July 25, 2014
In the latest 7-Eleven franchise lawsuit, 1200+ 7-Eleven franchisees allege that 7-Eleven, Inc. turned their American Dreams into Orwellian nightmares.
(UnhappyFranchisee.Com) A 7-Eleven franchise association (FOAGLA, Inc.) comprising more than 1200 franchisee members, and five individual franchisees, have brought suit in the Eastern District of California against 7-Eleven, Inc. alleging that the Japanese-owned convenience store giant has downgraded the role of its franchisees from independent contractors to that of mistreated employees with no decision-making authority, has subjected them to Big Brother-like video surveillance and monitoring, and has violated their civil rights in an exploitive scheme to drive corporate profits at their expense.
The dramatic allegations in the lawsuit have inspired a viral video critical of 7-Eleven, Inc. & CEO Joe DePinto, entitled 7-ELEVEN Franchise Blues – A Protest Song.
7-Eleven, Inc. Accused of Racial Discrimination & Bullying
7-Eleven franchise owners, many of them of South Asian origin, pay the 7-Eleven franchisor corporation an up-front franchise fee (often in the hundreds of thousands of dollars) in exchange for the right to operate one or more franchised stores as independent contractors, and to share a percentage of the store profits.
The suit alleges that especially after Tokyo-based Seven and I Holdings.Co. acquired 7-Eleven, Inc. and took the company private, it launched a predatory scheme to extract maximum profit at the expense of its South Asian and other franchisees.
According to the FOAGLA, Inc. suit, 7-Eleven systematically stalked, spied on, racially targeted and subjected its franchisees to absurdly rigid daily controls… stripping them even of the right to control the temperature of their stores or the volume of their in-store monitors.
The lawsuit also alleges that 7-Eleven, Inc. launched a predatory initiative wherein it unfairly terminated the agreements of franchisees with successful stores, reacquired the stores at no cost, then resold them to new franchisees at a “windfall profit,” an illegal industry practice known as “churning.”
The FOAGLA lawsuit also alleges that 7-Eleven, Inc. “readily deployed any means necessary to brutally discredit and crush any franchisee who voiced opposition or dared to stand up to its predatory practices.”
7-Eleven, Inc. Accused of Churning Franchise Stores for Profit
FOAGLA’s Complaint, Case No. 5:14-cv-01432 was filed on July 11, 2014 — the annual “7-Eleven Day”. The lawsuit details these various abuses and seeks equitable relief against 7-Eleven to stop its racial discrimination and profiling of South Asian FOAGLA members and franchisees. The suit also addresses 7-Eleven’s malicious retaliation against association leaders, invasion of franchisees’ privacy rights, and a misclassification of franchisees as independent contractors when they are, in fact, employees.
FOAGLA asserts that 7-Eleven must be dealt with head-on and its policies and procedures must be investigated with careful scrutiny the court. FOAGLA member Jas Dhillon, stated on behalf of the association: “This lawsuit was absolutely necessary to address 7-Eleven’s racial bias, its vendetta against vocal franchisees and harassment. As a result of this conduct, all of our businesses have suffered. FOAGLA brings this action in a united front to protect our members’ investments, privacy, livelihoods and, in some cases, their safety.”
FOAGLA’s lead counsel, Gerald A. Marks, Esq. of the Red Bank, New Jersey law firm of Marks & Klein, LLP stresses the importance of the larger civil rights issues at stake: “What needs to be understood is that this not a standard franchise dispute. Rather, this is a case about civil rights violations and affects many innocent and loyal franchisees. This action needed to be brought in order to protect FOAGLA members as well as all affected franchisees, and to restore balance to a franchise system that has spun out of control,” Mr. Marks stated. “We look forward to proving these claims on the merits before the federal court.”
Mr. Marks’ partner, Louis D. Tambaro, Esq. also commented: “As is well known, we at Marks & Klein are staunchly committed to protecting our franchisee clients’ rights and to combat every type of franchisee abuse. As alleged in the lawsuit, 7-Eleven is plagued by such abuse and franchisees are suffering. Such conduct cannot be tolerated, and that is why we are asking the court to impose the appropriate relief.”
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TAGS: 7-Eleven, 7-Eleven lawsuit, 7-Eleven franchise lawsuit, 7-Eleven franchisee lawsuit, 7-Eleven FOAGLA, 7-Eleven Asset Protection, 7-Eleven franchise opportunity, 7-Eleven franchise complaints, 7-Eleven franchisees 7-Eleven unhappy franchisee, Joe DePinto, Joseph DePinto, Mark Stinde, Seven and I Holdings, Marks & Klein, 7-Eleven Franchise Owners Association
July 24, 2014
7-ELEVEN Franchise Blues – A Protest Song (An UnhappyFranchisee.Com Original)
(UnhappyFranchisee.Com) 7-Eleven Franchise Blues – A Protest Song is a satirical remake of Tennessee Ernie Ford’s classic “16 Tons,” except instead of the plight of coal miner’s, the focus is on the plight of 7-Eleven franchisees who claim they are victims of a predatory and exploitive scheme run by Dallas-based 7-Eleven, Inc. and its Tokyo-based overlords, retail giant Seven and i Holdings.
States the intro:
“A lawsuit filed by more than 1200 7-Eleven franchisees alleges that the company’s ‘Asset Protection’ team stalks, bullies and harasses innocent franchisees with the goal of seizing the valuable franchises some spent decades building.
“Under the leadership of CEO Joe DePinto, the Japanese-owned company then resells the franchises for windfall profits, the suit alleges.”
7-Eleven Franchise Blues – A Protest Song
by Franchisee Ernie Ford
I bought a 7-Eleven & what did I get?
