December 21, 2012
RHINO7 Franchise 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 representing themselves as franchisor employees.
(UnhappyFranchisee.Com) According to the the Rhino7 website:
“Franchisor brand growth (adding franchisees) is Rhino7′s primary focus. We grow existing franchisors by selling franchisees, and we help create new franchisors out of existing businesses.
“In both cases, we start by helping our clients to strengthen their brands and enhance their franchisee marketing systems. We then leverage our knowledge and experience within the franchise industry, providing full-service capabilities, and excellent follow-through and support for our franchisors.
“We do all of this with a level of honesty, integrity, and an all-in commitment to both you and your brand that you simply won’t find anywhere else.”
RHINO7 franchise clients include Go Yo! frozen yogurt franchise, the PRO Martial Arts franchise, and the USA Mobile Drug Testing (USAMDT) franchise opportunity.
An unhappy USA Mobile Drug Testing franchisee, who was sold a franchise by an aggressive Rhino7 salesman, submitted this complaint on theUSA MOBILE DRUG TESTING Franchise Complaints post:
Rhino 7… USAMDT [USA Mobile Drug Testing] contracts them to do the business development and sell territories.
John Cohen, co-owner of Rhino 7, is listed on the USAMDT org 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. Untrue. They are not. Broker firms like Frannet and Franchoice send prospects to Rhino 7 to close.
My broker emailed me a short summary of the franchise and the earnings potential that is listed in the FDD. The same BS listed in the one posted here but I didn’t get the actual FDD until I started working with Rhino 7. I now know that I didn’t get the entire FDD, such as the list of franchisees. That was conveniently left out. I told my broker with Frannet about my experience and she stopped selling the franchise.
Most of the franchisees had Chris Otter as their sales rep at Rhino 7. He would say ANYTHING to sell a franchise, including making various earnings claims. He reportedly told every franchisee he sold over his 2 year track record that he and his wife planned on buying a territory. Many franchisees complained to [USA Mobile Drug Testing CEO] Joe Strom about his tactics once they were in the network, Joe always said he’d look into it but never did anything about it.
Chris allegedly was let go in Oct. 2012. Chris wasn’t the only one that lied and made financial claims to prospects, Neil Weiss reportedly has as well.
They are really adamant with a prospect that the franchisees are too busy to take validation calls. It was like pulling teeth to get to talk to even one. They want you to listen to pre-recorded validation calls that are monitored and mediated by the Rhino 7 sales director at the time. Finally I found several through LinkedIn and scheduled appointments to talk with them. They were happy to talk but so many were so new they didn’t have much to say.
Owners, employees or clients of Rhino7 are welcome to provide clarification or rebuttal of these allegations below, or by emailing us.
ARE YOU FAMILIAR WITH RHINO7 FRANCHISE SALES & DEVELOPMENT SERVICES? PLEASE SHARE A COMMENT BELOW.
Tags: Rhino7, Rhino 7, franchise sales, franchise consulting, franchise broker, USAMDT, Doug Schadle, John J. Cohen, Chris Otter, Neil Weiss, Go Yo! frozen yogurt franchise, PRO Martial Arts franchise, USA Mobile Drug Testing franchise
December 13, 2012
Beautiful Brands Chairman & CEO David Rutkauskas is being interviewed by Tulsa World retail reporter Kyle Arnold this week, we’ve been told.
UnhappyFranchisee.Com was notified of this at the last minute by Tulsa World Business Editor John Stancavage:
“We are going to do the Rutkauskas interview this week. This is your opportunity to be heard and be a part of this story. So, we need to hear from you, on the record, soon.”
This is the first we’ve heard from John Stancavage since we emailed him objections to Tulsa World’s printing of Beautiful Brands International (BBI) deceptive and misleading (in our un-humble opinion) press releases as bylined articles, without verification or fact checking.
Stancavage continued to publish BBI propaganda verbatim even after we sent him and one of his business writers proof that what they were printing was inaccurate.
This week, John Stancavage sent a terse email saying that if we want to have input to the story, we need to go on the record with an interviewee name and full contact information. Doesn’t matter to Stancavage that BBI sics their pit-bull attorneys on anyone who criticizes under their real name, evidently.
One anonymous source has told us that John Stancavage is good buddies with (or at the very least has a man-crush on) David Rutkauskas. So, thanks, Mr. Stancavage, but no thanks. But nice try.
However, we did provide “retail reporter” Kyle Arnold with enough info to do some actual reporting in the unlikely event that Tulsa World wants to take a momentary break from press release republishing and take a stab at actual journalism.
Here’s our letter (email) to Kyle Arnold, which we CCed to John Stancavage:
I am the publisher of a franchise insider website called UnhappyFranchisee.Com.
We have been critical of TulsaWorld.com for continuing to promote Beautiful Brands and its franchised brands as a success story when the facts indicate that Beautiful Brands has created many more failing or doomed businesses than successes. Despite the failures and pleas from failing franchisees for assistance, BBI continues to sell franchises and expansion “partnerships” without acknowledging the personal and financial devastation left in their wake. Up til now, Tulsa World has helped to create and maintain the illusion of BBI success.
