THE JANITORIAL AGENCY Franchise Lawsuit Alleges Fraud, Racketeering
July 15, 2013
The Janitorial Agency (TJA) principals Steve Conner and Dan Carey claim they provide entrepreneurs with a shortcut to owning highly profitable commercial cleaning businesses.
A class action lawsuit filed in Michigan District court on behalf of unit franchisees alleges Connor & Carey and their TJA team runs an unscrupulous scheme that “fraudulently & deceptively” induces individuals to invest thousands of dollars in their program, double charges them for services, never delivers the promised accounts or support, then moves on to new victims once they fail.
At least once, TJA President Steve Conner brought a pistol to a meeting with a franchisee who dared to complain, the suit alleges.
The lawsuit was filed July 10, 2013 in Michigan Western District Court by attorney Jonathan Fortman on behalf unit franchisees Walter Hollins of Michigan, Kemondie Patterson of Virginia, Rosa Pizzo of Florida, and “all others similarly situated in the United States of America whom have purchased a franchise(s) from The Janitorial Agency.”
Among other allegations, the class action lawsuit alleges that The Janitorial Agency, Conner, Carey, their affiliates, associates and employees violated the Racketeer Influenced and Corrupt Organization (“RICO”) Act, 18 U.S.C. § 1962(c). The plaintiffs also allege that the defendants tried to circumvent franchise disclosure laws.
Fortman’s group seeks damages “to remedy Defendants’ unconscionable, fraudulent, and unlawful practices in connection with the operation of its franchise scheme.”
Excerpt from the RICO Class Action Complaint Against The Janitorial Agency
Here is an excerpt from the initial complaint, Walter Hollins, Kemondie Patterson and Rosa Pizzo v. The Janitorial Agency Corp., The Janitorial Agency Franchise Systems Corp., The Janitorial Agency Services Corporation, Stephen Conner, Charles Carey, Linda Shell, Stacey Armstrong-Carey, Lisa Wells, Lisa Hoesl, Carol Davis, Brent Chapman, et al.
A link to the full complaint is posted below.
NATURE OF THE CASE
1. This is a class action brought by Unit Franchisees of TJA arising from the illegal business scheme of TJA and its web of affiliated entities and individuals who control and operate TJA (collectively, all the “Defendants”). Through this scheme, Defendants fraudulently induced Plaintiffs and the Class to purchase a cleaning franchise masked as consulting services and thereafter exploited their control and economic power in order to extract exorbitant and unjustifiable payments and expenditures from their franchisees. As a result, Defendants reap grossly inflated sales and profits, creating an illusion of corporate growth and business prosperity while causing substantial, permanent, and irreparable financial harm to the unit franchisees.
2. TJA’s illegal scheme consists of two primary components. First, TJA engages in a policy of fraudulently and deceptively inducing franchisees to purchase TJA franchises by intentionally misrepresenting the true nature of the contractual relationship as well as the financial prospects for the franchisee and their likelihood of success. Second, TJA further takes advantage of its franchisees through other illegal, deceptive and fraudulent means, including but not limited to its willful practice of creating an illusion of consulting services with plenty of guarantees.
3. The fraudulent intent underlying TJA’s scheme of deceptively luring franchisees to participate in its system and therefore extracting payments and franchise fees is demonstrated by its pattern of behavior when the inevitable franchisees’ failures come to pass. In this manner, Defendants suffer no loss. Defendants then execute the same scheme against the new Unit Franchisees to continue the illegal scheme of increasing revenues.
4. TJA misrepresents several material facts to its franchisees:
a. TJA misrepresents what the initial investment cost will include. Franchisees are led to believe that website design and hosting, website optimization, logo design, marketing materials, and business card development are included in the investment cost, however, TJA later charges them additional fees for many of the
services, including but not limited to:
i. An extra $250 fee for marketing materials;
ii. Multiple books required to complete the training program; and
iii. Purchase of the business cards at an exorbitant rate through TJA.
b. TJA makes guarantees to its franchisees, including guaranteed business volume and the best support system in the industry.
c. TJA asserts that franchisees will receive their guaranteed minimum business volume within 6 months and that they will perform tasks such as proposal submittal and walkthrough schedules.
d. However, when the franchisee comes to realize that they will not receive what they were guaranteed, TJA immediately places blame on the franchisee for various reasons including not completing training even though the franchisee has written proof of completion and not closing 30% of the business given to them in the form of prospective clients, even though the franchisees are not responsible for the proposal and pricing duties to the prospective clients and are at the complete mercy of TJA to provide such duties. In addition, over 90% of all prospective clients given to the franchisees have never heard of TJA when contacted by the franchisee or when the franchisee shows up for the “scheduled” walkthrough.
e. TJA markets its franchise as a “business opportunity” or “entrepreneur program” in order to avoid several Franchise Laws that would require them to properly disclose information such as the identity of other franchisees, franchisees who have left the system, and the total anticipated costs to open and operate their franchise.
f. Franchisees are required to complete several training programs. TJA may pass or fail franchisees at their sole discretion and then charge the franchisee extra fees to re-take the program.
g. TJA currently boasts that a sign of a scam is the use of multiple names, name changes, and multiple websites. However, TJA operates and has operated under several different names and/or websites, including but not limited to:
i. GMS Contracts;
ii. The Janitorial Agency;
v. Cleaning Proposal;
vi. The Janitorial Agency Franchise System Corp; and
vii. TJA Branding
h. TJA leads franchisees to believe that they will own and operate an independent business, however, the cleaning clients make payment to TJA through the franchisees and TJA retains control at all times.
5. Plaintiffs bring this action alleging violations of the Racketeer Influenced and Corrupt Organization (“RICO”) Act, 18 U.S.C. § 1962(c). Plaintiffs seek damages to remedy Defendants’ unconscionable, fraudulent, and unlawful practices in connection with the operation of its franchise scheme.
UnhappyFranchisee.Com Has Reported Numerous Complaints About The Janitorial Agency
UnhappyFranchisee.Com has been reporting on franchise complaints against The Janitorial Agency and its predecessor GMS contracts since 2011.
If you have had any dealings with The Janitorial Agency or the defendants, please share a comment here or on one of our related posts:
If you believe you are a victim of The Janitorial Agency and would like information on possibly joining the class action suit, contact Fortman Law.
If you are a defendant, franchisee, employee, friend or associate of The Janitorial Agency and think the lawsuit is without merit, your comments are welcome.
The Janitorial Agency has been offered the chance to provide a rebuttal, clarification or other statement for publication on UnhappyFranchisee.Com.
ARE YOU FAMILIAR WITH THE JANITORIAL AGENCY, STEVE CONNER, DAN CAREY OR THE OTHER DEFENDANTS?? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
TAGS: The Janitorial Agency, The Janitorial Agency scam, The Janitorial Agency lawsuit, The Janitorial Agency ripoff, The Janitorial Agency class action, TJA, Steve Conner, Stephen Conner, Steve Connor, Dan Carey, GMS Contracts, Linda Shell, Stacey Armstrong-Carey, janitorial scam, Jonathan Fortman, Jon Fortman, Walter Hollins, Kemondie Patterson, Rosa Pizzo
DISCLOSURE: The attorney discussed in this post, Jonathan Fortman, participates in our Franchise Attorney Directory.