July 2, 2012
Shazer Fernando Limas was a killer franchise salesman for Goldeneye Holdings, Inc., a regional master franchisee the Stratus Building Solutions commercial cleaning chain.
Fernando’s aggressive sales tactics resulted in praise and sales awards from the parent company, and made him the “golden boy” of Stratus in Southern California.
Yet within a couple of short years, Fernando Limas would leave his former boss’s Stratus franchise mired in controversy, lawsuits and scandal.
And Shazer Fernando Limas himself would be facing a possible death penalty, charged with the brutal murder of his girlfriend and their two young children.
Shazer Fernando Limas: Stratus’ killer franchise salesman
Peter Vavan’s Goldeneye Holding’s, Inc. entered a master franchise agreement in April, 2009, that granted him the right to sell and service Stratus Building Solutions unit franchises in Orange County, CA.
According to the company’s Franchise Disclosure Document, Vavan hired Shazer Fernando Limas as an independent contractor sales agent to assist him in the sale and marketing of franchises.
According to “Reasoned Source,” a Stratus insider and commenter on UnhappyFranchisee.com:
In the Beginning, Fernando [Limas] and [Stratus master franchisee] Pete Vavan were the “Golden Children” of Stratus Corp. They scored tons of franchise cash, they won awards, they had their respective pictures taken with [Stratus Franchising, LLC President Pete Frese and CEO Dennis Jarrett], they were held in the highest esteem and used as the “how to build your business, the STRATUS way”. After at least two month’s of bringing in 100k plus in franchise cash, Pete/DJ were so proud of them that they were asked “how did you do such a great job of bringing in the cash?”
Well, even after they found out, they were still happy, they were still promoting and pushing EVERYONE in the System as to HOW to SELL a Franchise! They were talked about in the Stratus Newsletter, they were on conference calls, they were brought up in front of Everyone at the Los Angeles area Regional Meeting…
According to a lawsuit filed on behalf of 52 Stratus unit franchise owners (see STRATUS BUILDING SOLUTIONS: Franchisees v.Goldeneye Holdings Lawsuit), Goldeneye Holdings, Inc. would advertise its janitorial franchise opportunity in Spanish-language publications. Once individuals inquired, Fernando would allegedly conduct the hard-sell presentations in Spanish, promising guaranteed cleaning accounts for their investments of thousands of dollars. Fernando had the Spanish-speaking opportunity seekers sign onerous legal documents that they could not read (as they were in English), took their money, and never delivered the promised cleaning accounts.
Later, many of Fernando’s angry victims would picket the Goldeneye offices in Orange County, and grant interviews that would be broadcast on Spanish language channel Telemundo. 52 victims would join together in a lawsuit alleging fraud against Goldeneye Holdings, Inc.
By that time, Shazer Fernando Limas had fled for greener pastures, having accepted a better offer from nearby master franchisee Stratus Building Solutions of San Diego. Peter Vavan and Goldeneye Holdings would later sue the Stratus franchisor for allowing, and perhaps engineering, the poaching of their star salesman by the San Diego Stratus franchisee. (See STRATUS BUILDING SOLUTIONS: Goldeneye Holdings v. Stratus Franchising Lawsuit)
Shazer Fernando Limas leaves more devastation in his wake
Up until Spring of 2012, Fernando’s alleged actions had prompted two lawsuits, had resulted in dozens of individuals and families losing their life savings, and had caused a riff between his former boss’s company, its franchisor and a neighboring franchisee. But the devastation to that point was nothing compared to what was to come.
During his time at Goldeneye Holdings, Inc., Limas began dating an attractive Latina named Arlet Hernandez Contreras whose family had moved to the U.S. from Mexico City ten years ago. The couple moved in together and had a tumultuous relationship. During that time, Arlet gave birth to two baby boys, Fernando and Emanuel.
According to a story in the OC Register, prosecutors believe that Shazer Fernando Limas murdered Arlet Contreras and their two sons by stabbing them in their apartment on April 14, 2012.
On April 15, Limas visited a hospital to have surgery on a cut on his hand.
In the days that followed Limas visited a Home Depot and bought a tarp.
10 days later, on April 25, workers in La Puente found a female body in the gutter, covered by a tarp, in an area known for trash dumping. The body would later be identified as Arlet Contreras.
Police began looking for Fernando Lima when cleaning crews discovered blood beneath the carpet and on the walls of Limas and Contreras’ recently emptied apartment.
Limas was arrested May 3 near the San Clemente Border Patrol checkpoint after leading police on a high-speed chase.
Police have not recovered the murder weapon nor the bodies of the two children. Fernando was 1 year old, and Emanuel was just 3 months old.
Prosecutors have charged Limas with three counts of special circumstances murder, which they say make him eligible for the death penalty. Limas is currently being held without bail.
Stratus salesman Limas had a tarnished past
According to the OC Register, Fernando Limas had a history of bad relationships, infidelity and domestic violence:
Court records from Los Angeles and Orange counties show Limas has been married at least twice and was accused of abuse by one of his former wives. His most recent marriage ended in July 2011 – when his son with girlfriend Contreras was 7 months old.
Another wife claimed in a 2007 court filing that Limas grabbed her and wrestled her to the door when she visited one morning as their marriage disintegrated. Moments later, she wrote in her request for a restraining order, “a girl came out of the bedroom who claimed to be his fiancée of two years.”
