interfered with the business relationship between ZESB and its prospective and actual customers by operating the www.robertzarcofacts.org and www.zarcolawfacts.org websites, and that ZESB has sustained damage as a result of the interference because at least one group of franchisees elected to ultimately not retain ZESB after coming across the websites.

18. To prevail on a defamation per se claim, Plaintiffs must demonstrate that (1) Defendants published a false statement about Plaintiffs; (2) the false statement was communicated to a third party; and (3) the communication tended to subject Plaintiffs to hatred, distrust, ridicule, contempt, or disgrace, or tended to injure Plaintiffs in their trade or business. Perry v. Cosgrove, 464 So. 2d 664, 666 (Fla. 2d DCA 1985). To find defamation per se based on statements that are injurious to trade or business, “the court must first determine whether the statement is capable of a defamatory meaning.” Klayman v. Judicial Watch, Inc., 22 F. Supp. 3d 1240, 1249 (S.D. Fla. 2014). Here, Plaintiffs have identified numerous false statements displayed on the www.robertzarcofacts.org and www.zarcolawfacts.org websites that the Court finds are capable of a defamatory meaning.   The vast majority of the statements are, at best, mixed opinions which are designed to impugn Plaintiffs’ reputation and injure or harm their business. LRX, Inc. v. Horizon Associates Joint Venture ex rel. Horizon-ANF, Inc., 842 So. 2d 881, 885 (Fla. 4th DCA 2003) (mixed opinions, which are actionable, are “based upon facts regarding a person or his conduct that are neither stated in the publication nor assumed to exist by a party exposed to the communication . . . the communicator implies that a concealed or undisclosed set of defamatory facts would confirm his opinion”). The Court further finds that Defendants failed to offer any competent evidence that would suggest the identified statements on the www.robertzarcofacts.org or www.zarcolawfacts.org websites are true.  2 As a result, the Court finds that Plaintiffs are likely to prevail on their claim for defamation per se.

19. Third, the Court finds, based on the record and evidence presented, that the threatened injury to Plaintiffs—continual loss of actual and potential customers—outweighs any possible harm the Defendants would face in being forced to remove the false statements of fact from the www.robertzarcofacts.org and www.zarcolawfacts.org websites. See Buc. Int’l Corp. v. Int’l Yacht Council Ltd., 2002 WL 31399604, at *4 (S.D. Fla. July 5, 2002) (finding threatened injury—the likely loss of business—outweighed the harm to defendants in removing improper content from their website); see also Int’l Hair & Beauty Systems, LLC v. Simply Organic, Inc., 2011 WL 5359264, at *9 (M.D. Fla. Sept. 26, 2011) (finding that threatened injury to plaintiff—the loss of customers and goodwill—outweighed potential harm to defendant).

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2 Miami Herald Publishing Co. v. Brautigam, 127 So. 2d 718, 723 (Fla. 3d DCA 1961) (holding that truth is an affirmative defense as to which the defendant has the burden of proof).

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20. Lastly, the Court finds that the public interest is served by enjoining Defendants from disseminating false statements of fact about Plaintiffs because there is “no constitutional value” in such statements. Gertz v. Robert Welch, Inc., 418 U.S. 323, 338 (1974).  Put another way, “[f]alse statements of fact are particularly valueless; they interfere with the truth-seeking function of the marketplace of ideas, and they cause damage to an individual’s reputation that cannot easily be repaired by counterspeech, however persuasive or effective.” Hustler Magazine v. Falwell, 485 U.S. 46, 51 (1988).

21. In light of the foregoing, the Court finds that Plaintiffs have established a prima facie case to support the injunction.

B. Motion for Order to Show Cause

 

22. On July 14, 2014, Plaintiffs filed a Motion for an Order to Show Cause Why Defendants Should Not be Held in Contempt for Their Failure to Comply with the Preliminary Injunction Order Dated September 16, 2013.

23. The Court finds that the assessment offered by Defendants on the www.robertzarcofacts.org and the www.zarcolawfacts.org websites pertaining to the order entered in the Massey case is false and misrepresents the contents and nature of the order. In particular, Judge Story never criticized or chastised any lawyers in the Massey case for anything, let alone Mr. Zarco who did not actively participate in the case, or Mr. Brito who never appeared as counsel in the case and had no involvement in the case whatsoever.

24. The Court also finds that the statements on the www.robertzarcofacts.org website that “other Federal judges” have made “unflattering assessments of Attorney Robert Zarco’s and Attorney Alejandro Brito’s mistake-riddled court filings” are false and not supported by the order Judge David G. Campbell entered in the Nutty Buddies case or the order by Judge King in Zarco Marine case, as suggested by Defendants.

25. The Court also finds the statement in Paragraph 13, supra, concerning the “official papers” filed against Plaintiffs to be a false statement of fact. As pointed out above, the “official papers” were not filed by the Office of the United States Trustee and the assessment offered by Defendants omits important facts and misrepresents the nature of the proceeding.

26. Further, the Court finds the statements in Paragraphs 11 and 14, supra, to be false statements of fact. The identified statements are, at best, mixed opinions that omit important facts or misconstrue the actual underlying facts.

27. In summation, Mr. Rolle and Sedna have failed to comply with the Preliminary Injunction by continuing to disseminate and/or failing to remove false statements of fact concerning Plaintiffs from the www.robertzarcofacts.org and www.zarcolawfacts.org websites. Therefore, Defendants shall have five (5) days from the date of this Order to fully comply with the Preliminary Injunction by removing the false statements of fact identified above, as well as any other false statement of fact concerning Robert Zarco, Alejandro Brito, and/or ZESB from the www.robertzarcofacts.org and www.zarcolawfacts.org websites.

28. The Court finds that Defendants have the ability to comply with the Preliminary Injunction and have failed to do so at their own peril. Thus, in the event Defendants fail to fully comply with the Preliminary Injunction and fail to remove the false statements of fact identified above and any other false statements of fact from the www.robertzarcofacts.org and www.zarcolawfacts.org websites, Defendants will each be subject to the imposition of contempt sanctions in the amount of $100 per day. Wilcoxon v. Moller, 132 So. 3d 281, 286 (Fla. 4th DCA 2014) (purpose of civil contempt to obtain compliance with court order); Parisi v. Broward County, 769 So. 2d 359, 363 (Fla. 2000) (courts have the authority to enforce an order or judgment through the exercise of their contempt powers). The contempt sanctions shall remain in effect until Defendants fully comply with the Preliminary Injunction and this Order.

29. Further, the Court finds that if contempt sanctions become necessary, Defendants can easily purge themselves of the $100 per diem fine by complying with the Preliminary Injunction and this Order. The Court also finds that the $100/day contempt sanction is reasonable in light of the damages Plaintiffs are sustaining from the loss of actual and potential clients as a result of the www.robertzarcofacts.org and www.zarcolawfacts.org websites.

