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Former USAMDT Franchise Owner writes:
NEVER short step your discovery process before you invest in a franchise. My first franchise experience was with USA Mobile Drug Testing. The “business “model” sounded genius upon first glance and the Franchise Development Broker (Rhino 7) sales rep made it seem like it was a completely new concept. I was told that there were 2 (two) franchise locations that were original locations, one in Florida and one in Connecticut. The business numbers were phenomenal. To strengthen my confidence in what was presented to me, I was also “educated” by the Rhino 7 rep on how “serious” the process is to submit any performance numbers for a franchise. As you will see in my letter, pretty much every tactic that was used to sell me the franchise was made up or falsely presented. It is my estimation, at this time, that about 50% of what Joe Strom or anyone from Rhino 7 says…is a total lie.
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First, Strom told tons of tales about his Florida location of USA Mobile Drug Testing, which he allegedly sold to enter into the franchise business so there wouldn’t be a “conflict of interest”. He has since admitted that he never owned a drug testing business prior to franchising USAMDT. There never was the famous “USAMDT mobile unit” that he allegedly owned and used…later, he even offered as a “loan” to new franchisees to help them in their business. There is not a single franchisee who borrowed Strom’s mobile drug testing unit, I believe it never existed. As a matter of fact, Strom has never even been in the drug testing industry at all, until he decided to franchise this idea.
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According to Strom in his early USAMDT days, he ran his original USAMDT franchise in Florida, but when he decided to franchise it, he sold the business. I recall one story when Strom was discussing the sale of his drug testing business. He said that he sold the business to a “guy” and then had to sign a non-compete clause for 2 years. After he signed the non-compete clause, the guy lost all his money in the Bernie Madoff scandal and had to shut down the business. This story is laughable now, knowing there is no “guy” and no truth to it. I can’t believe I bought the story at that time. The “guy” is as fictional as Manti Te’o’s girlfriend. Strom went on to say that even though the “guy” went out of business, he had to respect the non-compete clause. (Impressive honesty, isn’t it?) That explained to us why there was no Tampa location that Strom was running. From other sources, I found out later that Strom did attempt a franchise launch of a Tampa branch in the early days but it failed.
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Next, the Rhino 7 salesman who sold me the franchise told me that he too was an owner of a USAMDT franchise. That made me feel really good and I was glad I was working with a franchise owner to buy my share. However, once I made it to the training, Strom let me know that the Rhino 7 salesman was not an owner “because that would be a conflict of interest”. I am now discovering the first lie about USAMDT told by the Rhino 7 sales rep and Strom. The other franchisees in my training class did experience the exact same lie. We were all angry and we demanded that Strom put a stop to this lie. Strom assured us that he would take care of it.
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Fast forward 1.5 years later, at Strom’s request, I am doing a “discovery call” for a prospective franchise buyer who is using the same Rhino 7 sales rep did. The prospective buyer lets me know that his sales rep was an USAMDT franchise owner! I immediately said that is NOT true, the sales rep is not and has never been a USAMDT franchise owner. I then reported the incident (again!) to Strom. Strom verbally admitted to me that this is a major infraction by the Rhino 7 sales rep. He promised to “take care of it!” and to personally notify me of the correction. A couple months went by and Strom hasn’t followed up as promised so I followed up with him. Strom said that he fired the Rhino 7 salesman in question… so, end of story. Not exactly.
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A few more weeks rolled by and it happens to be in the company of another franchisee who informs me that he/she just finished up a “discovery call” that was set up by the same Rhino 7 salesman in question. I verified the information to find out that the discovery call set up be the same Rhino 7 salesman took place 3 weeks AFTER Strom has assured me that he had fired the salesman in question. I confronted Strom. Out of the blue, Strom makes up more lies: His tale was that he did fire the sales rep, but he was giving him the opportunity to “finish up his files”. What honest person would allow a dishonest, fraudulent salesman to continue to perpetuate the lie and represent him/her? (I also find out that the salesman didn’t get fired but he actually resigned from Rhino 7 to take on a new job.) This happened around the time the rebel franchisees decided together to leave the franchise. And so I consider the leave USAMDT at the time.
