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.

85 thoughts on “CHILDREN’S ORCHARD: CEO Taylor Bond Claims Franchisees Giving “Rave Reviews”

  • Pingback:CHILDREN’S ORCHARD: May 2010 Press Release : Unhappy Franchisee

  • May 13, 2010 at 12:11 pm
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    Per usual, Children’s Orchard CEO is long on PR aand gimmicks and short on performance. Stores continue to close. They are slated to lose several more this month, whcih will take them below 50. While the competitors are growing at 3 to 4% a year, Children’s Orchard is declining at 9% a year.

    They continue to take closed stores into bankruptcy suing most recently for $30,000 and $60,000, claiming lost royalties, when it is clear to everyone but themselves and a handful of loyalfranchisees that they’ve caused these stores to go under.
    John

  • May 13, 2010 at 2:56 pm
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    I was curious to see what stores were using the “Just In! Listings” that customers supposedly love, so I spot checked CA stores.

    More than half the store pages said “There are no Just In! items listed at this time.” (Apple Valley, Cypress, Fountain Valley, Lake Forest, Rancho Cucamonga, Roseville, San Juan Capistrano, Thousand Oaks)

    Some had 1 or more items listed (Laguna Niguel, Manhattan Beach, San Dimas, San Marcos, Santa Clarita, Simi Valley, Torrance) but they are stock photos and it’s unlikely they’ll be updated. Plus, the disclaimer says that there’s no assurance that the items shown are available.

    Looks like another poorly thought out gimmicky idea that will never be implemented.

  • May 14, 2010 at 6:59 am
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    What a joke. CO still don’t have a barcode system. What franchised retail store can you think of that doesn’t have a simple barcode system? Taylor needs to bring CO up to the 1990’s first.

  • May 14, 2010 at 11:30 am
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    The “store of the future” doesn’t have bar code scanning?

    I was also curious about the claim that they have gone to “Larger stores”? Since they haven’t been opening new stores, how are existing stores getting larger?

    Also, how are franchisees benefitting from sales diverted to the online store? Aren’t they now in competition with their franchisees?

  • May 15, 2010 at 11:37 am
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    Children’s Orchard is a great store with a great recycling concept.They have better quality as well as better prices than ANY other resale store in Ohio.Many of their competitors have stained clothing as well as worn out faded clothes.Children’s Orchard is by far the best!

  • May 18, 2010 at 9:36 am
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    You are right, it is a great concept, with high quality used children’s clothes.

    It does not mean, however, that the business is profitable, or that the store owner (franchisee) is able to operate under the dictates from this franchisor.

    This system is folding for a reason, and the reason is the kooky franchisor. He is a wiz bang at ruining businesses.

  • May 18, 2010 at 12:37 pm
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    Maybe the franchisees are cutting off their noses to spite their face, as they say.

    “Just In! Listings” sounds like a good marketing idea but when I checked the 9 or so stores in MA only one store had 1 item posted.

    How can Children’s Orchard provide improvements if their franchisees won’t participate or use the tools provided? Are CO franchise owners determined to fail to prove themselves right?

  • May 18, 2010 at 1:35 pm
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    Really? That’s all you can offer? “Children’s Orchard provide imporvements?”…

    Solid, well run locations have closed rather than sign the criminal franchise agreement at renewal time. The contract is so criminal that prospects have walked away from buying resales rather than sign up.

    And HOW MANY brand new stores have opened in the past few years?

    And, why didn’t stores fold up their tents when Walt Hamilton owned the system?

    Some franchisees may be cutting off their noses, but the franchisor is cutting franchisees off at the knees.

  • May 18, 2010 at 2:31 pm
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    “Solid, well run locations have closed rather than sign the criminal franchise agreement at renewal time.”

    They were offered a well-documented business proposal and they took a pass. That’s the way it’s supposed to work. That’s not criminal. That’s business.

    “The contract is so criminal that prospects have walked away from buying resales rather than sign up.”

    You might want to look up the actual definition of “criminal.” Again, the terms of the agreement were clearly spelled out, I assume. The parties did not come to an agreement and parted amicably. The system works!

    “Some franchisees may be cutting off their noses…”
    I agree. Maybe franchisees should spend more time trying the new programs and tools and less time pining for the good old days.

    Why should CO keep developing new marketing ideas if franchisees don’t participate?

  • May 18, 2010 at 5:03 pm
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    I retract “criminal” and insert….”one-sided”.

    Owning a franchise is NOT like being an independent business owner. The franchise agreement legally binds the franchisee to the franchisor and basically the franchisee works for the franchisor.

