May 6, 2013
Culver’s franchise entity, Culver Franchising System, Inc., is being sued for alleged racial discrimination against two African-American franchise owners who wanted to develop Culver’s franchises in black neighborhoods.
The filing of the lawsuit was reported by Mary Mitchell in the Chicago Sun Times (Former franchise owners’ lawsuit accuses Culver’s of racial bias)
In a federal lawsuit filed last week, the first black franchisees in the Culver’s system… accuse Culver’s of refusing to expand its brand into black communities because of racial bias.
Michael L. Jones and Michael G. Wilbern allege that they were thwarted in their efforts to open franchises in predominantly black neighborhoods in Chicago and Indiana.
The lawsuit alleges that Wilbern tried to open restaurants at 95th and Stony Island; 83rd and Stewart, and 119th & Marshfield on the far South Side. All three locations were turned down, even though Wilbern claims he notified Culver’s there was the potential to obtain tax-increment financing.”
The Sun Times article reports that refused to approve another South Side Chicago site for Wilbern, despite the fact the city had was willing to provide the lot for $1.00.
Culver’s headquarters is in the Village of Prairie du Sac, WI.
The lawsuit maintains that the company is “owned and managed entirely by white citizens,” and the “overwhelming majority” of Culver’s restaurants are located in areas where African Americans are in the minority.
A quick check of Culver’s home town at City-Data reveals that it’s not exactly a bastion of ethnic diversity, with black residents comprising just .6% of the population:
Ethnic Make-Up of Prairie du Sac, WI
- White alone – 3,677 (92.6%)
- Hispanic – 190 (4.8%)
- Two or more races – 41 (1.0%)
- Black alone – 24 (0.6%)
- Asian alone – 24 (0.6%)
- American Indian alone – 8 (0.2%)
- Other race alone – 7 (0.2%)
- Native Hawaiian and Other Pacific Islander alone – 1 (0.03%)
What do you think?
Are Culver’s franchising and site selection policies discriminatory?
Or do franchise companies like Culver’s have the right to determine their own site-selection criteria, and no obligation to expand into locations they don’t feel will succeed?
ARE YOU FAMILIAR WITH CULVER’S & THE CULVER’S FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
tags: Culver’s, Culver’s franchise, Culver Franchising System Inc., Culver’s franchise cost, Culver’s franchising, opening a Culver’s franchise, Culver’s racist, Culver’s racism, Culver’s discrimination
April 30, 2013
McDonald’s franchise owners are getting increasingly frustrated, according to a relatively small but telling franchisee survey by Janney Capital Markets.
Are you a McDonald’s franchise owner or McDonald’s employee? Please share your thoughts with a comment below.
According to Crain’s Chicago Business, The McDonald’s franchisee survey respondents “characterized their relationship with corporate as 1.93 on a scale where 5 would be excellent and 0 awful.”
A chief complaint among McDonald’s franchisees continues to be continuing emphasis on the Dollar Menu and price promotions.
The Chicago Tribune cites one complaint of “couponing like there’s no tomorrow.”
Another respondent complained: "Every quarter we sell a smaller percentage of our menu at a full (and profitable) price."
Another McDonald’s franchisee complaint is new product introductions that have caused an “operational nightmare.”
According to a franchisee quoted in Crain’s:
"We have more complicated items, with more elements coming from the (distribution center), more equipment coming from suppliers so everyone else is making more money sending us more ‘stuff’ and we are expected to deliver a product that takes 55 seconds on the best day in less than that, do it consistently and with a smile on our face…There’s little to smile about."
The battle between McDonald’s franchisees and corporate is one that is inherent in the franchise relationship, especially with publicly traded franchisor’s.
The franchisor is concerned with increasing sales and driving its stock price.
The franchisee is most concerned with profitability, not sales, as well as operational efficiency.
…because McDonald’s is beholden to its investors, monthly sales performance is key, said John Gordon, founder and principal of Pacific Management Consulting Group, a San Diego, Calif.-based chain restaurant consulting group.
"That’s where the real rub comes in with franchisees — same-store sales," he said.
After nine years of ever-higher sales at restaurants open for at least a year, the traditional measure of retail success, the streak snapped in October.
"The good news is that the chain has had a lot of success in the last four to five years," said Jack Russo, an analyst at Edward Jones & Co. in St. Louis. "Unfortunately for owner-operators, it is bad news because the bar has been raised. (Corporate) is trying to do everything it can to get sales up."
