CHILDREN’S ORCHARD: CEO Taylor Bond Claims Franchisees Giving “Rave Reviews”
Children’s Orchard CEO Taylor Bond claims, in a recent press release, that as it celebrates its 30th anniversary, his troubled company continues to be the leader and trailblazer of the “upscale resale franchise concept.”
He claims that his recent operational and franchise innovations “have helped to increase store inventories, boosted customer traffic and satisfaction, and resulted in an overall increase in store sales.”
Bond also claims the changes are attracting savvy prospective franchise owners: “we’re attracting a greater number of business owners who see us…for the sophisticated business model we offer.”
Taylor Bond states: “Customers and franchise owners alike are giving us rave reviews.”
Are Children’s Orchard Franchise Owners Giving “Rave Reviews”?
If these claims are true, Children’s Orchard CEO Taylor Bond is engineering a turnaround that’s nothing short of amazing.
Just last year, disgruntled Children’s Orchard franchise owners launched the OrchardCooperative.org website to protest Taylor Bond’s management and franchise policies and practices. According to the site,
“Many franchisees—after years in the business—have yet to make a profit, and many are being forced to close shop. Under Mr. Bond’s leadership, the number of stores has declined steadily from 86 in 2004, to 77 in 2007, to 71 in 2008, and to 61 in 2009. A handful of others are expected to close their doors this year.”
Currently, the number of stores listed on the Children’s Orchard site is just 51, down from nearly one hundred at one time. While Children’s Orchard stores have been closing, competitors seem to be thriving with similar concepts.
The statements and Taylor Bond quotes come from a 30th Anniversary press release (“Nation’s First Children’s Resale Franchise Reveals Business Model for Future”) issued by the company and posted on Franchising.com, Ann Arbor Biz and a handful of franchise blogs. Here are excerpts from the press release outlining the improvements claimed by Children’s Orchard:
Children’s Orchard Operational Improvements
“Larger stores, a reconfigured layout, and an emphasis on convenience and shopability…”
“…no-appointment-needed Walk-In Buying (with the industry’s only 20 minute guarantee) and seasonal Tent Sales”
“…we’ve enhanced the process by which we buy clothes from customers, and we’ve improved efficiency of back-end operations. Customers and franchise owners alike are giving us rave reviews.”
“The addition of these new elements to its business model, first tested at the company’s flagship location in Ann Arbor, Michigan, have helped to increase store inventories, boosted customer traffic and satisfaction, and resulted in an overall increase in store sales”
Children’s Orchard Online Store
“in March 2010 Children’s Orchard rolled out its online store at www.childorchstore.com”
“Children’s Orchard’s new online store gives moms access to a variety of brand-new products, ranging from eco-friendly handbags to kids toys to software that helps parents monitor their children’s Internet usage.
“Unlike any other children’s resale store, each Children’s Orchard store’s website offers its customers the chance to preview items that have just arrived at their nearest location. They’re called “Just In! Listings” and customers love them.”
“The franchise has also secured marketing partnerships with such well-known ebrands as Net Nanny® and JumpStart®.
“In addition, Children’s Orchard has launched a Social Media campaign on Facebook, engaging its customers through a series of contests and giveaways, and also launched a recipe exchange website designed for today’s busy moms.
Children’s Orchard New Franchise Requirements
“As part of the evolution to a more sophisticated business model, Children’s Orchard has elevated the capital criteria for new franchise owners. ‘We’ve raised the required net worth to reflect a new mindset: it’s not just about operating a store, but about building a business,’ Bond added.”
“’Over the last 30 years, we’ve grown a loyal, nationwide following of Children’s Orchard brand advocates. Most of our franchise owners came from this pool of devoted customers,’ Bond said. ‘And as Children’s Orchard® brings resale shopping into the next century, we’re attracting a greater number of business owners who see us not just for the quality products and services we provide, but for the sophisticated business model we offer.’”
ARE YOU FAMILIAR WITH THE CHILDREN’S ORCHARD FRANCHISE? WHAT DO YOU THINK? ARE STORE SALES RISING? HAS TAYLOR BOND TURNED THINGS AROUND? SHARE A COMMENT BELOW.
