WINDOW WORLD Lawsuit Alleges Illegal Franchise Sales

Window World, Inc.®, headquartered in North Wilkesboro, N.C., claims to be America’s largest replacement window company with stores and offices in more than 200 cities nationwide.

Window World has grown to more than 200 cities by selling what it termed “license agreements,” not franchises.  In an October, 2011 letter to Window World “licensees,” Window World CEO Tammy Whitworth and Window World President Dana Deem admit that their “license,” according to the Federal Trade Commission (FTC) and some state agencies, actually meets the definition of a “franchise.”

Since Window World has not complied with franchise registration and disclosure laws (which includes providing prospective franchisees with a Franchise Disclosure Document, or FDD), Window World has in essence admitted to having sold illegal franchises for several years.

The letter offers Window World “licensees” one of two options:  sign the new Window World franchise agreement and (assumedly) let Window World off the legal hook, or rebrand as an independent, and turn over all Window World manuals, forms and proprietary stuff.  If a “licensee” opts for the latter, Window World will pay them back their initial fee minus any profit they derived from their business.

Window World “licensee” David Hampton and his Window World of Chicagoland, LLC (“WWC”) is opting for a third option:  file a lawsuit in US District Court against Window World, Inc., Tammy Whitworth and Dana Deem.

According to the lawsuit:

This is an action for rescission and damages based on Defendants’ violations of the Illinois Franchise Disclosure Act, 805 ILCS 705/1 et seq. by, among other things, failing to register as a franchise under the Illinois Franchise Disclosure Act (“IFDA”) and making fraudulent representations and omissions in connection with the sale of an unregistered franchise. Plaintiffs also seek damages for Defendants’ breach of contract arising out of Defendants’ denial of Plaintiffs’ right of first refusal by establishing a new territory adjacent to Plaintiffs’ territory. As a result of Defendants’ wrongful conduct, Plaintiffs’ customer base has dwindled and the once thriving business has over night been devalued causing Defendants substantial monetary damages entitling them to recover damages and/or rescission under Illinois law.

David Hampton and Window World of Chicagoland, LLC are seeking rescission of the License Agreements and/or an award of damages, including their reasonable attorneys’ fees and court costs, in an amount in excess of $75,000, and for an award of punitive damages.

David Hampton and Window World of Chicagoland, LLC are represented by Alice A. Kelly of Chicago-based The Kelly Law Group, LLC.

Window World Franchise Lawsuit Documents (pdf format)

WINDOW WORLD Franchise Complaint (Legal Complaint)

Window World Letter to Franchisees (Exhibit C)

Window World Final Judgement & Consent Decree (Exhibit D)

ARE YOU FAMILIAR WITH WINDOW WORLD? WHAT DO YOU THINK? SHARE A COMMENT BELOW!

To contact the author and site admin, email UnhappyFranchisee[at]gmail.com

TRITON STONE GROUP Franchise Lawsuit: Someone’s Lying

Two prominent franchise owners of Triton Stone Group allege they were fraudulently induced into buying unprofitable, debt-ridden franchises, then were bullied by the franchisor to take on unsurmountable debt. 

The franchisor calls the claims “outrageous, ridiculous” and others claim the franchisees are the ones who are unreputable and dishonest.

Who’s lying?  Share your opinion below.

Did Triton Stone “Cook the Books”?

According to a story by David Wren of The Sun News, two prominent South Carolina franchise owners claim they were cheated out of millions of dollars by national granite and stone franchisor Triton Stone. 

Carroll “Tumpy” Campbell III (son of former S.C. Gov. Carroll Campbell Jr.) and John Cattano (former treasurer of the S.C. Republican Party) are accusing the Triton Stone Group officials of “extortion, fraud and ‘strong-arm tactics’”

The franchisees claim that the Triton Stone owners lied about the financial standing of two existing franchises that they sold them in Myrtle Beach and Charlotte, N.C. last year.

According to The Sun News:

The Triton Stone owners… forced Campbell and Cattano to pay millions more in debt that the two franchises had incurred before the sale took place, even though Campbell and Cattano were not obligated to take on any of the franchises’ prior liabilities, according to the lawsuit filed on Nov. 21 in circuit court in Conway.

Triton Stone “aggressively cooked the books” before the sale, the lawsuit states, then “exploited their newfound business leverage over the purchasers [Campbell and Cattano] to force, or try to force, the purchasers to pay millions of dollars in debts the purchasers did not owe.”

Among the allegations against Triton Stone Group:

“During the negotiations, the three Triton Stone representatives presented Campbell and Cattano with financial documents that appeared to show the Myrtle Beach and Charlotte locations ‘were a healthy, profitable business operation,’ according to the lawsuit.

“Campbell and Cattano agreed to purchase the franchises’ assets for $3 million – slightly less than what the financial documents indicated the assets were worth…

“Campbell and Cattano learned that Kessler had written about $600,000 in checks just days before the sale was completed…

“Vendors began depositing the checks written by Kessler on the now-empty [old] account, and the checks began bouncing,” the lawsuit states….

“When Campbell and Cattano confronted Kessler about the checks, Kessler told the two men that they now had to pay the bills or he would put them out of business, according to the lawsuit.

“By late July, Campbell and Cattano said, the forced debt payments were taking a serious toll on their ability to continue to do business. When they missed some of the payments Kessler and others told them to make, the lawsuit states, Triton Stone took control of a shipment of stone that was supposed to go to the Charlotte franchise and kept it sequestered at its Port of New Orleans entry point.

“Campbell and Cattano said they learned the annual profit for the two franchises was about $350,000 per year – less than half the amount Kessler and the others had claimed on financial documents.

“Finally, in late October and into November, the Myrtle Beach and Charlotte franchises could no longer pay its operating costs, debt service and the past-due bills…

“Campbell… and Cattano estimate they were stuck with about $4.4 million in old debt that they should not have had to pay in addition to overpaying for the two franchises by $1.7 million.

“Campbell and Cattano are alleging fraud, negligent misrepresentation, breach of contract, civil conspiracy and unfair trade practices against the Triton Stone defendants. The two men are seeking at least $10 million in actual and triple damages plus unspecified punitive damages. They also want a judge to declare that all the old debt they were saddled with belongs to the previous owners…

Or are the Triton Stone Franchisees’ Claims “Outrageous” & “Ridiculous”?