Stalked & bullied & deep in debt.
Asset Protection says I must go…
My Store’s being re-sold by Joe DePinto!
From Mumbai to Delhi to Bangalore
They dream of running a convenience store
They pool their money & American Dreams
Of selling ice-cold Slurpees & magazines
Big Brother is watching with cameras & more
He sees every corner of every store
He’s watching from Dallas but don’t you know?
He takes his orders from Tokyo
If you see their lawyers better run and hide
Franchisees didn’t & a lot of them cried
If they want your store, no chance you stand
When Joe says he needs another hundred grand
I bought a 7-Eleven & what did I get?
Stalked & bullied & deep in debt.
Asset Protection says I must go…
My Store’s being re-sold by Joe DePinto!
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TAGS: 7-Eleven, 7-Eleven protest song, 7-Eleven Franchise Blues, 7-Eleven franchise, 7-Eleven lawsuit, 7-Eleven Asset Protection, 7-Eleven franchise opportunity, 7-Eleven franchise complaints, 7-Eleven franchisees 7-Eleven unhappy franchisee, Joe DePinto, Joseph DePinto, Mark Stinde, Seven and I Holdings, Marks & Klein, 7-Eleven Franchise Owners Association, FOAGLA
July 18, 2014
David Rutkauskas’ controversial Beautiful Brands franchise system continues to shrink.
The latest closure is the only remaining Rex’s Chicken restaurant, which operated at the same Tulsa location as another defunct Rutkauskas venture: Coney Beach.
According to the Tuesday, July 15, 2014 Tulsa World article Rex’s Chicken closes Tuesday as owners seek new location:
Rex’s Chicken, 11089 S. Memorial Drive, Bixby, is closing Tuesday, and the owners reportedly are seeking a new location.
“Our franchise group, Big Rex, expects to announce within 90 days a new location,” said David Rutkauskas of Rex’s Franchise System/Beautiful Brands International.
The original Rex Chicken, which featured bite-size pieces of fried chicken, was operated by the McFarland family from 1975 to 1999.
Beautiful Brands purchased the brand and chicken recipes in 2007. The franchise group opened the new Rex’s Chicken in June 2010.
“The location has been challenging for a while because of parking, access and ultimately road construction,” Rutkauskas said.
Despite the failure to grow and the closure of its sole surviving location, the Rex’s Chicken website still promotes its franchise program, which requires an investment of $196,000 to $413,000.
Last October, Rutkauskas sold the rights to open Rex’s franchises to the Muscogee (Creek) Nation.
Tribe buys rights to Rex’s Chicken | News OK
TULSA — The Muscogee (Creek) Nation has purchased the rights to franchise Rex’s Chicken throughout its eight-county jurisdiction.
Under the $150,000 deal, Muscogee Nation Business Enterprise will open Rex’s Chicken locations in its travel plazas and, eventually, its casinos, said Beautiful Brands International, which owns the Rex’s Chicken brand. It’s a unique arrangement between a tribe and an Oklahoma restaurant brand.
We have not heard whether the Muscogee Nation Business Enterprise still plans to develop Rex’s Chicken locations.
Beautiful Brands chains Camille’s Sidewalk Café and Freshberry have also suffered recent closures.
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TAGS: Rex’s Chicken, Rex’s Chicken Tulsa, David Rutkauskas, Beautiful Brands International, BBI, franchises, franchise opportunity, David Rutkauskas franchise complaints, Muscogee (Creek) Nation, unhappy franchisee, franchise failures, Muscogee Nation Business Enterprise
July 16, 2014
Chris T. Gregoris, franchisor of YoFresh Yogurt Cafe , Poppin’ Kettle and the now-defunct Java’s Brewin’, has received notice that he and his franchise entities could be facing fines of up to $500,000 from the Connecticut Banking Commissioner for selling unregistered franchises.
June 12, 2014, the Connecticut Banking Commissioner has issued a Cease & Desist Notice of Intent to Fine (See below) YoFresh Yogurt Café, Poppin’ Kettle and Chris T. Gregoris for 5 violations of the the Connecticut Business Opportunity Investment Act (“Act”).
The notice states “notice is hereby given to each Respondent that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation upon each Respondent.”
Gregoris was previously fined $30,000 for selling unregistered Java’s Brewin’ franchises in Connecticut. Java’s Brewin’ was dissolved and the fine went unpaid.
Here’s the ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING
* * * * * * * * * * * * * * * * *
IN THE MATTER OF:
CHRIS T. GREGORIS
a/k/a CHRISTOS T. GREGORIS
a/k/a CHRISTOPHER GREGORIS
* * * * * * * * * * * * * * * * *
ORDER TO CEASE AND DESIST
NOTICE OF INTENT TO FINE
NOTICE OF RIGHT TO HEARING
DOCKET NO. CF-14-886-B
I. PRELIMINARY STATEMENT
The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the General Statutes of Connecticut, the Connecticut Business Opportunity Investment Act (“Act”).
Pursuant to Section 36b-71(a) of the Act, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, has conducted an investigation into the activities of Respondents to determine if Respondents have violated, are violating or are about to violate provisions of the Act (“Investigation”).
As a result of the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act.
As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Respondents pursuant to Section 36b-72(a) of the Act.
As a result of the Investigation, the Commissioner has the authority to impose a fine upon Respondents pursuant to Section 36b-72(b) of the Act.
Poppin Kettle Franchising, Inc. (“Poppin Kettle”) is a Massachusetts corporation formed on July 13, 2012. Poppin Kettle maintains its principal place of business at 8 Faneuil Hall Marketplace, Third Floor, Boston, Massachusetts 02109.