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FYI – California law does not allow future royalties on franchises that are closed.
I too closed after numerous attempts/years to sell my store. I also offered it to my employee for free; just take over the lease. She had her father-in-law review the ufoc and he said there was “no way in hell” he would allow her to sign it. And that’s with no money out of her pocket!
There is a lot of “bonding” ;; available on google that is public record, including the multiple corporations and LLC’s that corporate owns.
Check out where our hard earned $$ went:
(personal address redacted)
http://wombletradesecrets.blogspot.com/2010/11/trade-secrets-of-selling-used-childrens.html
The lawsuit by CO that’s the subject of that linked story is discussed here on Unhappy franchisee:
http://www.unhappyfranchisee.com/childrens-orchard-suing-failed-franchise-owner/
I believe CO filed 3 lawsuits against franchisees in 2010. Or are there more?
ADMIN,
Who are the 3 franchisees being sued? Are they being sued for closing their stores prior to the end of the franchise agreement only or because of the non-compete clause also? Did they sign the franchise agreement with minimum royalties or the one based soley as a percentage of sales?
REVISED Cathy: I don’t know the particulars. Perhaps others can share some info on these lawsuits.
A search of Justia.com returns the following lawsuits:
Children’s Orchard, Incorporated v. Thomas et al
Plaintiff: Children’s Orchard, Incorporated
Defendants: Tiffany Clare Thomas, Kent August Jaecke, Paul Overton Thomas and Upsy Daizy
Case Number: 2:2010cv14379
Filed: November 1, 2010
Court: Michigan Eastern District Court
Nature of Suit: Contract – Franchise
Children’s Orchard, Incorporated v. Nowling et al
Plaintiff: Children’s Orchard, Incorporated
Defendants: Shirley Nowling, Ernesto Pinal, Maria Pinal, Kids Kloset, John Does 1-10, The Nowling Company and Todd Nowling
Case Number: 2:2010cv10143
Filed: January 13, 2010
Court: Michigan Eastern District Court
Nature of Suit: Contract – Franchise
Children’s Orchard, Incorporated v. Children’s Orchard Store #210, et al.
Filed: June 3, 2009 as 2:2009cv12166 Updated: August 27, 2009 21:56:49
Plaintiff: Children’s Orchard, Incorporated
Defendants: Children’s Orchard Store #210, Matthew Fournier and Stephanie Fournier
Cause Of Action: Diversity-Contract Dispute
Court: Sixth Circuit > Michigan > Eastern District Court
Type: Contract > Contract: Franchise
Children’s Orchard, Incorporated v. Children’s Orchard Store #202 et al
Filed: March 9, 2009 as 2:2009cv10871 Updated: April 8, 2010 10:37:51
Plaintiff: Children’s Orchard, Incorporated
Defendants: Children’s Orchard Store #202, Maha Elsherif, Three R’s, LLC and Walid Ahmed
Court: Sixth Circuit > Michigan > Eastern District Court
Type: Contract > Contract: Franchise
Children’s Orchard, Incorporated v. Brown et al
Filed: December 27, 2007 as 2:2007cv15484 Updated: January 16, 2008 18:21:10
Plaintiff: Children’s Orchard, Incorporated
Defendants: Brown 1, Incorporated, Julie Brown, Michael Brown and Re-Kid, LLC
Court: Sixth Circuit > Michigan > Eastern District Court
Type: Contract > Contract: Franchise
Children’s Orchard, Incorporated v. Patricia Ann Childs et al
RFC Case Number: T-C08-13634P
Court Case Number: 2:08-cv-13634-MOB-RSW
File Date: Thursday, August 21, 2008
Plaintiff: Children’s Orchard, Incorporated
Plaintiff Counsel: Adam M. Bond – Attorney at Law
Defendant: Patricia Ann Childs, Richard A. Childs
Court: Michigan Eastern District Court
Children’s Orchard, Incorporated v. Children’s Orchard Store Number 63 et al
Plaintiff: Children’s Orchard, Incorporated
Defendants: Children’s Orchard Store Number 63, Lynn Youker, Paul Youker and Tiffanie Hernandez
Case Number: 2:2007cv11262
Filed: March 23, 2007
Court: Michigan Eastern District Court
Nature of Suit: Intellectual Property – Trademark
Andrew Clifford, Incorporated v. Children’s Orchard, Incorporated
Case Number: 2:2006cv10492
Filed: February 3, 2006
Court: Michigan Eastern District Court
Nature of Suit: Contract – Franchise
I noticed something interesting. Look at the last posting. It is the only one that was not instigated by the franchisor.