Triton Stone Group vehemently denies the allegations.  According to the Sun News:

Joshua Kessler, the managing director of Triton Stone Group, called the accusations “outrageous, ridiculous and unbacked” and said Triton Stone intends to file a countersuit.

“We operate with integrity and we are well respected, unlike some of the plaintiffs,” Kessler said, adding that Campbell and Cattano had “full access to our records, employees, our inventory and software. They did a private audit and they had numerous lenders do physical audits, so I was really floored to see these allegations in this lawsuit.”

Commenters on the original story question the integrity, honesty & motives of Carroll “Tumpy” Campbell III, John Cattano and their attorney.

Nick Borg wrote:

I have worked for Triton Stone and the brand owners for more than 9 years. I worked for both Mr. Kessler and then Mr. Campbell & Mr. Cattano after the sale. I was the General Manager of the store under both ownership groups and can tell you with certainty where the fraud lies. I left the company because I was frequently asked by Cattano to move inventory between stores (without a physical item moving between locations) so that he could borrow more from his lendors. Also redating invoice to make them seem more current to borrow off of them as well. Sounds like cooking the books, and fraud to me, but not on the part of Mr. Kessler, or Mr. Mathis… that was the John and Tumpy show.

TeamSucker wrote:

Maybe a publicity stunt as everyone I spoke to including Triton stone says they never got served. David Wren you should check on the Lawyer that filed the complaint seems to be a local Todd Kincannon and this according to an attorney I spoke with it seems this is a common practice for this amateur.

InvictaStones wrote:

I do not agree with this article AT ALL and I have done business with Triton Stone and Josh Kessler for many years!! They…  have been so nice to work with it is a shame these guys are messing with the name of such nice company I feel bad for all the good people with in the Triton stone organization and I also agree that John Cattano and Tumpy or Carroll Cambel has given us a lot of lies.

ARE YOU FAMILIAR WITH TRITON STONE GROUP & THE TRITON STONE FRANCHISE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

To contact the author or site admin, email UnhappyFranchisee[at]gmail.com

THE UPS STORE Franchise Owners Lose MBE Lawsuit

In 2006, a group of approximately 200 franchisees of "The UPS Store" franchise, sued franchisor Mail Boxes Etc., Inc. ("MBE"), United Parcel Service (UPS) and other UPS subsidiaries, alleging that (among other things) “MBE and UPS made untrue

statements of material fact and omitted material facts from various communications made in connection with the offer and sale of the franchises and in connection with the conversion from the old franchise model to the new "The UPS Store" franchise model.”

The UPS Store franchisees claimed that after its $190 million acquisition of MBE in 2001, UPS coerced and induced MBE franchisees to re-brand to The UPS Store model through its Gold Shield program.

The district court granted summary judgment in favor of Mail Boxes Etc., Inc. and UPS on all counts

The franchisees appealed the summary judgement.

The US Court of Appeals, 9th Circuit, handed down its decision last week affirming that the UPS Store franchise owners failed to prove their case.

The court decision is posted below.

More on The UPS Store franchise:

THE UPS STORE Franchise Complaints  June 23, 2011

Failure Rates of the 10 Most Popular Franchises  April 26, 2010

UPS STORE, MAIL BOXES ETC. Franchisees File Class Action Suit  November 12, 2009

Are THE UPS STORE / MAIL BOXES ETC. Franchise Owners Happy?  August 10, 2009

THE UPS STORE: Overview  August 10, 2009

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SAMICA ENTERPRISES LLC v. MAIL BOXES ETC., INC.

SAMICA ENTERPRISES LLC, an Illinois Limited Liability Company; et al., Plaintiffs-Appellants,

v.

MAIL BOXES ETC., INC., a Delaware corporation; et al., Defendants-Appellees.

No. 10-55433.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 9, 2011 Pasadena, California.

Filed December 1, 2011.

Before: SCHROEDER, REINHARDT, and MURGUIA, Circuit Judges.

NOT FOR PUBLICATION

MEMORANDUM^*

Appellants, approximately 200 franchisees of "The UPS Store" franchise, sued franchisor Mail Boxes Etc., Inc. ("MBE"), United Parcel Service ("UPS"), and other UPS subsidiaries (collectively "Appellees"), alleging various state law claims. The district court granted summary judgment in favor of Appellees on all of them. Appellants timely appealed. We affirm.

Appellants brought claims under the California Franchise Investment Law ("CFIL") and common law fraud and misrepresentation, alleging that MBE and UPS made untrue statements of material fact and omitted material facts from various communications made in connection with the offer and sale of the franchises and in connection with the conversion from the old franchise model to the new "The UPS Store" franchise model. Reasonable reliance is required under Cal. Corp. Code § 31300, the CFIL section imposing liability for misrepresentations made in franchise documents, as it requires that the damages to the franchisee be "caused []by" the misrepresentations. See Mirkin v. Wasserman, 5 Cal.4th 1082, 1092 (Cal. 1993); Younan v. Equifax Inc., 169 Cal.Rptr. 478, 487 (Cal. Ct. App. 1980). Reasonable reliance is also required under Cal. Corp. Code § 31301, the CFIL section imposing liability for misrepresentations and omissions made in other communications related to the offer or sale of a franchise, as that section requires that the franchisee, "not knowing or having cause to believe that such statement was false or misleading," have "rel[ied] upon such statement." In a well-reasoned, but unpublished, district court opinion, Judge Margaret Morrow summarized the rule: CFIL "incorporate[s] the reasonable reliance requirement of the common law." California Bagel Co. v. American Bagel Co., 2000 WL 35798199, *1, *18-*21 (C.D. Cal. 2000) (unpublished). Finally, it is well established that reasonable reliance is an element of common law fraud and misrepresentation claims. See City of Industry v. City of Fillmore, 129 Cal.Rptr.3d 433, 450 (Cal. Ct. App. 2011); Wells Fargo Bank, N.A. v. FSI, Fin. Solutions, Inc., 127 Cal.Rptr.3d 589, 600 (Cal. Ct. App. 2011). Because Appellants have presented no evidence showing that they reasonably relied on any alleged untrue or misleading statement, Appellants’ CFIL and common law claims fail.¹