Yofresh Yogurts Franchising, Inc. (“Yofresh”) is a Massachusetts corporation formed on January 28, 2011. Yofresh maintains its principal place of business at 8 Faneuil Hall Marketplace, Boston, Massachusetts 02109.
Chris T. Gregoris a/k/a Christos T. Gregoris a/k/a Christopher Gregoris (“Gregoris”) is an individual whose last addresses known to the Commissioner are 6 Acton Street, Watertown, Massachusetts 02472 and 8 Faneuil Hall Marketplace, Third Floor, Boston, Massachusetts 02109. Gregoris is the President, Treasurer, Secretary and sole Director of Poppin Kettle, as well as the President, Treasurer, Secretary and sole Director of Yofresh.
Gregoris was the President, Treasurer, Secretary and sole Director of Java’s Brewin Development, Inc. (“Java’s Brewin”), a Massachusetts corporation that was dissolved on June 18, 2012. On June 23, 2008, the Commissioner entered a Cease and Desist Order against Java’s Brewin for offering and selling unregistered business opportunities in violation of the Act, and on October 8, 2008, the Commissioner fined Java’s Brewin $30,000 in connection with the same violation. (Docket No. CF 2008-845-B). To date, such fine remains unpaid.
As entities having the same sole officer and director, Poppin Kettle, Yofresh and Java’s Brewin are affiliates within the meaning of Section 36b-61(1) of the Act.
III. STATEMENT OF FACTS
Poppin Kettle is in the business of offering and selling products, equipment and services to enable purchaser-investors to establish their own gourmet popcorn business. Poppin Kettle purchaser-investors may purchase a store, kiosk, cart or combination thereof.
Since approximately September 2011, Poppin Kettle has maintained a website that states Poppin Kettle “offers franchise opportunities nationwide.” The domain name (poppinkettle.com) is registered in Gregoris’ name. On its website, Poppin Kettle offers franchises for a $19,500 fee and elicits indications of interest from prospective purchaser-investors.
Since approximately September 2011, Respondents Poppin Kettle and Gregoris offered and/or sold Poppin Kettle business opportunities to at least one purchaser-investor in Connecticut, including an individual (“Investor 1”) who paid Poppin Kettle $19,500 in May 2013 as an initial franchise fee. As of May 2014, there is one Poppin Kettle Connecticut franchise location, which belongs to Investor I and is located in Meriden, Connecticut.
Gregoris represented to the Commissioner in writing that on May 22, 2013, Poppin Kettle sold a Poppin Kettle business opportunity to Investor 1, who paid Poppin Kettle $19,500 as an initial franchise fee.
On its website, Poppin Kettle represents to purchaser-investors that it will provide, among other things, pre-opening and operations training and support and that it will assist the purchaser in locating sites for the operation of the franchised business.
At no time was the Poppin Kettle franchise registered as a business opportunity under the Act, nor did Poppin Kettle file a claim with the Commissioner that its business opportunity was excluded from the definition of “business opportunity” or exempt from registration under the Act.
The Internet offering of Poppin Kettle franchises did not qualify for exemptive treatment pursuant to the Commissioner’s November 20, 1996, Order Exempting Certain Offers of Business Opportunities Made on the Internet from Business Opportunity Registration (“Internet Offering Exemption”) since Poppin Kettle’s website did not state that the business opportunity was not being offered to Connecticut residents and since subsequent sales were not made at a time when the business opportunity was registered.
Prior to the sale of the Poppin Kettle franchise to Investor 1, Respondents Poppin Kettle and Gregoris failed to provide Investor 1 with the disclosure statement containing the disclosures required by Section 36b-63 of the Act. Such disclosures, included without limitation, key information on the franchise, the seller and its principals and affiliates, risks associated with the purchase of the business opportunity; financial information on the seller; and relevant employment, disciplinary and litigation histories of the seller and its principals. Respondents Poppin Kettle and Gregoris, for example, failed to disclose to Investor 1 that it settled civil litigation brought by several New York business opportunity purchasers naming Gregoris and Java’s Brewin as defendants (DiPietro et al. v. Java’s Brewin Development, Inc., Christopher T. Gregoris et al. (E.D.N.Y. 1:08-cv-01620-ENV-MDG 2008)). In addition, Respondents Poppin Kettle and Gregoris failed to disclose to Investor 1, among other things, that Gregoris was a control person of Java’s Brewing, which was the subject of a Cease and Desist Order entered by the Commissioner on June 23, 2008 for violations of the Act; that on October 8, 2008, the Commissioner imposed a $30,000 fine against Java’s Brewing for the same violations of the Act, and that such fine remains unpaid.
Prior to the sale of the Poppin Kettle franchise to Investor 1, Respondents Poppin Kettle and Gregoris failed to inform Investor 1 that the Poppin Kettle franchise was not registered under the Act.
Yofresh is in the business of offering and selling products, equipment and services to enable purchaser-investors to establish their own frozen yogurt business.
Since at least September 2013, Yofresh has maintained a website stating that it: offered franchises for $29,500; would assist purchasers in securing a location with the use of a nationwide network of brokers; and would provide both pre-opening and operations training. The domain name (yofreshyogurtcafe.com) has been registered in Gregoris’ name since January 2010.
At no time was the Yofresh franchise registered as a business opportunity under the Act, nor did Yofresh file a claim with the Commissioner that its business opportunity was excluded from the definition of “business opportunity” or exempt from registration under the Act.
The Internet offering of Yofresh franchises did not qualify for exemptive treatment under the Internet Offering Exemption because Yofresh’s website did not state that the business opportunity was not being offered to Connecticut residents.