The franchisee filed. How do we find out the results of that one?
CHILDRENS ORCHARD – FDD UFOC ITEM 3 Detail
Item 3. Litigation
COI periodically is a party to various commercial disputes in the ordinary course of business, some of which involve claims or litigation with current or former franchisees. COI is a party in the following material pending cases:
Children”s Orchard. Inc. v. Andrew Clifford. Inc. et al.. (American Arbitration Association, Case No. 54 114 00538 06, filed April, 2006). COI initiated an arbitration action against Andrew Clifford, Inc., Diana Nazelli, Clifford Nazelli, and Carla Nazelli (the “Respondents”), operators of a Children”s Orchard store located in Ohio. Through the action, COI alleges claims for damages related to Respondents” failure to comply with their post termination obligations under their 1996 franchise agreement after they allowed their franchise agreement to expire. In May, 2006, Respondents filed a counterclaim against COI alleging breach of contract, violation of temporary restraining order, promissory estoppel, misrepresentation,-violation of Michigan franchise law, and violation of Ohio franchise law. A number of the counterclaims have been summarily dismissed, including claims that COI violated state franchise laws. COI denies all allegations of the counterclaims and intends to continue to vigorously defend the action.
Andrew Clifford. Inc. v. Children”s Orchard. Inc. (United States District Court for the eastern District of Michigan Southern Division, Case No. 06-10492). COI has consented to an injunction that extends the 1996 franchise agreement in the above matter until the above matter is decided.
Children”s Orchard. Inc. v. Lvnne and Paul Youker. et al.. (United States District Court for the Eastern District of Michigan, Case No. 07-11262, filed March, 2007). COI initiated an action against Lynne Youker, Paul Youker, Tiffanie Hernandez, and Children”s Orchard Store #63 (the “Defendants”), operators of a Children”s Orchard store located in California. Through the action, COI alleges claims for damages related to Defendants” failure to comply with their franchise agreement when they ceased paying royalties and began operating under another business name. On November 2,2007, the court entered a default against Defendants. Damages have not been determined.
Children”s Orchard. Inc. v. Michael and Julie Brown, et al.. (United States District Court for the Eastern District of Michigan, Case No. 07-15484, filed December, 2007). COI initiated an action against Michael Brown, Julie Brown, Brown #1, Inc., and Re-Kid, LLC. The Browns operated two Children”s Orchard stores located in Kentucky. Through the action, COI requests injunctive relief and alleges claims for damages related to the Browns” failure to comply with their franchise agreements when they sold one of their stores to Re-Kid, LLC.
http://www.franchoice.com/franchise/childrens_orchard/fdd_ufoc
Per UFOC –
“Effective January 1, 2004, Assimilation Franchising LLC (AF) purchased all of the stock of Children”s Orchard, Inc. Taylor Bond is the Manager of AF. “
in 1990, i bought the company and its 27 franchisee base of stores..less than 15 months later,i walked away and gave my interest back to the original founders. the reason was sort of simple,i could not in good conscience take money from new franchisee owners,knowing they were doomed to failure…the idea was good,but making money was not in the cards.The nature of franchising is so slanted against the owners,that it takes more than the franchise owner can do to show any sort of profit. The dice are loaded.. you cant win
Very once in awhile, a star is born…that star is the point to. will lead any newcomer to paradise. im sure that star becomes a well situated and rewarded member of the company.
and then there were 42… and counting
and for some good news….