Appellants brought an additional CFIL claim under Cal. Corp. Code § 31125 for failure to register the amendment to the franchise agreement in connection with the California franchisees’ conversion from the old franchise model to the new "The UPS Store" franchise model. Appellees argued before the district court that the registration claim was barred by the one-year statute of limitations pursuant to Cal. Corp. Code § 31303. Appellants failed to address the statute of limitations bar before the district court and, specifically, failed to oppose Appellees’ motion for summary judgment that was based on the one-year provision. Moreover, Appellants did not address this argument in their opening brief before this court. Arguments not raised in opposition to summary judgment or in the opening brief before this court are waived. See One Indus., LLC v. Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1158 (9th Cir. 2009) ("A party normally may not press an argument on appeal that it failed to raise in the district court."); Dream Games of Arizona, Inc. v. PC Onsite, 561 F.3d 983, 994-95 (9th Cir. 2009) ("We will not ordinarily consider matters on appeal that are not specifically and distinctly argued in appellant’s opening brief.") (internal quotation marks and citation omitted). Appellants therefore have waived any argument that their failure to register claim is not barred by the statute of limitations.

Appellants alleged that MBE breached its duty of "best efforts" under the franchise agreement to obtain incentives for franchisees. The undisputed facts establish that MBE engaged in several efforts to obtain improvements to incentives to franchisees but did so by means of oral persuasion. Appellants’ contention that attempting to obtain these same improvements by means of written requests was necessary to meet the best efforts requirement is without authority or merit. Therefore, summary judgment on this claim was proper.

Appellants alleged that UPS breached the implied covenant of good faith and fair dealing in failing to increase the prices set under the carrier agreement with the franchisees. The district court found that the implied covenant claim was preempted by the Federal Aviation Administration Authorization Act of 1994, which prohibits states from enacting or enforcing "a law, regulation, or other provision having the force and effect of law related to a price, route, or service of" carriers such as UPS. 49 U.S.C. § 14501(c)(1). Even if this claim was not preempted, however, it fails under state law. The implied covenant of good faith and fair dealing cannot be used to impose an affirmative duty to forbear enforcing the terms of the contract or to limit the ability of a party to do what is expressly authorized in the contract. See Storek & Storek, Inc. v. Citicorp Real Estate, Inc., 122 Cal.Rptr.2d 267, 277 (Cal. Ct. App. 2002). That is what Appellants wished to do here-to impose on UPS a duty to offer better prices and incentives than those dictated by the agreement. Therefore, even if not preempted, summary judgment on the duty of good faith and fair dealing claim was proper.

Appellants brought claims under the California Unfair Competition Law ("UCL"), alleging that MBE and UPS engaged in fraudulent, unfair and unlawful business practices. "Appellants’ claims under [the UCL] are governed by the `reasonable consumer’ test …. Under the reasonable consumer standard, Appellants must show that members of the public are likely to be deceived." Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (internal quotation marks omitted). Here, Appellants presented no evidence that a reasonable consumer would be deceived by the alleged fraudulent, unfair and unlawful business practices of MBE and UPS. Summary judgment on Appellants’ UCL claims was therefore proper.

Appellants argue that the district court erred in failing to apply other states’ "unwaivable" statutes, and in failing to apply Illinois law for franchisees with Illinois choice-of-law provisions in their franchise agreements. In addition, Appellants argue that the California choice-of-law provision, found in the majority of the franchise agreements, does not apply to pre-contract wrongs and that therefore the other states’ statutes applied. As to the first argument, the district court found that Appellants’ claims would fail even if the other states’ statutes applied. Appellants have failed to show why this conclusion was erroneous. As to the second argument, the franchise agreements with California choice-of-law provisions provided that the agreements would be "governed and construed under and in accordance with" California law, which covers all contract claims, including pre-contract wrongs. See Nedlloyd Lines B.V. v. Superior Court, 834 P.2d 1148, 1151-54 (Cal. 1992) (holding that the phrase "governed by" in a choice of law clause compels the "logical conclusion" that the parties "intended that law to apply to all disputes arising out of the transaction or relationship"). Therefore, the district court did not err in applying the law of California to all of franchisees’ claims.

The district court did not abuse its discretion in refusing to unseal the record. The district court found good cause to seal the record on Appellants’ initial motion. Appellants then failed to provide adequate justification for unsealing the record, and failed to follow Central District of California Local Rule 79-5:3 regarding motions to unseal. The refusal to grant the motion to unseal the record was not an abuse of discretion.

The district court considered all of Appellants’ arguments in opposition to Appellees’ motion for summary judgment at the time of the first and second order, and was not required to restate its findings in rejecting Appellants’ request for reconsideration of prior rulings.

The district court’s grant of summary judgment in favor of Appellees on all claims is therefore AFFIRMED.

Footnotes

---

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.

---

1. Because we find that Appellants’ common law fraud and misrepresentation claims fail for lack of a showing of reasonable reliance, we need not decide whether the CFIL preempts these claims.

*  *  *  *  *  *  *  *  *  *

Contact for site author and ADMIN:  unhappyfranchisee[at]gmail.com.

ARE YOU FAMILIAR WITH THE UPS STORE FRANCHISE?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

BIZZIBIZ Jim Piccolo, Out, Kurt Ohlson in as CEO of Bizzibiz

Kurt Ohlson is the new CEO of embattled digital marketing franchise start-up Bizzibiz. 

According to a message from CEO Kurt Ohlson, founder Jim Piccolo has stepped down from his position as head of the company due to a “severe medical condition requiring a major emergency surgery… and several additional surgeries and hospitalizations afterwards.”

The news about Jim Piccolo was contained in a message that Kurt Ohlson sent to UnhappyFranchisee.com regarding our post BIZZIBIZ Chris Hendley Social Media FAIL or Murder-Suicide as a Social Media Tool.

Statement From Bizzibiz CEO Kurt Ohlson

Dear Unhappy Franchisee,

I would like to respond directly to your post and to the post by Chris Hendley. I apologize for the delayed response but, as you know, BizziBiz prefers to answer in a professional manner with verifiable facts.

