USA MOBILE DRUG TESTING (USAMDT)

January 15, 2013

USA Mobile Drug Testing Franchisees Allege Fraud

Written by ADMIN · Filed Under ALL POSTS, Service franchise, SPOTLIGHT 1, USA MOBILE DRUG TESTING Franchise

USA MOBILE DRUG TESTING Franchisees Complain to FTC

January 15, 2013

USA Mobile Drug Testing (USAMDT) franchisees are pissed. Really pissed.

(UnhappyFranchisee.Com ) A group of USAMDT franchise owners hired franchisee attorney Mario Herman, who notified CEO Joe Strom that his clients have been defrauded, are terminating their agreements, and are demanding $635,000 in damages.

(Read attorney Herman’s letter here: USA MOBILE DRUG TESTING Franchisees Rebel, Cry Fraud)

The franchisee group feels that it has been deceived and misled, and want as many people to know about it as possible.

Franchise lead generation and broker network FranNet has reportedly dropped USAMDT from its franchise portfolio because of the controversy.

The renegade group of franchisees has reportedly started a campaign to notify news media, industry suppliers and government organizations.

Last week, the USAMDT franchise owners contacted the Federal Trade Commission (FTC).

They have supplied UnhappyFranchisee.Com with a copy of their complaint letter, reproduced below:

January 9, 2013

Federal Trade Commission

600 Pennsylvania Avenue NW Room 286

Washington, DC 20580

Attn: Craig Tregillus

Dear Craig,

It was nice talking to you today. A group of former USA Mobile Franchisees are requesting an investigation into the Fraudulent and Unlawful Practices that the franchisor, Joseph Strom Jr., CEO, of USA Mobile Drug Testing LLC (USAMDT), 15310 Amberly Drive, Suite 220 Tampa FL 33647, has used and continues to use in selling USA Mobile Drug Testing franchises.

Franchisee complaints include allegations of deceptive sales tactics, improper franchise disclosure, making improper earnings claims and financial representations, trying to keep prospective franchisees from talking to current franchisees, and the misrepresentation of vendors as franchisor employees.

The transgressions include but are not limited to:

1. John Cohen, co-owner of Rhino 7, is listed on the USAMDT organizational chart as the VP Franchise Sales. The email signatures and how they present themselves leads a prospect to believe they are all employees of USAMDT which is untrue. Rhino 7 is a franchise business development company hired by USAMDT for the purposes of selling franchises.

2. Rhino 7 offers prospective buyers pre-recorded validation calls only. A prospect must be extremely insistent in order to get just 1 live validation call set up. The list of franchisees contact information is not available to them during the sales cycle. All pre-recorded validation calls are carefully monitored and mediated by the Rhino 7 sales director.

3. Illegal earnings claims are posted on the Internet stating: “Net Annual Earnings of

$145,745.”

4. Entrepreneur.com states 77 franchises at the end of 2011, the USA Mobile Franchise

Disclosure Document (“FDD”) states 40.

5. Entrepreneur.com states 93 franchises at the end of 2012, USA Mobile website indicates 51 franchises. 8 of those redirect to the corporate 855 phone number because they have been shut down; 43 are operational franchises.

6. The Financial Performance Representation in the FDD is not based on a USA Mobile Drug Testing franchise, but is actually A&B Employer Solutions, Inc. (“A&B”), owned by Aron Galinovsky which operates its drug testing business as an add-on to a previously existing business.

7. A&B did not have to pay a $49,900.00 franchise fee that a new franchisee would have to pay.

8. A&B and Aron Galinovsky did not have to pay 9% royalties on its gross sales, which would amount to $29,630.00.

9. A&B and Aron Galinovsky has paid no royalties, ad fund contributions, or other required expenses that a new franchisee would have to incur. A&B did not have to pay the Roll-Out Advertising of $10,500.00 for its first three months (now mandatory at$19,500.00). This fact should have been properly disclosed, and its purposeful omission is deceptive and fraudulent.

10. Per Exhibit F-1 of the 2012 FDD – Operational Franchisees – Aron Galinovsky is still listed as an operational USAMDT franchisee even though it is stated in the 2012 FDD that Mr. Galinovsky stopped operating all of the USA Mobile Drug Testing products, services and systems at the end of 2011.

11. Per Exhibit F-2 of the 2012 FDD – Former USAMDT Franchisees – Mr. Galinovsky is not listed as a former franchisee in 2011 or 2012.

12. Per the validation tapes still in circulation, Mr. Galinovsky is still used to discuss the profitability of purchasing a USAMDT franchise.

13. On the www.USAMDT.com website – New Haven CT is still listed as a USAMDT franchise.

14. On the USAMDT internal franchisee contact log – Aron Galinovsky is still listed as a franchisee even though he does not know his USAMDT email address or password.

Your prompt attention to this matter is much appreciated.

