Dental Fix RX CEO Blames Franchise Failures on Franchisees, SBA Loans

Dental Fix RX has one of the highest failure rates in franchising.   45% of the franchise agreements in the most recent three year period ended ceased operation or changed ownership.  Dental Fix RX CEO David Lopez blames Dental Fix RX franchisees who he says considered their SBA loan proceeds like “Monopoly Money.”

(UnhappyFranchisee.Com)  According to it Franchise Disclosure Documents, “Dental Fix Rx, LLC, offers franchises for the operation of Mobile Service Centers which provide cost effective one stop shopping to medical practitioners and other practitioners in fields, such as, but not limited to, dentistry, veterinary and tattoo parlors … The total investment necessary to begin operation of a Dental Fix Rx® franchise is $65,100 to $163,000. This includes approximately $50,000 to $75,000 that must be paid to the franchisor or affiliate.”

David LopezDental Fix RX, LLC is headquartered in Davie, Florida.

It’s executive team is headed by Chairman & CEO David Lopez, and includes Chief Operating Officer Brian Dershow, Chief Legal Officer Eric Masson, Chief Financial Officer Brian LaBasco, Executive VP of Business Development Scott V. Mortier, Senior Director of Training Matthew J. Lau, Chief of Staff Carolyn Bolton, and VP of Operations Michael Leonard, Dr. Ken Tralongo is a Board Member/Director.

Also read:  DENTAL FIX RX Franchise Complaints (UPDATED]

Dental Fix RX: The Amazing Franchise With a Near-50% Failure Rate

We previously reported on Dental Fix Rx’s participation in the controversial (and in our opinion, deceptive) pay-for-praise “12 Amazing Franchise Opportunities” program.  (See Dr. John Hayes & His 12 Amazingly Deceptive Franchises, which includes Scott Mortier’s testimonial for John Hayes’ pay-for-praise program).

Dental Fix RX also has one of the highest franchisee turnover rates in franchising.

According to the company’s own disclosure documents, nearly half of the franchise agreements in a recent three year period resulted in ceased operations or termination by the franchisor.

Why do so many Dental Fix RX franchise owners fail?

According to CEO David Lopez, 90% of Dental Fix RX’s franchise failures were caused by irresponsible franchisees who walked away from their franchises because they “had no skin in the game.”

In a recent deposition given in a Dental Fix RX, LLC lawsuit against a failed franchise owner, CEO David Lopez explained that irresponsible franchise owners who took out SBA guaranteed loans treated the loan proceeds as “Monopoly money” and walked away from their franchises when the going got tough.

Dental Fix RX

David Lopez: Franchisees With Bank Loans “Don’t Have Skin in the Game.”

Dental Fix RX is suing a failed Virginia franchisee in the U.S. District Court of Florida, Southern District (Case No.: 17-cv-62218-ZLOCH
DENTAL FIX RX, LLC, Plaintiff, -vs PRACTICEWORKS, LLC, et al., Defendants).

We found David Lopez’s explanation for Dental Fix franchise failures in the non-confidential transcript of his deposition dated November 8, 2018.

In the deposition, David Lopez stated that he meets with every prospective franchisee personally and talks to them about the “potential downsides” of their franchise investment.

Lopez explained:  “At the beginning, I say, ‘If you don’t make it, you’re going to lose $35,000 to $40,000.’”

The Defendant’s attorney asked David Lopez if he warned prospective franchisees of the downsides of defaulting on a $120,000 loan:

DAVID LOPEZ:  I think what happened with the loans, I didn’t realize the downside on the loans because when we started doing them, I didn’t see the downside yet. So I’m an optimist by nature, so I wouldn’t have seen that. I thought I was doing the best thing for the franchisees and myself.  As soon as I realized that that — that decision was causing people to walk because they had no skin in the game, we stopped doing the loans.

ATTORNEY: All right. So you’ve used that phrase “people don’t have skin in the game.”
DAVID LOPEZ:  Yes.
ATTORNEY: So if somebody takes out a loan for, say, $120,000
DAVID LOPEZ: Yes.
ATTORNEY: and they personally sign in that loan —
DAVID LOPEZ:  Yes.
ATTORNEY: …in your terminology they don’t have skin in the game?
DAVID LOPEZ:  Correct. They’re using other people’s money.