First, I would like to clarify that Chris Hendley is not a BizziBiz Account Manager. Mr. Hendley is associated with Extreme Franchise Marketing, Inc., an independent company that does not share any ownership with any of the principals of BizziBiz. Extreme Franchise Marketing, Inc. currently has the exclusive rights to marketing the BizziBiz franchise opportunity in 2011. This contract ends on December 31, 2011. Mr. Hendley works for Gary Curtis, a vice president of Extreme Franchise Marketing, Inc. When Extreme Franchise Marketing, Inc. attempted to contact Mr. Hendley to discuss his post, he did not respond in time for this writing. Mr. Curtis responded on behalf of Extreme Franchise Marketing, Inc. and his team member, Chris Hendley. In a statement to the company, Mr. Curtis reported that “Mr. Hendley has had success in selling BizziBiz franchises and is a very passionate man who truly believes in the BizziBiz franchise product.”

Second, BizziBiz does not condone the use of profanity, nor do we believe that making threats is a proper way to respond to statements made about the company. As stated above, Mr. Hendley is not a BizziBiz Account Manager, nor is he a franchisee or a DMC (Digital Marketing Consultant) of a franchisee. Therefore, he does not have the authority to speak on behalf of BizziBiz. Furthermore, BizziBiz does not condone or endorse Mr. Hendley’s opinions or his actions. We hope that these facts help to clear the air on the posts from Mr. Hendley.

Lastly, you are probably wondering why this response is not from BizziBiz Founder Jim Piccolo. Due to Mr. Piccolo’s severe medical condition requiring a major emergency surgery on June 26, 2011 and several additional surgeries and hospitalizations afterwards, I was appointed CEO of BizziBiz on July 18, 2011. As many people know, Mr. Piccolo is a caring, charismatic, energetic, and philanthropic entrepreneur who is dearly missed by all staff, franchisees and DMCs of BizziBiz. We all pray for his full and speedy recovery.

If anyone wishes to discuss the items addressed in this forum, I encourage you to please contact me, Kurt Ohlson, directly at 480.991.8888 extension 120.

Respectfully,

Kurt Ohlson

CEO, Bizzibiz

Read more about Bizzibiz here:

BIZZIBIZ Chris Hendley Social Media FAIL or Murder-Suicide as a Social Media Tool November 6, 2011

BIZZIBIZ: Infomercial Huckster Don LaPre Dies in Prison October 7, 2011

BIZZIBIZ Franchise Founder Jim Piccolo Responds to Criticism August 27, 2011

BIZZIBIZ Franchise, Youngevity & Dr. Joel Wallach August 3, 2011

BIZZIBIZ: VP Don LaPre 2nd Exec Indicted for Fraud August 1, 2011

BIZZIBIZ Franchise Founder Jim Piccolo Defrauded 105 Investors, Says AZ July 17, 2011

BIZZIBIZ Suing Mr. Franchise Kevin B Murphy and Franchise Foundations PC July 17, 2011

ARE YOU FAMILIAR WITH BIZZIBIZ OR EXTREME FRANCHISE MARKETING?  SHARE A COMMENT BELOW.

To contact the author or site admin, email UnhappyFranchisee[at]gmail.com

BIZZIBIZ Chris Hendley Social Media FAIL or Murder-Suicide as a Social Media Tool

Bizzibiz, a franchised digital marketing and social media management company, claims it can create an impressive web presence “that represents your brand and speaks to the quality of your business!”

Recently, Bizzibiz Account Manager Chris Hendley represented the Bizzibiz brand and spoke to the quality of the Bizzibiz business with a comment leveled at the staff of UnhappyFranchisee.com. 

Bizzibiz Account Manager Chris Hendley left this message on our post about the death of Don LaPre, the alleged conman and VP of a Bizzibiz affiliate who recently died in prison:

Chris Hendley on November 4th, 2011 3:42 pm

To bad Don didnt break out and come Terminate your fucking ass before killing himself you cocksuckers will write about anything on here just to get attention

and still to this day not 1 person coming Forward saying they got screwed buying a Bizzibiz Franchise and thats the only Focus you should have had from day 1 but what do you expect from Lowlife douchebags to write about i guess

Wow! Chris Hendley of Bizzibiz must be using social media techniques so cutting edge that they appear, to the untrained eye, out of control and self-destructive.

Murder-Suicide as a Social Media Tool

While most social media experts embrace open dialogue and exchange of ideas, Bizzibiz’ Chris Hendley is pioneering the use of the wish for murder-suicide as a response to  those with opposing ideas.

While most social media experts would advise against using crude & vulgar terms when representing one’s company, it seems that Bizzibiz’ Chris Hendley believes in building one’s brand through the unashamed use of such bold words as “c*cksucker,” “f*cking *ss,” and “Lowlife d*uchebags.”

And while most timid social media experts would caution that the misuse of punctuation and capitalization might give the impression that one is an uneducated, illiterate and/or lazy lout, Bizzibiz’ Chris Hendley (obviously inspired by James Joyce’s Ulysses) brings the run-on sentence and random capitalization to a whole new level.

Bizzibiz’ Chris Hendley is working his social media magic on other blogs as well, including a discussion on Black Box Social Media.

In that discussion, Chris Hendley denies that Don LaPre was a VP of a Bizzibiz affiliate (although LaPre was named as such on their website) and claims that a noted franchise attorney endorses Bizzibiz (despite the fact that the noted expert entered litigation with Bizzibiz 3 months earlier).  While the untrained observer might mistake these statements as deceptions, or even lies, Bizzibiz Chris Hendley won’t be detered by such things as truth or, say, ethics.

In the Blackbox discussion, Bizzibiz Account Manager Chris Hendley posted one of his most magnificent pieces of social media writings, managing to combine offensive words, random capitalization, a thinly veiled death threat, and a brilliant mangling of grammar and syntax in just 34 words:

“…i guess if Don Lapre picked another type of franchise the Pathetic unhappy franchise dipshit could write crap about that franchise to bad Don lapre didnt do the world a favor and stabbed you”

Bizzibiz: Have you left the kids home alone?

Of course, we’re not saying that everyone at Bizzibiz is unprofessional and illiterate with homicidal tendencies.

In fact, Bizzibiz CEO Jim Piccolo’s response to our concerns was thorough, professional and respectful of our right to express our views (BIZZIBIZ Franchise Founder Jim Piccolo Responds to Criticism).  It was the most artful rebuttal we’ve received in a long time.

But the fact that someone like Bizzibiz Account Manager Chris Hendley is allowed to freely sabotage Bizzibiz’ online reputation unchecked is troubling.  It reinforces the concern that management not only doesn’t understand social media, they aren’t even monitoring their own employees’ misuse of it.