Sincerely,

Concerned USAMDT Franchisees

One thing that has the group especially upset is that they believe USAMDT and their outsources franchise sales organization, Rhino7, continues to promote the flawed franchise using the same allegedly bogus and misleading earnings claims, as well as misrepresentations regarding the size and health of the USAMDT system.

Adding fuel to the fire is the fact that CEO Joe Strom refuses to address the complaints about the misleading earnings claims, or even confirm how many USAMDT franchises are still in business.

USA MOBILE DRUG TESTING Franchise Complaints

USA MOBILE DRUG TESTING Strom Spins Franchisee Defection

ARE YOU FAMILIAR WITH JOE STROM, USA MOBILE DRUG TESTING OR THE USAMDT FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, USA Mobile Drug Testing failure rate, USAMDT, Federal Trade Commission, FTC, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom, Rhino7

Written by ADMIN · Filed Under ALL POSTS, Service franchise, USA MOBILE DRUG TESTING Franchise

USA MOBILE DRUG TESTING Franchisee Challenges CEO Joe Strom

January 6, 2013

A USA Mobile Drug Testing franchise owner is challenging CEO Joe Strom’s recent email message to USAMDT franchise owners.

In a January 2, 2013 email, Strom told his remaining franchisees that he had terminated a group of 7 franchise groups for violating their franchise agreements.

[Read excerpts from Strom’s email here: USA MOBILE DRUG TESTING Strom Spins Franchisee Defection]

However, UnhappyFranchisee.Com had published a letter sent to Strom a week earlier stating that the same group of franchisees were initiating their departure due to fraud on the part of Strom and USAMDT.

The group, represented by franchisee attorney Mario Herman, also demanded $635,000 in combined damages.

UnhappyFranchisee.Com has invited CEO Strom for clarification or a rebuttal, but have not received a response.

We did, however, receive this letter from one of the Rebel Franchisees (DrugTestinistas?) challenging Joe Strom’s characterization of the defecting owners as the threat to the system.

The greater threat, according to the unnamed USAMDT franchise owner, is Mr. Strom’s leadership and business practices.

Here is the anonymous letter, received today via email:

There is not much to be surprised when reading the excerpts from Mr. Strom’s letter to the franchisees. It is nothing but same BS song in all his desperate letters released every time the stuff hits the fan in his house. Lately, the stuff hit the fan so many times that his lamentable messages are easily predictable. Since Mr. Strom has nothing of substance to say, he is always hiding behind “patriotic” phrases:

"Our job is to protect your franchised business"…"the terminated franchisees threatened the greater good of all your business and the USAMDT brand".

Hold on! This sounds familiar. Didn’t we hear similar calls to defend Motherland, Fatherland coming from similar characters? It is just a matter of time (next defection?) until Mr. Strom will demand the remaining franchisees to raise barricades, burn the fields, poison the water and arm themselves to the teeth (men, women and children) to protect "The Brandland".

Question: Mr. Strom, what kind of threat do you see in a group of frustrated franchisees who decided to part because they lost enough money by being associated with YOU?

There is a limit to what one can take when dealing with a deceptive, unethical and erratic Strom. If you are looking for someone who is threatening USAMDT’s brand, look no further, Mr. Strom: Just look in the mirror! Ask the people from the USAMDT management team who left your house or who barely spent a couple of weeks working with you in 2012. They had enough of your managing style, just like the “terminated franchisees”, as you call the group who decided to divorce you.

In his letter to the franchisees, Mr. Joe “The Terminator” Strom states that he will take legal action against the group of rebels:

“We are taking legal action to insure that these former franchisees do not entrench on any of your territories or your business both in your territory and the surrounding territories”.

(Oops… what’s that word? “entrench”? Someone else hit already that nail… It’s legalese, so, let’s move on.)

Question: Mr. Strom, if you take legal action against the rebel group, are you going to take legal action against Aron Galinovky, A&B Employer Solutions (aka "USAMDT Franchise Model") who, according to your website and the FDD, is the New Haven franchisee but operates happily without adorning the USAMDT brand?

In the aforementioned letter, a somehow humble Mr. Joe “The Terminator” Strom states some ridiculous facts. Read carefully the following fragment of his letter:

“Additionally, the Franchisee Advisory Board has been meeting every week on the phone for the last three weeks to discuss and work through some growing pains and concerns that some of you have brought up. We have concluded our meetings for 2012 and I will be releasing the notes on those meetings shortly. Those notes take a bit longer to put together since the meetings took place for over four hours.”

Let’s see…

The number of meetings held in 2012 by Strom (yes, the whole year!) to deal with “some growing pains and concerns some of you have brought” equals 3 (three).

“Some” growing pains? Are you kidding us? In reality, essentially every day of the year your franchisees complained about the endless series of mistakes bordering crass incompetence made by Strom’s HQ: Unrealistic marketing materials, undisclosed costs in the background checking, after-hours/rush service hotline, test results management mistakes, etc. All these mistakes were costly and the complaints point straight to the poor level of support Strom’s HQ provides to the franchisees. One example, amongst so many others: USAMDT’s after-hours/rush service hotline 855-USA-TEST still doesn’t work! How many years since implemented by the HQ? Incredibly, USAMDT’s slogan proudly screams: “We are available 24/7. We come to you! Call us.” Call who? And who’s calling the franchisees?

