(UnhappyFranchisee.com) Forza Coffee franchise owner Sheri Lynn Tanson recently filed a lawsuit against Forza Coffee Company and franchisor Brad Carpenter. Tanson, whose Forza Coffee franchise was open less than a year before closing down, alleges in her suit not only that Forza Coffee sold the franchise using misleading and incomplete disclosure documents, but did so as part of a scheme known to industry insiders as "churning."
According to Paige Richmond’s article in the Gateway:
Tanson’s lawsuit alleges that the Carpenters’ actions demonstrate a pattern of setting up their franchises to fail. The lawsuit calls it “a scheme whereby they sell franchises to people, let the franchisees bear the cost of building out the stores, purchasing equipment and developing the market and waiting for the franchisee to fail while providing minimal support.”
Once the franchise fails, the lawsuit alleges, the Carpenters “ ‘re-take’ the store, paying only a small portion of the cost of build-out and equipment, and either operating the store as a company store or re-selling it to a new franchisee and starting the process over again.”
Tanson claims Carpenter offered her this deal when her own franchise began to go under.
Brad Carpenter alleges that this is simply a case of a franchisee not following the system, and then wanting to blame the franchisor for her own failure:
Carpenter said he attempted to supply all appropriate training and help to Tanson, but she refused it. He also said that Tanson did not complete certain tasks necessary for the business to succeed, such as buying the appropriate Forza signage.
“This is a woman who desired to have a franchise with us and we allowed it, and unfortunately it didn’t work out,” Carpenter said. “A month or so later, she needs someone to blame, so she blames the franchisor.”
The lawsuit also alleges that Carpenter and his wife, Lucinda, who are named in the suit as “Dugout Brothers, Inc.,” provided an expired Franchise Offering Circular disclosure document that left out key, required information, such as the franchisors prior experience with another coffee company, and the number of franchisees leaving the system.
The case is currently scheduled for trial on Aug. 8, 2008. Read the full article here:
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