The wife had been married to Limas for nearly four years, court records show. She accused him in court filings of “spending his money on other women, gambling, and drugs.” Once, she wrote, he pointed an air gun at her and pulled the trigger, but it was empty.
Aggressiveness. Dishonesty. Narcissism. Lack of empathy. These qualities all contributed to Shazer Fernando Limas’ short stint as the killer franchise salesman of what was ultimately a franchise scam.
These qualities, it appears, ultimately led him to be charged with the murder of a young mother and her two beautiful children.
Our thoughts and prayers go out to the victims and their families.
Related Reading: STRATUS BUILDING SOLUTIONS Franchise Complaints
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
June 1, 2012
UnhappyFranchisee.com has issued a franchise threat advisory for Stratus Building Solutions unit-level and master franchise opportunities.
Franchise Threat Advisories are issued by UnhappyFranchisee.com when a given franchise opportunity is still being promoted in advertising and editorial media, in franchise rankings, by trade groups, PR firms, sales organizations and franchise brokers as a viable and safe franchise investment, despite strong and disturbing evidence to the contrary.
Overview of the Stratus Building Solutions franchise: According to Entrepreneur magazine, Stratus has 5,148 master and unit franchises in the U.S.. Stratus master franchisees sell unit franchises and generate commercial cleaning contracts in a designated territory; unit franchisees pay for a “guaranteed” volume of commercial cleaning contracts, and perform the janitorial duties.
Beware of the Stratus Building Solutions franchise opportunity:
Widespread allegations of fraud by Stratus unit franchisees: A class action lawsuit has been filed against Stratus Franchising on behalf of more than 100 unit franchisees and another lawsuit of 52 Hispanic franchisees has been filed against a Stratus master franchisee alleging that Stratus franchises are sold using deceptive and fraudulent methods, and that unit franchisees never receive the contracts they pay for. In a Fox News report, the Stratus franchise opportunity is called a “pyramid scheme.”
Widespread allegations of fraud by Stratus master franchisees: Master franchisees are claiming that they were defrauded into buying the Stratus franchise through illegal and fraudulent earnings claims, inaccurate and incomplete disclosure documents, and were not provided promised services and support. At least one master franchise is suing Stratus Franchising and Stratus executives for fraud, while others are refusing to pay royalties and are de-branding from the Stratus system.
Internal instability and franchisee revolt: Discussions among franchisees, attorneys and other parties on UnhappyFranchisee.com paint a picture of internal strife and instability throughout the Stratus system. The largest master franchisees are reportedly going independent and forcing their unit franchisees to cease operating under the Stratus brand. Stratus executives Dennis Jarrett and Pete Frese are battling lawsuits and open hostility from their franchisees. Increasing press and Internet coverage of the allegations and lawsuits threaten irreparable damage to the brand. Some think that Stratus could be on the verge of implosion.
A questionable and much-maligned business model: Stratus Building Solutions shares a master/unit franchisee janitorial franchise business model with competitors Coverall, Jan-Pro, Jani-King and others that has been widely criticized and litigated. Recently, a Massachusetts federal judge ruled that janitorial franchisees had so little control over their destinies that they are technically employees, not franchise owners.
A franchise industry smokescreen hides and protects bad franchises and bad franchisors
Despite strong evidence that Stratus Building Solutions is a troubled and high-risk franchise, Stratus Franchising continues to promote its franchise with to an unsuspecting public with the the help of a smokescreen of awards by for-profit advertising providers. Stratus boasts that it has been awarded the 2012 Entrepreneur Franchise 500 ranking of #12 overall franchise, #1 Commercial Cleaning franchise, #1 Fastest Growing franchise, #2 Low Cost franchise, #2 Home-based franchise, #11 Global franchise; Inc. 500|5000 Fastest Growing Companies 2010 & 2011, Franchise Times Fast 55, Black Enterprise Top 40 Best Franchises for African Americans, Poder 360′s Top 26 Franchises for Hispanics and the 50 Top Franchises for Minorities by the World Franchising Network.
Note to prospective franchisees: You are urged to use extreme caution and seek the advice of professional advisors prior to signing any agreement with Stratus Building Solutions or similar janitorial franchise. Visit UnhappyFranchisee.com for more information.
Note to Stratus franchisees: If you have invested in a Stratus Building Solutions franchise, please share your experiences at UnhappyFranchisee.com, or contact us at UnhappyFranchisee[at]gmail.com. Help is available.
Note to industry professionals: Franchise writers, editors, franchise list compilers, brokers, advisors, lenders and bestowers of industry awards are asked to refrain from promoting the Stratus Building Solutions franchise, and are asked to help spread this warning regarding Stratus Building Solutions.
For more information, see the full threat advisory at UnhappyFranchisee.com, or email us at UnhappyFranchisee[at]gmail.com.
Read more about Stratus Building Solutions:
ARE YOU FAMILIAR WITH THE STRATUS BUILDING SOLUTIONS FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
May 30, 2012
The Orange County, CA master franchisee of Stratus Building Solutions, Goldeneye Holdings, Inc., is accused of perpetrating a franchise scam to defraud non-English-speaking immigrants out of their hard-earned savings (See STRATUS BUILDING SOLUTIONS: Goldeneye Holdings Franchise Lawsuit).
However, in this lawsuit, Petar Vavan’s Goldeneye Holdings, Inc. claims that IT is the victim of franchise fraud at the hands of Stratus Building Solutions and Stratus Executives.