David Lopez: Franchisees “Think It’s Monopoly Money.”

The Defendant’s attorney asked Lopez: “And what about the fact that the bank will sue them on their personal guarantee and take $120,000 from them?”

Instead of answering, David Lopez explained how the reason for 90% of the system’s franchise failures were that irresponsible franchisees perceived their borrowed funds as “Monopoly money,” and just walked away from their investments and responsibilities under the franchise agreement.

DAVID LOPEZ:  When we looked at the number of franchisees that failed…  It was like 90 percent of our failures were the ones that took bank loans. So for me, my correlation of it was, [they] don’t have any skin in the game.
If [the Franchisee Defendant] would have taken the money from his savings account or from his wife, he wouldn’t have walked. He would have known that was real money. But because it was Monopoly money, it was bank’s money, he just walked. I saw it happen over and over and over again. And as soon as we saw it happen, I stopped.
ATTORNEY: So you think that somebody who has the United States government ready to come after them $120,000 walks away because they think it’s Monopoly money?
DAVID LOPEZ:  Yes.
ATTORNEY: You do think that?
DAVID LOPEZ:  Well… that’s what the data tells me.
ATTORNEY: Okay.
DAVID LOPEZ:  At the time that I did it, I didn’t think that.
ATTORNEY: Okay.
DAVID LOPEZ:  I take loans all the time, and I realize they’re real and I got to pay them back. And I’ve never defaulted on a loan in my life. So I don’t believe that
way, but I believe the people that in Dental Fix, that’s how they were thinking, yes.

Why Dental Fix RX Stopped Participating in the SBA Loan Program

CEO David Lopez stated that they addressed the problem of failed franchises by no longer accepting franchisees who needed loans, and by letting their registration in the SBA Franchise Registry lapse:

I would say the problem was they didn’t have skin in the game, so it wasn’t their money. So somebody would come in and buy a franchise with no money out
of their pocket. The bank would give them the entire loan, and they would operate it and just quit, exactly like [the franchisee defendant] did.

It’s not his money. They just quit. Then they think they don’t have to pay it back, or I have no idea what happens. And we realized this started happening, and vans started going out of business. They were direct correlation to the loans, and we said we’re not doing this anymore since we realized it.

Our Plea to Franchisees: Stop Victimizing Ethical Franchisor David Lopez & Dental Fix RX

Dental Fix RXIt’s not often that we side with the franchisor over the franchisee, but CEO David Lopez made a compelling case in his deposition.

First, he made it clear that he takes all the risks and the franchisees can walk away from their investments scot-free.

It’s not like the bank is going to want to be paid back.

It’s not like the Department of Treasury has the right to seize their assets, repossess their homes or garnish their wages.

And David Lopez made it clear that he lets franchisees walk away easily.

It’s not like the franchisees need to give six month’s notice and pay a $10,000 fee.

And it’s not like Dental Fix RX LLC will sue their franchisee for failing and demand damages and future royalties.

So, we make the plea to franchisees to admit that the reason for their financial devastation and turmoil was that they lacked the “grit” that they promised David Lopez they had in that initial talk he has with every prospective franchisee.

How do we know that David Lopez is highly ethical?

Because he stated so, under oath:

ATTORNEY: Do you have an ethics or a value statement at Dental Fix?
DAVID LOPEZ:  Yes.
ATTORNEY: Is it in writing?
DAVID LOPEZ:  Yeah, our values on the wall in the training room. When everyone goes through training for six weeks, they stare at it.
ATTORNEY: Okay. What are the values of Dental Fix?
DAVID LOPEZ:  I don’t remember. I’ve got dozens of companies and they all have values. I can get a picture of it if you’d like…

ARE YOU FAMILIAR WITH THE DENTAL FIX RX FRANCHISE OR DAVID LOPEZ?  ARE FRANCHISEES WITH SBA LOANS ABLE TO WALK AWAY WITHOUT REPAYING THEIR DEBTS? SHARE YOUR THOUGHTS BELOW.