When the priorities of franchisees and franchisors diverge, sparks fly and the the franchise industry’s characterization of franchisees being “in business for themselves but not by themselves” seems debatable, at best.
ARE YOU A McDONALD’S FRANCHISE OWNER, EMPLOYEE OR SUPPLIER? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
TAGS: McDonald’s Corp, McDonald’s franchise owners, McDonald’s franchisees, McDonald’s Corp., McDonald’s complaints, McDonald’s franchise complaints, McDonald’s franchisee complaints, McDonald’s Dollar Menu
April 22, 2013
UnhappyFranchisee.Com asked The Journal Record (in February of this year) to stop putting the public relations agenda of Beautiful Brands International (BBI) ahead of the welfare of its readers and the credibility and reputation of its own publication.
We specifically asked Mary Melon and TJR to print corrections to the inflated BBI franchise sales and units counts that it has been printing at BBI’s behest for several years.
Instead of breaking with their role as BBI propagandist, The Journal Record chose to highlight the inane, silly lawsuit BBI filed to try to intimidate its Internet critics, and included the statement that BBI has ““297 locations around the world,” which they know to be false.
We sent this letter to The Journal Record President & Publisher Mary Melon:
April 22, 2013
VIA Email & Registered Mail
President & Publisher
The Journal Record Publishing Co.
101 N. Robinson Ave. Suite 101
Oklahoma City, OK 73102
Dear Ms. Melon:
My name is Sean Kelly. I have 24 years of experience in the franchise industry, having been VP of an international franchise consulting firm, an executive with a successful franchise company, founder and President of a franchise advertising agency, an expert witness in franchise litigation, and, currently, as publisher of UnhappyFranchisee.Com. I am frequently quoted in national publications on franchise matters, and am a contributor to trade and industry publications.
On February 13, 2013, I sent you a detailed email (attached) alerting you to what I believe are a large number of inaccurate and misleading statements about Beautiful Brands International (BBI) published by The Journal Record. I pointed out that these misleading statements could be potentially damaging to your readers, some of whom may rely on your articles to make significant franchise investment or partnership decisions.
In my opinion:
- For several years, The Journal Record has consistently misled its readers as to the success of Beautiful Brands International by overstating the number of franchise locations BBI has open.
- For several years, The Journal Record has consistently misled its readers as to the success of Beautiful Brands International by overstating the number of franchise locations BBI has “in development.”
- For several years, The Journal Record published “earnings claims” that franchisors are prohibited from disclosing, bypassing protections put in place by the Federal Trade Commission.
- For several years, The Journal Record has consistently misled its readers as to the success of Beautiful Brands International by printing only positive stories and self-serving announcements provided by the company, and turning a blind eye to the lawsuits, widespread franchise closures, skyrocketing SBA franchise loan default rates and the near-complete failure of the BBI partnership program.
In my email of February 13, 2013, I cited specific examples of inaccuracies and requested that you, at the very least, print corrections or clarifications to ensure that your readers receive accurate information. I copied your senior editorial staff, your business editor, and writer D. Ray Tuttle on the email. You responded by instructing Mr. Tuttle to look into these allegations and to keep you informed as to what he found. Mr. Tuttle sent me an email, saying “Thank you for alerting me to BBI, these practices and the projections. You raise good points and something that needs attention.”
Not only did neither you nor your writer ever follow up with me on this matter, The Journal Record continued its tradition of faithfully serving the public relations interests of BBI by publishing the story “Beautiful Brands sues anonymous Internet critic” on March 12, 2013.
The unfounded lawsuit against the “Internet critic” (me) is, in my humble opinion, BBI’s cynical & transparent attempt to send a public warning to discourage whistleblowers from sharing their experiences with and opinions of Beautiful Brands International. Beautiful Brands International, CEO David Rutkauskas, and/or their attorney Robert Sartin of Barrow & Grimm, obviously hand-fed Ray Tuttle the lawsuit and their quotes.
It seems quite telling that, over the years, The Journal Record did not consider a sexual harassment lawsuit against Camille’s Franchise System, Inc. involving Mr. Rutkauskas (2007), a lawsuit filed by an international Camille’s franchisee (2010), a lawsuit filed by a local Camille’s Sidewalk Café franchisee (2010), or a lawsuit from an international master franchisee (2012) against BBI to be newsworthy, yet considers a frivolous, bullying lawsuit designed to silence a critic of BBI to be priority news. Ray Tuttle’s “Internet Critic” story appeared days after the lawsuit was filed, complete with polished quotes from attorney Sartin and details regarding the potential financial penalties for expressing negative opinions toward BBI.