Are you familiar with Goldeneye Holdings or the Stratus franchise opportunity? Please share a comment below.
Case Id: 30-2011-00531707-CU-FR-CJC
Case Title: GOLDENEYE HOLDINGS, INC. VS. STRATUS FRANCHISING, LLC
Case Type: FRAUD
Category: CIVIL – UNLIMITED
Original Filing Date: 12/21/2011
1st Amended Complaint (posted below) Electronically Filed 2/27/12
Superior Court of California,
County of Orange, Central Justice Center
Goldeneye Holdings, Inc. d/b/a Stratus Building Solutions of Orange County, a California corporation,
Stratus Franchising, LLC a/k/a Stratus Building Solutions, a Missouri limited liability company; Dennis Jarrett, an individual; Pete Frese, an individual; David Farrell, an individual; Bill Blair, an individual; Marvin Ashton, an individual; Carmen Garcia, an individual; and DOES 1-20 inclusive,
First Amended Complaint for: (1) Fraud; (2) Negligent misrepresentation and omission; (3) Violation of California Franchise Investment Act; (4) Specific performance; (5) Declaratory Relief; (6) Injunctive relief; (7) Breach of contract and breach of the implied covenant of good faith and fair dealing; (8) Intentional interference with contractual relations (employment relationship); (9) Intentional interference with contractual relations (client relationships); (10) Interference with prospective economic advantage (employment relationship); (11) Interference with prospective economic advantage (client relationships); (12) Unfair business practices (bus. & prof. code section 17200); and (13) Rescission).
READ THE ENTIRE COMPLAINT (.pdf): GOLDENEYE HOLDINGS, INC. VS. STRATUS FRANCHISING, LLC
Overview of the Allegations
In this suit, the Goldeneye master franchisee alleges that Stratus Franchising, with the knowledge and control of its CEO Dennis Jarrett, President Pete Frese, Executive VP David Farrell, VP Franchising Bill Blair, Director of Master Development Bill Blair, Director of Master Development Marvin Ashton, and Director of Master Development Carmen Garcia participated in wrongful, unlawful and fraudulent conduct including “the deceptive and fraudulent manner of sale, breaches of contractual obligations, interference with Plaintiff’s employee and client business relationships, and unlawful and unfair business practices.
Fraudulent Earnings Claims
One of the major contentions of the Goldeneye lawsuit is that Stratus Franchising execs provided illegal and grossly overstated earnings claims based on fraudulent data. According to the complaint, Stratus execs told the Goldeneye franchise prospects that based on Stratus financial history they “projected new business generation of up to $15,588 a month by each salesperson Plaintiff would train and employ.”
In one meeting, Plaintiff was allegedly provided financial calculations “that showed anticipated new monthly billings of $9100. Also, Defendant Frese informed a representative of Plaintiff that Plaintiff’s Orange County territory was a $30 million territory on two occasions prior to Plaintiff paying its initial franchise fee…”
In an email, CEO Dennis Jarrett allegedly stated the probable amount of new monthly billings for each Regional Director in Orange County would be $10,000.
Once Goldeneye had signed up as a Stratus master franchisee, the suit alleges, they learned that “the best-performing master franchisee was performing at less than half of the projected financial metrics the Fraud Defendants had provided to Plaintiff.”
Interference with an Employee Relationship
Other major contentions of the Goldeneye master franchise lawsuit against Stratus Franchising and its execs include allegations that Stratus interfered with both its employee and client (unit franchisee) relationships.
Goldeneye Holdings claims that Stratus Franchising, through its “Anti-Recruitment Provisions” of its franchise agreement, is contractually obligated to take action if another master franchisee hires away employees from another master franchisee. Goldeneye alleges that “Defendants Stratus Franchising, Jarrett, Frese, Farrell, and Ashton… participated in, approved of, and knew of and did not stop the solicitation, recruitment and hiring of a productive employee of Plaintiff who was then serving as Plaintiff’s office manager and sales agent…”
Interference with Unit Franchisee Relationships
Goldeneye alleges that “contrary to providing strong support and resources,” Stratus “interfered with Plaintiff’s customers (unit franchisees working cleaning and service jobs in Orange County) in a detrimental manner.
Perhaps in retaliation for the Goldeneye complaints about their stolen office manager, the master franchisee contends the franchisor launched a “nontransparent and retaliatory ‘audit’ of such customers [Goldeneye’s unit franchisees] which asked questions, made suggestions, provided potential-litigation information, and opened discussions with the intention of damaging Plaintiff’s realtionship with such customers.”
Why Would Stratus Undermine Its Own Master Franchisee?
Why would Stratus undermine its own master franchisee? One commenter close to the situation believes Stratus Franchising conspired to kill two birds with one stone: to enrich a favored and cooperative master franchisee, and simultaneously silence a critic & whistleblower (Goldeneye Holdings). He/she states:
Stratus wanted to sell the San Diego territory to another master they had a business partnership with. Staff from Goldeneye were approached and hired away in violation of the franchise agreement. When Stratus was questioned about their involvement in this process, Jarrett and Frese instructed Carmen Garcia (Stratus employee based in southern California – web currently shows her as Director of Master Development) to start an ‘audit’ on Goldeneye’s franchisees.
Carmen Garcia has access to all franchisee records for masters and contacted the Goldeneye franchisees directing them to a group meeting by an attorney. Supposedly if they signed a document they would receive large sums of money from a lawsuit settlement.
