CUPPY’S COFFEE: Interview with Franchise Owner Joshua Miranda
October 5, 2008
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Interview with Cuppy’s Coffee Franchise Owner Joshua Miranda
October 3, 2008
Kindergarten teacher Joshua Miranda and his wife, nurse Clara Miranda, dreamed of opening a Cuppy’s Coffee cafe and operating a Cuppy’s Coffee mobile unit in Apple Valley, CA. They sent refundable deposits totalling $42,000 to Cuppy’s Coffee affiliate Elite Manufacturing and to Advantage Leasing for the mobil unit. After their financing did not pan out, they were unable to get their refundable deposits returned. Elite Manufacturing has defaulted on their refund agreement, and Advantage Leasing, who is suing Elite, refuses to return the Miranda’s $6,000 until they can get payment from Elite Manufacturing.
Joshua Miranda shares his story with UnhappyFranchisee.com, and offers advice to would-be franchise owners.
UF: What’s your background, Joshua? What were you doing prior to seeking your Cuppy’s Coffee franchise?
Joshua: I’m a kindergarten teacher. Clara, my wife, is a nurse at a convalescent hospital. We are leaders at our jobs and were convinced that as leaders we had the skills to hire managers and run a café business while maintaining our current professions.
UF: When did you decide you wanted to own your own business? Describe the process you went through to determine which franchise to buy.
Joshua: We started with the idea of investing to make extra money. The idea was to use the bank’s money and invest it. So, we opened an equity loan to start investing. We had made a previous real estate investment that went bad; we lost money. We started searching on the Internet and came across the Franchise Gator. Franchise Gator showed all this great opportunities to start a business.
We also had read an article that most rich people were business owners. I made inquiries to several franchises. They all called back including Cuppy’s Coffee. However, Cuppy’s made the most promises and made it sound so easy that I went with them. I didn’t bother to check them out because they were members of the Better Business Bureau, had the seal of the AAFD with the highest score ever achieved for fair franchising standards and were recommended by Franchise Gator, an internet service with guidance and information to franchise seekers. I also took the time to visit a Cuppy’s Coffee store. The owner gave me all the encouragement to go with the business franchise.
UF: How did you first learn about the general concept? What did you find appealing about this type of business?
Joshua: Coffee business here in California was booming. Other coffee businesses were making so much profit, so, we decided to sell it too.
UF: How did you first hear about your specific franchise? What attracted you to the company?
Joshua: The Franchise Gator recommended and introduced us to Cuppy’s Coffee. Cuppy’s was a member of the Better Business Bureau and had the seal of the AAFD with the highest score ever achieved for fair franchising standards. I also took the time to visit a Cuppy’s Coffee store. The owner gave me all the encouragement to go with the businesses. What was also attractive to us is that they stated that they did not charge royalty fees: a very appealing offer to a starting franchisee with limited assets.
UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Joshua: A contact person got in touch with me. He answered all my questions very politely and was very encouraging. Every time we talked, I ended up with the feeling that I was going to do great and that things were going to be so easy because the franchise will be with me 100%. They stated that my profits will run from $1,500.00 to $5000.00 per day.
UF: How much have you invested with Cuppy’s Coffee & Elite Manufacturing?
Joshua: We have $42,400.00 invested, total. $37,900.00 toward the Cafe, $6,000.00 toward the Mobil Unit and $1,500.00 Credit.
We applied for the Café Franchise in August 2007. We signed a purchase order in September, 2007 and sent $37,900.00 to Elite. We also signed a lease agreement in October 10, 2007 with Elite and Advantage Leasing Company for the Cuppy’s Coffee Mobil Unit. We were going to operate a Café and a Mobil Unit. We had to send Advantage $6,000.00 as a down payment for the Mobil Unit. Advantage in turn sent Elite $28,327.00 to start building the unit.
UF: How was the company’s training and pre-opening support. Was it a positive experience?
Joshua: I never got into training. As soon as they got my down payment, the calls to me stopped. They became very hard to reach, and when I was able to talk to someone, they were rude.
UF: What marketing and promotional guidance, programs & support were provided? Were they effective? Why or why not?
Joshua: They stated that my financial pre-qualification by them looked very good and was directed to start looking for a business location. They directed me to get contact names and numbers from the prospect business locations that were qualifiers by a ranking sheet they provided me through e-mail. They did not call them as they had promised. I started calling them myself and was able to narrow down a location that I was interested in. The owner provided me with a lease. I e-mailed it to Cuppy’s. They in turn, told me that a lawyer had to review it. They introduced me to a lawyer stating that the lawyer was going to charge to prepare the lease. I made a consultation with the lawyer over the phone but there was never a lease prepared. Now, the lawyer is charging me $1,500.00. I turn to Cuppy’s for answers and never returned my calls.
UF: How was your grand opening and your first year as a franchisee?
Joshua: The grand opening was all a promise and a dream that never came true. I was promised that my grand opening was going to be done in time for the Christmas holiday. They promised that at the grand opening they were going to send the Cuppy’s Mascot. They promised that Cuppy’s trainers were going to help me run the business for at least two weeks making sure everything was going smoothly. They stated that my profits will run from $1,500.00 to $5000.00 per day. They promised me to honor my request to schedule the training during a week of October when I had a week off from teaching. They promised me to accommodate all my family and that it was okay to bring them over. My wife requested her vacation at that time.