The “notes” of the meetings held by Mr. “Terminator” to deal with the growing pains are to be released “shortly”. Umm, not exactly… because writing the notes “takes a bit longer” (Ahaaa!). The rest of the business world knows these notes by the correct name, “minutes”. And these minutes are usually taken by a meeting attendee who is knowledgeable in the matters discussed. By now, you, the reader already figured out who takes ”notes” at the growing-pains meetings: no one but Mr. Joe “The Terminator” Strom himself. This explains why the notes take “a bit longer” to be released. In reality, it takes few months to… never until released. (The hope is that the growing pains will eventually go away).

Question: Mr. Strom, are you going to post your biography on your own website to proudly show to the rest of us your level of expertise and experience in the drug and alcohol testing industry?

With the recent departure of Casey Neubert, Director of Education and Compliance (wonder why?) there is no one left in your HQ team with ANY experience and knowledge of the industry. The two consultants that you pay are not actually your employees. They are contractors, they do for you what they do for any other TPA, as long as they get paid. (One of the two consultants was not cautious enough and let you display his bio on your website. He may reconsider.) We all think it’s about time for you to post your biography under “About USAMDT”. Show us what you have, Mr. Strom as a credible leader of a drug testing company. After all, you sell your expertise and brand name to others.

It’s time to stop here. Unless one wants to have fun or is a first time reader of “letters to franchisees” lamentable series, it is really not worth paying attention to Strom’s rhetoric, Brandland patriotism and pathetic attempts to legalese.

USA MOBILE DRUG TESTING Strom Spins Franchisee Defection

January 2, 2013

A group of 7 USA Mobile Drug Testing (USAMDT) franchisees demanded immediate termination of their franchise agreements and $635,000 in combined damages.

The demand came in the form of a letter dated December 28, 2012, emailed from the group’s attorney, Mario Herman.

Mr. Herman stated that his clients were leaving, due to fraud on the part of the franchisor and CEO Joe Strom, and would be fully debranded from USAMDT by January 1, 2013.

January 2, 2013, USA Mobile Drug Testing CEO Joe Strom reportedly told his remaining franchisees that HE initiated termination of the renegade franchisees.

Furthermore, Joe Strom reportedly claimed that terminations only occur AFTER franchisees receive formal notice and warning – a claim the renegade franchisees deny.

One of the defecting franchisees told UnhappyFranchisee.Com: “I never received any threat of termination by Strom or USAMDT. We alone initiated our departure.”

Truth seems an elusive concept for Strom, USAMDT

UnhappyFranchisee.Com has repeatedly urged USAMDT CEO Joe Strom to try being honest about the state of his franchise system, if only as a change of pace.

Mr. Strom has not provided any support for his contention that his franchise system grew from 77 franchises in 2011 to 93 in 2012 – a contention at odds with his own website and Franchise Disclosure Document.

In Joe Strom’s alleged email to his franchisees dated January 2, 2013, he stated:

HQ had to make an unfortunate decision to terminate a few franchises (listed below). To be crystal clear, HQ never wants to terminate anyone’s business. We tried several measures to avoid this action, but we were unable to get the cooperation needed from each of the franchisees terminated. Our job is to protect your franchised business & the USAMDT brand. Some of the actions and/or non-actions of the terminated franchisees threatened the greater good of all your businesses and the USAMDT brand. We just cannot and will not stand for that.

You should know that if your business was ever at risk for being terminated, you would receive several forms of communication to attempt to avoid that action. Nobody would ever be blindsided with their business being terminated.

USAMDT defector franchisees claim that Mr. Strom is not being truthful, as he did not initiate termination, as he states, and they never received “several forms of communication” to try to avert termination.

Mr. Strom’s email to his remaining franchisees also states:

We are taking legal action to insure that these former franchisees do not entrench on any of your territories or your business both in your territory and the surrounding territories. We will stand by our non-compete and that was clearly communicated when we terminated our agreement with them.

The defecting franchisees claim that this is also an untrue statement, as they have not received any notice of termination of the franchise agreement from Mr. Strom (as of January 2, 2013).

(Mr. Strom, may we humbly suggest that you meant to say “We are taking legal action to insure that these former franchisees do not encroach…” rather than entrench on the surviving franchisees’ territories…?)

Mr. Strom ends his email on a motivational, uplifting note:

I really appreciate everyone’s input and I am excited to use this momentum to take USAMDT to the next level.

It’s unclear what momentum he’s referring to, as the only momentum USAMDT seems to be experiencing is downward. Now that the rebel franchises have been purged from the website, there are just 36 franchise locations listed.