The intent was to put Goldeneye out of business and stop it from questioning Stratus deceptive business practices and the involvement in the hiring of their staff.
Is Stratus Master Franchisee Goldeneye Holdings a Victim, Predator or Both?
Stratus master franchisee Petar Vavan and his Goldeneye Holdings contend that they are the victims of a deceptive franchise scheme perpetrated by Stratus Franchising LLC and its executives.
More than 50 unit-level franchisees accuse Petar Vavan and Goldeneye of running their own scam targeting Spanish-speaking immigrants, and preying on their desire to achieve the American Dream.
What do you think? Share a comment below.
May 29, 2012
Should Entrepreneur De-List the Stratus Building Solutions Franchise Opportunity From Its Franchise 500®?
Should Entrepreneur discontinue advertising of the Stratus Building Solutions franchise?
Read UnhappyFranchisee.com’s letter (UPDATED) to Entrepreneur Editor-in-Chief Amy C. Cosper, and then share your opinion below!
Amy C. Cosper
2445 McCabe Way, Ste 400
Irvine, CA 92614
May 30, 2012
Dear Ms. Cosper:
One of Entrepreneur’s most highly ranked and highly touted franchises is in turmoil, and is facing many serious allegations of fraud and deception.
Stratus Building Solutions, ranked #12 in Entrepreneur’s Franchise 500®, is being accused by both its unit level franchisees and it master franchisees of having engaged in widespread fraud and deception, and having orchestrating what was called on FOX News as a “pyramid scheme.” Yet despite the fact that more than 100 Stratus franchisees are currently suing this franchisor, and a significant number of master franchisees have initiated a royalty strike and have begun to de-brand their operations, Stratus continues to promote its franchise using the claim that it enjoys a #12 ranking and “four Top 10 spots total in Entrepreneur magazine’s 2012 Franchise 500®”
UnhappyFranchisee.com believes that Entrepreneur’s high rankings and praise for a franchise that is clearly in crisis and of dubious character not only calls into question the legitimacy of the Franchise 500®, but endangers Entrepreneur magazine’s general credibility and reputation. We believe that once you look into this current situation and realize that your inclusion of this program in your top franchises list is putting your readers and their families at risk, you will de-list and cease advertising for Stratus Building Solutions, as you did with iSold It in 2007.
We have been here before: iSold It in 2007
UnhappyFranchisee.com has alerted Entrepreneur before, and Entrepreneur took swift action.
Back in 2006, Entrepreneur magazine advertised, hyped and named the iSold It eBay auction store franchise to its “Hot 100” companies:
#17 iSold It LLC
It’s no secret–eBay has become tremendously popular, and strategically positioned right alongside the world-famous online auction site is eBay drop-off store iSold It LLC. Elise Wetzel and her husband, Rick, founded the Pasadena, California, business in December 2003 and started offering franchises just a few months later. They have already sold more than 800 units and expect 2006 gross sales to exceed $100 million. The numbers speak volumes…
Entrepreneur helped fuel the hype and generate leads for the house-of-cards that was iSold It, even stating that the flawed and unproven business concept promised “limitless possibilities”:
The company continues to grow strong with 3,000 franchise applications flooding in every month and recent international expansion to Australia, Canada, Ireland and the United Kingdom. The future promises limitless opportunities…
In 2007, Entrepreneur continued to award ebay auction store franchise iSold It high praise, widespread positive exposure, the #1 Top New Franchise designation and a #110 ranking in the Franchise 500®.
UnhappyFranchisee.com (we were called FranchisePick.com back then) published an internal company memo in which iSold It CEO Ken Sully admitted that nearly all iSold It stores were losing money, stores were closing in droves, and many franchisees had “lost sizable investments, including homes and retirement savings.” Sully added that the company was on the verge of insolvency… yet the company was still recruiting franchisees and holding Discovery Days.
We publicly alerted Entrepreneur magazine, as we are alerting you now, and shortly thereafter iSold It was quietly removed from the Franchise 500® and Top New Franchises listings.
The iSold It franchise quickly disappeared, and with it the investments and savings of the 800 individuals (many of them Entrepreneur readers, no doubt) who were deceived into believing “The future promises limitless opportunities…” with iSold It.
At the time, UnhappyFranchisee.com praised Entrepreneur for its quick reaction and de-listing of a troubled and failing franchise. We hope that we can do the same when Stratus Building Solutions is delisted and dropped as an advertiser from Entrepreneur and Entrepreneur.com.