III. Conclusion

Based on the foregoing, the Court finds (i) that Plaintiffs have sufficiently established a prima facie case for a preliminary injunction; and (ii) that the www.robertzarcofacts.org and www.zarcolawfacts.org websites contain false statements of fact concerning Plaintiffs in violation of the Preliminary Injunction entered by this Court on September 16, 2013.

Accordingly, it is ORDERED AND ADJUDGED as follows:

1. Defendants’ Motion to Dissolve the Preliminary Injunction is DENIED.

2. Plaintiffs’ Motion for an Order to Show Cause Why Defendants Should Not Be Held in Contempt for Their Failure to Comply with the Court’s Order Dated September 16, 2013 is GRANTED.

3. Defendants shall take all acts necessary to comply with the Preliminary Injunction within five (5) days of this Order, including, without limitation, removing any and all false statements of fact concerning or pertaining to Plaintiffs from the www.robertzarcofacts.org and www.zarcolawfacts.org websites. Defendants shall then appear before the Court within fifteen (15) days of this Order and offer sufficient proof of compliance with the Preliminary Injunction and this Order.

4. In the event Defendants fail to comply with Preliminary Injunction by removing all false statements of fact from the www.robertzarcofacts.org and www.zarcolawfacts.org websites within five (5) days of this Order, Cecil Rolle and Sedna Consultancy, LLC shall each be subject to the imposition of civil contempt sanctions in the amount of $100 per day until Defendants comply with the Preliminary Injunction as directed by this Order.

DONE AND ORDERED in Chambers at Miami-Dade County, Florida, on 10/05/15.

MONICA GORDO CIRCUIT COURT JUDGE

 

The parties served with this Order are indicated in the accompanying 11th Circuit email confirmation which includes all emails provided by the submitter. The movant shall IMMEDIATELY serve a true and correct copy of this Order, by mail, facsimile, email or hand-delivery, to all parties/counsel of record for whom service is not indicated by the accompanying 11th Circuit confirmation, and file proof of service with the Clerk of Court.

Signed original order sent electronically to the Clerk of Courts for filing in the Court file.

Copies Furnished To: Counsel of Record

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ALSO READ:

FRANCHISE DISCUSSIONS by Company

 

ARE YOU FAMILIAR WITH ATTORNEY ROBERT ZARCO OR CECIL ROLLE?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: Robert Zarco, Attorney Robert Zarco, Franchise attorney Robert Zarco, Alejandro Brito, Zarco Einhorn Salkowski Brito P.A., Cecil Rolle, Cold Stone Creamery, Kahala, Online defamation, Internet defamation, online defamation lawsuit, online defamation litigation, internet defamation law

CA Franchise Legislation AB-525 Signed into Law

October 14, 2015

On Sunday, Oct. 11, Gov. Jerry Brown signed California bill AB-525 into law, giving Caligornia franchisees more protections when purchasing, transferring and terminating their franchise agreement.

(UnhappyFranchisee.Com) Keith Miller, Chairman at Coalition of Franchisee Associations (CFA), has shared the good news that the California legislation that he and other fair franchising advocates have been working hard to pass, has been signed into law.  According to a CFA announcement from Keith:

Coalition of Franchisee Associations.

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Dear CFA Members,

On Sunday, Oct. 11, Gov. Jerry Brown (D-CA) signed California bill AB-525 into law. This sweeping new law gives franchisees across the state more protections when purchasing, transferring and terminating their franchise agreement.
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Sponsored by the Coalition of Franchisee Associations (CFA), the law affects new franchisees (i.e., those who are granted or renew an agreement after Jan. 1, 2016) and current franchisees upon sale, transfer or termination of their franchise agreement.
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Specifically, the law amends the California Franchise Relations Act as follows:

Termination

  • Changes good cause for termination from failure to comply with “any lawful requirement of the franchise agreement” to failure to “substantially comply with the lawful requirements of the franchise agreement.”
  • Changes 30-day notice and cure period to at least 60-day notice and cure period. (Current immediate health and safety issues without full cure period remain).

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Sale and Transfer

  • Prohibits franchise agreements from preventing the sale/transfer of a franchise as long as transferee is qualified under then-existing standards for new or renewing franchises.
  • Prohibits the sale without franchisor written consent.
  • Requires franchisee to notify franchisor in writing prior to the sale/transfer.
  • Requires franchisors to communicate standards required for approval of new or renewing franchises.
  • Mandates that franchisors must notify franchisee of approval/disapproval of sale/transfer in writing within 60 days and if disapproved, must give reason. If not disapproved within 60 days, it is considered approved.

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Termination/Non renewal

  • Requires franchisors who terminate/fail to renew and take possession of the premises to repurchase all resalable inventory, and purchase equipment and fixtures at depreciated value.
    • Applicable for legal terminations and non renewals.
    • Previous law only required repurchase of inventory in cases of non renewal or unlawful termination.
  • Requires franchisors who terminate/fail to renew improperly as defined by the law to be liable for actual damages.

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To read the new law, click here. Note that the CFA will be hosting a webinar in the next several weeks to explain the details of the law and how it affects California franchisees.
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Please contact Misty Chally at 202-416-0270 or mistyc@thecfainc.com with any questions.

Congratulations to all those who worked to get AB-525 signed into law.

ALSO READ:

FRANCHISE DISCUSSIONS by Company

 

ARE YOU FAMILIAR WITH THE AB-525 CALIFORNIA FRANCHISE LEGISLATION?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: franchise legislation, California franchise legislation, California Bill AB 525, Coalition of Franchisee Associations, CFA, Keith Miller, franchise laws, franchise complaints, franchise, franchise opportunity, franchise complaints, unhappy franchisee

NY BAGEL CAFÉ & DELI Newburgh Store For Sale $50K

September 30, 2015

NY Bagel Café president Joe Smith appears to have his Newburgh, NY store listed for sale on Craigslist for $50,000.  Ad says the owner “has other interests” and “is moving on to other things.”

NY Bagel Cafe(UnhappyFranchisee.Com) Joe Smith,  founder of the controversial NY Bagel Café & Deli chain, appears to be trying to unload the sole non-franchise, company location, which is located in Newburgh, NY.

Two ads currently are running on the local Craigslist site for Hudson Valley, NY.

While the estimated start-up expenses for a new NY Bagel Café is between $100,000 and $200,000, Joe is trying to sell his store for just $50,000.