UnhappyFranchisee.com is not advising people not to invest in the Bizzibiz franchise opportunity.  That’s not what we do.  But we have some valid concerns about the concept and the company, which we feel compelled to share and discuss.

Thanks to Bizzibiz Account Manager Chris Hendley, we now have one more.

ARE YOU FAMILIAR WITH CHRIS HENDLEY OR THE BIZZIBIZ DIGITAL MARKETING FRANCHISE?  SHARE A COMMENT BELOW*

* Don’t worry.  If we disagree with you we won’t wish an infomercial huckster attacks you.

Read more about Bizzibiz here:

BIZZIBIZ: Infomercial Huckster Don LaPre Dies in Prison  October 7, 2011

BIZZIBIZ Franchise Founder Jim Piccolo Responds to Criticism August 27, 2011

BIZZIBIZ Franchise, Youngevity & Dr. Joel Wallach August 3, 2011

BIZZIBIZ: VP Don LaPre 2nd Exec Indicted for Fraud August 1, 2011

BIZZIBIZ Franchise Founder Jim Piccolo Defrauded 105 Investors, Says AZ July 17, 2011

BIZZIBIZ Suing Mr. Franchise Kevin B Murphy and Franchise Foundations PC July 17, 2011

To contact the author or site admin, email UnhappyFranchisee[at]gmail.com

BIZZIBIZ: Infomercial Huckster Don LaPre Dies in Prison

Don Lapre, the Phoenix-based infomercial pitchman, was found dead in his cell  at a federal-contract facility just 2 days before his trial on fraud charges linked to his vitamin-selling business.

According to Matt Hershey, supervisory deputy U.S. Marshal, Lapre was found about 8:30 a.m., unresponsive in an apparent suicide.

[Also read:  BIZZIBIZ: VP Don LaPre 2nd Exec Indicted for Fraud  August 1, 2011]

Officials would not say how Lapre may have killed himself. 

According to an Arizona Republic story:

“Previously, the U.S. Department of Justice stated Lapre may have suffered from anxiety and depression and warned that he may have had suicidal thoughts…

"We are not yet releasing how he might have injured himself.

”Lapre was wanted by law enforcement after he failed to appear at his U.S. District Court arraignment in June on 41 counts of conspiracy, mail fraud, wire fraud, promotional money laundering and transactional money laundering. A federal grand jury indicted Lapre on fraud-related charges for promoting his vitamin-selling business, Greatest Vitamin in the World of Phoenix. The indictments alleged that the business signed up 226,794 people who were promised lucrative commission checks for selling vitamins and recruiting others to the business.

“Customers and investors spent nearly $51.8 million, but only 5,000 victims were paid about $6.4 million in commission, according to a statement released in June by the U.S. Department of Justice. Lapre collected at least $2.2 million from the business from 2004 to 2007.”

UnhappyFranchisee.com has been following the Don LaPre saga as it unfolded because of LaPre’s connection to digital marketing franchise Bizzibiz and its affiliate Extreme Franchise Marketing.

Read more here:

BIZZIBIZ Franchise Founder Jim Piccolo Responds to Criticism  August 27, 2011

BIZZIBIZ Franchise, Youngevity & Dr. Joel Wallach  August 3, 2011

BIZZIBIZ: VP Don LaPre 2nd Exec Indicted for Fraud  August 1, 2011

BIZZIBIZ Franchise Founder Jim Piccolo Defrauded 105 Investors, Says AZ  July 17, 2011

BIZZIBIZ Suing Mr. Franchise Kevin B Murphy and Franchise Foundations PC  July 17, 2011

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Contact the author or site admin at UnhappyFranchisee[at]gmail.com

Geeks on Call franchise, Richard Artese

Geeks on Call President Richard Artese is promoting the newly relaunched franchise as a low-cost, high-potential opportunity.

The new Geeks on Call franchise, according to Rich Artese, does not require technical expertise,  just a love for sales, “helping others,” a $20,000 franchise fee and a flat monthly fee of $500.

In exchange, according to Artese, Geeks on Call franchise owners receive use of the “trusted brand,” as well as “back-end support including national brand marketing, sales advisors, a national call center, access to a national network of technical experts and partnerships with several telecom and IT Service products.”

A number of former Geeks on Call franchise owners have expressed concern, dismay and warnings about the rebirth of the Geeks on Call franchise program, which ceased selling franchises a few years ago amidst financial turmoil, lawsuits and controversy.  Many of the former franchisees expressed concern about the leadership and ethics of Richard Artese, the controversial president of the Geeks on Call.

On 9/17/2011, commenter Luis wrote:

As long as Richard Artese is part of this organization, I would highly recommend not becoming involved with this venture.

The original concept was a sound business model until Richard Artese and Richard Cole took the company down a very unethical path. That is one of the reasons so many of the executives who started and grew this company into a leading franchise brand left the company.

The company has fallen far from those days with Artese running the show.

By 2005 over 350 franchise locations were granted or operating but today that number is well under 100.

There have been many failures and many people have lost money betting on the current management team.

My advice – While the new model and low monthly franchise fees may be attractive, do not do business with Geeks On Call while Richard Artese is still involved due to ethical reasons.

Are you familiar with Geeks on Call, or the leadership of Richard Artese?  Are the warnings justified, or is the new Geeks on Call franchise a great low-investment opportunity in the dynamic service sector?  Please share a comment below.

Read past posts and discussions on Geeks on Call here:

GEEKS ON CALL Franchise: They’re Ba-a-ck!  September 15, 2011

GEEKS ON CALL Notice of Default & Foreclosure November 5, 2009

GEEKS ON CALL: Latest Franchise Rumors, Allegations October 14, 2009

Geeks On Call Franchisees Allege Their Franchisor is Breaking Law December 26, 2008

Geeks on Call Franchisees Sue Struggling Franchisor December 20, 2008

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GEEKS ON CALL Franchise: They’re Ba-a-ck!

(UnhappyFranchisee.com) The Geeks on Call franchise opportunity is not only back, according to the company, it’s stronger than ever.

Really?  It’s stronger than in 2007 when Geeks on Call still had 300 operational franchisees from coast to coast?

It’s stronger now, after the implosion of the company & the tarnishing of the brand via financial turmoil and franchisee lawsuits?