Why Entrepreneur should de-list and cease promotion of the Stratus franchise
100+ unit franchisees are suing the Stratus franchisor
Dozens upon dozens of Stratus franchisees allege the same thing: they never receive the guaranteed cleaning accounts they paid for. There are countless sad stories of hardworking entrepreneurs who have lost and are losing their investments through Stratus. Attorney Jon Fortman calls the Stratus franchise an outright scam. Read about it here: http://www.unhappyfranchisee.com/stratus-building-solutions-franchise-scam/
50+ Franchisees are suing Stratus in CA; lawsuit details how Stratus allegedly scams minorities and immigrants
A separate lawsuit by 52 Stratus franchisees alleged they were targeted via Spanish language ads but coerced to sign English franchise agreements they could not read. They also allege they never received cleaning contracts they paid for. Read http://www.unhappyfranchisee.com/stratus-building-solutions-goldeneye-holdings-franchise-lawsuit/
CA Master franchisee is suing Stratus Franchising for fraud, breach of contract & unfair business practices
Orange County master franchisee Goldeneye Holdings is suing Stratus Franchising for allegedly providing fraudulent earnings claims, for providing a franchise disclosure document with multiple misrepresentations and omissions, and for intentionally undermining its relationship with and employee and its unit franchisees. Read: http://www.unhappyfranchisee.com/goldeneye-holdings-stratus-franchise-lawsuit/
Stratus master franchisees are jumping ship, refusing to pay royalties
Stratus master franchisees contend the Stratus franchisor used deceptive and illegal tactics in the franchise sales process, including providing fraudulent sales figures and omitting required disclosures. Some have initiated de-branding from Stratus in their territories. Read: http://www.unhappyfranchisee.com/stratus-master-franchise-jumping-ship/
Stratus was called a “pyramid scheme” on FOX News and UnhappyFranchisee.com
Fox News provided an excellent overview of the franchisee complaints against Stratus that I would urge your franchise evaluation staff to review (http://www.unhappyfranchisee.com/stratus-franchise-pyramid-scheme/).
Also, there are many complaints by Stratus unit and master franchisees posted to UnhappyFranchisee.com: http://www.unhappyfranchisee.com/stratus-building-solutions-franchise-complaints/
Please act before more hardworking Americans (& Entrepreneur readers) are hurt
Entrepreneur can demonstrate its commitment to its readers
By publicly de-listing Stratus Building Solutions, Entrepreneur can demonstrate that it is committed to providing the best, safest and most stable opportunities to its readers, and that when a given opportunity obviously ceases to be viable, Entrepreneur will stop promoting it to its readers.
Entrepreneur can demonstrate its commitment to its advertisers
There are 488 franchise companies ranked lower than Stratus in the Franchise 500. When they see an obviously troubled and dubious franchise concept like Stratus ranked above their own, they question whether Entrepreneur is serious about preserving the reputation of their listing.
Entrepreneur can provide a leadership role in responsible media
UnhappyFranchisee.com is calling upon business and franchise media, associations, advertising portals and other advertising sellers to begin self-regulating by refusing to promote the most obviously non-viable franchise concepts and companies. Entrepreneur can provide an example by refusing to contribute to the tragic results and circumstances being created through the Stratus Building Solutions franchise.
Please act before more hardworking Americans are hurt
The people you read about in these lawsuits and complaints are the same people who buy Entrepreneur magazine, who browse the Entrepreneur.Com website, who pore over your articles professing that franchising is the gateway to the American dream of business ownership, a chance to be in business for themselves but not by themselves.
You and I both know that this is true for the right franchise under the right conditions. We also know that the wrong franchise in the wrong conditions leads not to the American Dream, but to the kind of nightmare that Stratus Building Solutions franchisees are reporting. Please don’t contribute to further exploitation by Stratus Building Solutions.
In conclusion, we understand the difficulty that excluding a profitable advertiser can present, but we are confident that exercising more diligence in maintaining your franchise rankings and pool of advertisers will enhance the Entrepreneur’s attractiveness to legitimate franchisor advertisers. We are willing to assist Entrepreneur in vetting and weeding out the most objectionable and troubled franchise concepts before they are promoted through Entrepreneur listings.
Please let us know whether you will be de-listing Stratus Building Solutions so that we can share the news with our readers. UnhappyFranchisee.com appreciates your consideration and response, and welcomes future collaborations and communications.
All the best,
[Editor’s note: The 2013 34th Annual Entrepreneur Franchise 500 does not include a listing for the Stratus Building Solutions franchise. It’s unclear as to whether Entrepreneur de-listed the troubled company or if Stratus failed to submit the necessary paperwork.]
SHOULD ENTREPRENEUR DE-LIST AND STOP PROMOTING THE STRATUS FRANCHISE OPPORTUNITY? WHY OR WHY NOT? SHARE A COMMENT BELOW.
May 29, 2012
STRATUS BUILDING SOLUTIONS: Goldeneye Holdings Franchise Lawsuit exposes another method janitorial franchises use to prey on the hopes and dreams of hardworking Americans. The suit was filed January 1, 2012 on behalf of 52 Spanish-speaking Orange County residents who claim they were victims of fraud at the hands of Stratus Building Solutions master franchisee Goldeneye Holdings Inc. DBA Stratus Building Solutions of Orange.
(UnhappyFranchisee.com) The lawsuit against Stratus Building Solutions master franchisee Goldeneye Holdings Inc. alleges that the company blatantly scammed Spanish-speaking franchisees by promoting the franchise in Spanish language publications, conducting the sales presentations in Spanish, then coercing them to sign English franchise agreements they could not read.
After the franchisees had signed and paid for their guaranteed work, the lawsuit alleges that none of them ever received the cleaning accounts they were promised – and paid for.
We have posted excerpts from the lawsuit filing below, followed by a link to .pdf of the legal complaint filing.
Are you familiar with the Stratus Building Solutions franchise opportunity? Please share a comment below.