And when it was near the time for the training, nobody had talked to me. So, I began to inquire again about it. Phone calls and e-mails were not replied. I finally talked to someone who directed me to the Cuppy’s College director who did not know anything about me. She got upset that I was requesting a date for the training. I explained that those dates were promised to me. She yelled at me accusing me of trying to get ahead of the line. She yelled that it wasn’t fair that I should get ahead of others that were in front of me. Then, she stated that she was going to make contact with me when she had a date for my training. I replied that I was a school teacher and that I couldn’t just leave my class to attend the training on any date. I also told her that my wife had already requested her vacation per instructions from the person who introduced us to Cuppy’s so that she could also attend the training. She didn’t care and referred to me as a person of a retarded mind.
UF: When did things start to go wrong? What was it that made you an unhappy franchisee?
Joshua: I felt I was pressured by Elite to give them money. I still had questions about the company and she wanted the money that same day before 4 p.m. her time. I’m in the Pacific Time which is three hours earlier. They had offered a $3000.00 towards Cuppy’s College traveling expenses but only if I sent them the money that same day. My wife had to request to get off work early for us to wire the money. As soon as I gave them my money, they stopped talking to me. What makes me unhappy is that they are not only stealing hard earned money from good honest people, but robbing them of the American dream: The dream to make it and be successful in the land of opportunity.
UF: Have you tried to resolve your issues with the franchisor? What was the outcome?
Joshua: We have been waiting for a refund since December 2007 when we notified them that the the bank turned down our application. It was until June 9, 2008, six months after begging for our refund, when Elite stated that they will refund us the money in payments. We accepted out of desperation and signed a settlement. They sent their first payment of $1,500.00 in July 2008. Payments of $1,500.00 were due every month after that. We have not received anymore payments. It looks that they are not going to send anymore payments according to a conversation we had with the legal aid in Elite’s office.
The Mobil Unit was not included in the above mentioned settlement. Elite never built the Mobil Unit. So, we ordered a cancellation to Elite and Advantage Leasing. Elite did not return the $28,327.00 to Advantage. Advantage has filed law suit against Elite and charging me interest for the $28,327.00 ($1,617.00 so far). Advantage will not return my $6,000.00 until it recovers it from Elite.
UF: What is your current situation? What would you like to see happen at this point?
Joshua: What they owe me came from an equity loan. I’m making payments on it with interest. I would like to get my money back so that I can pay off this loan and go on with my life. I am willing to help in whatever I can to resolve this situation and the situation of other franchisees.
UF: Do you think that the franchise concept is a viable? Under what conditions?
Joshua: It is viable for the rich who are the only ones who can invest in the good and expensive franchises. The rich could hire expensive lawyers to make sure they don’t get ripped off. For us, who could only rely on good credit, to invest in small unknown franchises through a bank loan, are vulnerable to fraud. It is viable as long as franchises have the seal of the AAFD with the highest score ever achieved for fair franchising standards. Wait a minute!!! Cuppy’s Coffee had that seal!!! How? Why? I think we should make the AAFD responsible for all the damage as well.
UF: What mistakes did you make? Looking back, what would you have done differently?
Joshua: I should have checked this company throughout like the way I’m doing it now and not pay any attention to the fact that they belong to the AAFD and BBB.
UF: How has your franchise investment decision affected your life?
Joshua: I’m broke with my wife and 3 children to support. My paycheck comes and goes and my bank account is going in red numbers.
UF: What advice would you give to prospective franchise owners? What questions should they ask? What warning signs should they look for?
Joshua: Do your research and check the company throughout even if they are affiliated with the Better Business Bureau and other affiliations. If you are financing the business, make sure you are qualified by the loan institution before you do anything. I was qualified by Cuppy’s and they assured me that I had no problems in getting a loan from a bank. It turned out that I didn’t qualify. All the phone calls, money, and time spent was for nothing. A bank should qualify a franchisee before anything else.
UF: Thanks for sharing your story, Joshua.
Joshua: Thank you.
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CUPPY’S COFFEE: Interview with Franchisee Daniel Suarez & Jaime Schneider
October 5, 2008
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Interview with Franchisee Daniel Suarez & Jaime Schneider
October 3, 2008
Overview: In September, 2007 partners Daniel Suarez & Jaime Schneider filled out the applications to become a Cuppy’s franchisee, and sent a $35,900.00 refundable downpayment to Cuppy’s construction affilate (Elite Manufacturing). Suarez & Schneider claim their application was initially approved and were told to begin searching for a location; shortly thereafter they were told, no, they were not eligible for financing (and were “unapproved”). They were told that Elite Manufacturing had spent their downpayment, but would pay them a partial refund of $35,000 over 10 months. After receiving 3 payments totalling $10,500, the payments stopped and their calls were not returned. According to Suarez & Schneider, Elite Manufacturing still owes them $24,500.00
In this interview with UnhappyFranchisee.com, partner Daniel Suarez shares his story and his due diligence advice for prospective franchisees.