The new Geeks on Call franchise sales team must be hoping the franchise and business communities have short memories, and neither use Google searches nor read old blog posts such as these:

GEEKS ON CALL Notice of Default & Foreclosure  November 5, 2009

GEEKS ON CALL: Latest Franchise Rumors, Allegations  October 14, 2009

Geeks On Call Franchisees Allege Their Franchisor is Breaking Law  December 26, 2008

Geeks on Call Franchisees Sue Struggling Franchisor  December 20, 2008

Are you familiar with Geeks on Call, Rich Artese, Glenn Davis and/or On Call Holdings International?  What do you think of the new franchise opportunity? Will Geeks on Call get a second chance to get it right?  Share a comment below.

Here’s the press release from the company:

“Geeks on Call is Back, Stronger Than Ever and Offering New Franchise Opportunities

“PRWeb – 9/7/2011

“Geeks on Call, the Virginia based IT service provider to small and mid-sized businesses and residential customers, is once again making franchise opportunities available to entrepreneurs hoping to tap into the nation’s growing need for affordable technical expertise and access to more affordable phone and Internet services.

“We took two years to build a new model, and we believe the result is an opportunity that is unique to our industry and attractive to entrepreneurs, says Rich Artese, President of Geeks on Call.  Artese says millions of business owners and residential consumers need a dependable trusted advisor to provide support and advice for all of their technology needs.

“Being part of the On Call Holdings International family of companies, Geeks On Call is able to arrange cost-effective telecom and Internet services from a broad array of reputable companies,, says Glenn Davis, CEO of On Call Holdings International. That’s good for small business owners because they are able to work with one knowledgeable technical team for all their IT and communications needs. And its great for the Geeks on Call franchisee because he can count on a residual monthly income stream, which enhances the long term value of his company.

“In addition to the trusted Geeks on Call brand, the company supplies its franchisees with back-end support including national brand marketing, sales advisors, a national call center, access to a national network of technical experts and partnerships with several telecom and IT Service products. These relationships, training and on-going support offers entrepreneurs with little or no technical experience the opportunity to build a business in the ever expanding world of IT services.

“The cost to acquire a new Geeks On Call franchise is just $20,000 for a single territory. There is no royalty fee based on revenue. Rather, Geeks on Call charges a flat monthly membership fee of $500.

“You do not have to be a technology expert to be successful with the new Geeks on Call, says Artese. You just have to love sales and helping others by creating solutions that make technology work for them. The relationships we have with technology experts and major telecom companies throughout the United States make Geeks On Call a truly unique opportunity. These relationships enable our franchise owners to provide support and service that is a cut above other IT service companies thereby enhancing the client relationship and franchisee profit potential.

“At its height in 2007, Geeks on Call had more than 300 franchisees across the country and was routinely ranked among the top franchise business opportunities in America. The company, under new ownership, has reformulated the franchise offering and is excited about bringing its well established brand back to the market.”

HELP US WITH AN UPCOMING POST: WHAT QUESTIONS OR CONCERNS DO YOU HAVE ABOUT THE NEW GEEKS ON CALL FRANCHISE OPPORTUNITY?

Email the author or site admin at UnhappyFranchisee[at]gmail.com.

 

BIZZIBIZ Franchise Founder Jim Piccolo Responds to Criticism

Bizzibiz, the new digital marketing franchise opportunity, launched with much hype January 1, 2011.  Much was made in the initial press releases and promotional video of the fact that serial entrepreneur Jim Piccolo had divested himself from his previous business ventures (most notably the controversial multi-level marketing real estate training school Nouveau Riche University) to devote himself full-time to Bizzibiz and its affiliated franchise sales brokerage Extreme Franchise Marketing.

A series of negative events followed.  In February, the Arizona Corporations Commission announced that Jim Piccolo and his previous business partners must pay nearly $6 Million in restitution and fines for defrauding 105 investors via an unregistered real estate scheme.  In April, Bizzibiz’ much-touted relationship with “Mr. Franchise,” franchise attorney Kevin B. Murphy, resulted in litigation (See BIZZIBIZ Suing Mr. Franchise Kevin B Murphy and Franchise Foundations PC).  In June, infomercial king Don Lapre, who was touted as a VP of Extreme Franchise Marketing, was indicted on 41 counts of conspiracy and fraud, accused of defrauding 222,000 people of $52 million.

Jim Piccolo recently responded to issues raised on UnhappyFranchisee.com regarding Bizzibiz, Extreme Franchise Marketing and its controversial associations.  Mr. Piccolo’s response is included, in its entirety, below.  The headings and short explanations (in italics) are ours.

Founder Jim Piccolo on the Bizzibiz Franchise Launch

“August 19, 2011

“DearUnhappyFranchisee.com:

“Since the start of our company in January of this year, BizziBiz has seen many victories and yet faced a few challenges, some of which were brought up on your blog. Certainly the current state of the economy has not made it easier. The development of a unique franchise model in the digital marketing space has been an exciting journey and discovery process.

“On the positive side we are very proud to state that since our official launch 1/1/11 we have empowered 74 franchisees, who have in turn hired 267 sales representatives—many who are brand new and just getting trained. All in all that is a total of 341 people that are finding exciting new careers for themselves, creating new jobs for many who may otherwise be in the unemployment line, and helping businesses become/stay profitable! In addition we have 38 staff members who come to work every day happy to be part of the solution to this country’s economic challenges. Call us what you want, but we truly believe that through good digital marketing, our small business community can grow and flourish. We’ve intentionally put our primary focus on small business, as it is proven that they are a hugely under-served market. While most digital marketing companies focus on the BIG clients because that is where the big money is, we believe that the smaller “grass roots” companies will be, in the long run, extremely loyal and appreciative of our efforts. In addition, we know that many of the large companies in this country started in a garage—including the likes of Microsoft Corporation. We know that our peers criticize us for this position, but I assure you our customers do not. There is not a week that goes by where one of them does not send us small tokens of their appreciation. While we are at it, THANKS to Marybeth King for the brownies and rice crispy treats last Thursday! J Hint, hint, they did not last long.

“Back to the business at hand…In your website’s posts about us, you address several concerns regarding our company’s leadership and clients. My hope is that we can help alleviate your concerns, and shed light onto the facts surrounding those issues.”