    All the new “programs and tools” you tout have not been able to overcome a “one-sided’ franchise agreement.

    I am very happy that the “well-documented business proposal” is being rejected, because it means consumers are reading it and understanding the implication of each and every clause.

    I congratulate each and every person who walked away. In fact, anyone who is looking at this franchise system shouldn’t walk away…they should run away.

    I think the fact that there it has been years since a new franchise has been sold, speaks for itself.

  • May 18, 2010 at 5:40 pm
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    Good points to make.

    However, assuming the franchisee of the solid well run location is a savvy business person, doesn’t it speak volumns that this business person would rather walk away from a solid investment than to renew under the terms of the renewal contract? Leads one to beleive that the renewal terms are vastly different than the original contract, so much so that the franchise no longer makes sense as an investment.

    This franchise wasn’t a cheap investment. If the franchisee is willing to just shut doors rather than sell the store, then doesnt’ this also tells us there is no market value to the franchise?

    And to address the new marketing ideas, perhaps the reason franchisees are not supportive of the new ideas is because of their experiences with the old ideas that were also developed by this same franchisor team?

  • May 19, 2010 at 12:02 am
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    To All, Taylor Bond is a total fraud. As a former Children’s Orchard franchisee, who was fortunate enough to have a contract that pre-dated Mr. Bond, I’ve watch him financially ruin almost everyone who has come into the business under one of his franchise agreements. With him the playing field is not level, but financially is tilted more and more in his favor. Few people have been able to break even, much less make a decent living under his system. Don’t be fooled by a glib tongue.

  • May 19, 2010 at 2:18 pm
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    I was wondering how many stores have closed that opened under Taylor Bond. Does anyone know?

  • May 19, 2010 at 8:43 pm
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    Taylor’s new marketing tool, shopping on line, is at the expense of his franchisees. He is selling many items that the franchisees sell in their stores in direct competitions with them. But, he forbids THEM to sell on line! Also, the “Cashe Card” he give away to customers who shop on line can be redeemed at any Children’s Orchard store – again at the expense of the franchisee!! Like always, he gets the profit at the franchisees’ expense.

  • May 20, 2010 at 11:21 am
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    I suspect the corporate on-line shopping site is no more popular than Taylor’s other attempts at business. Especially his Newcommers Welcome Service which came after another wiz bang business, egismoz.

    I really fault the journalists who print the stories that Taylor’s marketing pieces pitch, and never ever follow up on the many false and over the top claims he makes in the articles.

  • May 20, 2010 at 11:41 am
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    Maybe it would be good to follow up with the journalist and point him to this site?

  • May 27, 2010 at 10:21 am
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    How long will it take for the remaining franchisees to realize that the brand image of this franchise system has faded and lost value? The system will soon be at 49 stores, with more to close within the year. Stores with stable earnings are not being re-sold because many viable prospects walk away after reading the franchise offer or after they have visited the corporate office. How many stores have closed because they couldn’t find a buyer? They wouldn’t renew because of the current contract and they couldn’t sell because of the current contract. This franchise is a mess of epic proportions.

  • June 5, 2010 at 9:40 am
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    Looks like Taylor is at it again. These are quotes from press releases on what the owners had to say about awards they won:

    This month, Liz Lampe was recognized for her achievement in product quality and customer service, as well as consistent sales and traffic increases year after year. The store received a 95 percent customer satisfaction rating, and Lampe’s sales were up 13 percent in the last year.

    “We’re very proud to be recognized from among a national system of dedicated business owners, “said Liz Lampe, owner of Children’s Orchard in West Allis. “This achievement couldn’t have been possible without our hardworking staff and loyal customers.”

    This month, Debbie Brown was recognized for her achievement in having the highest sales and traffic growth over the past year. As owner of the San Juan Capistrano location, Brown increased her sales by 36.8% and traffic by 39.3%.

    “We’re very proud to be recognized from among a national system of dedicated business owners, “said Brown, owner of Children’s Orchard in San Juan Capistrano. “This achievement couldn’t have been possible without our hardworking staff and loyal customers.”

    This month, Donahi Bunt and Enedina Zertuche were recognized for their achievement in going above and beyond in developing and implementing creative marketing concepts. Hosting different fashion shows throughout McAllen is just one of the many ways that the owners have shown creativity while implementing new marketing concepts.

    “We’re very proud to be recognized from among a national system of dedicated business owners, “said Bunt, owner of Children’s Orchard in McAllen. “This achievement couldn’t have been possible without our hardworking staff and loyal customers.”

    There are more but you get the idea. I wonder if the owners gave CO permision to quote them like that. Taylor is also looking for people to partner with to advertise his on-line store. What do the store owners get out of this other than being forced to take a store credit issued by him?

