Is KITCHEN TUNE-UP a Veteran-Friendly Franchise if it Sues & Gags Franchisees?

Kitchen Tune-Up & Bath Tune-Up are franchise brands of Home Franchise Concepts (HFC), which also owns Budget Blinds, AdvantaClean, Two Maids and a Mop, PremierGarage, The Tailored Closet, Concrete Craft, and Aussie Pet Patrol.  Home Franchise Concepts has long promoted its franchises as Veteran-Friendly and great franchise opportunities for military Veterans.  However, since being acquired by $18B automotive giant JM Family Enterprises in 2019, HFC has begun suing failed and broke franchisees, including Veterans and even Service-Disabled Veterans.  Can franchise sellers who sue and gag military Veterans claim to be Veteran-Friendly?  by Sean Kelly, Founder, Franchise Truth for Veterans

(UnhappyFranchisee.Com) Read the series:  

Public Audit: Home Franchise Concepts (HFC) Veterans Franchise Program

• Are Home Franchise Concepts (HFC) Franchises Veteran-Friendly? Turnover Rates Compared
• JM Family, Home Franchise Concepts (HFC) Drives Army Ranger PK Kelley & Father into Bankruptcy

In its promotional Franchise for Veterans: A Guide for Retired Military, Kitchen Tune-Up claims it is a “veteran-friendly franchise” and a “Top Choice for Vets.”

Is a franchise company “Veteran-Friendly” if it sues its franchisees for their inability to pay fees, penalties & interest after having gone broke with THEIR franchise?

Should a franchise be considered a “top choice for Vets,” if prospective franchisees are denied access to the views and experiences of former franchisees?

Is a company demonstrating its respect for Veterans by forcing them to relinquish their Freedom of Speech, their right to express their views and share their experiences with other Veterans without fear of legal reprisals?

These are some questions I hope to discuss and explore with Andrew Skehan, President & CEO of Kitchen Tune-Up parent Home Franchise Concepts (HFC), who is, himself, a Navy veteran.

I also hope to engage with Brent Burns, President & CEO of JM Family Enterprises, the $18B automotive giant that is the parent of HFC.

JM Family Enterprises is the 17th largest private company in America, is the world’s largest independent distributor of Toyotas and owns a leading Lexus dealership.

The policy of suing failed franchisees, including Veterans, seems to have started after JM Family Enterprises acquired HFC in 2019.

I am curious as to how JM Family Enterprises justifies this policy, as well as withholding information from prospective franchisees,  with its stated commitment to fair, honest, ethical treatment of business partners and to providing accurate information to prospective partners.

I also wonder:  Does JM Family Enterprises requires its Toyota or Lexus buyers to sign confidentiality agreements that prohibit them from sharing negative opinions or bad experiences as they require of their franchisees?

Would it be legal to prohibit owners of a $30,000 car from sharing their experience and opinions with prospective buyers?

Why would it be legal to prevent franchise owners – whose contact information is a required disclosure – from speaking candidly with prospective investors, including Veterans, who could lose $500,000 or more?

Invitation: We invite all individuals and companies discussed to engage in open & constructive dialogue, provide corrections, comments &/0r rebuttals below of by emailing the author at UnhappyFranchisee[at]Gmail.com.

Franchisors:  We are looking for franchisors with good track records interesting in partnering to develop & promote best practices in recruiting and supporting Veteran franchisees.

Of 17 Veterans KTU & BTU Thanked for Their Service, Two Were Sued.  Five More Are Out of Business.

For Veterans Day in 2020, Kitchen Tune-Up posted a list of its franchisees who served in the military.

In 2021, its sister concept Bath Tune-Up did the same.

The combined list named 16 franchisees representing 17 franchises.

Two of the Veteran franchisees (Brian Whitfield, PK Kelley (2)) representing three franchises, were out of business and had been sued by the franchisor.

Five more were out of business (Garth Mathews  AZ, Colin McCarthy OR,  Jason Krueger NE,  Kevin Nemelka, UT & Patrick Frye NC).

Nine appear to be active and operating (Mike Dugan MA, James & Anne Pierce TX, Brian Daigle AL, Reno Pellman AZ, Ed Robbins CA, Dave Sweeny MI, Alan Taylor CO, Michael Stratton PA, & Steve Pearson FL)

That’s a 62% Attrition Rate.

