JAN-PRO Franchise Complaints

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• Hi Dennis, if you go to complaintsboard you can get my e-mail adress and phone number there. I'm a lead plaintif in the case and I can give you more information. Hang in there Dennis, you are not alone. We hope to get justice soon.

• I read the following article and thought I would share it . The Coverall Trial begins in May. Lets all say a prayer so that all of those people who got Ripped-off and hurt by Coverall finally get Justice.

  Federal Judge: Franchising Sounds Like Ponzi Scheme
  Posted Thu, 2010/04/01 - 19:12 by Corbin Williston
  Is franchising "a modified Ponzi scheme?" Last week, a federal judge said it might be.

  Janitorial franchises have long been a source of embarrassment for the franchise industry, and frequently attract purchasers with few assets and poor command of English.

  A 2001 report by the GAO on FTC enforcement of the Franchise Rule found that from 1993-2000, Coverall violations had affected 2591 investors, and JaniKing violations affected 900 investors.
  A 2005 news article in the NY Times noted complaints by Brazilian immigrant franchisees of Coverall in Boston, and a settlement of Coverall litigation in Los Angeles in which franchisees alleged fraud.
  An August 2009 interview with Franchise Times quoted Coverall making this claim:
  Jacqueline Vlaming, Coverall’s general counsel, said, “Every franchise owner who runs it like a business can make money.”

  In the most recent lawsuit, Pius Awuah and 10 other franchisees relate similar stories:

  1.They paid Coverall North America a "franchise fee" in exchange for which
  2.They were promised a minimum dollar amount of client accounts to service each month.
  3.Coverall entered into the contract with the clients and billed the clients.
  4.Coverall assigned the franchisees to clean the client premises, and
  5.Coverall would remit money to the franchisees after deducting various charges.
  The franchisees alleged in their Complaint that they were never given the amount of business they had been promised, and that the degree of control which Coverall exercised over them meant that as a matter of Massachusetts law that they were really employees of Coverall.

  After filing suit, the franchisee attorneys uncovered damaging information and Coverall moved to seal court documents. In an interlocutory appeal, a 3 judge panel of the 1st Circuit Court of Appeals said in October 2009:

  Coverall has been charged--it has not been found liable in this case--with activities that could be viewed as highly unattractive[cite omitted]

  It is not necessarily the disclosure to competitors that makes the district court's order a matter of concern. Others, including enforcement agencies and potential plaintiffs, may find the disclosures of interest in ways that would not serve Coverall's interests. [emphasis underlined in original]

  The lawsuit continued and on March 23, 2010 the District Court ruled in favor of the "franchisee" plaintiffs, holding that they are in fact employees.

  What has attracted attention within the franchise community is the Judge's comments about Coverall's assertion that its business was actually the sale of franchises. Traditionally industry trade groups such as the IFA have maintained that franchising is not an industry but rather a business model (although the IFA has on other occasions defined franchising as an industry).

  Judge Young stated:

  Describing franchising as a business in itself, as Coverall seeks to do, sounds vaguely like a description for a modified Ponzi scheme – a company that does not earn money from the sale of goods and services, but from taking in more money from unwitting franchisees to make payments to previous franchisees.

  The Judge went on to say that he believed that in fact Coverall was in the business of janitorial services and that under Massachusetts law the "franchisees" were really employees of Coverall. But the use of the term "Ponzi scheme" and the interlocutory ruling have caused this case to gain wide attention.

  An interesting issue raised by franchise law firm Nixon Peabody is the impact of the Massachusetts statute and case law on post-term non-compete clauses.

  The IFA issued a press release criticizing the ruling as a threat to franchising in Massachusetts. As far back as 1998, the IFA took the (then) unheard-of step and filed an amicus brief opposing a janitor who filed for unemployment after being fired from his job at West Sanitation Services. (Matter of Francis, 688 N.Y.S.2d 55)

  A bigger threat to Coverall might be the bad publicity which has caused it to lose contracts with Boston-area clients such as Legal Sea Foods and Cheescake Factory (NASDAQ: CAKE). Both restaurants paid Coverall, but the mostly Hispanic cleaning staff did not get paid.

  Coverall said it had properly sent money to the Boston "franchisee" and that it bore no responsibility for seeing that the workers were paid. After media reports, Coverall paid the wages. Legal Sea Foods terminated Coverall due to concerns about worker mistreatment, Cheescake Factory terminated Coverall due to a number of concerns, and the Massachusetts Attorney General is investigating the janitorial industry, according to the Boston Globe.