  • June 6, 2010 at 11:22 am
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    Thanks for posting.

    Once again, Taylor’s press releases are a joke.

    This franchise system has not thrived under his ownership.

    The story is in the numbers, not in press releases, and the numbers don’t lie.

    He can manipulate words, and send out all the press releases he wants, but it doesn’t change the reality that his franchise system is not thriving, or stable.

  • June 7, 2010 at 7:13 am
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    Visitor: I think you’re being a bit harsh. ;)

    Perhaps Taylor’s dedication to recycling led him to reusing the same boilerplate press release. Otherwise he or the PR firm would actually have to talk to franchisees.

    OR maybe the West Allis, San Juan Capistrano, & McAllen franchisees just coincidentally said the same thing. So did the franchisees from Laguna Nigel & Springfield:

    “We’re very proud to be recognized from among a national system of dedicated business owners,” said Wunsch, owner of Children’s Orchard in Laguna Niguel. “This achievement couldn’t have been possible without our hardworking staff and loyal customers.”

    “We’re very proud to be recognized from among a national system of dedicated business owners, “said Gosch, co-owner of Children’s Orchard in Springfield. “This achievement couldn’t have been possible without our hardworking staff and loyal customers.”

    Apparently, it’s a popular line in other franchise chains as well:

    “We’re very proud to be recognized from among a national system of dedicated and successful business owners, “said David Ramsey, owner of the Pump It Up in Manassas. “It’s truly rewarding to be in the business of having fun, and giving back to our local community. This achievement couldn’t have been possible without our hardworking staff and loyal customers.”

    Who cares what franchisees really have to say anyway?

  • July 2, 2010 at 9:47 am
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    How long will it take for the remaining franchisees to realize that the brand image of this franchise system has faded and lost value? The system will soon be at 49 stores, with more to close within the year. Stores with stable earnings are not being re-sold because many viable prospects walk away after reading the franchise offer or after they have visited the corporate office. How many stores have closed because they couldn’t find a buyer? They wouldn’t renew because of the current contract and they couldn’t sell because of the current contract. This franchise is a mess of epic proportions.

  • July 6, 2010 at 12:22 pm
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    Wonder if Taylor Bond ever revisits his earlier press releases must haunt him now, like this one on franchise gator.

    “Since assuming his position with Children’s Orchard in January 2004, Bond, whose previous experiences in franchising include high-level positions at Domino’s Pizza and Computer Renaissance, is bringing renewed growth to Children’s Orchard…. By applying experiences from his personal life along with lessons he learned during his years with other franchise concepts, Bond is well on his way to achieving his goal of having 300 locations open by 2007.”

    “Founded in 1980, Children’s Orchard is the nation’s first franchise of gently used and new name-brand kids stuff. With nearly 100 franchise locations in 23 states…”

  • July 6, 2010 at 4:45 pm
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    Sophisticated business model? THAT is a joke. Once Upon A Child has a computerized inventory control and buying system that is DECADES ahead of Children’s Orchard’s hand written, color coded tags. Any customer or potential franchisee can clearly see that. Children’s Orchard is improving: every year they get more and more like Once Upon A Child. Bigger stores, re-configured layouts (straight racks instead of circular ones), and walk-in buying are all concepts of Once Upon A Child.

    Stop whining, You are out of your mind. You said, “Are CO franchise owners determined to fail to prove themselves right?” Yeah, I’m sure they’re throwing away $150K to $750K in a few short years just to prove a point. Maybe they’ve given up after taking bad advice after bad advice from the franchisor. Perhaps the franchisor should actually base their advice, or dictates in most cases, on actual research instead of hunches. Exactly how much store traffic is generated by Just In! listings? It sounds to me like you must work at Children’s Orchard in the advertising department. You also said, “The parties did not come to an agreement and parted amicably.” Oh, how true THAT is. I would think that after so many people have chosen to part amicably from the franchisor, that they would try to create a franchise offering that isn’t so unattractive to potential franchisees. Ironically, it’s the FRANCHISOR who is failing at the expense of proving THEMSELVES right. It’s a classic case of Narcissistic Personality Disorder.

  • July 6, 2010 at 8:48 pm
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    Cathy:
    I’m out of my mind?

    You state that CO is such a terrible franchise and uses primitive handwritten color coded tags. But still, of all the franchises available, you chose to buy a CO franchise. Why didn’t you buy a franchise from OUAC if it’s so superior? Seems like bad judgement on your part.