PLEASE SHARE A COMMENT BELOW OR EMAIL US IN CONFIDENCE (UnhappyFranchisee@Gmail.Com).

Contact UnhappyFranchisee.com

TAGS:  Dental Fix RX, Dental Fix RX franchise, Dental Fix franchise, Dental Fix complaints, Dental Fix franchise complaints, David Lopez, Scott Mortier, Brian Dershow, Eric Masson, Brian LaBasco, Matthew J. Lau, Carolyn Bolton, Michael Leonard, Dr. Ken Tralongo, Dental Whale, FROOTS, Darby Dental Supply, Celtic Bank, SBA franchise loans, First Financial

16 thoughts on “Dental Fix RX CEO Blames Franchise Failures on Franchisees, SBA Loans

  • March 8, 2019 at 11:47 am
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    If you’ll notice the recurring issue with David Lopez, all of his problems come from the same place:

    His mouth.

  • March 8, 2019 at 12:37 pm
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    Looking back, that whole experience was very shady. There is no question they were pushing inexperience business people into untenable financial positions that they didn’t fully understand for their own profit.

  • March 8, 2019 at 12:37 pm
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    I love the Lopez quote above “If [the Franchisee Defendant] would have taken the money from his savings account or from his wife”…what kind of sexist pig is this guy? SMH

  • March 8, 2019 at 12:51 pm
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    Not sure if this article is for, or against dental fix.

  • March 8, 2019 at 12:59 pm
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    Bob:

    I must say that in researching this article I have become enthralled with what comes out of David Lopez’ mouth. (Of course if I were a former franchisee who believed his earnings claims and wound up trying to save my house from foreclosure, I would feel differently).

    David Lopez was featured in a Franchise Times article with the headline “Dental Fix CEO learns lessons one sip at a time.” The headline was based on Lopez’ quote ““You have to motivate yourself to the point that you drink your own Kool-Aid, because the second you don’t, nobody else will either.”

    Was David Lopez unaware that the term “drinking the Koolaid” is a reference to the 900 individuals who died after drinking cyanide-laced Koolaid under the direction of a leader who appeared rational at first but turned out to be a delusional and dangerous narcissist?

    Or was he sending a cryptic warning to those who thought they were heading for Park Place with their Monopoly money, but would be lucky to be living on Baltic Avenue after they got Dental Fixxed?

  • March 8, 2019 at 1:20 pm
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    Roger:
    The site name might be a giveaway to where our sympathies lie. But we are primarily a discussion site, and encourage all to share their opinions… especially those that differ from ours. What do you think is the cause of the high failure rate of Dental Fix RX franchises? Do you agree with David Lopez that Dental Fix RX franchisees feel like they can casually walk away from their investments because they have “no skin in the game”?

    The last sections are meant to be sarcastic. I invite Dental Fix RX (or franchisees of other concepts who took out SBA loans) to share their experiences with the pain of “walking away.” It’s hard to believe that David Lopez would contend that SBA loan holders think they are spending “Monopoly Money” when their homes, retirement accounts, assets, credit scores and everything else they’ve worked for is on the line. The reality is that the Department of Treasury comes after the borrowers for the full amount, and will garnish their wages for years to come. Or sic collection agencies on them. The “guarantee” by the SBA is a guarantee to the bank – who approved a loan that could never be repaid.

  • March 8, 2019 at 1:36 pm
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    For all you current or former Franchisees – THIS is the place to air your grievances. Please comment and contribute to the conversation. SEO and Page Hits matter for search visibility and organic conversation will ensure that Lopez gets exposed for fraud. Do your part and comment below!

    David Lopez used the same techniques to market to us, so let’s throw it back in his face.