To read more on Stratus Building Solutions:
* * * * *
Excerpts from ALFRED MENDOZA, DELFINO MORALES, Et. AL. v. GOLDENEYE HOLDINGS, INC. dba STRATUS BUILDING SOLUTIONS OF ORANGE
Superior Court of California
County of Orange
Case Number : 30-2012-00536505-CU-FR-CJC
BOHM, MATSEN, KEGEL & AGUILERA, LLP
A. Eric Aguilera, Esq. (Bar No. 192390)
695 Town Center Drive, Ste. 700
Costa Mesa, California 92626
Telephone: (714) 384-6500
Facsimile: (714) 384-6501
Attorneys for Plaintiffs
ORANGE COUNTY SUPERIOR COURT CENTRAL JUSTICE CENTER
ALFRED MENDOZA, DELFINO MORALES, HERIBERTO NAVARRO, JESSICA DOMINGUEZ, CESAR G. NAVA, GERARDO RODRIQUEZ
GRACIDA, JOSE LUIS RAMIREZ ZUNIGA, JAVIER QUINTO ORTIZ, FERNANDO QUINTANA, MARIA INES PALACIOS, FAUSTO PALACIOS, ELVA PEREZ ALBOR, MARIA DE LOS ANGELES PIEDRAS, GUILLERMO RODRIGUEZ, JAVIER RODRIGUEZ BELTON, RUFINA JARDON, MIGUEL A. ROJAS, M. ANGEL MELGOZA, NAZARIO ROJAS, ALEJANDRO ROJAS, RUBEN ROJAS, ROCIO ROJAS, BLANCA GUADALUPE SANDOVAL, BETZABETH G. DE SILVA, JAIME VARGAS, ALDENAHURA ANGELES, PEDRO REBOLLEDO, MIGUEL BARAJAS, JOSE LUIS BARRAGAN, OFELIA BECERRA, MARIA MARGARITA BRAVO, MARILU BURCIAGA, SOCORRO CAMACHO, MAGDALENA CANTE, YANINA CORONA, ORLANDO CORTEZ, VERONICA CUEVAS, OLGA ESQUIVEL, MARIA DEL CARMEN GAMA, JAVIER GARCIA, MAJDIEL GOMEZ, ALDO GUTIERREZ, FRANCISCO GUZMAN, MANUEL HERNANDEZ, ALFONSO JIMENEZ, RAFAELA LUNA, LUZ MARIA MAGAÑA, PEDRO MAYO, LUIS GABRIEL MEJIA, MELCHOR MENDOLA, PEREYRA GABRIELA, CLAUDIO MEDIZA Plaintiffs,
GOLDENEYE HOLDINGS, INC. dba STRATUS BUILDING SOLUTIONS OF ORANGE, a California Corporation; and DOES 1 through 10, inclusive, Defendants.
2. VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE §§ 17200 ET SEQ; AND
3. BREACH OF CONTRACT. DEMAND FOR JURY TRIAL
Plaintiffs are, and at all times mentioned herein were, residents of the State of California. All Plaintiffs purchased franchises from Defendant STRATUS, yet never actually received the franchises nor the income that was promised to them by the Defendant.
Defendant GOLDENEYE HOLDINGS, INC. dba STRATUS BUILDING SOLUTIONS OF ORANGE (“STRATUS”), is a California Corporation which is authorized to and does business in the State of California…
For some… the American Dream can become a nightmare. In this complaint, the Plaintiffs will detail how the Plaintiffs’ attempt to achieve the “American Dream” was thwarted by the new American reality: the corporate scam.
A. The Anatomy Of Stratus’ Fraudulent Scam
The first phase of the defendant’s scam is simple- target victims who don’t speak English. The Defendant accomplishes this goal by only advertising in Spanish speaking publications…
The advertisements seeks to attract Latino immigrants with promises of financial freedom if they purchase janitorial franchises from Defendant STRATUS. The advertisements encourage prospective franchisees to immediately call or visit “Fernando”, one of its sales representatives.
The second phase of the fraud begins during the sales process. Whether the prospective franchisees call in or shows up in person, the prospective franchisee is required to sit down with “Fernando”. “Fernando” proceeds to solicit the franchisees in Spanish, discussing all issues related to their franchises in Spanish and explaining all terms and conditions of the alleged franchise agreements in Spanish.
During his “pitch”, “Fernando” informs those that are interested in purchasing a STRATUS franchise that STRATUS sells sixteen (16) different franchises, franchises that will earn the prospective franchisee between $6,000 a year to $204,000 a year. During this presentation, Plaintiffs are enticed to purchase the franchises because STRATUS guarantees a certain monthly income based upon the size of their franchise.
Moreover, STRATUS promises the prospective franchisees that their cleaning locations would be geographically located in close proximity to their residence and that they would be guaranteed to make a higher hourly rate because their contracts were extremely lucrative.
Once the prospective franchisee agrees to purchase a franchise, “Fernando” immediately pulls out a franchise agreement in English and immediately insists that the prospective franchisee sign the agreement in order to reserve a franchise since it contends that its franchising opportuuities are about to be sold out.
Once the prospective franchisee signs the agreement and pays the franchise fee, he is informed by “Fernando” that STRATUS will be calling the franchisee shortly to inform them of the location of their new franchise. Despite these promises, none of the prospective franchisees are ever given the franchise they purchased nor are they ever provided with a refund from STRATUS for its inability to provide the franchise it promised.
In the present case, each of the Plaintiffs purchased a franchise from STRATUS and none of them ever received the franchise they were promised by “Fernando”, while acting as an agent for STRATUS.
