PROFORMA Franchise Complaints
October 10, 2012
PROFORMA Franchise Complaints include excessive franchisor control over the franchisee’s business, vendor kickbacks to the franchisor, coercive and manipulative franchise practices, and underhanded tactics to prevent Proforma franchisees from exiting the system.
(UnhappyFranchisee.com) Proforma is a promotional products and printing franchise founded by Gregory P. Muzzillo in 1978, and run by Greg Muzzillo and his wife, Vera Muzzillo.
Notable shareholders include Dr. Peter Buck and Fred DeLuca, the founders of Doctor’s Associates Inc., the franchisor of the SUBWAY franchise system.
Are you familiar with the Proforma franchise opportunity? Please share a comment below.
According to Proforma franchise marketing materials, “In 1986, [Greg Muzzillo] developed the Proforma franchise model – a network of independent distributors working together to build marketing clout and strong supplier relationships.”
Proforma franchise marketing states that a Proforma franchise can make your dreams come true:
“Make your dreams come true…” States the Proforma franchise website.
“It’s all about success. You want to own and build a successful business. Only Proforma, who is consistently ranked as one of the best US and Canadian franchise opportunities, can provide you with the tools to succeed in business like no other.”
The Proforma franchise website offers entrepreneurial freedom, stating: “We know that success isn’t only about the money you earn. Success is also about running your business the way you want. Only Proforma’s innovative business model offers that kind of success.”
“Only Proforma…Offers the most services to support your dreams and success.
“When you partner with Proforma, you partner with the industry’s leader. Join the company that provides you with the advantages to help you rise above the competition and take your success to the next level.”
Proforma Franchise Complaints Say It’s a Nightmare, Not a Dream
Proforma franchise complaints received by UnhappyFranchisee.Com claim that what at first appears like a path to the American Dream eventually turns into a nightmare for many franchise owners.
Here’s one complaint we received regarding PFG, the franchisor of Proforma:
PFG has ruined many a people in its “free franchise” crock of watered down confidence schemes.
PFG is one of the few that gets everyone on the backside. Most confidence schemes take the marks up front. PFG has figured out how to get them for the long haul. I’m sure it wasn’t planned, but it worked out that way.
…They take kickbacks from their hundreds of printing, promotional and apparel vendors promising the franchisee that they get privileged pricing… They hand franchises to people out the side door when a deal too-good-to-be-true shows up and they don’t want to share.
Their “Co-CEOs” live in Detroit and have absolutely nothing to do with the day-to-day. Their president (Brian Smith) is one of the biggest “whipping boys” that ever walked the face of the earth. He’ll talk logic and then sell the franchisees down the river when his boss lays down the gauntlet. Good guy, bad guy to perfection.
How does it work?
- They invite you to a “discovery” day – it’s the beginning of what they refer to as “due diligence”
- They give you disclosures and an agreement that is all one-sided in their favor
- They can change their mind at any time and you have no choice in the matter (just life most UFOCs or FDD as they now call it)
- They sign you up to a minimum 10 year agreement = the naive are signing 20 year agreements
- They give you a franchise that is of nearly no value – that’s why it’s free
- They control all of your money collections – if you take money, they dump you
- Here’s the kicker – they take 10% of all of your GROSS – they don’t give a damn about your profits – you can lose money and they’ll take their cut anyway
- They have their hands down every vendor’s pants. All of their vendors are in a 2% kickback scheme.
- If you have a large client, they’ll force you into doing business with their vendors (due to kickbacks) – you cannot push back or they’ll dump you and give your client to another franchise or they’ll simply take it and hand it off to one of their employees who suddenly “chooses to become a franchisee”.
- This has happened with accounts as large as the United Way and many other Fortune 500 companies
- The business is one of high overhead. The average franchise makes about 28% net profit because in printing, promotional and apparel, the product is nearly 60% of the deal. This only leaves 40% before overhead. Proforma takes all the proceeds, requires that they pay themselves, then they pay the vendors and then last is the franchisee. It’s indentured servitude and nothing more.
- If you make them angry, they take your money and then they tell the vendors to come after you! It’s another cute little “out” in the contract.
- A non-compete also keeps you around and from keeping your accounts if you part ways.
Be careful – Nothing of value is FREE!
To be fair, several of these complaints could apply to most, if not all, franchise opportunities (one-sided contracts, royalties on gross sales as opposed to profits, strict post-term non-compete covenants).
We have received positive feedback from a franchisee who owns or owned other franchises and reports a positive experience with Proforma.
However, franchisees of systems that control the billing, collect the revenue and then remit a portion to the franchisee often complain that their franchisor has much more control over their business than the typical franchise.
We have also received complaints regarding exorbitant fees required to exit the system, and unprofessional and bullying behavior by senior management.
ARE YOU A CURRENT OR FORMER PROFORMA FRANCHISE OWNER?
ARE YOU FAMILIAR WITH THE PROFORMA FRANCHISE OPPORTUNITY AND FOUNDER GREG MUZZILLO?
PLEASE SHARE A COMMENT – POSITIVE OR NEGATIVE – BELOW.