Remarkably, Mr. Tuttle not only continued to describe the troubled and embattled BBI as if it were a success story, he repeated the false claim that “BBI has 297 locations around the world, including franchised units for CherryBerry Self-Serve Yogurt Bar, Camille’s Sidewalk Café, Rex’s Chicken and FreshBerry Frozen Yogurt Cafe.”
Having read my email, Mr. Tuttle knows that BBI does not have “297 locations around the world” and that BBI has no ownership stake in CherryBerry Self-Serve Yogurt Bar (CherryBerry principals recently told Franchise Times that they only use BBI for “legal work.”) Mr. Tuttle and The Journal Record continue to mislead readers by inflating BBI’s franchise sales and unit counts, and deceptively attributing locations that belong to other companies to BBI.
The Journal Record is not the only publication that has helped to create the illusion that BBI is an international franchise powerhouse with the Midas touch. However, The Journal Record is the only publication that has continued to intentionally deceive its readers about Beautiful Brands International after being informed of the truth. After your counterparts at Tulsa World and Franchise Times read my reporting on BBI at UnhappyFranchisee.Com, they each published excellent articles (Kyle Arnold’s "Camille’s empire copes with setbacks" and Julie Bennett’s "Reality Check," respectively) that provided reality-based overviews of BBI’s recent track record.
Ms. Melon, I hope this letter will help motivate you to accept my offer of assistance in helping you and your writers correct the misinformation and inaccurate impressions you have communicated regarding both the track record and current performance of the Beautiful Brands International franchise ventures and partnership programs. If The Journal Record chooses instead to continue to serve as an unfiltered public relations propagandist for David Rutkauskas, Beautiful Brands and their attorneys, I will continue to do your fact-checking for you and publicly debunk the BBI fairy tale you seem so intent (at least to this point) on communicating.
All the best,
President, Relentless, Inc.
Attachment: Emails dated February 13, 2013
ARE YOU FAMILIAR WITH THE JOURNAL RECORD, THE DOLAN COMPANY OR BEAUTIFUL BRANDS INTERNATIONAL? SHARE A COMMENT BELOW.
Tags: The Journal Record, The Dolan Company, Mary Melon, Ray Tuttle, Kirby Lee Davis, Beautiful Brands International, BBI, David Rutkauskas, Robert Sartin, Barrow & Grimm
September 10, 2012
Maid-Rite franchise owners are suing the Maid-Rite Corporation, CEO Bradley L. Burt and his wife, EVP Tania M. Burt alleging fraud, negligent fraud, violation of the Missouri Merchandising Practices Act and breach of contract in connect with the sale of a franchise in Maryville, Missouri.
The Plaintiffs are seeking in excess of $500,000 in damages.
Are you familiar with the Maid-Rite franchise opportunity? Please share a comment below.
Maid-Rite franchisees Eric and Faith Willoughby claim in the lawsuit that Maid-Rite and the Burts “induced them to purchase a Maid-Rite restaurant by presenting them with an outdated Franchise Disclosure Document or FDD…
“In particular, the suit claims that the defendants concealed the fact that Maid-Rite had lost a dozen stores in the prior two years, that Maid-Rite’s finances had worsened substantially with losses skyrocketing from $100,000 to $650,000, and that individual results at restaurants had nose-dived, with the average “per ticket” revenue for dinner plummeting by a full $1 between 2008 and 2010.”
The press release for the lawsuit, issued by W. Michael Garner, P.A., follows:
Former Maid-Rite Franchisee Sues for Fraud, According to Franchisee Law Firm W. Michael Garner, P.A.
Minneapolis, MN (PRWEB) September 07, 2012
SOURCE: W. Michael Garner, P.A.
W. Michael Garner, P.A., a law firm representing franchisees, announced that a former franchisee of Maid-Rite Corporation, a franchisor of diner-style restaurants featuring “loose meat” sandwiches, has sued the franchisor, its Chief Executive Officer, Bradley L. Burt and his wife, Tania M. Burt, Executive Vice President and Director, alleging fraud, negligent fraud, violation of the Missouri Merchandising Practices Act and breach of contract in connect with the sale of a franchise in Maryville, Missouri. The Plaintiffs are seeking in excess of $500,000 in damages.