UF: Thanks for your time, Daniel. What’s your background? What were you doing prior to seeking a franchise?
Daniel: I have a computer science background, attended New Jersey Institute of Technology. The last 8 years I have worked in Sales. Currently working for Wachovia soon to be Wells Fargo.
Jaime: Prior to researching potential franchises, Daniel and I both worked in the automotive industry. We both decided it was time for a change and thought it would be nice to be our own boss.
UF: When did you decide you wanted to own your own business?
Daniel: I decided I wanted a franchise after leaving one job and not being happy working for my then present employer. We did lots of research into different industries and come to the conclusion that a Coffee franchise would be with in our budget and would have high probability of success.
Jaime: We did a lot of research. We decided coffee was the way to go with it being such a popular commodity. After seeing all the accreditations Cuppy’s received we decided to proceed with them. We were impressed by the awards and accreditations Cuppy’s obtained. They were considered the fairest franchise.
UF: How did you first learn about the general concept? What did you find appealing about this type of business?
Daniel: I find the concept of owning a franchise appealing because the difficult part of establishing relationships with distributors, establishing a brand/name recognition, having the startup process established, and having the initial franchise gone though making initial mistakes all done is very appealing. These headaches are a non issue.
UF: How did you first hear about your specific franchise? What attracted you to Cuppy’s Coffee?
Daniel: After lots of research and online comparison we selected Cuppy’s because it appeared to have an attractive system that worked. I spoke to present owners and they had good things to say. They advertise awards received. Their prices and cost of ownership were in line with others and the deciding factor was when one of their ‘partners’ (Elite) paid the initial $25,000.00 franchise fee for us if we made an almost immediate commitment.
UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Daniel: Sales process was smooth and professional. Prompt interaction and great communication. When searching for a franchise location their real state team was very helpful in following thru but sometimes lacking in coming up with locations of their so we did 90% of the searching. No issues with us doing our own looking.
Jaime: At the beginning Cuppy’s and Elite Manufacturing employees were polite, helpful and energetic. They helped to walk us through each process. After 5 months of working with them, the daily phone calls stopped and when we reached out to them we were told that our financing did not go through after we were already told that we were approved. At that point, we were no longer assisted in any way. They did not care to help us with the refund of our deposit. It was impossible to get a hold of them by phone or email. We went from being the people they spoke to everyday to the people they could not even respond to with an email.
UF: When did things start to go wrong?
Daniel: Here is our story in a nutshell: September of 2007 we filled out the applications to become a Cuppy’s franchisee. We were told we were approved and that we could begin our search for a location. After 4 months into the process we received a call stating that for some reason we were no longer eligible for financing.
At that time we requested a refund from Elite Manufacturing in the amount of $35,900.00 which was the amount we gave as a deposit for our Cuppy’s drive thru unit. We were told that the process would take anywhere from 4 to 6 weeks. After the six weeks with no response we again inquired about our refund through Mr. Danny Jones at Elite.
We were offered a payment schedule over a 24 month period to get our money back. We refused the offer and sought legal advice. We tried again to make an agreement with Elite and finally decided to sign an agreement that stated we would receive $35,000.00 over a 10 month period. We did receive 3 payments for a total refund of $10,500.00. Then the money just stopped coming in.
We made several phone calls to Danny Jones and sent several emails. I was told by Mr. Jones that they just did not have the money because they were behind with other debts owed. It has now been 4 months without a payment or response from Elite. We are still owed $24,500.00. Now when we try to contact them there is only a recording you get and no one returns the call.
Jaime: They were very helpful and positive in the beginning but once they had our money it was as if we did not exist to them.
UF: What is your current situation? What would you like to see happen at this point?
Jaime: I would like to see the money that is owed to me returned. Daniel and I are out $24,500.00.
UF: Do you think that the franchise concept is a viable? Under what conditions?
Daniel: Sure. You need to find the right franchise and ask the right questions. Do a lot of research. It is always a risk but I’m sure with the right franchise it will pay off.
UF: What mistakes did you make? Looking back, what would you have done differently?
Daniel: We did a lot of research so I think we did the right thing it that aspect. When doing the research we did fine one (1) posting that was negative about Cuppy’s when it was Java Jo’z. But it was one posting that now has multiplied to scary numbers.
Jaime: I guess our downfall was not contacting or visiting actual open and running Cuppy’s. We spoke to the references given to us by Cuppy’s…that was pretty silly of us looking back now.
UF: How has your franchise investment decision affected your life?
Daniel: Jaime used her entire savings! I took out a 48 month personal loan and refinanced my home prematurely and paid about $6,000.00 (I was only 12 months away from the premature date to expire) in doing so. I am now paying off my loan plus interest and increased my mortgage payment. I know have a ~$700 monthly bill that is towards nothing.
Jaime: Our lives are affected everyday. My savings of my hard earned money went toward this investment and Daniel took out a loan for the money which he is still paying back. It is unfortunate that Cuppy’s and Elite have gotten away with this. I know that we are not the only ones out there suffering and I just hope that there is a resolution in the future.
UF: What advice would you give to prospective franchise owners?