Children’s Resale Store: Franchise Fee
You have a loss of $11,998 on your disposition of Franchise Fee.
Your depreciation deduction for Franchise Fee for 2010 is $702.
We’ll transfer these amounts to the correct forms for you.
i am not sure what this post means
I believe that was a solicitation for accounting services. I believe that a franchise agreement is depreciated over 15 years, so if you close your store before 15 years, you can take the remainder of the depreciation in the year that you closed.
down to 39 stores!!! will this ever stop?
Not as long as that UFOC remains unsignable. I imagine one day we’ll hear that the franchise is either sold or goes under. It’s just sad that one person’s ego can kill a business and take so many others with it.
At one time this franchise was 99 stores with the goal of tripling in 5 years. The other kids resale franchises seem to have grown. Where did this go so wrong? What a wasted investment! Chance of resale is about slim to none and if by chance there is a buyer, the value of the store is signficantly less than what it was bought for. This is worse than buying a car!!!!!
Down to 38. And by the end of this year there will be ?????? Any bets?
33
Why don’t they disclose the many arbitration disputes. The outcome of those disputes are disturbing to say the least
Zors do disclose disputes and results in their disclosures. Bit tricky to read though.
The disputes that are filed by the zor against the zee, are usually listed first, and fall off the disclosure after a few years. Then the disputes filed by the zee against the zor follow, and usually have to be listed for 10 years.
Does anyone know if any new franchises have been sold in the past year? How many units are left?
It looks like Children’s Orchard is down to 34 stores listed on their website.
The latest to close appear to be:
Roseville, CA
Rowley, MA
Norwood, MA
Brunswick, OH
Rowley and Norwood are still appearing on the web site as open.
Correction.. looks like Children’s Orchard is down to 36 stores listed on their website.
The latest to close appear to be:
Roseville, CA
Brunswick, OH
Admin, you can delete my last comment
It looks like another store closed, Danvers, MA. The franchise is now down to 35.
I couldn’t find the Orchard Cooperative site. I guess that just expired too.
What do you think these remaining stores gross? 5% of the gross sales of 35 stores isn’t much of a budget for a franchise company. Are they providing ANY support or just collecting paychecks for as long as it lasts?
It’s hard to say what the average store grosses because there are a couple of $800K stores and most of the stores that weren’t making a profit or minimal profit have closed. Maybe $300K/year? If the average remaining store grossed $300K/year, that would be $630K being brought in by the franchisor (5% royalties plus 1% for the ad fund). Even if the average was $400K, that’s an income of $840K for the franchisor. That’s not a lot of money to run a business with their own rent and staff. Let’s not forget the windfall from the online store! And probable kickbacks from 5th/3rd for the cc/store credit machines. Oh, I almost forgot about the Newcomers Welcome Service franchise! I wonder if they pay Adam Bond or not because I would think that their legal fees from all of the lawsuits would be pretty steep.
I just heard that Adam Bond is running for political office in Mass and think their lawsuits have fizzled out, so they haven’t been able to drum up extra cash. I think that there were 90 stores more or less when Taylor took over in January of 2004. He sure has done a bang up job of “growing” the system. Unfortunately, Children’s Orchard is not a good example of business model that grows thriving franchise ownership.
Do not sell to these folks. They picked over my high end gently used toy offerings, took the Ebay value of $2000. plus worth of toys and gave me $41. Their “buyers” do not price anything the same way. You will be robbed blind of much needed, especially in my case, money. To make matters worse, even though I was one of the first two people in the store, they took their, “regulars” first, leaving me to stand waiting for an hour and a half. You are better off finding a local, nonfranchise seller who has some business standards and a reputation to protect. I will never sell anything there again and I work hard to keep local Moms from making the same mistake I did.
OMG…the nightmare continues! Taylor Bond along with his arrogance has run a beautiful franchise into the ground so deep, some may call it Hell! Pitiful how such a self centered human being, couldn’t stand to be wrong so he took down many franchisee’s and their hard work and for what? PATHETIC
Down to 33 stores
And then there were 32…