W. Michael Garner, P.A., a law firm representing franchisees, announced that a former franchisee of Maid-Rite Corporation, a franchisor of diner-style restaurants featuring “loose meat” sandwiches, has sued the franchisor, its Chief Executive Officer, Bradley L. Burt and his wife, Tania M. Burt, Executive Vice President and Director, alleging fraud, negligent fraud, violation of the Missouri Merchandising Practices Act and breach of contract in connect with the sale of a franchise in Maryville, Missouri.
The Plaintiffs are seeking in excess of $500,000 in damages. The case was filed in Federal District Court in Kansas City, Mo. and is entitled Maryville Maid-Rite LLC et al v. Maid-Rite Corporation, et al., Case No. 4:12-cv-01030-BWC.
Eric and Faith Willoughby, and their corporation Maryville Maid-Rite, LLC, claim in the lawsuit that Maid-Rite and the Burts induced them to purchase a Maid-Rite restaurant by presenting them with an outdated Franchise Disclosure Document or FDD. The FDD, required by the Federal Trade Commission, must provide purchasers of franchises with accurate and relevant information about the franchisor and the franchise system. Instead, the suit alleges, the Burts and Maid-Rite gave the Willoughbys an FDD that was nearly 2 years old and that concealed important facts showing the decline of the Maid-Rite system.
In particular, the suit claims that the defendants concealed the fact that Maid-Rite had lost a dozen stores in the prior two years, that Maid-Rite’s finances had worsened substantially with losses skyrocketing from $100,000 to $650,000, and that individual results at restaurants had nose-dived, with the average “per ticket” revenue for dinner plummeting by a full $1 between 2008 and 2010. The suit alleges that Maid-Rite had a current FDD, with the damaging information, on hand when it gave the Willoughbys the outdated one. The Willoughbys also claim that to close the sale, Burt gave them an elaborate, written business plan, for use in applying for a bank loan, that contained detailed projections showing substantial and increasing profits. The suit alleges these projections violated federal regulations.
The Willoughby’s restaurant opened in Maryville in May 2011 and lasted less than a year. “This case shows that some franchisors will still disregard federal rules and go to any lengths, including falsehoods and misleading statements, to make a buck from unsuspecting and innocent franchisees. The Willoughbys are hard-working people who put their savings and heart and soul into this venture. Had they been told the truth about Maid-Rite’s declining fortunes, they never would have made this investment.”
W. Michael Garner, P.A., based in Minneapolis, MN, devotes its practice to assisting franchisees, dealers and distributors in their disputes with franchisors. Mr. Garner has won verdicts or settlements in excess of $235 million dollars against franchisors, has written the leading legal treatise on franchise law, and has testified before Congress in favor of franchisee rights.
ARE YOU FAMILIAR WITH THE MAID-RITE FRANCHISE OPPORTUNITY OR MAID-RITE CORPORATION? SHARE A COMMENT BELOW.
August 21, 2012
August 19, 2012
(UnhappyFranchisee.com) DUNKIN’ DONUTS Accused of Franchise Discrimination Against Indian American Woman
A lawsuit expected to be filed Monday, August 20, 2012 by Marks & Klein, LLP of Red Bank, NJ alleges that Dunkin’ Donuts engages in discriminatory franchise practices that deprive both African-American and female Indian American franchisees the economically advantageous opportunities afforded to white male franchisees.
In the Amended Complaint and Jury Demand titled Priti Shetty, Amy Pretto, and Reggie Pretto, Plaintiffs, vs. Dunkin Donuts Franchised Restaurants, LLC, a Delaware Limited Liability Company, Baskin-Robbins Franchised Shops, LLC, a Delaware Limited Liability Company and Wayne Miller, individually, Defendants to be filed in the Superior Court of New Jersey, Middlesex County, Marks & Klein contends that a female Indian American franchisee named Priti Shetty was berated, insulted and denied a third store because of her race and gender.
(For the allegations regarding Dunkin’ Donuts discrimination against the African American plaintiffs, read DUNKIN’ DONUTS Accused of Franchise Discrimination Against African Americans and DUNKIN’ DONUTS: SCLC Accuses Dunkin’ Donuts of Racial Discrimination Against Franchisees)
Suit Alleges Dunkin’ Donuts discriminated against the only female Indian multi-unit franchisee they had in NY, NJ, CT or RI
The lawsuit contends that Priti Shetty and two male partners were granted a three unit franchise deal. When Ms. Shetty became the sole operating partner, the suit alleges that Dunkin’ Donuts refused to grant her the rights to a third location.
