CUPPY’S COFFEE: Letter from a Failed Franchisee

We received this letter from yet another failed Cuppy’s Coffee franchisee:

I wish I could be the bearer of some good news or encouraging insights, but I do believe we are all in the same boat and on the fast track to failure.

We opened our store in June, 2007, after a 22 month process to get open due to the problems and bad relationships Cuppy’s/Java Jo’z/Elite MFG. had with various third parties (Real Estate firms, Construction management companies, financing firms, etc.). It is the same story that has been replicated so many times.

We did well our first few months being open and I was encouraged that we may end up breaking even, though, we never did. I spent hours and hours and thousands of dollars promoting my store and building local relationships. We had a nice pool of loyal customers who came at least once daily. I had a great well trained staff and an attractive store in a good location.

No matter what we did, we could never achieve enough sales to break even and we eventually closed our doors in April to stop the bleeding. We had used up most of our working capital during the extensive period to get open, also there were tens of thousands of additional costs that were never mentioned (cable, sod, irrigation, fill dirt, parking lot striping, etc.).

We got deeper and deeper into debt, thinking eventually we would turn the corner if we just tried one more thing or held on one more month. This franchise is flawed and the information given to potential franchisees leaves out so many of the expenses that will be incurred that it would be a miracle for anyone to actually spend only what the projections recommend and to actually take in the revenue that is projected based on population or traffic count.

We did our due diligence and did everything right from our end as far as operations goes, but we have been unsuccessful. I have asked many times at corporate for information on how many franchisees are failing, how many are breaking even, and how many are profitable. I have never been given any answers to these questions.

It is my understanding from the internet that Supreme Building Technologies is now in a lawsuit with Elite Manufacturing to the tune of $1.7 million in unpaid invoices and breach of contract. This is most frightening and discouraging news and points to yet another repeat of the pattern of bad relationships that this company leaves in its wake.

I would be curious to hear the stories of some of the other franchisees on this email. Please share your stories with the rest of us.


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