Gregoris represented to the Commissioner in writing that no sales of the Yofresh franchise had been made to Connecticut residents.
IV. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND ORDER IMPOSING FINE
a. The Poppin Kettle Franchise Offered and Sold by Respondents
Poppin Kettle and Gregoris is a Business Opportunity
Paragraphs 1 through 24, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
The products, equipment, supplies, and services described in paragraphs 11 and 12 constitute a “business opportunity” within the meaning of Section 36b-61(2) of the Act in that they were offered and/or sold to purchaser-investors by Respondents Poppin Kettle and Gregoris to enable those purchaser-investors to start a gourmet popcorn business.
As described in paragraph 15, Respondents Poppin Kettle and Gregoris represented to prospective purchaser-investors that Respondents Poppin Kettle and Gregoris would assist purchaser-investors in locating sites for the operation of the franchise business and provide purchaser-investors with training and support necessary to make the franchise business a success. In so doing, Respondents Poppin Kettle and Gregoris represented that they would provide purchaser-investors with a sales program or a marketing program within the meaning of Section 36b-61(2)(D) of the Act.
b. The Yofresh Franchise Offered by Respondents Yofresh and Gregoris is a Business Opportunity
Paragraphs 1 through 27, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
The products, equipment, supplies, and services described in paragraphs 20 and 21 constitute a “business opportunity” within the meaning of Section 36b-61(2) of the Act in that they were offered to purchaser-investors by Respondents Yofresh and Gregoris to enable those purchaser-investors to start a retail yogurt business.
As described in paragraph 21, Respondents Yofresh and Gregoris represented to prospective purchaser-investors that Respondents Yofresh and Gregoris would assist purchaser-investors in locating sites for the operation of the franchise business and would provide purchaser-investors with training and support necessary to make the franchise business a success. In so doing, Respondents Yofresh and Gregoris represented that they would provide purchaser-investors with a sales program or a marketing program within the meaning of Section 36b-61(2)(D) of the Act.
c. Violation of Section 36b-67(1) of the Act by Respondents –
Offer or Sale of Unregistered Business Opportunities
Paragraphs 1 through 30, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
Section 36b-67(1) of the Act provides, in pertinent part, that “[n]o person shall in connection with the sale or offer for sale of a business opportunity: (1) Sell or offer for sale a business opportunity in this state or from this state unless it has first been registered with the commissioner and declared effective by the commissioner in accordance with the provisions of section 36b-62.”
As more fully described in paragraphs 11 through 24, inclusive, Respondents offered and/or sold Poppin Kettle and Yofresh business opportunities absent registration under the Act. The offer and sale of such business opportunities absent registration constitutes a violation of Section 36b-67(1) of the Act, which forms a basis for an order to cease and desist to be issued against Respondents under Section 36b-72(a) of the Act, and for the imposition of a fine upon Respondents under Section 36b-72(b) of the Act.
d. Violation of Section 36b-67(6) of the Act by Respondents Poppin Kettle and Gregoris – Fraud in Connection with the Offer or Sale of a Business Opportunity
Paragraphs 1 through 33, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
The conduct of Respondents Poppin Kettle and Gregoris, as more fully described in paragraph 18, constitutes, in connection with the offer or sale of a business opportunity, directly or indirectly omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading. Such conduct constitutes a violation of Section 36b-67(6) of the Act, which forms a basis for an order to cease and desist to be issued against Respondents Poppin Kettle and Gregoris under Section 36b-72(a) of the Act, and the imposition of a fine upon Respondents Poppin Kettle and Gregoris under Section 36b-72(b) of the Act.
V. ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Poppin Kettle has committed at least one violation of Section 36b-67(1) of the Act and at least one violation of Section 36b-67(6) of the Act;
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Gregoris has committed at least one violation of Section 36b-67(1) of the Act and at least one violation of Section 36b-67(6) of the Act;
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Yofresh has committed at least one violation of Section 36b-67(1) of the Act;
WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist and the imposition of a fine upon Respondents is necessary or appropriate in the public interest or for the protection of purchaser-investors and consistent with the purposes fairly intended by the policies and provisions of the Act;
WHEREAS, notice is hereby given to each Respondent that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation upon each Respondent;
WHEREAS, the Commissioner ORDERS that POPPIN KETTLE FRANCHISING, INC. CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation: (1) offering and selling unregistered business opportunities; and (2) in connection with the offer or sale of any business opportunity, directly or indirectly employing any device, scheme or artifice to defraud, making any untrue statements of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person;
WHEREAS, the Commissioner ORDERS that CHRIS T. GREGORIS a/k/a CHRISTOS T. GREGORIS a/k/a CHRISTOPHER GREGORIS CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation: (1) offering and selling unregistered business opportunities; and (2) in connection with the offer or sale of any business opportunity, directly or indirectly employing any device, scheme or artifice to defraud, making any untrue statements of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person;
WHEREAS, the Commissioner ORDERS that YOFRESH YOGURTS FRANCHISING, INC. CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, offering and selling unregistered business opportunities;
THE COMMISSIONER FURTHER ORDERS THAT, pursuant Section 36b-72 of the Act, each Respondent will be afforded an opportunity for a hearing on the allegations set forth above if a written request for a hearing is received by the Department of Banking, Securities and Business Investments Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the General Statutes of Connecticut and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on July 24, 2014 at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the General Statutes of Connecticut. At such hearing, each Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
This Order to Cease and Desist shall remain in effect and become permanent against any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
The Commissioner may order that the maximum fine be imposed upon any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
Dated at Hartford, Connecticut,
this 12th day of June 2014.
