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CUPPY’S COFFEE GOES TO COURT

July 12, 2008

Supreme Building Technologies filed suit against Elite Manufacturing, LLC alleging breach of contract regarding $1.7M in unpaid fees. July 3, 2008, Supreme Building Technologies, Inc. filed a lawsuit against Elite Manufacturing, LLC. for breach of contract, trade secret misappropriation and unfair competition. In short, SBT alleges that Elite has stiffed them for $1.7M in fees for inline construction of Cuppy’s Coffee stores, and fabrication of Cuppy’s coffee kiosks, carts and mobile units.

Additionally, SBT alleges that Elite Manufacturing has reneged on its contract by working with their subcontractors directly, cutting SBT out of the process – and revenue.

Court Documents [PDF]

Supreme Building Technologies, Inc. v. Elite Manufacturing, LLC

Supreme Invoices to Elite Manufacturing

The complaint alleges that:

In January, 2007, Elite manufacturing (a “franchisor of coffee shops”) hired SBT to perform its inline and modular construction and act as general contractor for all of Elite’s franchise buildings and structures. For inline construction, SBT was to receive 10% upfront as a downpayment, 30% when a building permit was issued, 30% on commencement of build-out, and 30% final payment within 10 days of completion. For modular construction of mobile units, carts and kiosks, SBT was to receive 50% upfront, and 50% within 10 days of completion.

Documents filed with the complaint include unpaid invoices dated from October, 2007 to June, 2008 for work done on inline construction totalling $1,427,805.51 and modular construction totalling $324,101.36. The invoices reflect work performed for 44 separate inline franchise locations and 11 franchise mobile units or kiosks.

When the locations listed in the invoices are cross-referenced with the Cuppy’s Coffee website, 13 of the inline franchises and 6 of the modular locations are listed as “Open,” 14 of the inline and 4 of the modular locations are listed as “Coming Soon,” and 17 of the inline locations and 1 modular location are not listed at all.

Who owns Supreme Building Technologies, Inc.?

The Articles of Incorporation list Alvin Handshoe of 335 Lane 340 Jimmerson Lake, Freemont, IN as sole stockholder. John Rodesiler has been referred to as SBT President and he and Rob Folk represented SBT at city council meetings.

According to a November, 2007 press release, “The Indiana Economic Development Corporation provided Supreme Building Technologies up to $225,000 in performance-based tax credits and up to $35,000 in training grants based on the company’s job creation plans. With assistance from the Steuben County Economic Development Corporation, the City of Angola will provide the company with property tax abatement.

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Comments

14 Responses to “CUPPY’S COFFEE GOES TO COURT”

  1. [...] THE FULL STORY & PDF OF THE COURT DOCUMENTS ARE POSTED AT UNHAPPY FRANCHISEE. [...]

  2. CUPPY’S COFFEE GOES TO COURT | Unhappy Franchisee…

    You’ve been blasted (a good thing) – Trackback from Franchise NewsBlast…

  3. Guest (Tony) says:

    I have a friend that has lost money to Elite. She has filed formal complaints with the Fort Walton Police, Florida AG, Florida Dept. of Agriculture and Consumer Svcs., Indiana AG, Angola Police Dept., IDEC, BBB and FTC. These agencies are now aware of Elite and the ball is starting to roll. Anyone who has lost any deposit should write formal complaints to each agency listed above as soon as possible. Make some NOISE! Put this lunacy to an end.

  4. ADMIN says:

    I just received a message from someone who asked me to pass this along. I guess he’s in contact with them and is filing a complaint:

    Police Chief Ted Litschauer
    Fort Walton Police Dept.
    7 Hollywood Blvd. NE
    PO Box 4009
    Fort Walton Beach, FL 32549
    (850) 833-9509

    fwbpolice@fwb.org

  5. Maria says:

    Any idea what kind of complaint is being filed with the Ft Walton Beach Police? Contractual things are usually civil. Is this some kind of fraud?

  6. ADMIN says:

    Maybe somebody thinks that taking people’s money and not giving it back for 2 years constitutes fraud and makes them a criminal enterprise. I wonder if continuing to take in refundable deposits knowing that they weren’t being put aside – accepting commissions on them – would be considered fraud?

  7. Susan says:

    I am curious, is Brian Hayes being sued as part of Elite or is he with SBT. On Elite website he is shown as the president but he was with SBT. What is going on?

  8. Ellen says:

    Dale Nabors is moving Cuppys to Alabama. Does that have something to do with the complaints filed with Ft. Walton Beach Police?

  9. ADMIN says:

    Does that have something to do with the complaints filed with Ft. Walton Beach Police?
    No, Alabama is Mr. Nabors neighborhood. He’s had that planned from the beginning is what I heard.
    They’ll probably be able to run the company out of his house pretty soon. Or maybe they’ll just set up a bunch of modular buildings in a parking lot somewhere.

  10. Carol Cross says:

    Hard to understand what is going on! When you look at complaints on the Rip-Off —Bad Business Website, you see that some defrauded franchisees have tried reporting the fraud to local authorities and State Attorneys but that they are ignored.

    Is this because “fraud” in franchising is not really well defined under the law because the franchise agreement, the actual contract, usuaully protects the franchisor for almost everything and anything he may do.