The Craigslist ads read:

BAGEL COFFEE DELI BIZ FOR SALE – $50000

20 year old bagel store for sale Fresh Baked N.Y. Bagels coffee cappuccino baked goods muffins crumb cakes full boars head deli wraps salads paninis soups and much more great location with outside seating owner moving on to other things $50k firm call 845-563-0891 for more details Located in the town of newburgh

and

BAGEL COFFEE DELI BIZ FOR SALE – $50000

20 YR. Old Bagel store offering fresh baked NY Bagels coffee capuccinos baked goods wraps salads smoothies full boars head deli and much more Owner has other interests free standing building parking and outside deck for eating call 845-563-0891 $50,000 firm located in the town of newburgh

Here’s are PDFs of NY Bagel Newburgh ad #1 and NY Bagel Newburgh ad #2.

NY Bagel NewburghIt’s not clear whether the store is being sold as a franchise, or whether the buyer will be free to rebrand.

NY Bagel Café is not registered to sell franchises in New York state.

Since there is no registered trademark for “NY Bagel Café,” a new owner would likely not have to change the name if he took over the store.

NY Bagel Café, CEO Joe Smith and franchise broker Dennis Mason have been the subject of much controversy and several investigations into their franchise practices:

Learn more here…

What’s Going on with NY Bagel Café Newburgh?

Joe Smith appears to be eager to shed the Newburgh NY Bagel Cafe. with ads on Craigslist.

Facebook posts on the company pages announced that NY Bagel Café Newburgh has new management.

NY Bagel Café Newburgh also has a new phone number.

Does anyone know what’s going on with NY Bagel Café Newburgh?

ALSO READ:

NY BAGEL CAFÉ Franchise Graveyard

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

NY BAGEL CAFÉ Franchise Fraud Investigation by MD Attorney General

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

NY BAGEL CAFÉ & DELI Franchise Complaints

DENNIS MASON Franchise Complaints

NY BAGEL CAFÉ Franchise a Scam? MA Woman Says Yes

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

PLEASE SHARE YOUR OPINION BELOW or Contact UnhappyFranchisee.com

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

LEGACY ACADEMY, INC. v. Mamilove LLC Franchisee Award Reversed (Court Ruling)

September 30, 2015

In 2013, a Gwinnett County jury awarded former Legacy Academy franchisees  $1,155,000 after finding the childcare franchisor had made misleading and deceptive earnings claims in the franchise sales process.  The Georgia Supreme Court reversed the verdict and voided the award, in part because the franchisees hadn’t read the disclosure documents before signing.  See the full court opinion below.

(UnhappyFranchisee.Com)  The Georgia Supreme Court reversal of the Legacy Academy ruling and award conveys two powerful lessons for prospective franchisees:

1) Read your Franchise Disclosure Document (FDD) and Franchise Agreement

2)  Understand what you’re agreeing to

Here’s the story, in a nutshell, as I understand it (non-attorney version):

Two sisters, The Reymonds,  approached Frank Turner and Melissa Veal Turner about becoming Legacy Academy franchisees

  • The Turners made pre-sale earnings claims that weren’t disclosed in the disclosure documents (as required by the FTC)
  • The Turners pressured the Reymonds to sign the franchise agreement even though they had just provided them with the disclosure documents at the same lunch meeting (The FTC requires 14 days must pass between disclosure and signing.).  The Turners allegedly told the Reymonds they’d lose their location if they didn’t sign then and there.
  • The Reymonds signed the franchise agreement without reading the documents or having them reviewed.
  • 10 years later, the Reymonds sued Legacy for fraud, negligent misrepresentation and violations of the RICO Act.
  • A jury found in the franchisee’s favor and awarded them over $1M.
  • On appeal, the GA Supreme Court reversed the verdict and nullified the award since, by signing the franchise agreement, the Reymonds had attested that they had received no earnings claims (Item 19) and that the representations in the franchise agreement  were all they relied on (merger clause).

(I have asked Legacy Academy attorney M. Kathleen Hart to point out any factual misstatements in my layman’s summary)

Chief Justice Thomas ruled that the franchisees could not legitimately claim they were defrauded by an agreement they did not read. He cited something called Lewis, supra 189 Ga. at 601 which states, in part:

The law will not excuse [a plaintiff] for failing to read the instrument because of her confidence in the defendant, upon whom she had no legal right to rely, and who the allegations show employed no trick or artifice that caused her to fail to do her duty in reading before signing… The law will protect the innocent against fraud . . . but it demands of every one that he make use of his own facilities to avoid being defrauded.

Was Legacy Academy Cleared of Fraud Allegations?

Legacy Academy attorney M. Kathleen Hart wrote to us that “the Court found that Legacy did not commit fraud and overturned the damage award.”

I find that statement a bit misleading, at least when communicating it to a non-lawyer, as it implies the Turners were cleared of wrongdoing.  While the Turners may have been cleared of fraud in a legally actionable sense,  nowhere does it say that they did not provide undisclosed and deceptive earnings claims, that they did not knowingly violate the mandatory 14-day review period, or that they did not pressure the franchisees with the (probably empty) threat that they’d lose their prized location if they didn’t sign on the spot.

From an outside, non-legal perspective, both franchisees and franchisor were proven guilty.

The Reymonds are guilty, it seems, of failing to do an ounce of due diligence, of signing an agreement for a huge investment without reading it or having it reviewed by an attorney, and of expecting a court to fetch them back their money 10 years later.

The Turners and Legacy Academy are guilty, it seems, of short-sighted and questionable franchise business practices that have earned them years of franchise litigation and undoubtedly stunted the growth of the Legacy Academy franchise chain.

What do you think?  Share a comment below.

LEGACY ACADEMY, INC. v. Mamilove LLC Georgia Supreme Court Decision

View as a PDF:  LEGACY ACADEMY, INC. v. Mamilove LLC Georgia Supreme Court Decision

297 Ga. 15 FINAL COPY

S14G1891. LEGACY ACADEMY, INC. et al. v. MAMILOVE, LLC et al.

THOMPSON, Chief Justice.

This appeal arises out of an action brought by the owner of a franchise, Mamilove, LLC, and its officers, Michele and Lorraine Reymond (collectively “the Reymonds”), in which they sought rescission of a franchise agreement and damages for claims related to their negotiations for, and ultimate purchase of, a daycare franchise. The named defendants are the franchisor, Legacy Academy, Inc., and its officers, Frank and Melissa Turner (collectively “Legacy”).

A review of the evidence presented at trial demonstrates that in 2001, Michele and Lorraine Reymond, sisters, approached the Turners and expressed an interest in purchasing a Legacy Academy Center daycare franchise. Michele testified that in July 2001, Legacy gave her and her sister an earnings claim purporting to state the historical earnings of existing franchisees. This earnings claim reflected that in the first two years after purchasing a franchise, franchisee could expect to receive net income of $260,000 and $440,000, respectively. The Turners also discussed with the sisters an available property on Old Peachtree Parkway, suggesting it would be a good location for their franchise.