Howard F. Pitkin
I hereby certify that on this 12th day of June 2014, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to: Poppin Kettle Franchising, Inc., 8 Faneuil Hall Marketplace, Third Floor, Boston, Massachusetts 02109, certified mail no. 7012 3050 0002 1692 6507; Chris T. Gregoris a/k/a Christos T. Gregoris a/k/a Christopher Gregoris at: 6 Acton Street, Watertown, Massachusetts 02472, certified mail no. 7012 3050 0002 1692 6514; and 8 Faneuil Hall Marketplace, Third Floor, Boston, Massachusetts 02109, certified mail no. 7012 3050 0002 1692 6521; and Yofresh Yogurts Franchising, Inc., 8 Faneuil Hall Marketplace, Third Floor, Boston, Massachusetts 02109, certified mail no. 7012 3050 0002 1692 6538.
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TAGS: Chris Gregoris, Christos T. Gregoris, YoFresh franchise, YoFresh Yogurt Café franchise, YoFresh franchise opportunity, YoFresh franchise complaints, Poppin’ Kettle franchise, Chris Gregoris franchise opportunity, Chris Gregoris franchise complaints, Ken Mason, Dennis Mason, franchise registration, illegal franchises, unhappy franchisee
June 25, 2014
Chris Gregoris, founder of the YoFresh Yogurt Café franchise, Poppin’ Kettle popcorn, and previous owner of the now-defunct Java’s Brewin’ franchise chain has received criticism from some former franchisees and prospective franchisees on UnhappyFranchisee.Com.
Some of the complaints were leveled at YoFresh sales agent Dennis Mason, who also goes by the name Ken Mason.
You can read some of the critical comments here:
UnhappyFranchisee.com has questioned Chris Gregoris about suspicions that the company has marketed (and even sold) franchises in registration states in violation of state franchise laws:
However, despite the criticism, multiple YoFresh Yogurt Café franchise owners have issued statements in support of both Chris Gregoris and the YoFresh franchise opportunity:
The latest two messages, received from owners David De Fede and Steve Karabon, are posted below.
Both claim that the franchisor was upfront about the risks of franchise ownership, and both were pleased with the support they received from the franchisor.
6/22/14 YoFresh franchise owner David De Fede wrote:
My name is David De Fede and I own Yofresh Yogurt Cafe of Venice Florida. It seems to me that all the people complaining probably should not have bought into this type of business.
Did any of them have business background?? Did they expect Chris to run the business for them and guarantee success?? That’s not how it works. My wife and I have made our store very successful by working long hours and contributing to the community.
Yofresh was there for us with all of the pertinent info that we needed to get started. Don’t forget there are no franchise fees and after you open it is your business to run the way you wish. NO FRANCHISE FEES FOLKS. I see other franchises close all the time because of the on going royalties.
I can say that Chris did everything he promised for us. Maybe from what I am reading is that his only downfall is associating himself with this Ken guy, which obviously has a troubled past.
David De Fede
6/25/14 YoFresh franchise owner Steve Karabon wrote:
My name is Steve Karabon, My wife and I own a Yofresh Yogurt Café franchise in Oak Creek, Wisconsin since July 2012.
Our experience with Chris, Ken and anyone else involved with Yofresh has been nothing less than honest, upfront and informative as to the risk,what it would take to be successful (with no guarantees), the cost involved, and the potential downside of starting your own business.
My wife and I discussed these factors and the risks that come with it and moved forward with this company and have been extremely pleased with our success.
There is never a guarantee that any business whether it be a franchise or an independent owner is going to prove profitable. With that being said, we stand behind Yofresh Yogurt and the entire team associated with the company.
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TAGS: YoFresh, YoFresh Yogurt Cafe, YoFresh franchise, YoFresh Yogurt Cafe franchise, Chris Gregoris, Steve Karabon, David De Fede, Yo Fresh, yogurt franchise, franchise opportunity, franchise complaints, unhappy franchisee
June 19, 2014
The YoFresh Yogurt Café franchise and founder Chris Gregoris have received criticism from some former franchisees on UnhappyFranchisee.Com
However, others have come forward to defend the franchise and the franchisor.
Former YoFresh Yogurt Café franchise owner and current Director of Operations Yasir Syed wrote to us in defense of the YoFresh Yogurt Café and Chris Gregoris.
Yasir Syed began working as YoFresh Yogurt Café’s Director of Operations in June, 2012. Before that he had been the part-owner of the Denville, NJ YoFresh franchise.
In response to ex-franchisee Leon Walker’s complaints, Syed claims that Gregoris is a “standup guy” who is honest about the risks of starting a YoFresh franchise.
He claims Gregoris “worked with us on payments on the franchise fee, let us borrow money for advertising, and offered a lot of support.”
Syed cautions that all yogurt franchises have failures, and franchisees won’t succeed if they don’t run the business correctly, advertise, manage expenses and payroll, and take a hands-on approach.
YoFresh Yogurt Café Director of Operations Yasir Syed wrote:
My name is Yasir Syed,
I am the Director of Operations and have been since June of 2012. I started with Yofresh by opening a store in Denville, NJ with my partners. I then sold my share in the business and started working with Chris full time. My partners manage the store currently.
Since I met Chris in 2012 he has been a standup guy. I’m not just saying that because I work for him, but because he was honest when we bought the franchise, told me it could be a huge success, or failure. Owning any business is not easy, and having business before, I knew it was a risk. Chris did not lie to me about anything (I never dealt with Ken, so I cant speak in regards to his sales) But Chris worked with us on payments on the franchise fee, let us borrow money for advertising, and offered a lot of support.
As far as Leon saying, there is a scam going on, its ridiculous. Everyone who signs a franchise fee is provided support, training, and build out help.