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I threaten Strom that I am going to join the rebel group. To convince me to stay with USAMDT, Strom offered me a “side deal”: Not to pay any royalties for 2 (two) years. He also assured me that this “sweet deal” will be renewed at the end of the 2 years since his attorneys won’t let him sign an agreement for more than 2 years. I agreed but in order to seal the deal I asked Strom to draft a formal agreement to be signed on both sides within a month. A month passes …2 months…3 months…and nothing! Only when I decided to put the pressure on him, Strom called me with all his executive board to let me know that they are not going to honor the initial “2 years no royalties” agreement. This happens to be on the same day when Strom announces a new member of the executive committee and investors’ board, Jerry Clum who is listed as a USAMDT owner. Jerry Clum owned a franchise in homecare and he apparently made millions running the homecare business. In the announcement, Strom suggested that Jerry was now an “investor”. I assumed the new “investor” is what fueled Strom’s ego and makes him not to sign the agreement with me.
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I called the attorney representing the 8 rebel franchisees already out of USAMDT and I get details on how to join the group. I found out that the first mediation with USAMDT is set for 2 weeks from the day Strom decides to T-bone me with his reverse decision. Strom called me the next day to apologize and to offer to sign the original agreement which he sent to me within a couple hours. At this time, it is crystal clear whom I’m dealing with. I smiled and nodded knowing that I’ll be leaving USAMDT soon because I cannot do business with someone who lies, cheats, and steals from honest people who joined the franchise to work hard and be successful. Strom then tells me that Jerry Clum is really not an investor and that Clum didn’t give him any money to get on the investors’ board. After the smoke has cleared and I realized what happened there, it is my belief that Jerry Clum was just going out of drug testing business (there could be more to Clum’s story). To mask the situation, Strom announced at the same time that Clum was joining the investors board, that he was selling all three of his territories so there wouldn’t be a “conflict of interest”. You may be seeing this “conflict of interest” thing becoming a blanket answer to all of Strom’s excuses. It is heard a lot in the USAMDT land.
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I am now out of USAMDT. As for the remaining franchisees, I wish them the most success. These are good people who invested their hard earned money and retirement funds and they deserve success for what they’ve put in. If you’re considering investing in USAMDT franchise, my advice is DON’T! You can start a drug testing business with a fraction of the cost and by going to DATIA to be a certified collector. NOT ONE of my current clients using the service has been given to me by USAMDT or acquired due to USAMDT’s support. THERE ARE NO NATIONAL ACCOUNTS THAT SEND BUSINESS TO YOU! For reasons known only by Strom, it seems that USAMDT is still convincing people that there are national accounts that you automatically get as soon as you pay the money and sign up with them. This is simply not true.
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There is no real “business model”. This franchise is nothing but a concept in Strom’s head which he was never been able to execute. Matter of fact, when he tried, it failed. The Connecticut franchisee’s numbers shown in the FDD are skeptical at best. I don’t have hard evidence that Aron Galinovsky, owner of A &B Employers Solution and not of USAMDT of New Haven, presented false numbers, but I do know that the business he built is not from a mobile drug testing “model”. A & B Employers Solution had a fixed location when he launched his drug testing business. The USAMDT “model” is based on not having a fixed location. Aron also owned another business (homecare) so it was really just an additional service they started offering. I assume Aron had automatic clients as soon as he decided to get into the drug testing business. It would also be relatively easy to redistribute revenues and expenses between these two businesses to show a false sense of success for the drug testing part.
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As for Dale Dugas’ comments that state that him and his family could not be happier with the choice of investing in USA Mobile Drug Testing… Before I left the franchise, this would’ve been a statement I would’ve made too. Mostly because when you have $100,000+ invested in something and you’re working your butt off every day to make it successful, you have to keep yourself focused and you cannot keep questioning your decision. My statements aren’t made to say the business idea isn’t a good one, it is a good idea. The problem is that the owners of the franchise are not honest people and I am afraid they will pull everyone down with them. Once I left the USAMDT system, I didn’t skip a beat. My business is still up and running, no clients left me, and we’re about to land another record month. I just had to get myself away from the toxicity of Strom and I don’t want to be susceptible to what he is capable of in the future. I couldn’t be happier with my decision.
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I cannot express enough how much of a scheme this franchisor, USAMDT is. I think we only scratched the surface to show what he’s capable of in terms of lies and deceit. I have learned my lesson about the dirtiness of franchising world and the lesson everyone can learn is
1. Run from investing in USAMDT, and
2. Any franchise you want to invest in, do hard core inspections on everything you are told. I was naive and I just believed what I was told. Don’t do that. I’m learning that the mistruths I was told are commonplace in franchising.
Best of luck in the franchise world!
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Tags: USA Mobile Drug Testing, USA Mobile Drug Testing franchise, USA Mobile Drug Testing complaints, USA Mobile Drug Testing franchise complaints, Rhino7 franchise broker, drug testing franchise, mobile drug testing, Joseph Strom, Joe Strom. franchise millionaire, Jerry Clum