Subsequently, the Reymond sisters created Mamilove, LLC, an entity established for the purpose of holding title to the real property upon which they intended to build their Legacy Academy franchise and the building and personal property used in the operation of their franchise. In September 2001, Michele, who had a master’s degree in business administration and was working for a large corporation, and Lorraine, who was working for WebMD, again met with the Turners and were given an offering circular and a franchise agreement (the Agreement) for their signature. They signed the Agreement the same day without reading either it or the offering circular. Ten years later, they brought the action at issue in this appeal, alleging that Legacy fraudulently induced them to sign the Agreement by providing false information about the historical earnings of existing Legacy Academy franchisees.1

They sought to rescind the Agreement and to recover damages for claims based on allegations of fraud, negligent misrepresentation, and violation of both OCGA § 51-1-62 and the Georgia Racketeer Influenced and Corrupt Organizations Act (“RICO”),3 OCGA § 16-14-1 et seq.

A jury trial ensued, and after the close of evidence, the trial court denied Legacy’s motion for directed verdict as to all of the Reymonds’ claims.4

The jury found in favor of the Reymonds, issuing a general verdict awarding them $750,000 in compensatory damages, $375,000 in additional RICO damages, and $30,000 in costs of litigation.

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1 The Reymonds’ daycare center opened in November 2002. At trial, they claimed the center lost $212,300 in the first year of operation and had net earnings of $103,692 in 2004, but that by 2009, net earnings dropped to $28,299.

2 OCGA § 51-1-6 states that “[w]hen a law requires a person to perform an act for the benefit of another or to refrain from doing an act which may injure another, although no cause of action is given in express terms, the injured party may recover for the breach of such legal duty if he suffers damage thereby.” The Reymonds alleged Legacy failed to make certain required disclosures in violation of 16 CFR § 436 and that Legacy’s failure to comply with the duties imposed by this Federal Trade Commission regulation caused them damage.

3 The Reymonds predicated their RICO claim on allegations that Legacy committed acts of theft by conversion (OCGA § 16-8-4), theft by deception (OCGA § 16-8-3), theft by taking (OCGA § 16-8-2), and falsification, concealment, and fraudulent financial documentation (OCGA § 16-10-20).

4 Consistent with this ruling, the trial court also denied Legacy’s motion for judgment notwithstanding the verdict. See OCGA § 9-11-50 (b).

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Legacy appealed, raising various challenges, including a challenge to the trial court’s ruling on its motion for directed verdict.  The Court of Appeals affirmed, Legacy Academy, Inc. v. Mamilove, LLC, 328 Ga. App. 775 (761 SE2d 880) (2014), and we granted a writ of certiorari to determine whether the Court of Appeals erred when it affirmed the trial court’s denial of a directed verdict on the Reymonds’ claims for rescission, fraud, negligent misrepresentation, and violation of the Georgia RICO statute. Because we find Legacy was entitled to a directed verdict as to these claims, we reverse the decision of the Court of Appeals in part.

1.   A motion for directed verdict may be granted only where the evidence demands the particular verdict and fails to disclose any material issue for jury resolution. See OCGA § 9-11-50 (a). Legacy argues the trial court erred by denying its motion for directed verdict on the claim for rescission based on fraudulent inducement because this claim was precluded as a matter of law by the Reymonds’ failure to read the Agreement.

“In general, a party alleging fraudulent inducement to enter a contract has two options: (1) affirm the contract and sue for damages from the fraud or breach; or (2) promptly rescind the contract and sue in tort for fraud.” Ekeledo v. Amporful, 281 Ga. 817, 819 (1) (642 SE2d 20) (2007). Having elected to seek rescission and pursue a claim for fraud, the Reymonds were required to prove that Legacy through misrepresentation, act, or artifice intentionally induced them to sign the Agreement and that they justifiably relied on the misrepresentation, act, or artifice, being “reasonably diligent in the use of the facilities at [their] command.” Lewis v. Foy, 189 Ga. 596, 598 (6 SE2d 788)(1940). See Markowitz v. Wieland, 243 Ga. App. 151, 153 (532 SE2d 705) (2000). They attempted to meet their burden through the presentation of evidence showing inaccuracies in the earnings claim provided by Legacy prior to the Agreement’s execution and their reliance on these representations in deciding to sign the Agreement. It is well-settled law, however, that

a party who has the capacity and opportunity to read a written contract cannot afterwards set up fraud in the procurement of his signature to the instrument based on [extra-contractual] representations that differ from the terms of the contract. Statements that directly contradict the terms of the agreement or offer future promises simply cannot form the basis of a fraud claim for the purpose of cancelling or rescinding a contract. In fact, the only type of fraud that can relieve a party of his obligation to read a written contract and be bound by its terms is a fraud that prevents the party from reading the contract.

(Citations and punctuation omitted.) Novare Group, Inc. v. Sarif, 290 Ga. 186, 188-189 (718 SE2d 304) (2011). See also Craft v. Drake, 244 Ga. 406, 408 (260 SE2d 475) (1979); Lewis, supra, 189 Ga. at 598.

The Court of Appeals held that the Reymonds’ failure to read the Agreement was excused because the jury would have been authorized to find based on evidence that they gave the Agreement to the Reymonds on the same day it was signed and told them that they had to sign the documents that day or another franchisee would be allowed to take their desired location. While these allegations would have authorized a jury to conclude that Legacy rushed the Reymonds by threatening the loss of their desired franchise location, they are legally insufficient to support a finding that the Reymonds were prevented from reading the Agreement through fraud or misleading artifice. See Budget Charge Accounts, Inc. v. Peters, 213 Ga. 17, 18 (96 SE2d 887) (1957) (mere allegation that defendant was in a hurry insufficient to excuse plaintiffs from reading documents); Citizens Bank, Vienna v. Bowen, 169 Ga. App. 896, 897 (315 SE2d 437) (1984) (evidence that defendants covered part of document and were in a hurry to have documents signed insufficient to establish that plaintiff was prevented by fraud from reading documents). Indeed, the complaint, the Reymonds’ arguments, and the evidence at trial all demonstrate that the Reymonds were not prevented from reading the Agreement but that they blindly relied on Legacy’s representations regarding expected income as a result of their own desire to quickly begin construction of their center at a particular location.