[Pictured:  "Jim Piccolo, a renowned visionary and entrepreneur with more than 25 years of experience in a wide variety of service and product industries..."  Source:  Bizzibiz]

Founder Jim Piccolo on Bizzibiz’ digital marketing track record

Bizzibiz digital marketing franchise and its franchise sales affiliate Extreme Franchise Marketing launched January 1, 2011 boasting a very aggressive growth plan.  In an initial post UnhappyFranchisee raised the concern that Bizzibiz and its principals appear to have little digital marketing experience and zero track record as a company.  In fact, Bizzibiz’ own social media presence appears weak, with only 5 tweets and 49 followers (as of today) on its Bizzibiz twitter account and 207 “Likes” on its main Facebook page.
Jim Piccolo responds: “With regards to our track record of success, as a start-up company, we’ve been able to reach hundreds of small business customers in a relatively short period of time, thanks to our loyal franchisees working hard. Some of these companies  had little to no online presence, and as a result of our passionate effort we have been able to deliver measurable results in the areas of website development, SEO, SEM, Social Media Optimization, Email Marketing, etc. –results that are supported in the clients’ monthly reports. Again, as I mentioned above, our business model is primarily tailored toward smaller businesses that have a great need to reach their audiences in the digital space—and we can say that we’ve made a difference for those businesses. Additionally, along the way we have been able to support some digitally well-established businesses and make a significant impact on their digital presence too. We are happy to put you in contact with some of those businesses that can share their experience and results.

“So why have we at BizziBiz not done a better job with our own online presence? We have experienced rapid growth, and as we continue to establish our own brand identity, we have much yet to carry out in our brand messaging. Our attention has been and continues to be on our small business clients and, unfortunately, we have not dedicated the resources to maintain a healthy social presence of our own. We are currently looking at our resources and making some adjustments internally so that we can dedicate efforts to actively manage our social media and online brand reputation and overall web presence. This is a common problem with rapidly growing companies. It reminds me of the parable of the master shoe maker, who was so busy with his craft and serving his customers he and his children wore old shoes. Using this analogy, we, at this point, are pretty much barefoot. When given the choice of happy customers and sore toes or unhappy customers and comfy toes we choose sore toes….at least for now! I know that there are MANY entrepreneurs out there who could say “yep, been there!” As for the rest of you…thank you for understanding.

Founder Jim Piccolo on Bizzibiz’ Association with Don LaPre

The stormy start of the Bizzibiz franchise also involved the arrest of infomercial king Don LaPre, who was listed as VP of Bizzibiz affiliate Extreme Franchise Marketing.  See BIZZIBIZ: VP Don LaPre 2nd Exec Indicted for Fraud

Jim Piccolo responds: “One of the topics that was raised by your postings is BizziBiz’s affiliation with Don Lapre. Don was never a vice president or an officer or employee of BizziBiz. Rather, we utilized his voiceover talents and video production creativity as an outsourced consultant to assist with promotional and training media. Although his consulting services were completed before the unrelated accusations were brought against him, Don acted with great character and ethics in all areas he touched while working with BizziBiz. The product that he produced for us was simply amazing and worth many times what we paid him for it. His title of vice president represented his level in the commission hierarchy as an IBC (Independent Business Consultant) with Xtreme Franchise Marketing, Inc. (XFM), whose website you screen-captured in your post. XFM is a separate company, with a different ownership structure than BizziBiz Franchise, Inc., Xtreme Franchise Marketing, Inc  was created to sell franchises just likeFranChoice, Frannet, and many others.  Additionally, at the time of his indictment, Don was no longer marketing BizziBiz franchises.”

Bizzibiz Founder Jim Piccolo on his Fraud Charges

Much of the initial launch of the Bizzibiz franchise has been focused around the experience and leadership of founder & CEO Jim Piccolo.  Jim Piccolo’s integrity and track record were called into question when in February 17, 2011, the Arizona Corporations Commission announced that Jim Piccolo and his business partners must pay nearly $6 Million in restitution and fines for defrauding 105 investors with unregistered deed of trust investments.  See BIZZIBIZ Franchise Founder Jim Piccolo Defrauded 105 Investors, Says AZ.

Jim Piccolo responds:  “Now to address the fraud charges against me… I was named in the Arizona Securities Division’s investigation of Michael Roberts, Charlevoix Homes and Five Star Capital, despite any direct activity with the company or wrongdoing. I agreed to settle the issue rather than fight the Securities Division, which would have lead to more harm and frustration for the investors—many of whom are friends of mine. An important note to make here is my wife Mary and I conducted careful due diligence and received validation of the opportunity through recognition like the Arizona Small Business Association’s naming of Charlevoix as one of its 50 Arizona Companies to Watch.  We invested in the Charlevoix project and our personal investment was, in fact, monetarily larger than all of the other investors in this dispute. The Consent Decree shows that I agreed to settle this dispute and that no findings of fact were made against me. My attorney, Jeff Matura is open to answer questions if you’d like to contact him:

“Jeffrey C. Matura,  Graif Barrett & Matura, P.C.,  E-Mail: jmatura@gbmlawpc.com”

Jim Piccolo on Bizzibiz Client Youngevity & Dr. Joel Wallach 

Our response to a recent Bizzibiz press release (BIZZIBIZ Franchise, Youngevity & Dr. Joel Wallach) made the point that Bizzibiz seems to invite controversy through its questionable associations.  Its first publicly touted client is run by Dr. Joel Wallach, who has been accused of being a con-man and snake-oil salesman.

Jim Piccolo responds:  “Lastly with regards to Youngevity, they are one of many clients that we help with digital marketing. We believe they are a forward-thinking company that has embraced the potential of the internet/digital marketing to grow their business.  The services we provide are a great fit for their needs. Further, if we did not take on customers because some people didn’t like their founders, or they had lawsuits out against them, we’d have to turn down companies like Microsoft and Apple. We also ask that others who choose to attack us do not do it through our client base.  This is not fair to us and certainly not fair to our clients.”

Jim Piccolo Promises Transparency & Openness

UnhappyFranchisee.com seeks to create conversations that provide both sides of an issue so that our readers can make up their own minds.  We appreciate Jim Piccolo’s response to the issues raised here, and are happy to provide an opportunity to clarify and respond on an ongoing basis.  We have taken him up on his offer to hear from happy Bizzibiz clients on the success of their digital marketing, and would further like to hear from Bizzibiz franchise owners about their experiences.