The following excerpt from the lawsuit provides an overview of the deiscrimination allegations:
Despite operating two profitable locations, Priti Shetty’s request to open a third location in Stockholm, New Jersey was unreasonably rejected after she told Dunkin she would be solely responsible of operating the store.
The flimsy excuse used by Dunkin for its refusal to approve the third location was that the store would not be able to service customers without a drive-thru window.
The same Stockholm location, however, was eventually sold to a (white) male, and to date operates without a drive thru window.
The discriminatory nature of this refusal is further reinforced by the fact that Priti Shetty was regularly subjected to harassment and unfair treatment (as previously described above) at her other two Dunkin locations by her Operational Manager Wayne Miller and other Dunkin managers who regularly berated Priti (and her female Indian employees) and threatened to fail Priti’s stores on inspections without cause and repeatedly told Priti because she was an Indian woman, she was not able to run a Dunkin location.
Dunkin also refused to let her re-open the two franchised stores that failed after nine months of operation by a white operator – after she had successfully operated the locations for five years – because she is an Indian American female.
Dunkin’s unreasonable refusal to let Priti Shetty re-open the Wantage and Oak Ridge stores has resulted in her being sued for rent by the two separate landlords of those premises…
Defendants knowingly refused to do business with Plaintiff Shetty based upon her race, national origin, color and sex by (i) consistently permitting its agent to make derogatory, harassing and threatening statements to Plaintiff Shetty and advising her that females were incapable of competently operating Dunkin stores and (ii) refusing to permit her to open a third Dunkin location in Stockholm, New Jersey without cause or justification and subsequently permitting a male franchisee to open in the same location…
The lawsuit also alleges that Dunkin’ Donuts discriminated against an African American couple, and that Dunkin steers its few African American franchisees to troubled and lower potential ethnic neighborhoods and reserves socioeconomically advantageous markets for non-minority franchisees.
Read the entire complaint here:
Also Read: BASKIN-ROBBINS Franchise Complaints
ARE YOU A DUNKIN’ DONUTS FRANCHISE OWNER OR FRANCHISEE?
DO YOU BELIEVE DUNKIN’ DONUTS DISCRIMINATES ON THE BASIS OF RACE, CREED, COLOR OR GENDER?
SHARE A COMMENT BELOW.
Company rebuttals welcome.
Tags: Dunkin’ Donuts, Dunkin’ Donuts franchise, Dunkin’ Donuts franchise lawsuit, Dunkin’ Donuts discrimination, Dunkin’ Donuts complaints, Dunkin’ Donuts litigation, Priti Shetty, Amy Pretto, Reggie Pretto, Baskin Robbins franchise, Baskin Robbins lawsuit, Baskin Robbins franchise complaints, Baskin Robbins discrimination, Jerry Marks, Marks & Klein, franchise lawsuits, discrimination lawsuits
August 18, 2012
Del Taco franchise opportunity: Are you familiar with it?
If so, please share your experience, opinions or insights with a comment below.
According to data released by the Small Business Administration (SBA), Del Taco franchise owners who qualified for SBA-backed franchise loans have a loan failure rate of 21%.
Of the 50 SBA-backed loans issued to Del Taco franchise owners, a quarter were unable to repay their loans.
That percentage just barely earns Del Taco a spot in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)
Del Taco has been undergoing significant improvements.
In 2006, after nearly doubling in size, Del Taco was acquired by privately-held Sagittarius Brands.
In 2008, Del Taco opened its 500th restaurant, expanded to 16 states and achieved system-wide sales of $563 million.
According to its website,
“In 2010, Del Taco completed a recapitalization transaction with an infusion of equity capital from investors.
“This enabled Del Taco to continue its growth path and develop a new prototype design with a contemporary look, updated colors and new interiors which convey the freshness ‘cues’ that Del Taco stands by including freshly grated cheddar cheese, lard-free beans made from scratch, marinated chicken grilled throughout the day and hand-made pico de gallo.
“Company restaurants throughout the system are being reimaged and new franchise locations feature the prototype design.”
”The development and construction team at Del Taco has also revamped the overall building to reduce costs and improve through-put to meet increased customer traffic.
“This effort is benefiting new company restaurants as well as new franchise locations.
”By the end of 2011, Del Taco had more than 530 locations.”
Del Taco maintains a healthy balance of company-owned and franchised locations
We believe that a 20% SBA loan default rate is a red flag that warrants attention by prospective franchise owners.