- End of excerpt -
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Read the Full Complaint (.pdf): Stratus Building Solutions Goldeneye Lawsuit
ARE YOU AN STRATUS BUILDING SOLUTIONS MASTER FRANCHISE OWNER OR UNIT FRANCHISEE? ARE YOU FAMILIAR WITH THE STRATUS FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
May 23, 2012
UnhappyFranchisee.com received this open letter from Stratus unit franchisees to the franchisor and master franchisees of Stratus Building Solutions.
OPEN LETTER TO STRATUS FRANCHISING, LLC AND ITS MASTER FRANCHISEES
May 22, 2012
From the beginning of this dispute through today, Unit Franchisees have been open to working with Stratus to address the flaws we’ve identified in the business model used by Stratus. It has always been the position of the Unit Franchisees that Stratus could become the leader in the industry if all parties undertook a serious review of the issues with the goal of making the system fair.
As you know, the Stratus model is not unique and is being scrutinized in several forums throughout the country. Our position was made known through discussions with the attorneys representing Stratus at the time we first filed suit. However, our efforts were quickly rebuffed and we started down the path of litigation. The existing Unit Franchisees remain hopeful that ultimately the system, in whatever form it takes, will give them the only thing they wanted from the start: the ability to improve their lives through their own hard work.
We do not believe that there can be anything that remotely resembles resolution unless the Unit Franchisees are included in ongoing discussions. In addition, the harm to Unit Franchisees that could not survive in this system and have moved on to other opportunities has to be addressed now.
You can no longer afford to assume that the Unit Franchisees are powerless to do anything.
Never forget that there are large numbers of Unit Franchisees who now feel empowered because we listened to them and brought them together in an organized manner. We welcome the opportunity to sit down at the table right now with Stratus and the Masters to resolve these issues. If everyone is willing to make some concessions, there can be a global resolution. Doing it piecemeal will only cost everyone more time and money. Ultimately, the choice is yours.
We have committed to represent our clients zealously no matter how long it takes. I think everyone can agree that litigation is bad for business. When looking at these issues, emotion must be removed from the equation. This case is about business decisions, some of them difficult, which must be made.
Please consider this letter as the Unit Franchisees request that they be included in the discussions now underway. We hope that Stratus and the Masters make the right decision as they move forward.
Very truly yours,
Jonathan E. Fortman
LAW OFFICE OF JONATHAN E. FORTMAN, LLC
|10 Strecker Road, Suite 1150
Ellisville, MO 63011
|JONATHAN E. FORTMAN
Attorney at Law
|KELLY M. SPANN
ARE YOU FAMILIAR WITH STRATUS BUILDING SOLUTIONS FRANCHISE DISPUTES? FEEL FREE TO SHARE A COMMENT BELOW.
May 18, 2012
Rumors abound that several large Master Franchisees of Stratus Building Solutions are defecting to compete with their beleagured commercial cleaning franchisor… and they’re taking their unit-level franchisees with them.
(UnhappyFranchisee.com) Stratus Building Solutions is under fire, both externally and, it seems, internally.
Externally, Stratus Building Solutions is defending itself from a lawsuit brought by attorney Jonathan Fortman on behalf of nearly 100 unit-level franchisees who claim that they were defrauded by the janitorial franchisor.
The allegations in Fortman’s lawsuit were damningly portrayed in a recent FOX 4 “Problem Solver” news report (See STRATUS Franchise Called “Pyramid Scheme” on FOX News).
Fortman contends that many of his clients invested thousands of dollars in the Stratus franchise for cleaning accounts they never received. Others received cleaning accounts, only to have them taken away and given to other franchisees.
“They are stealing from people,” said Fortman in the news story, “people are paying thousands of dollars and never getting an account.”
Internally, it’s rumored that major Stratus Master Franchisees are jumping ship. Master Franchisees from Georgia and New York are rumored to have formed a new, independent cleaning brand and are forcing their unit franchisees to convert.
It’s rumored that a Midwest Stratus Master Franchisee is forming an independent co-op and inviting other Stratus Master Franchisees to join.
East Coast and SE Stratus Master Franchisees Are Going Independent… and Taking Unit Franchisees With Them.
Two of the top 4 Master Franchisees in the Stratus franchise system, Jeffrey Aibel (Atlanta, GA) and Ken Casseri (Buffalo, NY) have reportedly formed a new company (called Pro Squared Facility Services™ or Pro2) and taken aggressive steps to disassociate their operations from Stratus Building Solutions.
Other contacts and markets listed on the new Pro Squared website include Jitendra Kapur (Stamford, CT), Dave Boutwell (Jacksonville, FL), and Joel Craddock (Rochester, NY).
Stratus unit-level franchise owners under Aibel’s Master Franchisee entity (Paladin Building Services) received a sudden and harsh letter demanding that they cease any usage of the Stratus Building Solutions name or trademarks by May 30, 2012 (The letter was dated May 14, 2012).
The letter threatened unit-franchisees with non-payment for their work and termination of their franchise agreements if they do not immediately adopt the new name and discontinue all use of Stratus Building Solutions-branded apparel, business cards, and company names, and destroy, replace or de-brand Stratus Building Solutions-branded equipment, vehicles and/or chemicals.
More Stratus Building Solutions Franchise Rumors & Innuendo
Word from the UnhappyFranchisee.com grapevine has it that:
- Another Stratus Master Franchisee in the Midwest is setting up a co-op for other Masters who want out of the system.
- Stratus has been offering the Master Franchisees the ability to terminate their master franchise agreements by paying 6 months of royalties and agreeing to indemnification concerning the franchisee lawsuit.