In addition, the record demonstrates that had they chosen to read the Agreement, the Reymonds would have been aware that they were signing an agreement expressly stating that Legacy had made no representations and they were not given or relying on any representations by Legacy regarding potential volume, profit, income, or success of the franchise5 and that by signing the Agreement, they were acknowledging that neither Legacy nor any of its agents had made any representation as to: “(i) earnings capability of Legacy Academy Center; (ii) a specific level of potential sales, income, gross or net profit for the Franchisee; or (iii) a specific level of sales, income, gross or net profits of existing centers (whether franchised or company-owned) other than as specifically described in the Offering Circular.”6  Because the pre-contractual earnings claim upon which the Reymonds allege they relied expressly contradicts the disclaimer and acknowledgment provisions of the Agreement,

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5 The Agreement included a disclaimer clause providing that “Franchisor expressly disclaims the making of, and Franchisee and each Owner acknowledge that it has not received from Franchisor or any party on behalf of Franchisor, any representation, warranty or guarantee, express or implied, as to the potential volume, profit, income or success of the business licensed under this Agreement.”

6 It is undisputed that the offering circular made no representations regarding potential sales, income, gross or net profits for either existing or potential franchisees. In fact, it affirmatively states both that it contains no representations as to potential sales, income or profits and that franchisor was making no representations as to potential sales, income or profits.

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their reliance on such representations was unreasonable as a matter of law. See Novare Group, supra, 290 Ga. at 188-189 (“[s]tatements that directly contradict the terms of the agreement . . . simply cannot form the basis of a fraud claim for the purpose of cancelling or rescinding a contract”); Craft, supra, 244 Ga. at 408 (pre-contractual statement that contradicted language of contract cannot be basis for fraud absent evidence that plaintiff was prevented by fraud from reading the contract); Ledford v. Smith, 274 Ga. App. 714, 726 (618 SE2d 627) (2005) (“Fraud cannot be the basis of an action if it appears that the party alleging the fraud had equal and ample opportunity to prevent it and yet made it possible through the failure to exercise due diligence. [Cits.]”). As stated in Lewis, supra, 189 Ga. at 601:

The law will not excuse [a plaintiff] for failing to read the instrument because of her confidence in the defendant, upon whom she had no legal right to rely, and who the allegations show employed no trick or artifice that caused her to fail to do her duty in reading before signing. No one can truthfully claim to have been defrauded in a matter about which that one has full knowledge and opportunity to exercise his free choice. The law will protect the innocent against fraud . . . but it demands of every one that he make use of his own facilities to avoid being defrauded. No other rule could safely be adopted and enforced by the courts with reference to written instruments. It is essential to all business relationships that the validity and solemnity of written contracts, freely and voluntarily executed, be upheld.

Absent any evidence of fraud that prevented the Reymonds from reading the Agreement, the evidence demanded a verdict in favor of Legacy on the rescission claim.

2. Having determined that the Reymonds were entitled to the remedy of rescission, the Court of Appeals held that the merger clause contained in the rescinded Agreement did not bar the remaining claims for fraud, negligent representation, and RICO violations. Our ruling in Division 1 now mandates a different result.

There is no dispute that the Reymonds executed the Agreement and our holding in Division 1 affirming its validity means that they are bound by its provisions, including a comprehensive merger clause which, using standard contract language, states that “this agreement constitutes the entire agreement of the parties with respect to the matters contained herein. This [a]greement terminates and supercedes any prior agreement between the parties concerning the same subject matter.” Under Georgia law, as “a matter of law, a valid merger clause executed by two or more parties in an arm’s length transaction precludes any subsequent claim of deceit based upon pre-contractual representations.” See First Data POS, Inc. v. Willis, 273 Ga. 792, 795 (546 SE2d 781) (2001). As we explained in First Data,

[w]here a conflict exists between oral and written representations, it has long been the law in Georgia that if the parties have reduced their agreement to writing, all oral representations made antecedent to execution of the written contract are merged into and extinguished by the contract and are not binding upon the parties.

Id. at 794-795 (citations omitted). Thus, where a written contract contains a comprehensive merger clause, “prior or contemporaneous representations that contradict the written contract cannot be used to vary the terms of a valid written agreement purporting to contain the entire agreement of the parties, nor would the violation of any such alleged oral agreement amount to actionable fraud.” Id. at 795, quoting Campbell v. C&S Nat. Bank, 202 Ga. App. 639, 640 (415SE2d 193) (1992). Compare Authentic Architectural Millworks, Inc. v. SCM Group USA, Inc., 262 Ga. App. 826 (2) (a) (586 SE2d 726) (2003) (merger clause does not bar fraud and negligent misrepresentation claims where alleged misrepresentations are contained within contract) and Raysoni v. Payless Auto Deals, LLC, 296 Ga. 156, 157-158 (766 SE2d 24) (2014) (partial merger clause was not comprehensive and did not bar reliance on written representations outside scope of merger clause). It follows that the Reymonds’ fraud, negligent misrepresentation, and violation of RICO claims which depended entirely on allegations of pre-contractual representations are precluded as a matter of law by the Agreement’s merger clause.7

3. The Reymonds argue that even if Legacy was entitled to directed verdicts on their claims for fraud, negligent misrepresentation, and RICO, the jury’s award of $750,000 in compensatory damages can be upheld as an award of damages on their OCGA § 51-1-6 claim.8   We cannot agree. The verdict form submitted to the jury, which was reviewed and agreed to by the parties, asked the jury to determine, in pertinent part: (1) whether as to the Reymonds’ claims against Legacy, it found in favor of the Reymonds or Legacy, and if in favor of the Reymonds, in what amount; (2) if it found in favor of the Reymonds and awarded damages and found Legacy liable under the RICO statute, whether the Reymonds were entitled to additional RICO damages; and (3) whether either party was to be awarded costs of litigation and if so, in what amount. The verdict thus clearly reflects the jury’s finding that Legacy violated the RICO statute because it awarded the Reymonds $375,000 in additional RICO damages. The verdict provides no insight, however, into the jury’s specific findings regarding the other claims presented for its determination. In fact, it is impossible to ascertain from the general verdict returned whether the jury based its award of damages solely on the RICO violation or on a combination of the RICO violation and one of the other asserted grounds, several of which we have determined should not have been submitted to the jury. See Division 1, supra. Accordingly, the jury’s verdict must be reversed in its entirety and the case remanded for a new trial. See Ga. Power Co. v. Busbin, 242 Ga. 612, 616 (250 SE2d 442) (1978) (verdict cannot stand where appellate court cannot determine whether verdict was entered on a proper basis).

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7 Contrary to the Reymonds’ argument, our holding in City Dodge, Inc. v. Gardner, 232 Ga. 766, 769-770 (208 SE2d 794) (1974), does not require a different result. We stated in City Dodge that where there is evidence from which a jury could find that a rescinded contract is void because of antecedent fraud, the contract’s disclaimer clause would be ineffectual because “in legal contemplation, there is no contract between the parties.” Id. at 770. In comparison, the terms of the contract in this case, including the merger and disclaimer clauses, are enforceable against the Reymonds because there was no evidence from which a jury could have determined that they were entitled to rescind the Agreement.