We do salute Del Taco for maintaining a nearly 50% company-owned to franchise-owned store ratio.
We also are encouraged by the infusion of capital and the investment in concept, operational and marketing improvements.
And the overall, the growth of the chain seems sound.
What do you think of the Del Taco franchise opportunity?
Are you familiar with the Del Taco franchise opportunity?
What do you think accounts for the SBA loan failure rate of Del Taco franchise owners?
What steps should Del Taco be taking to stop further franchise failures?
Has Del Taco taken enough action to address the problems that led to these loan failures?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
If you are a Del Taco franchise representative or employee, please feel free to leave a comment or email us at UnhappyFranchisee[at]gmail.com.
ARE YOU FAMILIAR WITH THE DEL TACO FRANCHISE OPPORTUNITY?
ARE YOU A CURRENT OR FORMER DEL TACO FRANCHISE OWNER?
PLEASE SHARE A COMMENT BELOW.
Del Taco, Del Taco franchise, Del Taco franchise complaints, Del Taco complaints, fast food franchise, quickservice franchise, mexican food franchise, mexican fast food franchise, franchise failure rates, SBA franchise loans, worst franchises, unhappy franchisee, Sagittarius Brands, Del Taco LLC, Paul J.B. Murphy III, David Pear, Barry Barnhart, Michael Vogel
August 15, 2012
A&W Restaurants CEO Kevin Bazner responds to UnhappyFranchisee.com, explains the reason for A&W Restaurants 22% SBA franchise loan default rate, and provides an update of the newly acquired franchise company.
Are you familiar with the A&W Restaurants franchise opportunity? Please share a comment below.
In our post A&W Restaurants Franchise Complaints, we reported that the Small Business Administration listed the default rate of A&W Restaurant franchisees for SBA-guaranteed loans was 22%.
We also reported that 167 A&W franchises (18%) had ceased operation or been terminated between 2008 and 2011, according to A&W’s 2012 franchise disclosure document (FDD).
UnhappyFranchisee.com invites franchisors and individuals to participate in out discussions, and to feel free to rebut, clarify or disprove statements made by us or our commenters.
A&W Restaurants President & CEO Kevin Bazner provided the following statement in response to our post:
As President and CEO of A&W Restaurants, I feel the need to respond to the recent article published on this site.
While SBA did cite data gathered by the Coleman Report, several key points were left out, which made it seem like the A&W Restaurants franchise as a whole has a high loan failure rate. That is simply not true.
The end of the article mentions that A&W Restaurants was purchased by a partnership of franchisees in 2011. It fails to note that the sale was not finalized until December 19th- quite literally the end of 2011. For the majority of the year, A&W was owned by YUM! Brands, who had purchased the company in 2002.
It is also not mentioned that the A&W system as a whole operates in several different arenas: as a base brand, and also co-branded, largely with KFC and Long John Silver’s. Once YUM! announced the plans to sell A&W, a portion of the co-branded restaurants dissolved, choosing to operate without the A&W component. Many of these restaurants had qualified for SBA- backed franchise loans, and are no longer a part of the A&W system, but were included in the data that indicated a 22% loan default rate.
Overall, the A&W Restaurant family is stronger than ever. We have successfully transitioned from YUM! ownership, and have enjoyed seeing positive sales results from our operators.
Our focus for 2012 is simple: to build profitable sales. We are not actively pushing to open more units without thoroughly researching the needs of the market beforehand.
We have an open dialogue with our operators, and have pledged to maintain complete transparency with our franchise partners. As a company, we are committed to providing our operators with all of the tools necessary to make their business profitable, including ongoing training, and marketing and operational support.
We are incredibly proud to be a part of this company, and look forward to growing this brand and increasing the profits of our franchise partners.
President & CEO
ARE YOU AN A&W FRANCHISE OWNER OR FORMER FRANCHISEE?
ARE YOU FAMILIAR WITH THE A&W FRANCHISE OPPORTUNITY?
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Tags: A&W Restaurants,A&W Restaurants franchise, A&W franchise, restaurant franchise, A&W franchise failures, A&W franchise complaints, A&W franchise problems, YUM Brands, Kevin Bazner, SBA loans, SBA loan failure rates
August 8, 2012
To: Attorney Robert B. Sartin, Barrow & Grimm
cc: David Rutkauskas, Chairman & CEO, Beautiful Brands, Inc.