If the rebel franchisees are correct in their contention that Mr. Strom is starting 2013 by lying to his remaining franchisees, that downward trajectory is unlikely to reverse anytime soon.

USA MOBILE DRUG TESTING Franchisees Rebel, Cry Fraud

December 31, 2012

USA Mobile Drug Testing franchise owners claim they have been defrauded by CEO Joe Strom and USA Mobile Drug Testing, LLC.

Through their attorney, Mario Herman, a group of 7 USA Mobile Drug Testing (USAMDT) franchisees have demanded immediate termination of their franchise agreements and $635,000 in combined damages.

Mr. Herman states that his clients will be fully debranded from USAMDT by January 1, 2013.

UnhappyFranchisee.Com has reported many of the claims enumerated in attorney Herman’s letter (see below) in these prior posts:

USA MOBILE DRUG TESTING Franchise Complaints

USA MOBILE DRUG TESTING Franchise Questions for CEO Joe Strom

USA MOBILE DRUG TESTING Franchise Complaints: CEO Joe Strom Responds

USA MOBILE DRUG TESTING Franchise Warning

When given a chance to respond to the serious allegations raised in these posts (namely the misleading earnings claim in the FDD, and the inconsistent and suspicious reporting of franchise locations), CEO Strom evaded all but one of the questions posed to him.

Franchisee Attorney Mario Herman’s Letter to CEO Joe Strom

UnhappyFranchisee.Com obtained (from an anonymous source) a copy of this letter sent by franchisee attorney Mario Herman to USAMDT CEO Joe Strom on December 28, 2012.

LAW OFFICE OF MARIO L. HERMAN

5335 Wisconsin Avenue N.W.

Suite 440

Washington, D.C. 20015

December 28, 2012

VIA EMAIL TO jstrom@usamdt.com

Joe Strom, CEO

USA Mobile Drug Testing, LLC

15310 Amberly Drive, Suite 220

Tampa, FL 33647
Re: Notice of Termination
Dear Mr. Strom:

I have been retained by the below-referenced franchisees of USA Mobile Drug Testing, LLC (“USA Mobile”) regarding numerous transgressions committed by USA Mobile in violation of Florida law, including Florida’s “Baby FTC” Act.

The franchisees are Breillat, Barga, Hamil/Montelibano, Kesler, Parker, Saracovan, and Greenberg. The total amount of the combined damages exceed $635,000.00. Demand is hereby made for that amount.

The transgressions include, but are not limited to:

Illegal earnings claims offered via the Internet stating: “Net Annual Earnings of $145,745.”

Entrepreneur.com states 77 franchises at the end of 2011, the USA Mobile Franchise Disclosure Document (“FDD”) states 40.

Entrepreneur.com states 93 franchises at the end of 2012, USA Mobile website indicates 51 franchises. 8 of those redirect to the corporate 855 phone number because they have been shut down; 43 are operational franchises.

Misrepresentations contained in Item 19 of the FDD in terms of the revenue generated by the putative Connecticut “franchisee.” The Financial Performance Representation in the FDD is not based on a USA Mobile Drug Testing franchise, but is actually A&B Employer Solutions, Inc. (“A&B”), which operates its drug testing business as an add-on to a previously existing business.

The FDD at item 19 states: “We do not know the extent to which this operator provides products or services outside of his territory, or the portion of its revenues that are derived from outside of the territory.” The $329,225.40 revenue number most likely includes sales to existing A&B Employer Solutions clients and/or drug testing clients throughout the nation. New USA Mobile Drug Testing franchise owners would have neither an existing client base nor the ability to market outside their local area. Therefore, the $329,225.40 is highly misleading. The FDD further states: “We have not audited or verified the reports, nor has the operator confirmed that its report is prepared according to generally accepted accounting principles.”

Furthermore, A&B has paid no royalties, ad fund contributions, or other required expenses that a new franchisee would have to incur. A&B did not have to pay the Roll-Out Advertising of $10,500.00 for its first three months (now mandatory at $19,500.00). This fact should have been properly disclosed, and its purposeful omission is deceptive and unfair.

A&B did not have to pay a $49,900.00 franchise fee that a new franchisee would have to pay.

A&B did not have to pay 9% royalties on its gross sales, which would amount to $29,630.00.

USA Mobile knowingly allowed its external sales staff, Rhino 7, to falsely represent itself as being internal to USA Mobile, and knowingly allowed said external staff members to represent themselves as franchisees or soon-to-be franchisees.

USA Mobile deliberately failed to disclose any information about its corporate-owned location in Tampa, Florida. This includes information about earnings.

USA Mobile made representations to franchisees and potential franchisees as having national and regional accounts that would benefit franchisees. No such accounts existed at the time.

USA Mobile failed and continues to fail to disclose information about failed or closed franchisees.