Jim Piccolo responds: “If the writers at Unhappy Franchisee would like to speak with me further regarding BizziBiz, I would be happy to talk with them, or even do a video interview. We also have many happy customers who would be prepared to share their experiences. I know that these types of blogs tend to bring out only the negative—I guess the happy people don’t bother wasting their time on these forums. Man, if I spent my time writing all the great things that I experience everyday with my work, my family, my kids school, my church, and my friends, I wouldn’t have time to do anything else. A wise mentor of mine once told me, ‘Stay true to your vision, focus on the good, move to help your fellow man with love in your heart and you will reap what you sow.’ Not bad advice, huh?

“Thank you for allowing me to share.

“Sincerely,

“Jim Piccolo

“BizziBiz”

ARE YOU FAMILIAR WITH JIM PICCOLO AND THE BIZZIBIZ FRANCHISE OPPORTUNITY?  PLEASE SHARE A COMMENT BELOW.

Email the author at unhappyfranchisee[at]gmail.com

 

BIZZIBIZ Franchise, Youngevity & Dr. Joel Wallach

Bizzibiz, the new digital marketing franchise, has a new social media client:  Multi-level marketing company Youngevity, run the controversial Dr. Joel Wallach.

In yesterday’s press release (included below), Youngevity’s VP of Marketing Vanessa Hunter is quoted as saying “BizziBiz has a great track record of success helping businesses increase their online visibility. We believe they are the perfect technology partner to bring us to the next level of engagement and beyond.”

What is the Bizzibiz “track record of success”?

We’re not sure what track record of success Ms. Hunter is referring to.  Since the launch of the Bizzibiz franchise in January, 2011, Bizzibiz has done little to offset its own Internet public relations nightmare.

In February, 2011, the Arizona Corporations Commission announced that Bizzibiz founder & CEO Jim Piccolo and his previous business partners must pay nearly $6 million in restitution and fines for defrauding 105 investors.  (Read: BIZZIBIZ Franchise Founder Jim Piccolo Defrauded 105 Investors, Says AZ )

In April, 2011, the company filed a lawsuit for legal malpractice against its own franchise attorney and Director of Franchising (Read: BIZZIBIZ Suing Mr. Franchise Kevin B Murphy and Franchise Foundations PC)

In June, 2011, TV huckster Don LaPre – who the company’s Extreme Franchise Marketing arm touted as Vice President, was indicted on 41 counts of conspiracy and fraud, and accused of defrauding 222,000 people of $52 million.  LaPre was arrested after reportedly hiding out in a health club locker room for two days, where he allegedly stabbed himself repeatedly. (Read:  BIZZIBIZ: VP Don LaPre 2nd Exec Indicted for Fraud)

How has Bizzibiz used social media to address these controversial happenings?  Have they addressed or rebutted the critical assertions coursing through the blogosphere, on this site and others?

It appears that they have done nothing except tout their association with another controversial figure, Dr. Joel Wallach.

“A snake-oil sales pitch if there ever was one.”

Bizzibiz client Dr. Joel Wallach and Youngevity have already amassed lots of negative buzz on the Internet already.  Here’s what the critics are saying:

“The lies of Wallach and Australian Longevity may do more harm than simply ripping people off. Several of Wallachs claims are potentially dangerous, and some of his products may be harmful.”  Stuart Adams (Dr. Wallach Exposed)

“Wallach has a long history of involvement in dubious healthcare schemes, such laetrile treatment for cancer, as well as chelation and hydrogen peroxide therapies for coronary artery disease.”  James Pontolillo

“Dr. Wallach is an engaging and entertaining speaker… but this is a snake-oil sales pitch if there ever was one.”  NutriTeam Health Watch

Here’s the press release:

Youngevity®, Direct Marketer of Nutrition and Lifestyle Products, Takes the Leap into Digital Marketing

Consumer Cloud to Provide Vehicle for Greater Growth

 

“With our global network of distributors, we’re well-positioned to leverage social media marketing to our advantage."

San Diego, CA (PRWEB) August 01, 2011

Javalution Coffee Company (JCOF-PK), Youngevity Essential Life Sciences (http://www.youngevity.com), a direct marketer of lifestyle and nutritional products, including gourmet healthy coffee, has selected digital marketing specialists BizziBiz (http://www.BizziBiz.com) to significantly enhance its presence in the digital world. This commitment to social media marketing is central to the company’s growth strategy of mobilizing customers and distributors and their social reach or "network cloud."

According to Vanessa Hunter, vice president of Marketing at Youngevity, BizziBiz will work with Youngevity to help the company enhance its use of social media to grow its online visibility, strengthen its brand and reputation, and allow distributors and customers to more actively engage with the company.

“Word-of-mouth advertising, or referral marketing, is extraordinarily powerful in today’s social networking world,” said Hunter. “With our global network of distributors, we’re well-positioned to leverage social media marketing to our advantage. BizziBiz has a great track record of success helping businesses increase their online visibility. We believe they are the perfect technology partner to bring us to the next level of engagement and beyond.”

Zach Ferres, Tribal Leader at BizziBiz said, “We’re thrilled at the opportunity to work with Youngevity, because they have such a creative vision about the digital era and using online tools to attract distributors and customers. They are an innovative, fast-growing company with lots of energy. Our tool set is a great fit for them.”

About Youngevity

Youngevity Essential Life Sciences (http://www.youngevity.com), a wholly-owned subsidiary of AL Global Corporation, is a nutritional and coffee company dedicated to improving lifestyles through vibrant health and flourishing economics. Founded in 1997 by Drs. Joel Wallach, DVM, ND and Ma Lan, MD, Youngevity is the only network marketing company with an FDA-authorized health claim. CLR Roasters, a coffee roasting and distribution company, is a wholly owned subsidiary.

On July 11, 2011 Youngevity merged with Javalution Coffee Company (PINKSHEETS: JCOF) (http://www.javalution.com), which owns and distributes Café La Rica and other brands, which are distributed to retailers. Javalution also roasts the JavaFit® brand of coffee with health benefits.

ARE YOU FAMILIAR WITH BIZZIBIZ, YOUNGEVITY OR DR. JOEL WALLACH?  SHARE A COMMENT BELOW?

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