Daniel: Research, research, research! Although, I really do feel that Jaime and I did that and we were still misled. When you read about a franchise receiving awards and accreditations you assume it is a reputable company. That was not the case with Cuppy’s and Elite. I guess you can never be sure but I would definitely tell others to go to the headquarters as well as visit as many of the actual up and running stores and ask questions.
Also, I would strongly suggest a franchise lawyer. We decided not to hire one because our budget was tight. I look back now and highly regret that. However, I also think that a lawyer would have looked over the franchise agreement, taking a look at their reputation as we had done, and given us the go ahead. So, who’s to know what the lawyer would have said.
Jaime: When you read about a Franchise receiving awards and accreditations you assume it is a reputable company. That was not the case with Cuppy’s and Elite. I guess you can never be sure but I would definitely tell others to go to the headquarters as well as visit as many of the actual up and running stores and ask questions.
UF: Thanks for sharing your story, Daniel & Jaime.
Daniel: Thank you.
Jaime: Thanks for the opportunity.
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CUPPY’S COFFEE: Dale Nabors’ Private Conference Call
October 4, 2008
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Friday, October 3rd, Dale Nabors held short, invitation-only conference calls with two groups: unhappy Cuppy’s Coffee franchisees who have opened, and unhappy Cuppy’s Coffee franchisees who have not yet opened. There was no conference call for the third group: unhappy franchise depositers whose $35K - $100K+ refundable deposits Cuppy’s Coffee/Elite Manufacturing felt free to spend on other things.
Reportedly, Dale’s bold action plan includes actually talking to the franchisees whose financial futures are teetering on disaster. According to Jim: “The Cuppy’s corp office will be in touch early next week to begin scheduling calls.”
Of course, Dale reportedly blamed the “negative blogging,” in part, for the current situation (perhaps signaling a new Fransynergy motto: Believe, Shut your Pie Hole, and Succeed). Attendees immediately heeded his plea with negative blogging.
Jim writes:
It lasted about 15 mins. He said he felt like he failed particularly in the area of communication. (Really? nah…) He and the corporate team (team?) are going to work at responding to calls and emails on a more timely basis.
I think I heard that Dale said he is working with their banks and the franchisee banks to attempt to restore confidence in the brand. He requested a stoppage of negative blogging to give them some time to move past where we are today.
He hopes to announce that the SBT suit is resolved sometime next week. He intends to meet with each franchisee re: where they are in the process and what they need to get back on track to opening the store.
The Cuppy’s corp office will be in touch early next week to begin scheduling calls.
And then a bunch of stuff about how we need to work together to make this the best specialty coffee brand in the US.
Oh - and have a great weekend.
Good luck to him and the Cuppy’s “family.”
He left out believe and succeed…hmm
guest writes:
We just heard Dale on the conference call & all I have to say is… WHAT BULLSHIT! DALE HAS BEEN MEETING WITH MORG.
jd writes:
As I stated elsewhere, where was this six months ago?
He’s asking people to stop the negative blogging, but people have heard that before when they signed their ‘refund’ agreements, and things quieted down until they stopped getting paid.
Current and prior management has brought this onslaught on themselves. People that haven’t opened their stores yet need to look at the economics of the situations. You could take the $40k loss on your current investment and open independently, and you would probably save $50k on the buildout. Your $10k ahead already.
Quit letting Dale blow smoke up your ***
David writes:
…I will not stop the negative blogging or trying everything within my power to see that they get what they deserve for taking money from people and not feeling like they need to give it back.
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CUPPY’S COFFEE: Attorney Rudy Harper & Assistant Desiree (Reportedly) Resign
September 11, 2008
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It’s been reported that Cuppy’s Coffee in-house attorney Rudy Harper and Desiree Kahn, the Cuppy’s Coffee legal assistant in charge of handling refunds, resigned Wednesday, September 10th.
Harper and Kahn reportedly stayed behind in Ft. Walton Beach after a limited number of employees were invited to relocate to the new home office in Muscle Shoals, AL. Not receiving a paycheck and a lawsuit from the landlord over nonpayment of rent are likely factors in their abrupt departure.
One commenter on Blue Mau Mau wrote:
The last attorney left is Lou. Is he even allowed to practice law in the state of Florida or Alabama?
With all of the legal issues Cuppy’s is facing, perhaps it should have been high on Cuppy’s priority list to at least pay their attorney his paycheck.
What do you think? Are there any Corporate employees left in Florida? Did the Alabama “Dream Team” get paid? Share a comment below.
CUPPY’S COFFEE: Interview With Franchisee Rick Noem
September 4, 2008
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Interview with Cuppy’s Coffee Franchisee Rick Noem, Ft. Collins, CO
Franchisees Krista and Rick Noem paid $125,000 to for the Fort Collins, Colorado Cuppy’s Coffee franchise and as a downpayment for construction of their Cafe from (essentially) Cuppy’s construction arm, Elite Manufacturing. Their American dream quickly turned into a nightmare. To date, they have lost more than $200,000 and are in a financial crisis.
UF: What’s your background? What were you doing prior to owning your franchise?