Leon opened a store and started his employees at outrageous salaries. I advised him paying regular employees $10.00 per hour and management 14 or 15 per hour was not a sustainable model.
His sales were excellent the week I was there for training. After that whenever I went to visit the store he was never there, he always had kids running the store. I have nothing personal towards Leon, we got a long great, but in my opinion he never ran the business correctly, never advertised, managed expenses and payroll, and was very hands off.
When ever you get into a franchise, you are given support, ultimately its up to the person to run the store correctly. Many franchises close down, Menchies, Lets Yo, Yogurtland, and Red Mangos. Its the sad nature of the business.
If Leon wants to continue his attacks, I can’t stop him, but I wont engage in false and malicious attacks. Leon should use his time more productively then being on this site 24 7.
Director of Operations
8 Faneuil Hall Marketplace
Boston, MA. 02109
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TAGS: YoFresh, YoFresh Yogurt Cafe, YoFresh franchise, YoFresh Yogurt Cafe franchise, Chris Gregoris, Yasir Syed, Yo Fresh, yogurt franchise, franchise opportunity, franchise complaints, unhappy franchisee
June 18, 2014
YoFresh Yogurt Café franchise owner Don Wroten has good things to say about the YoFresh Yogurt Café support team and franchisor Chris Gregoris in particular.
Wroten and his wife opened the YoFresh Yogurt Café franchise in Hatfield, PA on November 9, 2013.
Wroten wrote to UnhappyFranchisee.com to share his support and positive experience as a new YoFresh Yogurt Café franchise owner.
Some of the major benefits Wroten received as a YoFresh franchise owner was a “top notch property search company,” extensive and intensive on-site training, marketing training and support, and ongoing input and guidance.
As for franchisor Chris Gregoris, franchisee Wroten says that he has been accessible, responsive and a man of his word, even honoring an error in his contract that resulted in a waiver of training fees.
Wroten is obviously an experienced businessman, as the statement he provided includes some good advice for prospective franchisees to be skeptical of what franchise salesmen tell you.
YoFresh Yogurt Café franchise owner Don Wroten wrote:
My wife and I are owner operators of a Yo Fresh Yogurt Cafe in Hatfield Pa.
I am not sure what happened in other cases however, our experience has been quite different but with some similarities. We did meet the infamous Ken who did exaggerate about the machine cleaning as well as the ease of starting up the business. However, he did what sales guys do to get sales and make things sound better than they actually are. But when you deal with sales people, that is something you should expect and be prepared for. No sales person worth their salt tells of the down side of what you are getting into known or unknown. If you have made normal purchases of cars or whatever, you know not to take what the sales guy tells you for absolute truth. You have to read between the lines and do your homework.
We too were told how easy it was to clean the machines but we spoke to other owners, who by the way, were more than willing to speak with us candidly so we were well aware of what it would take to do that. So we put the machines on a daily schedule and it has not been a huge issue once we trained our personnel to do it. We found it to be not that difficult but very time consuming.
We quickly moved past Ken and were dealing more directly with Chris. We meet with him and Ken and went over the franchise contract in detail including cost. The franchise fee we paid was $29,500. We understood exactly what we were paying for and what we could expect in terms of support from the Yo Fresh team.
They provided us with a top notch property search company who worked with us daily providing leads. Some of the leads were old and outdated, which was a little frustrating but that was due to real-estate databases not being kept up to date. However, they provided us with solid suggested demographics for any area where we were considering opening a store. The demographic information was invaluable and definitely aided in our site selection. The real-estate firm stuck with us and provided insight as we were going through the leasing process explaining terms we were not familiar with as well as standard pricing per square foot and about what we should pay or offer for certain spaces. We obtained our own attorney to assure everything was in alignment between the franchisor and the landlord. We had the real-estate company provided by Yo Fresh at no additional charge, with us until the final lease was agreed upon. And yes, our attorney was expensive but well worth it.
Yo Fresh, Chris, did provide us with a list of attorney’s, lenders and leasing companies as resources if we did not have or chose to get our own, however, we were not obligated to use them. We opted to find and use our own resources, which was not a problem to Yo Fresh.
We did have a project overrun which probably could have been avoided if we went on the cheap, however, we wanted a quality store that was inviting as well as being a fun place to be for our community. So we spent more than some other stores would spend and we built our store from scratch. It was new construction, which we knew going in. In all honesty, we thought we could get it done cheaper than we did but it would not fit our idea of the type of place we wanted to represent us so we bit the bullet.
Yo Fresh had nothing to do with that. We opened a 2,000 sq. ft store (which Chris advised us was to large and costly) with a large party room with high tech features with large HDTV, Over head projector, 22×13 ft screen and a dynamic sound system throughout the store.
We hold business meetings, Scout meetings, Bible studies and kids birthday parties in the room. We also opted for a large preparation area to name some of the features.
A week prior to our opening a Yo Fresh trainer came out and provided us and our staff excellent training on a daily basis. Stayed with us to make sure we understood and could execute on every aspect of the business. We were coached on what and how to order product and in which quantities. We had no idea since we never did this before. The training was very detailed. We have not had to have any additional training. We were left with training materials, forms, references as well as other resources which we still use as well as use to train new employees. And by the way, there was an error in the contract on the price of the training, in our favor and Chris honored it without hesitation. We got the training for free!
Chris has been out to our store multiple times. Monitoring our employees as well as our operations. Providing input on things we could do better and talking in depth about marketing ideas and marketing niches.
We took some of Chris’ advice but we developed a solid marketing plan while we were waiting for construction completion and we began to execute on it prior to the store opening. We built anticipation up in the community by contacting different market segments like schools, churches, Sports Leagues, Police and Fires departments, Pre-schools and Day Care Centers. We gave out flyers and discount cards and talked up the business so when the doors opened we had customers right away. We didn’t seven have a Grand Opening.