Your editor John Stancavage has said that you are researching a story that will finally tell the truth about BBI, and that you are going to interview David R. Given Tulsa World’s past infatuation/collusion with BBI, we are skeptical but hopeful you will do real reporting and tell the truth about BBI’s track record. We also hope that you will give due credit to UnhappyFranchisee.Com for publishing franchise facts and franchisee grievances so people my read our posts for more info on BBI.
BBI makes money selling two types of dreams: Franchise Opportunities to those dream of owning their own businesses, and Partnership Opportunities to those who dream of building a national franchise system with BBI’s help. As we understand it, BBI generates income for themselves whether these dreamers fail or succeed.. and most fail or never open the franchises they paid for.
Yet publications like Tulsa World (so far) continue to promote the illusion that those who invest their life savings with BBI are joining a winning team, a success factory (despite obvious evidence to the contrary).
CAMILLE’S SIDEWALK CAFE Franchise Complaints (See the comments posted under it from unhappy franchisees)
We reported the facts, from BBI’s own documents:
“In 2007, Beautiful Brands claimed that it had 100 Camille’s Sidewalk Cafés open and “more than 800 franchise agreements worldwide.”
The Camille’s Sidewalk Café 2011 Franchise Disclosure Document (FDD) indicates that in the beginning of 2008 there were 81 Camille’s franchises open in the U.S..
By the end of 2010, that number had dropped to just 41 U.S. franchises.
As of June, 2012, there are 32 Camille’s U.S. locations listed on their website. The Camille’s U.S. franchise network has shrunk 60% since 2008.”
In 2008, Beautiful Brands claimed it had sold 800+ Camille’s franchises. In 2012, Camille’s website lists 32 open locations.
According to a Tulsa World article in 2008:
“Rutkauskas is founder and CEO of Beautiful Brands International, which operates franchises that include Camille’s Sidewalk Cafe. Camille’s alone has nearly 900 locations in development worldwide, according to the company’s Web site.”
Kyle, in franchising, the term “in development” means that someone has paid a fee for the rights to develop a given franchise. That would indicate that BBI collected fees for nearly 900 Camille’s franchises, yet only 32 are still open. BBI collected fees for nearly 869 franchises, 800 of which appear to never have opened with the balance having opened and closed. The question to ask is, is BBI’s real business selling dreams that never come to fruition?
Adding credence to the suspicion that BBI is simply interested in collecting franchise fees no matter what the outcome is the fact that BBI pre-sold 14 Coney Beach franchises before they even tested the business. Coney Beach failed dismally, and your publication quoted BBI founder David Rutkauskas admitting to doing no research into hot dog consumption before selling the untested hot dog franchise. He told Tulsa World “I don’t think we realized that people don’t eat hot dogs three times a week.”
Ask David if those 14 were repaid their franchise fees. We know of a franchisee complaining that they were stuck with their worthless franchise rights to 2 Coney Beaches. It appears BBI sold an untested concept, took money for it, abandoned the concept, yet kept the money.
Why does Tulsa World continue to promote BBI as a success story when its own publication has been publishing all the damning evidence that reveals BBIs failures for years now?
Are you really going to end this deception? We hope so, Kyle, because good people and their families continue to be hurt. Business is business, but people need to be able to make informed decisions, not have trusted business publications printing fantasies as fact.
We have learned that when franchisees attempt to speak out or warn others, they are hit with legal threats by BBI and intimidated into silence. See what happened when former franchisees exercised their 1st Amendment rights on our site:
BBI’s “Partner Programs”
Tulsa World and others frequently publish BBI press releases that hype the signing of a new partner brand into the BBI portfolio, along with David’s obligatory statement about how great the new concept is and how BBI is going to make them the next franchise success story (like Coney Beach!). Most soon fade away and are dropped quietly from the BBI portfolio without notice. Strangely, Tulsa World never comments on these departures… or that these brands are missing by the time the next press release is published. Why is that?
We are told BBI’s “partner” brands pay BBI a development fee (We have been told it ranges from $50K to $100K) after receiving the promise that BBI will build them into a lucrative, national franchise system. We’ve been told that these small business owners have reported that they feel neglected and cheated once BBI has their money, but they won’t speak out due to fear of legal repercussions and intimidation. Some have separation agreements that prohibit them from warning others.
Do a quick check of published BBI past press releases and you’ll find evidence of at least 13 companies that signed up with BBI and whose franchise programs have gone nowhere. They made a big splash when they signed up with BBI, and then they quietly slipped off the BBI “portfolio” without a word.
The Bread and Butter Bistro
The Crusty Croissant Bakery & Café
Dixie Cream Donut Co.,
In the Raw Sushi
Le Beau Rouleau Crepes and Croissants,
St. Michaels Alley.
Sonny Bryan’s Smokehouse,
Top That! Pizza
Please ask David how much these brands paid BBI and why each of them separated from BBI without achieving franchise success? Please ask how many of the current 7 franchisors named in the portfolio have requested or are in the process of separating from BBI?