Rick: Krista has been in the fast casual restaurant management field for 21 years. I have managed Pizza Hut, Einstein Bros Bagels, Long John Silvers, Jack in the Box and Wendy’s. I was looking for an opportunity that would allow me to work for myself to benefit our family rather than give it to another company. Rick is an analyst for IBM with an MBA in Technology Management.
UF: When did you decide you wanted to own your own business? Describe the process you went through to determine which franchise to buy.
Rick: We decided two years ago to start looking into the world of franchising. We actually signed with a company called Saint Cinnamon out of Toronto in September of 2007. In January of 2008, we severed our relationship with that franchise due to Saint Cinnamon making significant changes to our contract that would have crippled us right out of the gate (so we have a really bad track record on picking franchises). We had to find another concept that would work in our 2000 square foot space. (Lease was signed in October of 2007). In February of 2008, I was contacted by Ken Massie (no longer with Cuppy’s) about their concept. I flew to Florida on February 10, 2008, to see the operation. I was impressed with the product and knew it could surpass Starbucks and some of the other major coffee brands out there. It took us about a month to do our homework. There were two locations in Colorado open or soon to be open. We spoke to both franchisees (who both had a few minor construction delays) but who were overall thrilled with the concept and the product they were serving. We did see all the negative blogs, but really thought this was due to Java Joz’, and that Cuppy’s was/is going to be a great up-and-coming company.
UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Rick: We ended up signing our franchise agreement on March 24, 2008. Ken Massie and other key players were calling me several times a day to check on my progress, answer any questions we had and really made it seem like there was going to be a strong communication network between franchisor and franchisee. While the phone calls were getting old, it comforted us knowing that they would always be there for us.
UF: How was the company’s training and pre-opening support. Was it a positive experience?
Rick: We returned from Cuppy’s Coffee College on August 8, 2008. It was a great experience. Everyone seemed knowledgeable about the product and were very enthusiastic about getting us up and open for business. We felt the training program was sufficient but after training everything ended abruptly (support/communication).
UF: When did things start to go wrong? What was it that made you an unhappy franchisee?
Rick: In May of 2008, I advised Cara (our FSM) and Theresa (Elite) that I was running out of capital to get me through the build-out process. I was advised that if I was approved as a franchisee, I would put 50% down, Elite would in house finance the other 50% as well as obtain an equipment leasing package to come up with working capital. After I put the 50% down, none of the other promises materialized. I made it clear to everyone when I signed that they were getting everything we had and there was no more where it came from. I was assured by Steve Wesolowski (finance department) that it was a done deal. We have gone through many different banks and capital companies trying to obtain additional working capital to no avail. I went to Florida on June 27th and confronted Theresa St Clair, Dale Nabors and the Greg Rynearson (new president of Elite) and told them once again that we were out of funds and rent was to commence on June 28th and that we were not happy with how long it was taking the architect and engineer to complete our plans. Rick and I scraped up enough money to pay our rent and loan payments (totaling $9200 a month) for June, July and part of August. I was assured that we would work something out with Dale. He made many statements to me about talking to my landlord to have rent postponed for three months and tacked on to the back end of the lease. My landlord was not willing to go for that because the delays were not due to him but to Elite and the architect and engineers of the project. In April of 2008, we provided Elite with a full set of plans (we had them completed when we were doing the other concept) and all that needed to be done was the Cuppy’s dress and engineering. It took us until July 11th to receive the first set of plans. They were a joke. The architect added doors and walls where there were no plans for them. It took an additional three weeks to get a set of plans that were good enough for my landlord to get to the city. He still had to redline some changes but they were pretty minor. The final plans arrived to my landlord two days before we left for training.
UF: Have you tried to resolve your issues with the franchisor? What was the outcome?
Rick: All we get from the franchisor are empty promises of phone calls and follow-up. They are great about talking the talk when you are face to face but it is not long before you realize they are just blowing more smoke.
UF: What is your current situation? What would you like to see happen at this point?
Rick: We are broke, can’t pay rent ($6000 a month) or loan payment ($3000 a month). We want our money back so we can stop the bleeding and try to get closer to being able to pay off all the debt occurred at Cuppy’s expense.
UF: Do you think that the franchise concept is a viable? Under what conditions?
Rick: I think Cuppy’s has a great product and could make a name for itself once it has a sound infrastructure in place. I feel Dale started with good intentions but really didn’t know what he was getting himself into when he purchased the company. If Dale can rectify the situation with all the unhappy franchisees, and build up the infrastructure to support new stores, we think he can turn this around. Whether this happens or not is yet to be seen. I would not invest money with this company as it stands now, until its intentions can be ascertained.
UF: What mistakes did you make? Looking back, what would you have done differently?
Rick: We jumped into Cuppy’s after our landlord made it very clear that even after our Saint Cinnamon effort failed he was going to hold us to our lease. We were pressured by our landlord to get something in our space quick. Cuppy’s came along, gave us a great song and dance and we jumped. They were so upbeat, and the interview process with them made it feel like we had to say the right things for them to consider us, like we were interviewing for the right to be a part of this company. This gave them more credibility. Again, I feel strongly that while we are guilty of jumping in too fast, Cuppy’s is guilty of misleading current and potential franchisees. They were making promises to close the deal. The money we gave them is gone. Dale told us on two separate occasions that he is personally responsible to us for that money, and that he will do what it takes to make good on it if he was unable to secure financing for our store. We need him to make good on that so we can attempt to repair the damage done.