    I can’t understand why Dale Nabors took on all of this mess and he is really going to have to put his “Believe and Succeed” message to work for himself. Someone posted that he took on both the assets and the liabilities of Cuppy’s when he purchased Cuppy’s,

    Is this true? Why would he do this? .

  11. ADMIN says:

    I can’t understand why Dale Nabors took on all of this mess and he is really going to have to put his “Believe and Succeed” message to work for himself. Someone posted that he took on both the assets and the liabilities of Cuppy’s when he purchased Cuppy’s,

    Is this true? Why would he do this?

    Well, if he “believed” that he could really fix the problems there, he could “succeed” in getting a multiple companies practically for free. Rumor has it that he actually put no cash down whatsoever. It might have been tempting because there were so many obvious inefficiencies to fix right off the bat: hugely bloated staff, focus on sales only, taking people’s deposits and spending them on payroll rather than escrowing them.

    However, Dale took on some serious liability and has a franchise company that has never demonstrated an ability to produce royalties. Or profitable units.

    We’ll find out if his “Believe & Succeed” mantra works in short order.

    Remember everyone, you’ve got to believe… or you’ll kill the Success Fairy and no one will get their deposits back!

  12. RS says:

    I am a Cuppy Franchisee. I have gone all the way through the process. I have applied for and recieved an SBA loan. I have paid Cupp’s/Elite thousands of dollars for supplies and equipment. I was promised my store would be open the end of July the first week in August. Earlier this week I recieved an anonymous call from a Cuppy executive, informing me the call was off the record, basically he said they had a cash flow problem and that I might be wise to get an attorney. Later on I received another call from an executive working for Elite manufacturing, he said also they have cash flow problems, he stated things are in a disarray and that if I was to pursue legal action he would understand. I was informed that even though I was promised I would be open, I have recieved no equipment, no cabinets, no signs for my store, no sinks, no hot water heater, virtually nothing. I was informed that they had no money to make my cabinets and that even if they did they do not have plans, templates, dies or anything to make them with. Several months ago they had 97 employees and an onsite daycare, they now have 57 and no day care, they are moving from Florida to Alabama and they are only taking 12 key people with them. I feel like I have beenleft out to hang, I have paid to remodel a store in a mall, I have a lease, i have loan payments, I have an empty store and no promises in the for seeable future to get me open. A lot of people have been deceived, a lot of families have been forced into bankruptcy or are on the verge. The things that have been done by Cuppy’s Coffee and Elite manufacturing is criminal, they have shown litlle regard for those they have sunk. Are you thinking of a coffee franchise, think again, be careful, especially with Cuppy’s Coffee and Elite manufacturing. I may never recover, I have hired an attorney, I have contacted my SBA funder and I have contacted the mall where my store is located, yet the sad reality is that my wife and I’s future is not looking real good. I know of at least 5 other families in the same boat, we are all holding on hoping against hope that the sun will come out again and that our stores will get open, we have all paid thousands and thousands of dollars for up to this point, NOTHING.

  13. Steve G says:

    Cuppy’s needs a new list of references for potential franchisee’s to call if they are dumb enough to get past the first sales pitch. How about Jackie Jefferies in Arizona who sold her drive thru years ago but got on the phone with people as a current owner and talked Cuppy’s up to the fullest degree of success. She now lives in Mexico. How about Michael Luevano who lives in California and worked on the Cuppy’s sales floor making much more money than his failing cafe. Michael went bankrupt and lost his home. Lili Tran, who owned half the corporate drive thru locally there in the Ft. Walton Beach area. She sold out to Dale Nabors and relocated to New Orleans and does nails. The store averages about $30.00 a day and is going broke. Dale will move this drive thru to the great metropolis of Muscle Shoals, Alabama where he knows if will be a “GLOWING” success with it’s $5.00 cups of Cafe D’Arte. Troy Ponto, truck driver, single digit IQ, was a salesperson at Cuppy’s, now works as a maintenance man for Cuppy’s. He is on the verge of bankruptcy with his drive thru or should I say…Shane Stulz”s drive thru (Troy didn’t have the credit to buy the Cuppy’s business so his partner Shane put his home up for collateral). THEY will be moving his and Shanes drive thru to the “PROMISED LAND” Muscle Shoals, Alabama. BUYERS BEWARE! Dale could be stupid enough to have him selling Cuppy’s franchises again. And then there’s the poor Marketing Director, Rachel Clark that Dale forced out of the Corporate Headquarters of Cuppy’s. She and her husband are on the verge of bankruptcy thanks to a drive thru that does $50.00 a day there in Navarre, Florida. Another of their money making references, Terry Strong in Louisiana has failed and gone out of his Cuppy’s drive thru business and disappeared. If all of these people cculd be put back on the REFERENCE LIST when Dale gets to Alabama I am sure Cuppy’s will enjoy success like never before.
    BELIEVE (the lies) & SUCCEED (in going broke)

  14. ADMIN says:

    Steve G:

    Doesn’t Rob Folk belong on that list?

    He was on the Internet touting himself as a happy franchisee defending the company. Turns out, he never even opened his franchise because he had an offer to sell his real estate at a profit. They ended up repurposing his custom building for Mary Patrick, who opened with it after a 22 month pre-opening period, then closed 8 months later.

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