The Financial Performance Representation (“FPR”) provided by USA Mobile substantially overstates revenue and understates expenses a new franchisee realistically would expect. The FPR provided in the FDD should be based on what a majority of the USA Mobile franchisees are achieving within the network. Based on the fraud and the deceptive and unfair trade practices detailed above, my Clients hereby terminate their respective Franchise Agreements effective immediately. All proprietary information is in the process of being returned to you, and all my clients will be fully de-identified by January 1, 2013.

Please ensure that the clients listed above are accurately listed as terminated franchises in the forthcoming 2013 FDD, and have your attorney contact me at the number or email indicated above. Finally, please refrain from any future communications with any of my aforementioned clients.
Sincerely,
Mario L. Herman

Attorney for USA Mobile

Drug Testing Franchisees

Despite Mr. Strom’s insistence that there are 93 USA Mobile Drug Testing franchises, the USAMDT website indicates that there may be as few as 43.

With the defection of these 7, there may now be as few as 36.

We have contacted the corporate office of USA Mobile Drug Testing franchise about these concerns, and invite their clarification, correction or rebuttal.

ARE YOU A USA MOBILE DRUG TESTING FRANCHISE OWNER, EXEVUTIVE, EMPLOYEE OR CLIENT? ARE YOU FAMILIAR WITH THE USA MOBILE DRUG TESTING FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, USA Mobile Drug Testing failure rate, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom, Mario Herman, franchisee rebellion

Written by ADMIN · Filed Under ALL POSTS, Service franchise, USA MOBILE DRUG TESTING Franchise

USA MOBILE DRUG TESTING Franchise Warning

December 21, 2012

USA Mobile Drug Testing prospective franchise owners should, in the opinion of UnhappyFranchisee.Com, proceed with extreme care, do extra due diligence, and speak to as many current and former franchisees as possible before investing in this franchise.

Read: USA MOBILE DRUG TESTING Franchise Complaints

USA MOBILE DRUG TESTING Franchise Questions for CEO Joe Strom

USA MOBILE DRUG TESTING Franchise Complaints: CEO Joe Strom Responds

USA MOBILE DRUG TESTING franchise tests positive for Hype

USA Mobile Drug Testing franchise marketing claims that the USAMDT is “less risky than starting your own business.”

“Just get in your vehicle and make money,” says the USA Mobile Drug Testing franchise website.

The USAMDT states that its location in CT had annual sales of $333,000, with an impressive income of $155, 000 after expenses.

USA Mobile Drug Testing CEO Joe Strom claims that USAMDT has grown from 11 franchises in 2010 to 77 franchises in 2011 to an impressive 93 franchises in 2012.

However, the franchisees who contacted us tell another story entirely.

The franchisor’s responses to our questions are evasive and seem fishy.

And, bottom line, the numbers just don’t add up.

How many franchises does USA Mobile Drug Testing have? Simple question, right?

We can’t seem to get a straight answer as to how many franchises USAMDT has up and operating.

When we wrote our first post on USAMDT, we reacted to the company’s listing on Entrepreneur.Com, which indicated that the number of USAMDT franchises had dropped from 77 in 2011 to 52 in 2012 – a decline of 25 franchises.

CEO Joe Strom then told us that our data was incorrect, and directed us back to the same page on Entrepreneur.Com which suddenly states that USAMDT has 93 franchises – a gain of 16 franchises over 2011.

So we went to the USAMDT website and manually added up the locations listed. There are 51 locations listed on the USA Mobile Drug Testing website.

Of those 51 locations, 8 locations list the corporate phone number (855-USA-TEST), not a local number, indicating that there may be as few as 43 franchises.

Confidential sources indicate that number may be dropping soon, as a numerous franchisees are planning to either close or leave the system in the coming months.

Additionally, USAMDT’s own Franchise Disclosure Document (FDD) seems to contradict Joe Strom’s assertion that there were 77 franchises at the end of 2011.

The FDD states there were 40 USAMDT franchises at the end of 2011, not 77.

We have once again asked CEO Joe Strom for some corroboration that there are 93 USAMDT franchises, and that the system grew by 16 rather than declined by 25 franchises.

USAMDT has one of the most questionable Financial Performance Representations we’ve ever seen.

The 2012 USAMDT Franchise Disclosure Document (FDD) contains what we believe is one the most misleading earnings claims (Financial Performance Representations) that we’ve ever seen.

The Representation states it is for a “USA Mobile Drug Testing business… located in New Haven, Connecticut, and it is operated by A & B Employer Solutions, Inc. (“A&B”).”

It claims A & B Employer Solutions, Inc. had yearly sales of $329,225.40 and “income” after expenses of $155,039.10.

However, the disclaimers and explanations in the “fine print” of the 200+ pages of legal documents show that the use of this business as a representation of the performance of a USAMDT franchise is beyond absurd:

- A & B Employer Solutions, Inc. was an established business selling drug testing services to an existing customer base – an advantage new franchises would not have.