FYI, I have asked a number of former franchisees to submit questions that will help you with your interview with David Rutkauskas. I will compile them and share them with you asap. I do understand that writing the truth will mean that you will have to violate the protection so far afforded to Tulsa’s Golden Boy by Tulsa World. I sincerely hope you are willing, able, and allowed to do so so that those who are considering signing on with BBI can make a more informed decision.
Legal disclaimer: Of course, these are all my opinions and I invite you to draw your own conclusions. I could be wrong. As opinions, these statements cannot be considered as defamation against TulsaWorld, BBI, its founders or officers.
Feel free to respond with comments or questions. I wish you the best of luck with your story and interview.
We look forward to reading Kyle Arnold’s blockbuster interview with Beautiful Brands Chairman & CEO David Rutkauskas.
The result will reveal whether Tulsa World and business editor John Stancavage are in journalism or in the fairy tale business.
ARE YOU A BEAUTIFUL BRANDS INTERNATIONAL FRANCHISE OWNER OR FRANCHISE PARTNER? ARE YOU FAMILIAR WITH BEAUTIFUL BRANDS INTERNATIONAL (BBI)? PLEASE SHARE A COMMENT BELOW.
November 15, 2012
McGrow Franchise Consulting spreads the deadly franchise lie that franchises hardly ever fail.
(UnhappyFranchisee.Com) McGrow Franchise Consulting of Hingham, MA claims it is “recognized as the leading franchise consulting firm in this country.”
McGrow Franchise Consulting encourages companies to start offering franchises with their help, claiming McGrow will share with them the “secrets to success.”
McGrow Franchise Consulting claims that the U.S. Department of Commerce has stated that fewer than 5% of franchises ever fail.
According to McGrow Franchise Consulting, franchisees don’t need to worry when they invest their life savings, 401Ks and their kids’ college funds because they have a whopping 95% chance of success.
Unfortunately, McGrow Franchise Consulting is spreading The Franchise Lie.
And they have inspired others (like sex offender & franchisor Greg Cantrell) to spread the franchise lie as well.
McGrow Franchise Consulting Spreads The Franchise Lie
McGrow Franchise Consulting can claim it’s recognized as the leading franchise consulting company in the nation.
Yet, in the past two decades, we’ve never heard anyone refer to McGrow as the leading anything. Most people in the industry have never heard of them.
McGrow Franchise Consulting claims its clients are successful, that their clients have sold thousands of franchises, that they maintain long term relationships with every client and that, if you hire them, “You’ll be able to expand with less overhead and fewer day-to-day operating headaches, while generating a highly profitable stream of income.”
Yet McGrow Franchise Consulting does not include a client list on its website, and there are no names attached to its few sparse client comments. Where are the long lists of successful franchise clients who are maintaining a 95% success rate and generating steady streams of profits?
McGrow Franchise Consulting claims that buying a franchise is an almost risk-free investment:
Low Risk – The U.S. Commerce Department estimates that 95% of franchises succeed; only 25-35% of independent businesses succeed. Why the difference? Since a franchise is usually a duplicate of an already successful business, it should succeed.
The only problem is that the U.S. Commerce Department never stated that franchises have an estimated 95% success rate. They haven’t published any success rate that we know of, at least not in the past 25 years.
It’s a lie.
Even the IFA warned about The Franchise Lie
In May, 2005, International Franchise Association President Matthew Shay warned franchisors and other members (McGrow is a supplier member of the IFA) to knock it off with the bogus statistics. He wrote:
A message from International Franchise Association President Matthew Shay
It has come to our attention that some IFA-member companies may be providing information about franchising that is long out of date and no longer presents an accurate picture of the sector.
Of particular concern is information claiming that the success rate of franchised establishments is much greater than that of independent small businesses.
Many years ago, the U.S. Department of Commerce conducted studies about franchising which presented such statistics. That information is no longer valid. The agency stopped conducting such studies in 1987.
We strongly urge you to remove any information from your Web site and published materials that make such a claim. The use of such data, in the absence of current research, could mislead prospective franchisees who are attempting to conduct responsible investigations…
As a member of the franchising community, you serve as a gateway to future generations of franchisees and entrepreneurs. Please join IFA in making an effort to present an accurate picture of franchising.
Matthew Shay President
International Franchise Association
Could it be that the leading franchise consulting firm in America and a long-time member of the IFA, and its founder Jack McBirney, didn’t get the memo?
Or are McGrow Franchise Consulting and Jack McBirney knowingly deceiving prospective franchisors and franchisees as to the real dangers of franchising?
We will contact McGrow Franchise Consulting and ask for clarification and give them a chance for rebuttal.
We will ask them for a copy of the Department of Commerce research study that they quoted.
And we will ask them for a complete list of ALL the franchise programs they have helped launch.
It will be interesting to see how close to a 95% success rate their clients have achieved.
ARE YOU A MCGROW FRANCHISE CONSULTING CLIENT? ARE YOU FAMILIAR WITH THE MCGROW FRANCHISE CONSULTING, JACK MCBIRNEY OR THE FRANCHISE LIE? SHARE A COMMENT BELOW.