Brian Whitfield, Minot, ND, Out of Business, Sued by Franchisor for $209,761.09

Kitchen Tune-Up publicly welcomed Brian Whitfield as the franchisee in Minot, North Dakota on May 6, 2019.

On 8/19/22 the franchisor filed a lawsuit against him (HFC KTU, LLC v. Firm Foundation Builders, LLC and Bryan Whitfield, No. 51-2022-CV-01185, District Court, North Central Judicial District of the State of North Dakota)

The franchisor was represented by attorney Andrew A. Green of Halper, Cottrell Green PA.

Brian Whitfield appeared without an attorney (pro se).

A judgement was entered against Brian Whitfield for damages in the amount of $209,761.09 at an interest rate of 6.50%.

Other judgements against Brian Whitfield exceeded $210,000.

PK Kelley, Flower Mound, Texas, Franchisee of Kitchen Tune-Up & Bath Tune-Up Being Sued by Franchisor, May Lose Means to Rebuild

PK Kelley, a former Army Ranger with 3 deployments in the Middle East, is currently being sued by the franchisor (HFC KTU LLC, v. Orange Diamond Remodeling Solutions, LLC; John Patrick Kelley; John Mark Kelley Filed November 7, 2023)

His father stands to lose his retirement savings and may have to file bankruptcy.

If the franchisor succeeds in forcing PK Kelley into bankruptcy, he may lose the security clearance he needs to rebuild his life after making the fateful mistake of investing in these low risk/high reward Vet-Friendly franchises.

According to public records, Home Franchise Concepts is represented by one of the largest law firms in the country.  Haynes Boone has nearly 700 lawyers in 19 offices around the world, with more than 40 major legal practices.  According to Dallas Morning News, many Haynes Boone attorneys bill clients $850-$975 per hour, with some exceeding $1,000.

HFC has the deep pockets of an $18B corporate parent & the franchisees’ own money.

Air Force Veteran Garth Mathews  & Rhonda Mathews    Out of Business

The Mathews operated their Phoenix area Kitchen Tune-Up from November, 2016 to September, 2023.

In 2019, the Mathews were given the The Fast Track Award, which “is given to a franchisee for their commitment to growing their business, dedication to building and training their team, system participation, and more.”

Army Veteran Jason Krueger   Out of Business/Home in Foreclosure

Army Veteran Jason Krueger reportedly operated the Lincoln, Nebraska Kitchen Tune-Up from April, 2018 to November, 2023.

Jason & Michelle Krueger filed for Chapter 13 bankruptcy 1/11/22 but it was dismissed a couple of months later.

Nebraska Secretary of State records indicate their corporation Krueger Enterprises, Inc. was dissolved April 16, 2022.

The corporate address is a home owned by the Kruegers.  According to Zillow,  it in in Pre-Foreclosure status for failure to make payments.

The Krueger’s franchise is still listed as active in the Kitchen Tune-Up FDD, but Jason’s LinkedIn profile indicates it ceased operation November 2023.

Air Force Veteran Colin McCarthy, Eugene, OR, is Out of Business

Air Force Veteran Colin McCarthy registered his corporation 8/30/19.  It was administratively dissolved 10/27/22.

Colin McCarthy’s Eugene, OR franchise is listed as active in the 2022 FDD.  It does not appear to have been transferred, yet is now listed as owned by Budget Blinds franchisee Mark Enockson.  McCarthy is not disclosed as having left the system in the 2023 FDD, so it’s not clear what happened.

Colin McCarthy now appears to be working as a real estate agent and has his own home listed for sale.

Air Force & Army Veteran Kevin Nemelka, Bath Tune-Up, Out of Business After 1 Year

According to his LinkedIn profile, Dr. Kevin Nemelka was the Bath Tune-Up franchisee for North Salt Lake, Utah, from Nov. 2021  to January, 2023.

That’s just 1 year, 3 months in business.

Dr. Nemelka is a veterinarian in West Jordan, Utah and opened the franchise with his daughter, Tiffany Pierson.