• On Facebook

  I am a victim of Jan Pro / Soy una víctima de Jan Pro

• Former Jan-Pro Operations Manager!!! I was considering purchasing a Jan-Pro franchise and buying at the FP-20 level about a year ago. I had trouble reading through and understand the FDD, but H.T. seemed to be determined to get me in ASAP to buy this franchise. I wasn't sure why, but I was hesitant to purchase the franchise, so I decided to try things on my own.

  I've found that this business is not so easy to learn, as people are not willing to discuss how to price jobs, etc., etc., etc.

  Are you in a position to lend some help to an aspiring business owner? Also, is there a way to contact you away from this blog? Please advise.

• jerry,

  This is Dave. We spoke before. My computer crashed and I loss your contact info. Please contact me.

  • jerry/dave:
    We don't post personal contact info. However, if each of you emails permission to exchange to unhappyfranchisee[at]gmail.com I'll forward it to each of you.
    Thanks.

• I've owned a Jan-Pro franchise for years. I've experienced the good and the bad (mostly bad). But, I've learned one Very important thing. You see, I've also started my own cleaning business and have several accounts that are not a part of Jan-Pro. The problem is they continuosly pester the contacts at the jan pro accounts. If you went out to eat and the manager asked, "hows the food", you reply it's fine, then the waiter asks the same question, then the busboy stops over 2 minutes later and asks you again, wouldn't you start to look for something wrong? That's exactly what Jan-Pro does. they call from the office, then the ops manager stops in, then they want you to go in and get an evaluation (all in the same month). This causes problems. In my other business, I don't bother the customers at ALL. They have my number, I call them ONCE every few months, and guess what? They don't cancel or complain. Jan Pro is actively looking to take accounts away and resell them to another franchise owner, that is why they constantly pester exisiting customers until they complain, and then voila! There goes your account.

• Allen:

  I'm glade to see that you are taking steps to remove the "middle man" from the picture. I strongly encourage everyone to do the same.

  I have been in this business for almost 30 years and have never been so disappointed as to what I personally witnessed as an Operations Manager.

  Change is coming -- I guarantee it.

• Wow. Being an "insider" allows me to compare properly from when I owned my own business and what I have seen as an Operations Manger, Director of Sales and Regional Manager for various owner/operator companies. Lots of misplaced anger out there, if you want to be angry at someone or some company, here's where your anger should be placed.

  Jan-Pro International or any Master Franchisor has an obligation to properly train, support, supervise their "regional operators". That is where the fault lies, they accept money for the rights to a specific geographic area, they do not properly train nor follow up with that person on a regular basis. There are numerous "Master Owners" that I have had the pleasure to meet and see that they are quality people and are doing "right" by their unit franchisees and the actual contract cleaning customer.

  However, you get some bad apples with every lot, because Jan-Pro International and others don't do a proper screening initially, and they certainly don't follow up and through with them on a continual basis, you get regions that are managed/owned by people that aren't in the business under the correct circumstances and guidance.

  Take the time to review the FDD, take the time to call all/most of the owner/operators listed in the FDD and see what they say about the regional master franchisor. Don't just call one or two, you need to call at least a dozen. If they don't have a dozen, call all listed.

  Owner Operator systems are vastly superior to "traditional companies" both in customer retention and business relationships.

  Be mad at the corporate office, demand from them to do a better job of screening their current and prospective regional masters.

• I'm Jerry V or 1st Amendment. So that there is no confusement I'am not the jerry that posted at 3:54 pm. Maybe we happen to have the same name. I'm posting this so that other people don't get confused.

  I disagree with what you said about there only being a few Bad Apples. From my experience and from all the calls from around the country that I have received it seems to me like the whole company is bad. I have received close to 100 calls from people of diferent states and cities. It's not just a few bad apples but the whole tree is bad. I have received calls from people in 25 diferent states and Canada.

  The way I see it the whole corporation is bad.

• Look at the numbers, look at the states effected, When you have literally 7500 owner/operators throughout a system, you are going to have some unhappy campers for sure. If you had 7500 employee's, you would have at least 100 people that would complain and say their employer was a lier, cheat, thief etc...

  Hold Jan-Pro International accountable for not training, supervising, inspecting their Master Franchisee's. Those are the "bad apples" that I'm referring too. Look at states like Indiana, Kentucky and some others, they are poorly run, managed and have numerous franchisees listed that are unhappy.

  We are speaking the "same language", you want to "throw the baby out with the bath water!". That's where you and a lot of others loose credibility and standing both legally and morally. For every "one" disenchanted franchisee, I can find no less than 10 "happy". Though one is too many, the organization as a whole must improve and to improve, they must choose better master franchisors.