- The FDD state: “the territory that [A & B Employer Solutions, Inc.] actually service has been limited to the New Haven, Connecticut market, and includes approximately 10,000 businesses. This is approximately the same size as a typical or average territory size of 10,000” The FDD then contradicts itself, saying “This operator may provide products and services in areas outside of its territory. We do not know the extent to which this operator provides products or services outside of his territory, or the portion of its revenues that are derived from outside of the territorv.”

- A & B Employer Solutions, Inc. was restricted to a local territory, but may have sold nationally? The $329,225.40 figure may have been derived from a business marketing nationally, not confined to a market like a franchisee would be? Seriously?

- The FDD states “We did not have a written franchise agreement with A&B until 2011. However, both A&B and we have treated A&B’s operations as a “franchise” (except that A & B did not pay royalty fees prior to signing a franchise agreement…).” It appears that A&B also did not pay a franchise fee, advertising fund or technology fund fee.

- The FDD states “Due to internal business and ownership issues unrelated to us or the System, at the end of 2011 this operator ceased operating using Marks and using all of the USA Mobile Drug Testing products, services…”

Why would A & B Employer Solutions, Inc. severe all ties with USA Mobile Drug Testing unless USAMDT trademarks and services gave them no significant benefit?

- The FDD states “We have not audited or verified the reports, nor has the operator confirmed that its report is prepared according to generally accepted accounting principles.”

So USAMDT has no idea whether this Financial Performance Representation contains accurate information or not, but it will provide it to prospective franchisees anyway?

Did Joe Strom exploit the Sandy disaster to discourage franchisee lawsuits?

Unnamed franchisees claim that USAMDT offered franchise owners affected by Superstorm Sandy a seemingly generous 3-months without royalty payments in order to help them weather the devastation in the Northeast.

Seemed like a kind and thoughtful gesture, they said.

However, CEO Strom required franchisees to sign a legal document in order to get the gracious offer. The legal agreement contained a waiver of rights that was completely unrelated to the Sandy situation or royalty forgiveness. One section of the waiver read:

Franchisee acknowledges that the waiving of three additional monthly Minimum Royalty Fees is of considerable value. For the value received Franchisor and Franchisee, for themselves and their successors, assigns, heirs and personal representative, for good and valuable consideration the receipt of which is hereby acknowledged, release each other and their respected affiliates, officers, directors, shareholders, employees and agents from any and all actions, causes of action, suits, claims, damages, expenses, debts, bills, covenants, contracts, controversies, agreements, promises, judgments, or demands that either of them now has, may have ever had, or may have against the other based on any transaction, event, or circumstance whatsoever relating to the Franchise Agreement through the date of this agreement except for the terms and conditions specifically agreed to in this agreement and any claims for which Franchisor would have the right to indemnification or contribution under the terms of the Franchise Agreement arising out of the Franchisee’s operation of the franchise.

So, Joe Strom had such compassion for franchisees devastated by Hurricane Sandy that he was willing to give them 3 months worth of royalties… as long as they signed a legal agreement forbidding them from suing him for anything the company may have done – or not done – in the past.

Anyone considering becoming a USA Mobile Drug Testing franchise owner should consider this question: What is USAMDT so worried about that they would use a natural disaster like Sandy to sneak a waiver of rights by their storm-ravaged franchisees? And why is it so hard to get a straight answer to the simplest of questions, such as “How many franchises are still up and running?”

ARE YOU A USA MOBILE DRUG TESTING FRANCHISE OWNER, EXECUTIVE, EMPLOYEE OR CLIENT? ARE YOU FAMILIAR WITH THE USA MOBILE DRUG TESTING FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, USA Mobile Drug Testing failure rate, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom

Written by ADMIN · Filed Under ALL POSTS, Service franchise, USA MOBILE DRUG TESTING Franchise

USA MOBILE DRUG TESTING Franchise Complaints: CEO Joe Strom Responds

December 20, 2012

USA Mobile Drug Testing franchise CEO Joe Strom has provided a response to our two recent posts on the USAMDT franchise.

Our first post communicated some of the complaints we’ve received from USA Mobile Drug Testing franchise owners, and invited others to share their opinions, positive or negative:

USA MOBILE DRUG TESTING Franchise Complaints

Our second post contained a list of questions we posed to USA Mobile Drug Testing franchise CEO Joe Strom after we reviewed the USAMDT Franchise Disclosure Document (FDD).

USA MOBILE DRUG TESTING Franchise Questions for CEO Joe Strom

Mr. Strom was gracious enough to provide this reply to our inquiries:

We received your email and have viewed the postings about USAMDT on your website. We strongly disagree with the allegations and the conclusions that are clearly suggested in the postings.

We wholeheartedly believe in the USA Mobile Drug Testing business, the abilities of our franchisees, and our ability to work with and support our franchisees. We understand that the system’s success will depend on the success of our franchisees. To this end, USAMDT has made and continues to make substantial investment in our training programs, vendor relationships, service and support systems, marketing and brand recognition activities, and operating systems. These efforts take many forms. In some instances this involves improvements to our internal system, and in other instances, we team up with experienced consultants and vendors to bring additional value to the system. Another effort that we have proudly taken is to develop a franchisee advisory council and we actively work with its franchisee members to hear and respond to our franchisees’ concerns and suggestions.