None of this was easy and it was very time consuming but we knew that all we would get out of this venture was what we put into it. And that goes for any business venture. You have to work it or it will work you.
We opened in November 2013, just in time for 18 snow storms and the polar vortex which provided us with single digit temperatures for days at a time. We couldn’t even open the doors sometimes 2-3 days a week due to the snow and ice. However, we had a great location, the family size and income were above what Yo Fresh had suggested and we survived the brutal winter ahead of figures provided to us by an independent source, to our surprise.
When the weather broke our sales more than doubled and are on a steady growth rate. We thank God for that.
Everything did not go perfectly during the process and there was some exaggeration in certain areas but no more than I would expect in for example, purchasing a house and you move in and find things that you did not see during inspection or buying a car and having some repair issues you did not expect. This is not to discount or disprove the experiences of other franchisee’s who may very well have had some issues. However, that is not our experience and we speak with, on a regular basis, other owners and exchange ideas as well as keep each other abreast of what is working and what is not, hot products, marketing tips, staffing requirement and the such.
None of them have expressed the sentiments of Leon to us. in our experience, there is a great deal of collaboration with other successful Yo Fresh Cafe locations. We would not have made it without some of their good advice and coaching along the way. And I have not found, so far, that me being African American has been a hindrance. My wife and I are a mixed couple in a predominantly white area and we took on the challenge of going out and meeting the community we wanted to serve and they have responded to us.
I am very sorry things did not work out as well for others and we will keep them in our prayers, we just did not have the same experience. My advice to anyone doing any type of business deal is to do your homework, know what you are getting into, know what is going to be required of you, get your own resources, do not rely on others to make you successful and know that you will have to bust it to make it work.
I have found that everything is not for everybody. I hope things work out for those who have lost their finances and are in a bad way. We will keep you all in our prayers and if you have any questions, feel free to contact us at Yo Fresh Hatfield PA. If you still have your business and want some ideas and or suggestions, we will be more than happy to share what we know with you as others have so graciously shared with us.
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TAGS: YoFresh, YoFresh Yogurt Cafe, YoFresh franchise, YoFresh Yogurt Cafe franchise, Chris Gregoris, Don Wroten, YoFresh Hatfield, yogurt franchise, franchise opportunity, franchise complaints, unhappy franchisee
June 13, 2014
Is 4Cats Arts Studio a great franchise opportunity? Is it possible to get a strong return on a $100,000+ investment in a 4Cats Arts Studio?
4Cats Arts Studio franchise looks like a fun and fulfilling business to run.
Currently, the 4Cats website lists 71 locations in Canada, 4 in the U.S., and 1 in Australia.
4Cats Arts Studio franchisees run art studios for children ages 2-15 . According to 4Cats Arts Studio marketing, kids get to work in a variety of mediums, taking inspiration from the works of famous artists.
According to the 4Cats Studio website, “we are incredibly organized and because of our size, have great purchasing power which means the best prices [for franchisees] possible.”
Included in the cost of a franchise is a 7 year franchise licensing agreement (with option to renew after seven years) ans “start-up and ongoing training and support from Head Office personnel who live and breathe 4Cats!”
According to the 4Cats website:
“4Cats training program is designed to be user friendly, extensive and ongoing. We prepare you to successfully and confidently operate your studio.
“You will be trained on all aspects of the studio curriculum, studio set up, art history training, curator training and the big picture of managing and marketing the entire business. The program is a combination of extensive online videos, skype video conference demonstrations, slide shows and pdf’s. Training includes the added benefit of attending hands on studio training in a certified training studio.
“We are commited to making in-store operations as efficient as possible for franchisees…
“Our incredible training program prepares you for running your location. Successful studios are located in both large cities and small communities.
“Simple online step by step process that guides you through the opening of the business and training program.
Extensive support developing a community & marketing plan.
Extensive location selection support &approval
Extensive and ongoing training & support.
4Cats Arts Studio Franchise Investment: Approximately $71,900 – $103,000
The initial and ongoing investment required for a 4Cats Arts Studio franchise is not insignificant.
According to the 4Cats Arts Studio Franchise Disclosure Document 2011 (FDD), the initial franchise fee is $40,000.
Ongoing costs include a continuing franchise fee of 10% of gross sales (paid monthly), an advertising and promotional fund of 3% of gross sales and a software fee of $35 – $170 per month.
Additional ongoing costs include purchase of required materials from 4Cats corporate ($1000 – $3500 per month), 1% of gross sales on local marketing, and $1000 for renovation/redecorating every 6-8 months.
[Left, 4Cats logo. Source: 4Cats.com website]
According to the FDD, 4Cats franchise owners have to pay a “proportionate share” of the franchisor’s costs for the Annual Meeting.
The franchisor derives income franchisee required purchases and can use vendor rebates on franchisee purchases to “benefit the system.”
Some franchisees are maintaining that the high cost structure makes it virtually impossible to achieve profitability.
Read and comment on that issue here: 4CATS ARTS STUDIO Franchise Complaints
Also see: 4Cats Arts Studio Franchise Disclosure Document 2011 (California)
ALSO READ: FRANCHISE DISCUSSIONS by Company
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IS THE 4CATS FRANCHISE A GREAT OPPORTUNITY?
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TAGS: 4Cats franchise, 4Cats Arts Studio franchise, 4Cats Arts Studio franchise opportunity, 4Cats Arts Studio franchise complaints, children’s franchise, art franchise opportunity, franchise complaints, Joey Simon, Darryl Simon, unhappy franchisee
June 12, 2014
4Cats Arts Studio franchise complaints include an unprofitable business model, unfair termination of franchise owners and “predatory” franchise practices by the franchisor.