RE: Beautiful Brands discussion at UnhappyFranchisee.com
Dear Mr. Sartin:
The UnhappyFranchisee.com website invites those with opposing viewpoints on particular franchise companies and issues (often franchisors and current or former franchisees) to present their views so that our readers, especially prospective franchisees, can weigh both sides and make more informed decisions.
We believe that more realistic, better-informed franchisees make better franchisees, and help to build stronger, more successful franchise companies.
We are not anti-franchising, and it is our goal to help legitimate companies become better.
While franchisors are often unaccustomed to open dialogue and interacting in a forum that is not under their control, our site actually gives them the opportunity to clear up misconceptions, explain extenuating circumstances, and get credit for initiatives they undertake on behalf of their franchisees.
We understand that there are usually two sides to every story. We give both sides the opportunity to present their case.
We believe that more realistic, better-informed franchisees make better franchisees, and help to build stronger, more successful franchise companies. – Unhappy Franchisee
It has come to our attention that you, on behalf of your client Beautiful Brands, Inc., have sent threatening letters to some of those who commented on our site. We’ve been told that these letters threatened these commenters with potential lawsuits if they did not retract their comments within ten days of receiving the letter.
I wanted to take this opportunity to explain our policies regarding retractions, and also offer you and your client a suggestion for a more beneficial course of action.
We are happy to publish a timely retraction from any commenter who requests it. Several have requested retractions, and we have published two posts this morning indicating which comments have been retracted. You can see them here:
We will continue to post comment retractions from the recipients of your letters as we receive them.
We do not, however, remove or delete comments posted by third parties on our site. This is a common policy among the better blogs for a host of reasons.
However, I would like to extend the offer to you and your client to respond to, clarify, rebut or provide an alternative opinion on any of the statements appearing on UnhappyFranchisee.com, whether they be comments or statements we have made. You and/or your client are free to post directly in the comment section of any of the growing number of posts on Beautiful Brands. If you prefer, you can provide a statement that we can publish as a freestanding post, free of our editorial opinion. I would also be happy to conduct a written interview with Mr. Rutkauskas by sending him a list of questions and publishing his answers verbatim.
I’m sure you’ll agree that sometimes the heavy-handed legal approach is not the best approach. Responding to negative comments in social media is one of those areas. There are many, many complaint sites that have higher search engine power and do not provide as enlightened an approach to rebuttal as ours. There are franchise industry sites with greater reach than ours who love to report on franchisor tactics they perceive as bullying. Believe me, in the blogging world, those perceived as trying to kill open dialogue and free speech on the Internet are usually rewarded with widespread exposure, not the silence they tried to achieve.
My point is, it is better for your client to cease the intimidation tactics and address the issues here, in a friendly forum, rather than elsewhere on the Internet where such dialogue might be more difficult,
I invite your client to provide us with a statement, comments or guest post addressing the published SBA default rate of Camille’s Sidewalk Café franchise owners, of the decline in units, and affirming their commitment to the success of their franchisees and, hopefully, explaining the initiatives they are implementing to ensure the success of their current and future franchisees.
I look forward to your thoughts on these matters.
Also read: BEAUTIFUL BRANDS Franchise Complaints
ARE YOU FAMILIAR WITH BEAUTIFUL BRANDS, DAVID RUTKAUSKAS, OR THE CAMILLE’S SIDEWALK CAFE FRANCHISE? SHARE A COMMENT BELOW.
August 8, 2012
More failed Camille’s Sidewalk Café franchise owners have requested that their comments be retracted after they received threatening letters from the law firm of Beautiful Brands Inc., franchisor of Camille’s Sidewalk Café, Freshberry, Rex’s Chicken and the now-defunct Coney Beach.
The comments were in response to our post regarding a Small Business Administration (SBA) report alleging that 58% of SBA loans awarded to Camille’s Sidewalk Café franchise owners ended in default (See CAMILLE’S SIDEWALK CAFE Franchise Complaints)
In another post (BEAUTIFUL BRANDS Franchise Complaints), we noted that, according to a Beautiful Brands Inc. disclosure document, 70 Camille’s Sidewalk Café franchises had been terminated, not renewed or ceased operation for other reasons between 2008 and 2011 .
We solicited opinions from franchisees, the company or customers: What accounts for the high failure rate of Camille’s Sidewalk Café franchises? What can Beautiful Brands do to help reduce the high failure rate?
Beautiful Brands Franchise Owners Alleged Lack of Support
Former franchisees cited a lack of franchisor support, inadequate supply distribution and the franchisor’s apparent indifference to their success as main factors in the failures of their Camille’s Sidewalk Café franchises.