[Pictured, left, USAMDT Founder & CEO Joe Strom. Photo source: USAMDT website]

As your website postings are anonymous, we do not know who may have made these comments or have any details or substance. We hope that the writer will approach us directly so that we may discuss and work towards a solution for their specific problems. As such, we do not respond to each anonymous claim or “Question” posed in the posting. We object to the use the phrase “fine print” to describe information in our Franchise Disclosure Document. “Fine print” implies that the information was in some way hidden or shielded from view – that is an entirely inaccurate description of information that we clearly included in our Franchise Disclosure Document.

Contrary to the statements in the posting, we have many growing and successful franchisees who are very happy with their investment choice and with our support. In fact, here’s a quote we recently received:

“My Family and I could not be happier with our choice and investment in USA Mobile Drug Testing, the training was exceptional and gave you a solid foundation for success, however some choose not to follow the training and it becomes very clear who they are quickly. We are growing at a fast rate and anticipate a tremendous 2013, Joe Strom and all of his staff are working hard to deliver the best franchise support team they can which will make this a franchise force for years to come.”

Remember success comes from what you put into it, no franchise will work unless you follow the model……. Dale Dugas, CPC, President, USA Mobile Drug Testing of Southeast Texas

We are not perfect, but we are committed to supporting our franchisees. We will continue to improve our system, and we understand that the system’s success will depend on the success of our franchisees.

Sincerely,

Joe Strom

CEO of USA Mobile Drug Testing, LLC

ARE YOU A USA MOBILE DRUG TESTING FRANCHISE OWNER, EXECUTIVE, EMPLOYEE OR CLIENT? ARE YOU FAMILIAR WITH THE USA MOBILE DRUG TESTING FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.

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Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, USA Mobile Drug Testing failure rate, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom

Written by ADMIN · Filed Under ALL POSTS, Service franchise, USA MOBILE DRUG TESTING Franchise

USA MOBILE DRUG TESTING Franchise Questions for CEO Joe Strom

December 16, 2012

USA MOBILE DRUG TESTING’s Franchise Disclosure Document for 2012 provides a Financial Performance Representation to prospective franchise owners.

The representation is used by USA Mobile Drug Testing franchise salesmen and franchise brokers to help convince prospective franchisees to invest $80,000 to $120,000 in a USAMDT franchise.

[Also read: USA MOBILE DRUG TESTING Franchise Complaints]

The Financial Performance Representation states that between January 1, 2011 – December 31, 2011, the USA Mobile Drug Testing location in New Haven, CT achieved the following financial results:

A&B Employer Solutions Revenue:

Total Revenue	$329,225.40
Total Expenses	$194.186.30
Income	$155, 039.10

Is USAMDT & CEO Joe Strom Intentionally Deceiving Prospective Franchisees?

The Financial Representation provided in the 2012 FDD makes the USAMDT franchise seem like a pretty profitable opportunity.

[Read it here: USAMDT 2012 FDD redlined]

Why, then, did 30% of its franchises disappear in the past year?

(See USA MOBILE DRUG TESTING Franchise Complaints)

It didn’t add up, so we looked a little closer at the fine print.

Here’s what we found:

The New Haven, CT business used for the Financial Performance Representation is NOT a USA Mobile Drug Testing franchise, but is actually A&B Employer Solutions, Inc. (“A&B”), which operates its drug testing business as an add-on to an existing, previous business.

The A&B Employer Solutions, Inc. website states “Headquarters for A&B Employer Solutions are located in New Haven, CT., however, services are provided nationwide.”

The USAMDT FDD states: “We do not know the extent to which this operator provides products or services outside of his territory, or the portion of its revenues that are derived from outside of the territory.”

So the $329,225.40 revenue number could include sales to existing A&B Employer Solutions clients and/or drug testing clients throughout the nation.

As new USA Mobile Drug Testing franchise owners would have neither an existing client base nor the ability to market outside their local area, the $329,225.40 could be highly misleading.

Additionally, A&B Employer Solutions, Inc. paid no royalties, ad fund contributions or other required expenses that a new franchisee would incur.

A&B Employer Solutions, Inc. did not have to pay the Roll-out Advertising of $10,500 for its first three months.

A&B Employer Solutions, Inc. did not have to pay a $49,900 franchise fee, as the new franchisee will.

A&B Employer Solutions, Inc. did not have to pay a 9% royalties on its gross sales, which would be $29,630.

So it seems that the Financial Performance Representation provided by USA Mobile Drug Testing could be substantially overstating revenue and understating the expenses a new franchisee could realistically expect.

Questions for CEO Joe Strom regarding the USA Mobile Drug Testing franchise opportunity

UnhappyFranchisee.Com has a number of questions for USA Mobile Drug Testing, LLC CEO Joe Strom.