(UnhappyFranchisee.Com) 4Cats Arts Studio franchisees run art studios for children ages 2-15 and adults.
At 4Cats Arts Studios, kids get to work in a variety of mediums, taking inspiration from the works of famous artists.
4Cats Arts Studio was founded in British Columbia and the franchise has grown to over 70 locations throughout Canada, USA and most recently, Australia.
According to a report on CBC News, eleven 4Cats Arts Studio franchise owners in British Columbia, California and South Carolina have launched a legal action against the franchisor, claiming that “the franchise agreement makes it impossible to make a profit.”
Are you familiar with the 4Cats Arts Studio franchise opportunity? Is it a good franchise opportunity or a predatory scheme as some franchisees contend? Share a comment below.
CBC reports that
“Put simply, 4Cats is a predatory system designed and operated by 4CE to extract all of the available profits from the operation of the system in favour of the franchisor and leave nothing for the franchisee,” the parties claimed in an arbitration notice.
The claimants are collectively demanding more than $4 million in compensation.
“There have been some misrepresentations for profitability — there’s been no profit whatsoever. No return on investment,” [franchisee] Galeano said.
[Left: 4Cats Arts Studio logo. Source: 4Cats.Com]
The franchisor allegedly terminated her franchise agreement, and left her unable to teach art in her market due to a non-compete clause in her agreement.
According to lawyer Jennifer Pocock, of Sotos law firm, who is representing the franchisees:
“In essence, the claim is one based on no one is able to derive any profits from this franchise system,” said Pocock. “This claim revolves around sharing profits and the franchisees claim that the franchiser hasn’t shared the profits from the system.”
The group is seeking damages in the range of $4 million.
Galeano said she invested around $100,000 since she opened her doors and has not gotten any return investment.
The 4Cats Arts Studios franchise was founded by Joey and Darryl Simon and is based in Victoria, British Columbia, Canada.
Are you familiar with the 4Cats Arts Studios franchise?
Do you think that it’s a great franchise opportunity run by franchisors dedicated to their franchisees’ success?
Or do you agree with the allegations in the arbitration notice that it’s a predatory system designed to generate profits for the franchisor at the expense of the franchisees?
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TAGS: 4Cats Arts Studio franchise, 4Cats Arts Studio franchise opportunity, 4Cats Arts Studio franchise complaints, 4Cats Arts Studio lawsuit, franchise, franchise opportunity, franchise complaints, unhappy franchisee
June 9, 2014
The UBuildIt franchise was rated the 4th worst franchise opportunity in the $0 – $150, 001 investment range by Forbes magazine.
We specifically invited discussion of the UBuildIt franchise on our post UBuildIT Rated a Worst Franchise by Forbes. Do You Agree?
Kendell McGowen, UBuildIt Director of Franchise Development, responded to our request with the following statement:
Mr. McGowen wrote:
Obviously we do not agree with the ranking placement UBuildIt has been assigned. No doubt, the time period associated with rankings was a tougher time for the economy in general, and most definitely affected the overall construction industry.
And yes, UBuildIt did lose some momentum during the timeframe associated with the rankings suggested, much like the majority of all business, franchising or not.
However, what we experienced during the downturn was a thriving environment with the UBuildIt construction consulting model. Our franchisees that were fully dedicated to the UBuildIt model and less on the General Contractor/traditional builder model flourished and continue to do so. Our current network of franchise owners include both those only participating in UBuildIt construction consulting along with those that use the UBuildIt model in combination with their General Contractor business.
The construction industry is a $664 Billion industry, not many can state more than that. And, it is on track to top $1 Trillion in 2015! Our marketing ballpark is HUGE! There is ALWAYS the demand for new home building, foreclosed homes are being rehabilitated, current homeowners are retrofitting their homes to accomodate their evolving needs (remodeling is an avenue pursued by many when they are somewhat hesitant to enter new construction), and the future market potential is immense.
To help you better understand UBuildIt, the home owner takes the role of the project manager. They have complete control of the project, new construction or remodel. They set their budget and make every decision, all while controlling the bottom line to maintain the budget set. Throughout the process, planning and construction, they have the UBuildIt consultant to guide them through the entire process, all while sharing both supply and subcontractor contacts (at reduced rates), along with the knowledge of fair cost. The UBuildIt consultant is an advocate to the home owner/builder. End story, home owner/builder completes the project with instant equity of 10 to 30% of the appraised value of the completed project. Fantastic savings for the home owner/builder!
The two most compelling incentives for the UBuildIt franchisee vs. the General Contractor/traditional builder is 1) in the consulting role the franchisee spends less time on the project allowing for many more projects to be completed 2) the liability of the job site, subcontractors, and home warranty is transferred to the home owner/builder.
The UBuildIt home office provides the franchisee with: one week of intense training prior to opening, bi-weekly updates sent via our NewsFlash emails (supporting all facets of the business), continual support of new and improved marketing materials which includes a plethora of marketing creatives for UBuildIt franchisees, annual training at national convention, regular sales training videos to help perfect the art of selling UBuildIt, and much more.
UBuildIt Director of Franchise Development
We thank Mr. McGowen for his response, and invite other franchisors being discussed on our site to provide their viewpoints, which we will dutifully publish.
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TAGS: UBuildIt , UBuildIt franchise, UBuildIt franchise opportunity, UBuildIt franchise complaints, franchise, Forbes wordt franchises, worst franchises, Kendell McGowen, unhappy franchisee