    Kim – I would’ve asked my wife, but that conversation wouldn’t have gone over well. I guess Lopez didn’t get the memo that I liquidated my retirement account ($65K) after giving him all the loan money. It’s not like I had skin in the game or anything…. /s

  • March 8, 2019 at 1:58 pm
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    In one part of the deposition, an attorney is surprised that David Lopez cannot say how many franchises his first company FROOTS has despite the fact that he still has an ownership stake. Lopez explains “…I try to take my energy and focus it on things that produce value for me and it’s not something that produces value, so I just block — try to block those things from my time and my energy.”

    Perhaps the pain and loss of a failed franchise is one of the things Mr. Lopez “blocks.” I am eager to hear David Lopez’s response to this sad story posted by “JV” over on the Dental Fix RX Franchise Complaints page http://www.unhappyfranchisee.com/dental-fix-rx-franchise-complaints/

    David, did JV not have “skin in the game”?

    “I’m one of the victim of Celtic Bank and Dental Fix Rx “fraud scheme”. This two companies turns my life and my family into a nightmare. Why I call this a “fraude scheme”? Because for me, today that I think about it, and how this persons took advantage of me, advantage of my dream, for this a more, this is a fraud scheme.

    “Everything begins with an email showing my interest in the franchise and asking for more information. Couple of hours later Dental Fix Rx franchise sale representative was calling me. Two weeks later I was flying from West Virginia to Florida for a “discovery day”. I clearly remember when the seller ask me, “did you have $25K in cash? I say: I’m close to it, but I had a 401K, and other sources and make them cash quick.” She then say: “I got the person who will get you a $150K SBA (7a) loan. Just call this person, I’ll do the same, and just follow her on everything she says to you, and in less than 30 day you will have that money in your bank”. And guess what? I did…

    “Celtic Bank representative sent me an email with an “example” of how to fill a financial statement, sales projections, including overvaluing my house to make my equity higher, just to qualify myself to this $150K loan quickly.

    “Everything runs as planned, I quit my job, I pull out my 401K retirement plan, my wife did the same, and we sell our first and only house. All this to follow a “dream”, that 6 months later turned into a nightmare. Had to fill a Bankruptcy Chap 7, had to move to a one bedroom apartment in Puerto Rico, yes to a one bedroom apartment with a family of 4 members, because we loss everything, our jobs, our house, our dreams…”

    David, if you are going to be in the business of selling franchises, understanding the entire process holds “value” for you in that it might keep you from saying preposterous things that undermine your credibility as an entrepreneurial visionary and “innovation evangelist.”

  • March 8, 2019 at 2:27 pm
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    Also 38/54 SBA Loans have defaulted. He’s had more than 75 failures, so his 90% of failures had loans metric is bogus.

    Just another example of David Lopez’s inability to properly count.

  • March 9, 2019 at 3:59 am
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    Sounds like the same story. Was told how to fill put projections to recieve loan. Used up all of 401k. Financially changed my life to where I had to file Bankruptcy and because of that couldn’t get certain employment. Almost lost my house. How can this be our fault I’d it’s the same story for so many who have never met. Seems like California got hit the worst to.

  • March 9, 2019 at 12:08 pm
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    Id recommend you all look at Carolyn Bolton, she is the scammer that came from subway and took Brian’s job. She is actually one of the dumbest people they have and she will crumble as shes weak. all dental fix franchises are getting screwed by Carolyn as she drowning in the mess she got herself into.

  • March 9, 2019 at 9:24 pm
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    David Lopez is an idiot if he doesn’t realize that the loan payments are simply too high when coupled with Dental Fix’s ridiculously and unreasonably high weekly/monthly franchise fees. It’s wasn’t because we thought we hade “no skin in the game.” MORON!

    He is the epitome of greed. Dental Fix benefits from failed franchisees enough to pursue them and that’s what they do. It’s as simple as that and it’s all going to come to an end here soon. Also the training in the classroom is only 3 weeks. Not 6 weeks which would be more appropriate. Then they place you in training with an already successful franchisee for one week which teaches you absolutely nothing about obtaining customers which is what you really seriously need to be trained in.

    The training all together is a joke and just about as insufficient as it can be. They boast about their technical service help line while you’re in training and then when you get in the field it is nonexistent. If you do reach someone at Dental Fix for help, you get the infamous question… “Did you call the manufacturer?”