1) USAMDT operated a company-owned location from June, 2010 through April, 2011 in Tampa, FL. What were the sales achieved by USAMDT in its home market? Why not use the Tampa revenue numbers as the Financial Performance Representation?

2) Have any USA Mobile Drug Testing franchise owners achieved $330,000+ in sales? If not, why are you providing this representation in your FDD?

3) Did A&B Employer Solutions, Inc. receive compensation of any kind for allowing its sales numbers to be used in the marketing of USAMDT franchises?

4) Why did A&B Employer Solutions, Inc. sever its relationship with USAMDT shortly after signing a franchise agreement? Is USA Mobile Drug Testing, LLC pursuing legal remedies against A&B Employer Solutions, Inc. for breaking its franchise agreement?

5) According to Entrepreneur magazine, the number of USA Mobile Drug Testing franchises dropped 30% from 77 in 2011 to 52 in 2012. What accounts for the loss of 25 franchised locations?

6) According to our sources, more than 25% of the remaining franchisees wish to close or leave the system. What is causing this franchisee dissatisfaction, and what is USA Mobile Drug Testing, LLC doing to reverse this downward spiral?

7) Do you think that selling the USA Mobile Drug Testing franchise using the A&B Employer Solutions, Inc. numbers and calling it a “lower-risk” opportunity (despite an apparent failure rate of 30% and climbing) is ethical and aboveboard?

ARE YOU A USA MOBILE DRUG TESTING FRANCHISE OWNER, EXECUTIVE, EMPLOYEE OR CLIENT? ARE YOU FAMILIAR WITH THE USA MOBILE DRUG TESTING FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.

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Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, USA Mobile Drug Testing failure rate, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom, Franchise Disclosure Document, FDD

Written by ADMIN · Filed Under ALL POSTS, Service franchise, USA MOBILE DRUG TESTING Franchise

USA MOBILE DRUG TESTING Franchise Complaints

December 16, 2012

USA MOBILE DRUG TESTING Franchise Complaints include a reportedly high failure rate, widespread franchisee discontent, and a lack of knowledgeable, capable franchise support staff at the franchisor home office.

Are you familiar with the USA MOBILE DRUG TESTING Franchise Opportunity? Please share a comment below.

(UnhappyFranchisee.Com) USA Mobile Drug Testing was founded in 2008, and is based in Tampa, FL.

The USA Mobile Drug Testing franchise website claims that their franchise offers the tools for building a successful random drug testing service business that you can run from home.

[Also read: USA MOBILE DRUG TESTING Franchise Questions for CEO Joe Strom]

It states: “Owning a USAMDT Franchise offers most of the benefits of business ownership but provides important additional elements to help one succeed, such as a proven business model, comprehensive training, marketing expertise, and ongoing support. In addition, a nationally recognized brand and trademark provides instant consumer visibility and credibility.”

Like many brand-new, high-risk franchise opportunities with virtually no proven track record, USA Mobile Drug Testing markets itself as a lower-risk investment, stating:

“USAMDT Franchising provides many of the benefits of business ownership – the ability to make decisions and have control, to create wealth for the present and equity for the future; but is considered less risky than starting your own business.”

Is The USA Mobile Drug Testing Franchise a Flash in the Pan?

According to information submitted to Entrepreneur magazine, USA Mobile Drug Testing grew 600% in one year, from 11 franchises in 2010 to 77 franchises in 2011.

The following year, the number of USA Mobile Drug Testing franchises dropped 30% to just 52 franchises.

What happened to the 25 franchisees who thought they were taking a “less risky” path to business ownership and were told they could “Just get in your vehicle and make money?

Did they lose their investments of $83,731 – $115,611 in just one year?

Of 40 Remaining Franchisees, “Over 25% Are Looking to Get Out or Close”

UnhappyFranchisee.Com has received a complaint from an unnamed USA Mobile Drug Testing franchise owner who claims the situation is actually even worse than it seems.

He/she claims that the system is in a state of collapse, that there is no franchise support, and many franchisees are looking for a way out.

A USA Mobile Drug Testing franchise owner writes:

Of the 40 remaining franchisees, over 25% are looking to get out or close because they are out of money, no longer want to send their money to the ZOR, there is no support, no structure or system and all of the knowledgeable employees at HQ are now gone.

We have contacted the corporate office of USA Mobile Drug Testing franchise about these concerns, and invite their clarification, correction or rebuttal.

ARE YOU A USA MOBILE DRUG TESTING FRANCHISE OWNER, EXECUTIVE, EMPLOYEE OR CLIENT?
ARE YOU FAMILIAR WITH THE USA MOBILE DRUG TESTING FRANCHISE OPPORTUNITY?
PLEASE SHARE A COMMENT BELOW.

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Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, USA Mobile Drug Testing failure rate, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom

Written by ADMIN · Filed Under ALL POSTS, Service franchise, USA MOBILE DRUG TESTING Franchise