    You claim that Once Upon a Child has a superior system that’s working in the marketplace. That makes Taylor Bond & Children’s Orchard very wise to be imitating them, right? They are making judgements based on what’s actually working – but instead of congratlating them on sound improvements you criticize them for making all their decisions on “hunches.” Sounds contradictory on your part.

    You defend franchisees not participating in marketing intiatives (like “Just In! listings”) because they got bad advice in the past, but then say the initiatives aren’t working. How can they work if people don’t participate? How can the marketing dept base decisions on real data (not hunches) if no one participates? Seems illogical on your part.

    Where’s the logic in anything you say? Sounds to me like you are just looking for someone to blame. Then again. I’m probably just out of my mind.

  • July 13, 2010 at 10:38 pm
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    did the Las Vegas stores close?

  • July 15, 2010 at 4:30 pm
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    it is confirmed that the Vegas stores have closed. i think that brings the total down to 48

  • July 15, 2010 at 4:58 pm
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    President Bond has raised the financial requirements of potential new franchisees for one reason. When they eventually fail, and they will, they will have more resources for him to go after.

  • July 15, 2010 at 5:29 pm
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    Pres. Bond has raised the required capital investment for new franchisees so they will be sure have money left over to pay him when they are sued by CO for closing their failing stores before their contract agreement is up. It is not profitable for him to have stores closing when the owners have to then declare bankruptcy. Legal fees are expensive, even if you are just paying your own attorney brother to do your dirty work. Most of these stores have little, if any, resale value because of his new one-sided contract. He is not interested in the stores’ success, only in collecting the franchise fees, territory fees or suing for the remainder of the money he feels he has coming to him when the stores close. If his business sense was half as good as his glib tongue, we’d all be millionaires!

  • July 16, 2010 at 8:51 am
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    So, how many new stores have been sold in the last 2 years?

  • July 22, 2010 at 5:27 pm
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    As another Children’s Orchard franchise about to go out of business. I want to ad my 2 cents. It is all I have left. My family invested nearly $200,000.00 in this Rip Off and yes, for you nay sayers defending this corporate fraud. I hope and pray that someday you’ll get what is coming to you. If my prayers are answered some of you may even spend time in prison with him, where you can still be on his payroll for a butt or 2.

  • July 26, 2010 at 9:52 am
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    Be careful. If your contract is newer than 2004, then you are in a world of hurt for closing early. Where you are located?

  • July 26, 2010 at 9:04 pm
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    46 stores left, that is it. Is there any hope that this franchise will turn around or are 46 owners hanging on for dear life? Is there any way an existing owner can get out from underneath this without losing everything?

  • July 27, 2010 at 2:25 pm
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    It’s actually 45. I’m shocked. I last checked on 7/6 and there were 48 stores. 3 stores have vanished in 3 weeks. When will the franchisor take ANY responsibility for the failure of its business model?!?! Even IF it was entirely the franchisees’ fault, then the franchisor must be awfully bad at choosing to whom it sells a franchise. Either way, it points to problems at the top. It seems so wrong to be liable for closing a store prior to the end of a franchise agreement when obviously so many franchisees don’t make a profit. There need to be serious changes made to federal law on this matter.

  • July 27, 2010 at 3:21 pm
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    There’s a franchisee & store list from 1/1/07 posted The Orchard Cooperative website. In 2007, it showed 60 stores open & 27 closed (87 total). Currently there are 45 stores listed on the website (44 franchises & the Ann Arbor co store, not on the 07 list).

    Here are the 6 stores that most recently disappeared from the site, and the franchisee owner names from the 07 list:

    CA Rancho Cucamonga (Esther & Alvin Sibal)
    CA Simi Valley (Rhonda Ray)
    CT Manchester (Joanne Miller)
    NC Raleigh (Rafael Estellar)
    OH Pickerington (Susan & Gordon Fink)
    OK Oklahoma City (Tiffany Jaeke)

    Condolences to the franchise owners who closed.

    Does CO or Taylor Bond ever send out any word of these closings to the existing owners, or ever mention the diminishing number of stores?

  • July 28, 2010 at 11:24 pm
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    No, you have to go to the website to count the stores that are opened. Did the Simi Valley store sell? If not and that was the asking price then the franchise stores have lost more market value that I originally thought. How does one get out from underneath this?

  • August 6, 2010 at 3:13 pm
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    It seems counterproductive to trash the franchise in a public forum for everyone to read when franchise owners are actively trying to sell their stores. How does this help us sell our stores? It doesn’t.

  • August 6, 2010 at 6:10 pm
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    guest, are you suggesting that everyone should just stay quiet about the problems and the store closings and put on a happy face so that you can sell your own store to some uninformed, unsuspecting buyer… and leave everyone else in the dust?