Beautiful Brands has not yet commented on the SBA default rate, the seemingly high failure rate or what measures they have taken to increase support for their remaining franchisees.
Instead, they had their law firm send threatening letters to franchisees who posted with their real names, demanding that they retract their comments or face possible litigation for “defamation.”
Former Camille’s Franchise Owners Retract Their Comments
As we stated in our previous post (BEAUTIFUL BRANDS Former Camille’s Franchise Owner Retracts Comment After Legal Threat), UnhappyFranchisee.com does not remove comments, even when requested by the comment author.
We will, however, post a commenter’s retraction.
Former Camille’s Sidewalk Café franchise owners hereby retract the following comments:
The success of a franchisor is measured by the success of their franchisees. When a franchisor is succesful but his franchisee fail he to is a failure. When a franchisor becomes very wealthy and most of his franchisees lose everything, then exploits his original fabricated succuss to develop a business model to expand his fortune on the failure of his past and future franchisees, that is fraud.
This commenter retracts his statement that Beautiful Brands provides inadequate support and does not provide efficient food distribution to new markets:
Well I could on w this senerio for pages. Simply put Dave R should be tried and prisoned for the way he treated us and other franscises. We had purchased rights to 7 locations in MN and opened 2 one Waite park and one in rochester near the Mayo clinic. Dido prior comments. Although they helped in opening the sites that was it!
All support was gone when we continued to struggle with shitty and high priced food prices and losey support from us foods. We had to find our own vendor with very high prices , Cisco. Two other franchisers in Minneapolis opened 4 restraunts and despite long experiences in the restaurant business were unable to make a go of it.
The whole ordeal cost me millions,frustration, drove my to son to drink and leave the business, and a law suite and judgement for payment os a long term lease. All in all it comes down to lack of support and pricing that Camille’s couldn’t offer. Dave was interested in selling his francises collecting his money and and leaving town. I would like to some day see him on CNBC American greed after they lock him away.
These comments alleging lack of support and abandonment of established franchisees in favor of promoting new concepts are also hereby retracted:
Camille’s sidewalk cafe has a high default rate because there is no support. Franchisees cannot get a hold of them and they put no effort into helping them with support. The concept is ran by family that has no real restaurant or business experience other than watching the food channel.
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Beautiful Brands which is Camille’s Sidewalk Cafe parent company. They have moved on from Camille’s and are doing the same thing with there other brands. They make most of their money from franchise fees and development deals.
“Control over people is an illusion that will bite you in the end.” – David Rutkauskas
“Control over people is an illusion that will bite you in the end,” writes Beautiful Brands Chairman & CEO David Rutkauskas in his blog. “…if you live by the rigidity of structures and the inflexible rules you impose… then you’ll only suffer defeat at the hands of your own creation.”
Actually, that’s a pretty poignant quote.
The attempt to control negative comments about Beautiful Brands via legal threats and intimidation makes Beautiful Brands and David Rutkauskas look like bullies. And no one likes bullies.
Claiming that personal opinions and/or factually verifiable statements are legally defamatory (they’re not) makes both David Rutkauskas and his law firm look silly.
Preaching transparency and open dialogue on his blog then trying to shut down the 1st Amendment rights of those who believed in and invested in his brand, in our opinion, makes CEO David Rutkauskas seem a tad hypocritical and, in the end, ineffective. (Where will he send the threatening letters when the comments are anonymous?)
Whether their complaints are valid or not, Beautiful Brands has created a number of unhappy and vocal franchisees.
The SBA report and the failed locations reported in the Beautiful Brands disclosure documents cannot be ignored-away.
So we again invite David and Camille Rutkauskas and Beautiful Brands to take us up on our offer to join the conversation…
To provide clarification as to the reasons for the seemingly high default rate and franchise closures of their franchises…
To dispute the allegations made by their ex-franchisees, if they wish…
And to explain what initiatives they are implementing to help their surviving and future franchisees.
As David Rutkauskas writes in his blog, “Believe me, you don’t want to be known for using people and then tossing them aside.”
Also read: BEAUTIFUL BRANDS Franchise Complaints
ARE YOU FAMILIAR WITH BEAUTIFUL BRANDS, DAVID RUTKAUSKAS, OR THE CAMILLE’S SIDEWALK CAFE FRANCHISE? SHARE A COMMENT BELOW.