    Their markup to the franchise on equipment/hand pieces makes it impossible to sell anything unless the customer is ignorant enough to not shop around. Dental Fix has made life for me and my family a living hell. I’ve been out of business since the end of 2017 and have yet to default on my SBA loan ($1921.00/month). Now tell me David Lopez, does that sound like I think I “have no skin in the game?”

  • March 10, 2019 at 4:15 pm
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    To whom it may concern,

    I was a franchisee and unhappy with results as well. I lasted about 1.5 years and that’s because I ended up getting an SBA loan. I lost 110k of my own 401k money.

    I feel like they didn’t research the market fairly. They advertised how the competition was the big corporations when in fact the ones who had all the business were these mom and pop’s. They didn’t have the overhead like we did so was hard to compete with pricing. After a couple of months of being launched, it was hard to get a hold of anyone their to help you out or ask questions about repairs.

    I had to file bankruptcy because of this franchise. 1st time ever in my life. Those franchise messed up my financial life for a few years and because I had to file bankruptcy I was unable to get certain employment.

  • March 11, 2019 at 5:56 pm
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    After training the DF marketing guy came to my town to help me cold call, and he said things to the dental office leads I didn’t feel comfortable with….

    In the end I couldn’t keep up with expenses. I lost my retirement, it went on to effect my marriage.

    If I could do it all over again, I wouldn’t.

  • March 11, 2019 at 9:33 pm
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    David Lopez and his cronies are a perfect example of greed and stupidity! They suck you dry right from the beginning, the make you purchase a $90k Mercedes Benz Sprinter van just because they were getting $8k kickback from MB. You do not need such big expense when you start a business. And then you have to pay weekly royalties fees that will clean up your business account until you run out or money and have no choice but to go out business and become miserable because you just lost your lifetime savings.

    You cannot make any money selling equipment with the high margins they charge on top of manufacturers price, you cannot do business with two middle man.

    Their marketing campaign sucks and you hardly ever get new customers.

    $15k for their training program is a joke, people cannot learn everything they need to know to be successful in 3 weeks……

    You pay “Corporate Support” fees every week for no support “zero” support. They just take your money and they invest it in the other business “Dental Whale”.

    These are the reasons why Dental Fix Franchise owners are not successful, we do have “skin in the game” ; we are well aware that we are dealing we real money here, money that worked hard all our life to lose it all in this Ponzi Scheme.

  • March 13, 2019 at 8:20 pm
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    I worked for the corporate office these franchisees got “Fooled by the “sales man” in a fancy Corvett and they were fed the idea of dreaming big working less and making 3x the profit on one job. One guy said they had to buy a MB sprinter No.. that is false they could buy any kind of work van one guy even made a van from an old Ambulance…

    THEY WERE SOLD AGAIN BY A SALES MAN ” these guys wanted the corporate operators to do all they’re the work, the marketing calls and take appointments YES This was Operators job but the employees only made 10 bucks an hour so they did the minimum … but David Lopez didn’t invest back into the DFx company it went from David Lopez having an office at the corporate office to him not being there at all and paying himself and his wife that didn’t work there a salary.while the employees don’t get annual pay raises so they’re was no incentive to go above and beyond D.L didn’t invest back into the company nor his employees supporting these franchisees.

    But these guys became “Divas” sending equipment into the repair shop at the corporate office for repairs they learned how to repair in training.. ummm makes no sense…and they didnt invest in there education they should have done their homework on Dentalfix and the Dental field. The LISCENSING that manufactures have cost! the training to repair …

    Sales is what drives this company not repair on handpieces…these guys repaired handpieces time and time again but failed to learn in depth other equipment they touch on it and learn it in training but I feel goes out the window once they go back to their territories

    .. if your not telling your customers what you do and selling yourself your going to fail ….Personality goes a long way and More than half of these guys were stiff older men thinking they knew
    (know it alls) how to repair everything and the kitchen sink but.. none knew how to sell themselves which needs to be learned with experience…these guys expected everyone else to do the hard work for them with minimial effort and than blamed other people when it got hard!

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