- As many as 40% of Stratus Master Franchisees may have ceased paying royalties.
As stated, the latter contentions are rumor and innuendo… If you have better information (or better rumors and innuendos), please add them as a comment below.
We have reached out to the Master Franchisees discussed and Stratus Building Solutions for clarification and comment to this story as well.
ARE YOU A STRATUS BUILDING SOLUTIONS FRANCHISE OWNER OR FRANCHISEE? ARE YOU FAMILIAR WITH THE STRATUS BUILDING SOLUTIONS FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
May 10, 2012
Stratus Building Solutions is under fire in this Problem Solvers report by FOX News’ Kansas City, MO affiliate
“An attorney calls it a pyramid scheme” says the lead-in anchor.
“Victims out money call it outright fraud.”
FOX 4 “Problem Solver” Linda Wagar does an excellent job describing how Stratus, like other janitorial franchises, allegedly preys on working class immigrants, sells them cleaning contracts that promise guaranteed work, then doesn’t deliver.
Attorney Jonathan Fortman Calls Stratus Franchise a Pyramid Scheme
Here are some quotes from the interview with Fortman:
“They are stealing from people, and they know going in when they get that money that they will never do what they are obligated to do under that franchise agreement… and they don’t care.”
“Now more and more what we’re hearing is these people are paying thousands of dollars and never getting an account.”
“These are the people who have the work ethic, they want to succeed, and they want to buy into the American Dream.”
“It’s just a whole variety of things that they are doing that make it so difficult for these franchisees to be successful… they can’t make them be successful because there’s not enough work.”
Stratus CEO Dennis Jarrett Blames Franchisees
When asked why the Internet is filled with complaints about the Stratus franchise and why so many franchisees are suing, Dennis Jarrett has two answers: Not that many are unhappy, and it’s their own fault.”
“It’s a small minority…” says Stratus CEO Dennis Jarrett. “It could be people that have messed up their accounts, they feel like they want to point the finger of accountability toward somebody else.”
ARE YOU A STRATUS FRANCHISE OWNER OR FRANCHISEE? ARE YOU FAMILIAR WITH THE STRATUSFRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
March 9, 2012
March 6, 2012
La franquicia de Stratus es una estafa, acuerdoa abogado.
La franquicia de limpieza de Stratus Building Solutions es una estafa que se aprovecha de las esperanzas y sueños de inmigrantes, trabajadores sin documentación, y familias que no hablan inglés, dice abogado Jon Fortman.
Acuerdoa un comunicado de prensa (abajo) distribuido en Inglés y Español por lasOficinas del Ley de Jonathan Fortman, Status intenta captar víctimas que considera poco probable luchar. Luego, Stratus los vende franquicias delimpieza, las que garantiza que generarán un ingreso mensual atractivo.
Acuerdoa Fortman, Stratus sabe que las cuentas de limpieza nunca van a generar elingreso prometido. Actualmente, Fortman está llevando a cabo en litigio denombre de los franquiciados de Stratus. Aquí es el comunicado de prensa:
Contacto: Jonathan Fortman PARA PUBLICACIÓN INMEDIATA
Stratus Estafa Miles Por el País
Stratus Building Solutions está estafando miles de personas por los Estados Unidos por una conspiración de franquicia compleja.
Stratus Building Solutions es la franquicia de más rápido crecimiento en 2012 de acuerdo a Entrepreneur.com y es #12 en Franchise 500® en 2012. La empresa de franquicia de limpieza se fundó en 2004 por Dennie Jarrett y Peter Frese y se creció astronómicamente desde entonces. Stratus dice que tiene una sistema de apoyo, costos mínimos, e incluso garantiza un ingreso mensual. ¿Parece demasiado bueno para ser cierto?
Eso es porque LO ES. Stratus estafa miles de personas con una conspiración de franquicia compleja. La empresa ahora tiene dos demandas colectivas presentados contra ellos en el estado de Missouri y una acción grupo en California. Las demandas contienen varias reclamaciones alegando que Stratus intenta captar minorías, no proporciona el ingreso mensual “garantizada” , no tiene una sistema de apoyo, y termina franquicias sin previo aviso y por razonamiento falso. Stratus intenta captar minorías que hablan poco o nada de inglés (algunos ni siquiera son ciudadanos legales) en un intento de disuadirlos de tomar cualquier acción legal. Garantizan un ingreso mensual mientras que saben que no tienen las cuentas de limpieza para proveer esos ingresos. Entonces, Stratus termina la franquicia, diciendo que el franquiciado recibió quejas de la cuenta de limpieza y con ello se termina el contrato, cuando no existen quejas de ningún tipo. La resulta es una conspiración conocido como “franchise churning.” Miles de personas están perdiendo todo porque se ven envuelto en la estafa de Stratus. Es el momento de que el público, objetivos futuros, y personas ya afectadas saben la verdad de Stratus.
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Si le gustaría más información sobre este tema, por favor llama Jonathan Fortman a (314) 522 -2312 o manda un mail a firstname.lastname@example.org. Para español, por favor llama a Teresa a (314) 522 -2312 extensión 104.
LE PODEMOS AYUDAR.
¿CONOCE LA FRANQUICIA DE STRATUS BUILDING SOLUTIONS? POR FAVOR, COMPARTE SU EXPERIENCIA EN UN COMENTARIO ABAJO.
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