UF: How has your franchise investment decision affected your life?
Rick: We had hopes of opening several locations. We wanted to make enough money to help put our five children through college and pay off our debt so we could enjoy our retirement years. Now we will be working to replace money taken from our 401K and stock sale so we can set a time for retirement (probably ten years later than previously planned). Once we settle with Cuppy’s, we still have to come up with a plan to help us sever from our lease without having to file bankruptcy or lose our house altogether. We do not know how this is going to turn out. We have contacted people to keep theirs eyes open for anyone looking to rent in this area. Hopefully we can find someone to take over this lease, which is going to be a huge money-maker. I am just sorry that money will not be coming our way. This will haunt us for many years to come.
UF: What advice would you give to prospective franchise owners? What questions should they ask? What warning signs should they look for?
Rick: If someone offers you a “free-franchise”, remember the old saying. “You get what you pay for”. They are great at wining and dining you until you sign and then the honeymoon is over. We paid nothing for the franchise, and that is exactly what we got back from them. Investigate prior lawsuits and blogs. Take these blogs seriously, and contact the writers to get more information, I wish we had. Had we known all of this six months ago we wouldn’t be where we are today. We did our homework. Even though I called the references provided to me by Cuppy’s, I also talked to franchisees who were already open in our area. They were happy with the company.
UF: Have you heard the allegations that Cuppy’s Coffee franchisees may have been paid to give positive references?
Rick: I just recently learned that.
UF: Thanks, Rick
Rick: Thanks for listening.
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CUPPY’S COFFEE: List of Locations, Status
September 2, 2008
Cuppy’s Coffee Locations 8/26/08
Here is the list of Cuppy’s Coffee franchisees as listed in the latest UFOC: Cuppy’s Coffee Franchisee list from 12/08 UFOC
Here is the list of locations, as they appeared on the Cuppy’s Coffee website as of 8/26/08. Please share any additions, corrections, clarifications that you know about in the comment section below. Please also list any failed or closed locations that appear or do not appear on this list. [This list reflects VERY few of the many closed or paid never opened franchises]
AL Huntsville Drive Thru
AL Tuscaloosa Drive Thru
AL Tuscaloosa Drive Thru
AK None
AZ Pearce Mobile Cafe
AZ Arizona Kiosk
AZ Tucson Cafe
AZ Tucson Mobile Cafe
AR Sheridan Mobile Cafe
AR Stuttgart Mobile Cafe
CA Chino Cafe
CA Fairfield Cafe Coming Soon
CA Lincoln Cafe
CA Mammoth Lakes Drive Thru
CA Modesto Mobile Cafe
CA Moorpark Cafe
CA Oceanside Cafe
CA Rancho Cucamonga Cafe
CA Riverside Cafe Coming Soon
CA Santa Clarita Cafe
CA Wheatland Drive Thru
CA Temecula Cafe (JJ) [CLOSED]
CA North Hollywood [Paid Never Opened] binford
CA Long Beach [Paid Never Opened] alcafaras
CO Fort Collins Cafe
CO Longmont Drive Thru
CO Westminster Cafe
CO Fort Collins Cafe [PAID NEVER OPENED] Noem
CT None
CT Manchester [CLOSED]
DE Wilmington Cafe Coming Soon
DC None
FL Beverly Hills Mobile Cafe
FL Beverly Hills Mobile Cafe
FL Brooksville Drive Thru Coming Soon
FL Casselberry Cafe Coming Soon
FL Holiday Mobile Cafe
FL Jacksonville Beach Drive Thru
FL Kissimmee Mobile Cafe
FL Maitland Cafe Coming Soon
FL Miami Mobile Cafe
FL Miami-Quail Roost Cafe Coming Soon
FL Navarre Drive Thru [CLOSED]
FL Niceville Mobile Cafe
FL Pace Drive Thru
FL Pace Mobile Cafe
FL Panama City Beach Drive Thru
FL Port Charlotte Drive Thru
FL Port St. Lucie Mobile Cafe
FL Ruskin Mobile Cafe
FL San Antonio Cart
FL Shalimar Drive Thru
FL Venice Drive Thru
FL Venice Drive Thru
FL Wellington Mobile Cafe
FL Orlando Cafe [CLOSED]
FL Oviedo JJ Cafe [CLOSED]
FL Niceville [PAID NEVER OPENED]
GA Carrollton Cafe Coming Soon [DEBRANDED]
GA Cumming Cafe Coming Soon
GA Kennesaw Cafe w/ DriveThru
GA Savannah Mobile Cafe
GA Sugar Hill Cafe
GA Tyrone Cafe w/ DriveThru Coming Soon
HI None
IL Normal Drive Thru Coming Soon
IL Rockford Drive Thru
IL Woodstock Drive Thru
IL Chgo/Midway Drive Thru [CLOSED]
IA Ames Mobile Cafe
IA Des Moines Drive Thru