The February 14, 2023 FDD lists the North Salt Lake, Utah location as active.

Marine Corps Veteran Patrick Frye Sold After 1 Year, Deleted Bath Tune-Up From his Resume

United States Marine Corps Veteran Patrick Frye was the Bath Tune-Up franchisee of Winston-Salem, NC.

He sold his business just 1 year after opening.

It appears he sold to local Kitchen Tune-Up franchisee Peter Mahoney.

He deleted references to his ownership of Bath Tune-Up from his LinkedIn profile.

Does a Veteran-Friendly Franchise Hide Dissent & Revoke Veteran’s Free Speech?

To be clear, neither Kitchen Tune-Up nor Home Franchise (HFC) concepts are unique in this regard.

The 2023 Kitchen Tune-Up Franchise Disclosure Document (FDD), Item 20, states:

Exhibit D is a list of the names, cities and states and current business telephone numbers (or if unknown, last known home telephone numbers) of KITCHEN TUNE-UP® franchisees: who transferred territories… had territories terminated, not renewed or reacquired by us… who otherwise voluntarily or involuntarily ceased to operate territories… or who had not communicated with us within 10 weeks of the issuance date of this disclosure document.

… In some instances, current and former franchisees sign provisions restricting their ability to speak openly about their experience with the KITCHEN TUNE-UP® franchise system. You may wish to speak with current and former franchisees, but be aware that not all such franchisees will be able to communicate with you.

Confidentiality and non-disparagement agreements like this prevent thorough due diligence and are commonly used to defeat the FTC Franchise Rule’s intention that prospective franchisees be able to access the experiences and opinions of current and former franchisees.

How does a franchisor hold itself out as being Veteran Friendly and offering a great opportunity for Veterans when it must prevent dissent, censor potentially negative or realistic opinions, and be immunized from the criticism that would motivate it do do better?

What gives Kitchen Tune-Up  or any HFC franchise the right to prohibit Veterans from speaking to any franchisee or former franchisee it wants?

And if a Veteran served his or her country and puts their family’s financial future on the line, why should that Veteran be forced to give up their fundamental American right to speak their truth to whomever they want whenever they want?

Wanted:  A Franchisor Willing to Provide Veterans With Terms That Truly Indicate Respect for Military Service.

I founded Franchise Truth for Veterans, in part, to challenge the industrywide fiction that offering a discount on a franchise fee makes a company Veteran-Friendly.

I founded it to expose the destructive indifference of those who remain silent while supposedly Vet-Friendly franchise sellers like JDog deceive and exploit military Veterans they claim to help.

I am looking for one – or more – franchisors willing to reconsider the bullying & silencing tactics that defeat the transparency intended by the FTC Franchise Rule, and forgo the tactics made possible by expensive lobbyists and clever franchisor attorneys, like those at Hayes Boone.

I am hopeful that Home Franchise Concepts (HFC), headed by Navy Veteran Andrew Skehan, may see that there’s an opportunity here to set its concepts apart by implementing changes that will make Kitchen Tune-Up, Bath Tune-Up and others actually Vet-Friendly, Top Franchises for Veterans.

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Read our Posts Supporting Veterans in Franchising:

VetFran or VetScam? Turnover Rates of IFA-Endorsed Vet-Friendly Franchises

FTC: Stop VetFran’s Deceptive Franchise Marketing to Veterans

Some Franchisors & VetFran Exploit Veterans Even After They’ve Failed

Franchise Warning: JDog Junk Hauling for Veterans (Index)

JDOG Franchise Dream Ends in Veteran Suicide, Double Homicide

What Every Veteran Should Know About the JDog Franchise

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TAGS: Franchise Truth for Veterans, PK Kelley, Army Ranger PK Kelley, Kitchen Tune-Up, Kitchen Tune-Up franchise, Kitchen Tune-Up franchise for veterans, Bath Tune-Up, Bath Tune-Up franchise, Home Franchise Concepts, HFC, Andrew Skehan, JM Family Enterprises, Brent Burns, Budget Blinds, Veterans in Franchising, Veteran-Friendly Franchises, Best Veteran Franchises, VetFran, franchise confidentiality, franchise litigation, franchise NDAs