8 Legacy did not seek review on certiorari of the Court of Appeals’ holding as to the OCGA § 51-1-6 claim so we express no opinion on that issue.

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Judgment reversed in part and case remanded. Benham, Hunstein, Melton, Nahmias and Blackwell, JJ., and Judge Ural Glanville concur. Hines, P. J., not participating.

Decided April 20, 2015.

Certiorari to the Court of Appeals of Georgia – 328 Ga. App. 775.

C. David Joyner; Gregory, Doyle, Calhoun & Rogers, Charles L. Bachman, Jr., for appellants.

Ichter Thomas, Cary Ichter, W. Daniel Davis, for appellees.

Greenberg Traurig, Ernest L. Greer, Michael J. King, amici curiae.

 

ALSO READ:

FRANCHISE DISCUSSIONS by Company

LEGACY ACADEMY Franchise Complaints

LEGACY ACADEMY Ichter Thomas Wins Suit for Legacy Academy Franchise Owners

ICHTER THOMAS Another Win Against Legacy Academy Franchise

LEGACY ACADEMY Franchise Marketing Representations

LEGACY ACADEMY Are Frank & Melissa Turner “Disreputable”?

LEGACY ACADEMY Invited to Respond to Franchise Complaints

 

ARE YOU FAMILIAR WITH THE LEGACY ACADEMY FRANCHISE PROGRAM AND ITS FRANCHISEE DISPUTES?

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS:  Legacy Academy,  Legacy Academy franchise, Legacy Academy litigation, Legacy Academy litigation, LEGACY ACADEMY, INC. v. Mamilove LLC, franchise earnings claims, franchise fraud, Andersen, Tate & Carr PC, Frank Turner, Melissa Turner, Melissa Reymond, Lorraine Reymond, Cary Ichter, M. Kathleen Hart, cease and desist, takedown demand letter

UNHAPPYFRANCHISEE.COM Response to Legacy Academy 2nd Cease and Desist Letter

September 29, 2015

UnhappyFranchisee.Com responds to a nasty legal demand by Legacy Academy attorney M. Kathleen Hart of Andersen, Tate & Carr PC to remove a Legacy Academy logo and a supposed replacement logo from a 2 1/2 year old post.  We aren’t sure how to comply, since no logo has appeared on that page for 21 months. #bullying #harrassment

(UnhappyFranchisee.Com) On September 24, 2015 attorney M. Kathleen Hart sent us a our 2nd cease and desist letter demanding that we remove the Legacy Academy logo from a 2013 blog post.

She claims that she had made the same demand 21 months ago and we refused to comply.

Legacy Academy(See LEGACY ACADEMY 2nd Cease & Desist Letter to UnhappyFranchisee.Com)

Then she went off on how we had added disclaimer copy to the logo, but that wasn’t enough to qualify for “nominative fair use” because it didn’t meet the “minimum necessary test.”

M. Kathleen’s letter was delightfully condescending and snarky, in that arrogant attorney style we’ve come to enjoy so well:

Since you claim to be just a “simple blogger,” I’ll try to be simple…

…I don’t want to repeat myself, so let’s just keep this simple…

… you presumably know how to use email…

I was just about to start Googling “nominative fair use” and “minimum necessary test” when it occurred to me to check the web page.

Lo and behold, there isn’t a single Legacy Academy logo (or replacement logo) on that page, and there hasn’t been since I removed it in January, 2014.

Now I must inform the fiery and irascible Ms. M. that I cannot remove what no longer exists.

Unhappy Franchisee.

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M . Kathleen Hart, Esq.

Attorney for Legacy Academy, Inc.

Andersen, Tate & Carr , P . C .

1960 Satellite Boulevard , Suite  4000

Duluth, Georgia 30097

September 29, 2015

Dear M.:

Thank you for your letter of September 24, 2015.

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However, your representation that we have continued to use the logo (or replaced it with one with a disclaimer) on the page that you first objected to in your letter of January 28, 2014 is incorrect.

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You state “On January 24, 2014, we issued a written demand on behalf Legacy [sic] that you cease and desist violating Legacy’s protected rights in the Mark by removing the logo displayed on the webpage http://www.unhappyfranchisee.com/index.php?s=legacy.   Despite this demand, you have chosen to continue using and displaying the Mark on your webpage…”

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Your original letter (attached) contained a scan of a printed post published December 18, 2013 titled “ICHTER THOMAS Another Win Against Legacy Academy Franchise.” The logo was removed from that post shortly after we received your January 24, 2014 letter and was not replaced. There has not been a Legacy Academy logo on that page for the 21 months since you last communicated with us.

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If you would like us to be able to accurately respond to objections in the future, please indicate the specific text or graphics you object to by providing a screen capture or printed/scanned page, as you did with your original letter.

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Also, when providing web addresses to designate specific online content you find objectionable, it would be advisable for you to refer to static web pages rather than dynamic web pages that contain changing indexes of category contents (as you did in both your letters when you referenced the dynamic web page http://www.unhappyfranchisee.com/index.php?s=legacy.) Referring to a dynamic category index of blog posts will inevitably cause confusion, as the content of that web page changes every time a post in that category is added, updated or recategorized.

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Learning the difference between the two types of web pages should help you communicate more effectively in the future not only with us, but with other blogging miscreants, infringers and roustabouts.

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Please let me know if there’s anything else I can do to address your concerns and put your clients’ minds at ease. But please don’t wait 21 months to respond this time! My memory span is not what it used to be!

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Cheers… ADMIN (UnhappyFranchisee.Com)

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CC via email Mr. Frank Turner, Mrs. Melissa Veal Turner, Legacy Academy

Attachment: Legacy Academy 1st cease and desist letter

 

Read:

LEGACY ACADEMY 2nd Cease & Desist Letter to UnhappyFranchisee.Com

ALSO READ:

FRANCHISE DISCUSSIONS by Company

LEGACY ACADEMY Franchise Complaints

LEGACY ACADEMY Ichter Thomas Wins Suit for Legacy Academy Franchise Owners

ICHTER THOMAS Another Win Against Legacy Academy Franchise

LEGACY ACADEMY Franchise Marketing Representations

We have also had our own issues with Legacy Academy and its attorneys:

LEGACY ACADEMY Issues Cease & Desist Letter to UnhappyFranchisee.Com

LEGACY ACADEMY Are Frank & Melissa Turner “Disreputable”?

LEGACY ACADEMY UnhappyFranchisee.Com Complies With Legal Request/Threat

LEGACY ACADEMY Invited to Respond to Franchise Complaints

 

ARE YOU FAMILIAR WITH THE LEGACY ACADEMY, FRANK TURNER, MELISSA TURNER OR M. KATHLEEN HART?