IN Shelbyville Drive Thru
KS None
KY Frankfort Mobile Cafe
LA Covington Cafe w/ DriveThru Coming Soon
LA Monroe Drive Thru
LA Houma Drive Thru [CLOSED]
MD Bel Air Cafe Coming Soon
ME None
MA Chicopee Drive Thru
MA Hanover Cafe
MA Lawrence Mobile Cafe
MA Leominster Cafe
MI Augusta Mobile Cafe
MI Battle Creek Drive Thru
MI Clawson Cafe w/ DriveThru Coming Soon
MI Clinton Township Cafe
MI Jackson Kiosk [CLOSED]
MI Taylor Kiosk [CLOSED]
MI [Paid Never Opened] Reisner
MN None
MS Gulfport Drive Thru
MS Ocean Springs Drive Thru
MS Petal Drive Thru
MO St. Louis Cafe Coming Soon
MT None
NE None
NV Las Vegas Mobile Cafe
NH None
NJ None
NM None
NM Albuquerque Drive Thru [PAID NEVER OPENED] Menz
NY Greece Drive Thru
NY Yorktown Heights Kiosk Coming Soon
NC Charlotte Cafe Coming Soon
NC Greensboro Mobile Cafe
NC Hampstead Mobile Cafe
NC Hendersonville Kiosk
NC Raleigh Cafe Coming Soon
NC Spring Lake Cafe w/ DriveThru Coming Soon
NC Wilmington Cafe
ND None
ID Eagle Cafe Coming Soon
OH Columbus Cafe
OH Elyria Mobile Cafe
OH Mansfield Cafe w/ DriveThru Coming Soon
OK Duncan Drive Thru
OR Salem Cafe
OR Woodburn Drive Thru Coming Soon
PA Bridgeville Drive Thru [CLOSED] [9/8/07 - 8/21/08]
PA Easton Kiosk Coming Soon
PA Mechanicsburg Cafe
RI None
SC Greenville Drive Thru
SD None
TN Athens Mobile Cafe
TN Athens Drive Thru
TN Knoxville Drive Thru
TN Knoxville Drive Thru
TX Edinburg Cafe
TX Longview Kiosk
TX Temple Cafe
TX Colleyville ["Still trying to open"]
TX Midland [CLOSED]
TX Houston [CLOSED]
TX Arlington [CLOSED]
TX Copperas Cove [CLOSED]
TX [PAID NEVER OPENED] beasley
UT None
VT None
VA Fredericksburg Drive Thru
VA Gainesville Cafe Coming Soon
VA Richmond Mobile Cafe
VA Springfield Kiosk
VA Midlothian [CLOSED]
VA Christianburg [CLOSED]
VA [PAID NEVER OPENED]
WA Puyallup Cafe Coming Soon
WA Richland [PAID NEVER OPENED] (Heber)
WV Falling Waters Mobile Cafe
WI Madison Cafe Coming Soon
WY None
CUPPY’S COFFEE: Employees Bid Fond Farewell to Dale Nabors
August 29, 2008
As the trucks carrying what’s left of Cuppy’s Coffee and Elite Manufacturing home offices leave Ft. Walton Beach in their rear view mirror, the Medina, Cuppy’s and Elite employees left behind bid some fond farewells (here and at Blue Mau Mau) to Dale Nabors and their former co-workers who they claim “brown-nosed” their way to Muscle Shoals, AL:
This is our last day… A great company has been destroyed in less than 6 months! As employees we at least cared about the franchisees. WE TALKED WITH THEM AND CRIED WITH THEM - WE WORKED MANY DAYS FROM HOME TRYING TO HELP THEM, BECAUSE YOU WOULD NOT ANSWER THEIR CALLS - YOU TALKED THE TALK BUT DID NOT WALK THE WALK; And now you have stolen all of our futures!
I will continue to think of the franchisee’s and hope they get their real estate and build-outs before they go broke. We believed you and now we are unemployeed and the franchisee’s who were once our friends hate us! Your hiding-out and blaming us for your not doing what you suppose to do is at least finally ending.
BELIEVE AND FAIL
Franchisee’s should pray that someone stops Dale from stealing their money. At least when Elite was run by Brian Hayes, buildings got built, now it’s run by a kid with no construction experience and who brown noses Dale all day.
Brian may have been late but the franchisee’s got built-out. Dale Nabors could care less, he stopped paying SBT and MBM because he wanted to dispute their invoices and expenses.
Before Dale our company had it’s weaknesses just like all new companies, but we had more than 100 dedicated employee’s and managers. When Dale came to the company he acted like he controlled the company and he had Morg’s backing while he acted so confident and all the while ran the operations and the companies into the ground.
We were a great company with great employees, franchisee’s and managers. This is what happens when a person like Dale is left in charge of your future. Dale how do you sleep?
Guest writes:
Dale promised the managers he had the money and a plan to really speed up Elite’s build-outs. He claimed we would have all of them done before the end of the year. He told us Morg and Brian were wasting franchisee’s money and that he could get buildings built at half the cost.
He stopped paying SBT & MBM for buildings and stopped paying the vendors. This caused all hell to break loose.