    Did you go to the Taylor Bond School of Ethics?

  • August 7, 2010 at 7:13 pm
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    I didn’t intend to sound so mean with my last comment. Sorry guest. I know everyone’s between a rock and a hard place. But still…

    It’s not like the store closures are any secret and it’s in the disclosure documents anyway. Yet if you Google “Taylor Bond” and you’ll get his interview stating:

    “Under the leadership of new President and CEO Taylor Bond… Children’s Orchard, with nearly 100 thriving locations in 23 states, is selling 5 million items to approximately 1 million customers each year… By applying experiences from his personal life along with lessons he learned during his years with other franchise concepts, Bond is well on his way to achieving his goal of having 300 locations open by 2007.”

    Anyone can count that there are fewer than 50 stores on the website. I think the way to be able to sell new franchises and existing stores is by having Taylor Bond step down and bring in someone with a new direction and not all the baggage.

  • August 8, 2010 at 12:47 pm
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    Good grief ‘ya all…..either franchisees care, or they don’t. Period. And more than one needs to care, and more than one needs to have a back bone.

    The ones who could care less, are the ones who have several more years before their Walt era contracts have to be renewed, and they have their heads stuck in the sand.

    For some reason, it seems like the Calif. stores are the only ones that are being re-sold, I guess the air is too thin in Calif and starves the brain.

  • August 9, 2010 at 9:56 am
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    Nuts to that law. It will be challenged.

    Rogue Franchisors – now there should be a law against them!!!!!

  • November 3, 2010 at 12:20 pm
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    My store closed after numerous attempts to sell it were unsuccessful, falling apart with the signing of the franchise agreement. I would like know who the attorney was that LR was talking about in the 11/3/09 post who COI will no longer deal with? I think we are all in this together whether our store is open or not… the existing stores are just waiting it out…because selling won’t be an option. It would be interesting to know of the 40+ stores still open, and I say that because more could have closed since the 45 number, how many of them are still under the old agreement ? What do they plan to do when it’s time to re-sign?

  • November 3, 2010 at 5:26 pm
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    Children’s Orchard continues to decline in numbers as owners can’t survive under the current policies and practices where the franchisor takes more and more and the stores get less and less. The most money they seem to be making is in suing stores that close and claiming future royalties. The truth is, if the owners were smart, they would sue Bond for the losses they’ve incurred since his takeover. I think they are now down to 43 stores

  • November 5, 2010 at 11:47 am
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    The attorney is Mario Herman in DC. And as my favorite thing to do is count open children’s orchard stores – I concur – 43 stores (including the corporate store).

  • November 8, 2010 at 12:50 am
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    I can see why watching the number of open CO stores is your favorite thing…it looks to be as interesting as watching the Ball drop in Times Square. Pretty soon we will need a party hats and bazookas……10…..9……8..

  • November 8, 2010 at 3:32 pm
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    There is an interesting article in the Franchise Times Nov./Dec. 2010 issue on page 76 dealing with a franchisor suing a franchisee for future royalities when the business closed before the contract was up. The case involved New York Medicine Shoppe franchisee, TLC Pharmacy. Laura Sobolesk, the franchisee, opened the pharmacy in 2004 and signed a 20 year deal. She closed up shop in December 2008. The Medicine Shoppe franchise sued for unpaid royalties and marketing fund payments. It also asked for future royalties on the remaining 16 years on the franchise contract.(nearly $900,000) Sobolesk wrote letters to the court saying she could not afford an attorney or the plane fare to Missouri where the case was to be heard. She didn’t even show up to court. The judge ruled she had to pay past due royalties and interest, plus additional legal fees. ($128,000) But the judge REFUSED to grant lost future royalties.

    Ron Gardner, attorney with the Minneapolis law firm Dady Gardner, believes this ruling may “turn the tide” of franchisors pressuring the franchisees for future royalty payments by providing case law in favor of the franchisee. Who is to guarantee that the franchisor would remain in business through the life of the contract?

  • November 8, 2010 at 6:54 pm
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    Thanks, Pete. That will come in handy for far too many of us.

  • November 9, 2010 at 6:57 am
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    Thanks for the tip, Pete. Too bad the article doesn’t seem to be posted on the website.

    I’ve reposted your comment to one of the Curves threads (http://www.unhappyfranchisee.com/curves-robert-lays-story/). If you want to see a franchisor that is aggressive in going after failed and failing franchisees, read through the nearly 1000 comments on that post. With 1/3 of their domestic units failed, that appears to be a big business for Curves.

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