ARE THEY JUSTIFIED IN HARASSING US?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: Cease and Desist letter, takedown demand, nominative fair use,  Legacy Academy,  Legacy Academy franchise, Early Learning franchise opportunity, Legacy Academy franchise complaints, Andersen, Tate & Carr PC, Frank Turner, Melissa Turner, M. Kathleen Hart, cease and desist, takedown demand letter

LEGACY ACADEMY 2nd Cease & Desist Letter to UnhappyFranchisee.Com

September 29, 2015

Georgia-based childcare franchisor Legacy Academy and attorney M. Kathleen Hart of Andersen, Tate & Carr PC seem obsessed with bullying our franchise blog into removing a logo from a 2 1/2 year old post.  Will this latest Cease & Desist Takedown Demand have the desired effect?  Or are they setting themselves up for ridicule and derision?

(UnhappyFranchisee.Com) In January, 2014,  attorney M. Kathleen Hart  wrote us a letter that said our use of the Legacy Academy “derivative mark” and “adulterated derivative mark” on a post published 13 months earlier could create a “likelihood of confusion” between Legacy Academy’s brick and mortar franchised daycare centers and our UnhappyFranchisee.com franchise discussion website. (See the 1st Cease & Desist Letter: Legacy Academy Cease & Desist Letter to UnhappyFranchisee.Com  January 24, 2014)

Citizens of the beautiful Southern state of Georgia, M. Kathleen Hart, Legacy CEO Frank Turner and VP Melissa Veal Turner were evidently concerned that there may be someone, somewhere, (a patient under heavy sedation? Or suffering from Traumatic Brain Injury?) who is unable to distinguish between a website and a large building filled with children.

It didn’t make sense to us but…  Maybe it’s a Southern thing, we thought.

Legacy AcademySo we took the logo (temporarily) off the web page they objected to (ICHTER THOMAS Another Win Against Legacy Academy Franchise).

We created a proposed alternative graphic which included text that unmistakably disclaimed any relationship between UnhappyFranchisee.Com and Legacy Academy.

(See our response to the 1st Cease & Desist Letter: LEGACY ACADEMY UnhappyFranchisee.Com Complies With Legal Request/Threat)

With these changes, we were certain that even a recently arrived extraterrestrial who had not been paying attention in his Earth Object Differentiation 101 class could not mistakenly believe that Legacy Academy had created a website with which to criticize itself.

We submitted our proposed solution to M. Kathleen Hart for her immediate review and feedback.

No answer.

We sent M. another email asking if our proposed solution was acceptable.

Her assistant confirmed that she received it, but again, no response.

21 months later, M. Kathleen Hart sent us the 2nd Legacy Academy cease and desist letter (below).

I could be wrong, but it seems to me that neither M. Kathleen nor her client ever bothered to check the original post to see that the logo they objected to was removed 21 months ago and never replaced.

A link to our response is posted below.

M. Kathleen Hart’s email as a PDF:  LEGACY ACADEMY 2nd Cease & Desist

 

Andersen Tate Carr law firm

M . Kathleen Hart

Direct Phone : 67 8 -5 18-6 8 5 1

Email: khart@atclawfirm.c o m  

Direc t Fax : 77 0 – 2 3 6 – 9 7 8 5

 

September 24, 2015

VIA   EMAIL: unhappyfranchisee[at]gmail. com

UnhappyFranchisee.com

RE: UnhappyFranchisee.com’s Unlawful Use of Legacy Academy, Inc.’s Registered Service Mark

To Whom it May Concern:

This law firm represents Legacy Academy, Inc. (“Legacy”), the owner of a federal registration for the “Legacy Academy For Children” service mark, USPTO Registration Number 2686283 (the “Mark”), which registration has become incontestable. On January 24, 2014, we issued a written demand on behalf Legacy that you cease and desist violating Legacy’s protected rights in the Mark by removing the logo displayed on the webpage http://www.unhappyfranchisee.com/index.php?s=legacy.   Despite this demand, you have chosen to continue using and displaying the Mark on your webpage (and, as a result, to be displayed as a result in Google’s “Images” search feature) and have merely added a disclaimer of sponsorship or affiliation.  Legacy now hereby renews its demand that you immediately cease and desist all use of the Mark, as such use is not nominative fair use.

.

Since you claim to be just a “simple blogger,” I’ll try to be simple in outlining why your continued use of Legacy’s Mark is not legitimate.  While the disclaimer might address the factor of the nominative fair use test relating to an indication of joint sponsorship or endorsement, it does not address the factor that weighs whether the use of the mark was necessary (also known as the “minimum necessary” test). Courts have consistently found that use of a design mark or logo is not nominative fair use, because it is not necessary to identify the trademark owner’s goods or services. Basically, you can use the name “Legacy Academy For Children”, but you cannot use the logo or the graphic, because the logo is not necessary to your goal of identifying Legacy or its services. It might be helpful in driving traffic to your website and to your directory of franchisee attorneys, but it isn’t necessary.

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Also, with respect to the content of your articles regarding my client, I’ve enclosed a copy of the Georgia Supreme Court’s recent decision in Legacy Academy, Inc. et. al. v. Mamilove, LLC et al., in which the Court reversed the Georgia Court of Appeals ruling that you recount on your website. The Supreme Court unanimously determined that Legacy was entitled to a directed verdict on the plaintiff’s claims for rescission, fraud, negligent misrepresentation and violation of the Georgia RICO statute. To translate, the Court found that Legacy did not commit fraud and overturned the damage award. Given that you have invited all companies discussed on your website to “provide corrections, clarifications or rebuttals ,” I wanted to make sure that you have a copy of the decision so that you can update your story on Legacy accordingly (removing the headline that Legacy is “guilty of fraud” would be a good start), stop misleading those who visit your attorney advertising website and avoid any further pesky letters from me.

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I’ve already give you all the nasty-sounding warnings in my January 24, 2014 letter, and I don’t want to repeat myself, so let’s just keep this simple. Stop using Legacy’s logo and update your story on Legacy so that it is accurate and not misleading , and you will not have to hear from me again or spend time trying to write responses to my letters on your blog (responses that you never bothered to actually send to me directly, even though you presumably know how to use email). At least not unless you do something else that violates the rights of one of my clients.

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Of course, nothing in this letter is a waiver of any rights or remedies of my client, and Legacy reserves all rights regarding the same. Please direct your response to this letter to me.

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Sincerely,

M. Kathleen Hart, Esq.

for Andersen, Tate & Carr, P.C.

Enclosure

cc: Mr. Frank Turner (via email) Mrs. Melissa Turner (via email)

Mr. Robert Thomas, Esq., Andersen, Tate & Carr, P.C.