Every week we would hear about some big deal he was working on with a famous builder which would save the franchisees thousands of dollars and make the company stronger than ever. He told us it was because of Morg’s poor management skills and Brians stealing Elite’s money was the reason why he was being forced to put franchisee’s build-outs on hold. He also said that Morg and Brian were probably partners.
Before Dale and when he first came on as a consultant the management team would discuss each franchisee problems at a weekly meeting. Getting the right real estate was always a big factor and the company really had a hard time getting good locations during the first year I was there. The next problem we faced as managers was dealing with the people that we thought would qualify for their loans - we would spend hundreds of hours helping them get a good location only to be told they can’t get a loan, I know that many of the people did not get their franchise fee’s paid back to them.
It seemed that the company was always trying to figure out how to pay refunds from Elite, because of financing problems and people getting second thoughts about moving forward. I know a lot of time monthly payments were being made from the accounting department to people that had lost their financing, because they would call if they were a day late. Now the calls are not being paid at all.
I am not bitter, but it is hard to see so many people’s hopes destroyed. We once had a vision of this company being the best company in Florida - WHAT HAPPENED???? - I am hurt to see what this company has become - how did we get here? It is hard for me to say, but Dale lied to us and now he is moving on, while the rest of the employees and franchisees are left to wonder what will happen to us next.
Cuppy’s Coffee Overview
August 29, 2008
CUPPY’S COFFEE: Lawsuits Filed v. Cuppy’s, Elite Manufacturing
August 28, 2008
Visit http://www.clerkofcourts.cc/court/courtsearch.htm.
Do a search for “Cuppys” or “Elite: at this site, you’ll see the listings for a growing number of lawsuits, including these two:
Defendant CUPPYS COFFEE & MORE INC ELITE MANUFACTURING LLC
Plaintiff: RICHARD KYLE Attorney: H WESLEY REEDER
Case Number: 2008 CA 003401 S File Date: 6/18/2008
SUMMONS ISSUED TO: ELITE MANUFACTURING LLC 6/18/2008
SUMMONS ISSUED TO: CUPPYS COFFEE & MORE INC 6/18/2008
SUMMONS ISSUED AMENDED COMPLAINT TO: ELITE MANUFACTURING LLC Receipt: 95453 Date: 08/11/2008
SUMMONS ISSUED AMENDED COMPLAINT TO: CUPPY’S COFFEE & MORE INC Receipt: 95453 Date: 08/11/2008
SUMMONS SERVED AMENDED COMPLAINT: ELITE MANUFACTURING LLC 08/19/08
Defendant CUPPYS COFFEE & MORE INC MEDINA MANAGEMENT STRATEGIES LLC
Plaintiff ROBERT Z KNOX Attorney: MICHAEL T HARPER
CIRCUIT CIVIL FILING FEE Receipt: 95375 Date: 08/08/2008
SUMMONS SERVED: CUPPYS COFFEE & MORE INC 08/14/08 8/15/2008
SUMMONS SERVED: MEDINA MANAGEMENT STRATEGIES LLC 08/14/08 8/15/2008
SUMMONS ISSUED TO: MEDINA MANAGEMENT STRATEGIES LLC Receipt: 95375 Date: 08/08/2008
SUMMONS ISSUED TO: CUPPYS COFFEE & MORE INC Receipt: 95375 Date: 08/08/2008
Additionally, there are rumors of a suit being filed against Cuppy’s Coffee in connection with the franchising of San Gelato Cafes.
CAN ANYONE SHED SOME LIGHT ON THESE COMPLAINTS? SHARE A COMMENT BELOW.
SPONSORED LINKS:
CUPPY’S COFFEE & Funding Solutions LLC
August 28, 2008
On a discussion thread on Blue Mau Mau, Attorney Paul Steinberg posted this disturbing comment:
[Regarding Elite & Cuppy's]…there are unanswered questions which are indicative of fraud:
- There are persons who claim to have obtained funding from various sources, including loans brokered by Funding Solutions LLC .
- According to their website, that company placed over 90 loans at an average of $300,000.
- That equals $27,000,000 of loans, most if not all of that being government-guaranteed.
- Normally, build-out loans are disbursed as the work progresses, and the contractor tenders invoices evidencing progress.
- The contractor so tendering appears to have been Elite.
- Some borrowers allege that their bank fully disbursed the loan monies, but the work was not performed by Elite and/or SBT.
- All of a sudden, Funding Solutions removed any mention of Cuppy’s from their website after a certain Canadian attorney and a certain Pennsylvania bank began asking uncomfortable questions.
- Any person who borrowed money to fund their Cuppy’s should find out if all of the money was disbursed yet, and if the money was all disbursed but the construction not completed, the borrower should have their attorney get involved immediately.
“Wait and see” has not worked.
With the prospect of a investigation of Funding Solutions LLC and Cuppy’s Coffee by the Inspector General of the cognizant federal agency, certain people may be working overtime burning out the motor in the paper shredders even as they counsel others to “wait and see.”
WHAT DO YOU THINK? DID YOU DEAL WITH FUNDING SOLUTIONS? LEAVE A COMMENT BELOW.