Read:

UNHAPPYFRANCHISEE.COM Response to Legacy Academy 2nd Cease and Desist Letter

 

ALSO READ:

FRANCHISE DISCUSSIONS by Company

LEGACY ACADEMY Franchise Complaints

LEGACY ACADEMY Ichter Thomas Wins Suit for Legacy Academy Franchise Owners

ICHTER THOMAS Another Win Against Legacy Academy Franchise

LEGACY ACADEMY Franchise Marketing Representations

We have also had our own issues with Legacy Academy and its attorneys:

LEGACY ACADEMY Issues Cease & Desist Letter to UnhappyFranchisee.Com

LEGACY ACADEMY Are Frank & Melissa Turner “Disreputable”?

LEGACY ACADEMY UnhappyFranchisee.Com Complies With Legal Request/Threat

LEGACY ACADEMY Invited to Respond to Franchise Complaints

 

ARE YOU FAMILIAR WITH THE LEGACY ACADEMY, FRANK TURNER, MELISSA TURNER OR M. KATHLEEN HART?

ARE THEY JUSTIFIED IN HARASSING US?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: Cease and Desist letter, takedown demand, nominative fair use,  Legacy Academy,  Legacy Academy franchise, Early Learning franchise opportunity, Legacy Academy franchise complaints, Andersen, Tate and Carr PC, Frank Turner, Melissa Turner, M. Kathleen Hart, cease and desist, takedown demand letter

TAKEDOWN HALL OF SHAME: ERA Expense Reduction Analysts

September 8, 2015

ERA Expense Reduction Analysts joins the UnhappyFranchisee.Com Takedown Hall of Shame with this takedown demand letter sent by Australian attorney Sylvia Fernandez of Holding Redlich.  Ms. Fernandez wanted us to take down a complaint by a “disgruntled franchisee” of Expense Reduction Analysts who alleges that ERA is guilty of “ a clear and deliberate fraud perpetrated on the USA authorities and on all ERA USA and global franchisees.”

(UnhappyFranchisee.Com)  ERA Expense Reduction Analysts took exception to a letter and supporting documents we received from a “disgruntled franchisee” of Expense Reduction Analysts who alleges that ERA is guilty of “ a clear and deliberate fraud perpetrated on the USA authorities and on all ERA USA and global franchisees.”

We invited ERA Expense Reductions Analysts, Charles Marfleet, and other all parties to provide corrections, clarifications and a rebuttal to the allegations made by the franchisee, Armstrong Consulting Pty Ltd.

Instead, they chose to have their law firm sending a threatening letter, thus earning them a coveted spot in the UnhappyFranchisee.Com Takedown Hall of Shame

Original Title of Threatened Content:  ERA EXPENSE REDUCTION ANALYSTS Franchise Fraud Allegations

Original location: http://www.unhappyfranchisee.com/era-expense-reduction-analysts-franchise-fraud-allegations/

Threat or takedown demand:  ERA Letter to Unhappy Franchisee – 02.09.15; ERA Letter to Nick Stretch Legal – 02.09.15

Date of threat or takedown:  September 2, 2015

UnhappyFranchisee.com response:  Polite refusal, invitation to publish company’s corrections, clarifications or rebuttal.

 

H Holding Redlich 200

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H HOLDING REDLICH



2 September 2015

The Proprietor

UnhappyFranchisee.com

By email to [redacted]

Partner Sylvia Fernandez

Direct line (02) 8083 0408

Email sylvia.fernandez@holdingredlich.com

Our RefSZF 14680036

Dear Unhappy Franchisee

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Letter of demand for the removal of defamatory material from ‘Unhappy Franchisee’ blog

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We act for Expense Reduction Analysts (ERA).

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It has been brought to ERA’s attention that your blog currently hosts an article described as having been submitted by Armstrong Consulting Pty Ltd (AC) entitled ‘ERA EXPENSE REDUCTION ANALYSTS Franchise Fraud Allegations’, located at ‘ http://www.unhappyfranchisee.com/era-expense-reduction-analysts-franchise-fraud-allegations/* (sic) (Article).

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For your benefit, you should be aware that AC is one of three related plaintiffs in proceedings in the Supreme Court of New South Wales against a number of ERA entities and directors. The plaintiffs are former shareholders in the ERA group who assert in the legal proceedings, among other things, breaches of various agreements governing their shareholdings in the group. Their claims do not concern the franchising aspects of ERA’s business. These legal proceedings have been on foot since 2011 and concern many of the matters raised in the Article. The hearing of these legal proceedings has yet to occur and as such, many of the statements made by AC in the Article pre-judge without foundation matters that will ultimately be determined by a court in relation to what is essentially a dispute between shareholders.

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We have also drawn to the attention of the firm of solicitors representing AC in these legal proceedings the defamatory nature of the Article and have demanded on behalf of ERA that AC immediately procure the Article to be removed from your blog. A copy of our letter [Letter to Nick Stretch Legal – 02.09.15] is enclosed for your reference.

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As you are now on notice of the defamatory nature of the Article, its irrelevance to the matters which appear to be the subject of your blog and its tendency to pre-judge matters that will ultimately fall to be determined by a court, ERA demands that you remove the Article from your blog immediately and that you undertake not to host the Article or any similarly defamatory publications which concern ERA or any of its directors or associates in the future. ERA’s rights are strictly reserved. ERA will rely on this letter on the question of its costs in the event that litigation ensues.

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Yours faithfully

Holding Redlich

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Sydney. Melbourne. Brisbane

Level 65 MLC Centre 19 Martin Place Sydney NSW 2000 OX 529 Sydney

GPO Box 4118 Sydney NSW 2001 T +61 2 8083 0388

www.holdingredlich.com


5:5129727_1 NDR ABN 15 364 527 724

* We corrected their incorrect URL.

Our Takedown Hall of Shame was inspired by and a tribute to the original Electronic Frontier Foundation [EFF] Takedown Hall of Shame.

Also read:

ERA EXPENSE REDUCTION ANALYSTS Franchise Fraud Allegations

EXPENSE REDUCTION ANALYSTS Franchise Complaints

ARE YOU FAMILIAR WITH THE EXPENSE REDUCTION ANALYSTS FRANCHISE OR THE ERA FRANCHISE Charles Marfleet or Charles Howson?

What about Armstrong Consulting Pty Ltd? Or Holding Redlich?

PLEASE SHARE A COMMENT – POSITIVE OR NEGATIVE – BELOW.

 Contact UnhappyFranchisee.com

TAGS: Expense Reduction Analysts, Expense Reduction Analysts franchise, ERA, ERA franchise, Expense Reduction Analysts franchise fraud, Armstrong Consulting Pty, Charles Marfleet, Ronnie Clucas, Charles Howson, Accuma Group PLC, Leonard Curtis, Hinzman and Associates, Kreston Dormer, Baker Tilley, Holding Redlich, H Holding Redlich

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