RICKY’S CANDY: Why’d the Princeton Store Close?
Thanks to Krystal Knapp, writer for the Times of Trenton, for citing UnhappyFranchisee.com as a source for her recent article on the closing of the corporate-owned flagship Ricky’s Candy, Cones & Chaos store in Princeton, NJ (Princeton Borough sweetshop closes on a sour economic note).
Knapp’s article quotes comments left here and on the retired Franchise Pick website in which Ricky’s new president Donald Cheng blamed the economy for the struggles of the Princeton store and the chain as a whole. “The current economy has impacted the retail sector much more heavily than others. The Ricky’s model was heavily dependent on a robust economy where parents splurge on their children and friends,” wrote Cheng. “However, as the economy worsened, more people became budget conscious and retailers have to react by providing better value and Ricky’s did not adjust fast enough."
Cheng had promised a repositioning of the Ricky’s concept to adapt to current economic climate, starting with the Princeton store. After his short burst of comments here were questioned by current and former franchisees, Cheng was never seen nor heard here again.
The Times article includes some telling details of the financial woes of the failing chain, and its unsuccessful attempt at gaining bankruptcy protection:
In December 2008, the company filed for Chapter 11 bankruptcy. Among other creditors, court records show Ricky’s owed thousands of dollars in back rent to Nassau Tower Realty and $100,000 to the state in sales tax.
Ricky’s struggled to pay rent of $14,590 a month that increased to $15,673 a month in April, court records show. Ricky’s made a partial payment of $2,000 for September 2008, and the realtor tapped into a $75,000 deposit to pay for rent in the coming months. That money was exhausted and Ricky’s owed Nassau Tower $42,301 for March, April and most of February.
The bankruptcy was rejected by a judge and dismissed in May.
According to Knapp, “The Willy Wonka-esque franchise that sold candy, ice cream and other sweets went sour along with the economy, records show.”
Ricky’s demise may have occured “along with” the decline of the economy, but some argue not because of the tough economic times. According to Guest, commenting on a related Ricky’s Candy post:
…The one flaw of the article is the idea that the economic conditions were a factor in the fall of Ricky’s. NO, IT WAS NOT…… Court documents from the Ch 11 attempt clearly showed that even when the economy was roaring and Toll Brothers couldn’t build a McMansion fast enough Ricky’s was not making any money and the only income supporting the shell was the franchise fees and royalties paid by people who thought they were buying into a successful business model. The house of cards began to crumble once the store owners began to communicate directly and the fact checking began.
Was the Princeton store simply a franchise sales tool from the start?
Ricky’s Candy, Cones & Chaos franchisees have alleged that the Ricky’s concept was not viable from the start and the company’s – and founder’s – main goal was to sell franchises. Nearly all franchise stores have failed and closed, and angry franchisees are suing.
The shockingly high rent of the Princeton store suggests that it perhaps was designed to be a brand showcase and franchise sales vehicle rather than a profitable candy store. Could a candy store in Princeton, NJ, even in good economic times, realistically sell enough candy and cones to justify rent of more than $175,000 per year?
Or did Ricky’s corporate assume the high rent and high overhead would be recouped not by selling candy, but by selling the dream of owning a successful Ricky’s franchise?
Related Posts on Ricky’s Candy, Cones, & Chaos:
RICKY’S CANDY: Message from Donald William Cheng
RICKY’S CANDY, CONES & CHAOS: Summit, NJ Store to Close
RICKY’S: Princeton, NJ Store Eviction Notice
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
The story left me with many questions. Here are a few.
The Princeton store’s rent was more than $175,000 and required a deposit of $75,000. It was raised to $188,000 per year.
Could a 3000 sf candy store in Princeton ever sell enough candy to be profitable with that rent, or was this just a PR & franchise sales showcase used to sell the story and harvest franchise fees?
Who are the Toll Brothers?
What’s the status of the lawsuit(s)?
The story gets better with Rick Barber trying to sell stock with a reverse IPO with a shell company called SPYRUS, Inc Below is a link to a SEC filling with financial information on Ricky’s Candy (the store) and RFG (the franchise) page 59 of this filling is the smocking gun. While Rick Barber was out “touting” the success of the franchise this is what was going on behind the scenes.
http://www.secinfo.com/d19T7u.u4.htm
Rick Barber may be toast, but Charles Alario is still out there working the next deal.
Buyer beware. Harold’s Famous Deli
The reference to Toll Brothers, the home builders of luxury homes in the was a metaphor for the booming economy. While the economy was booming and people were spending money like water Ricky’s was swimming in RED INK.
The truth is coming out and anyone with knowledge that has been following this case can see for themselves what has happened here. The facts are all there along with tons of proof, but this case has to get court in order to stop these thieves who committed fraud when they sold the franchisees a Ricky’s concept that never had a chance. The problem we are facing is that getting to court takes time, especially when you are dealing with individuals that know how to work the system. One individual has been doing this type of scheming for years and has basically been getting away with it. .
The Ricky’s franchisees are asking for help here since we need to stop these individuals from ruining any more lives. We need this story to get on the news, in the news, passed on thru the internet in order to protect unsuspecting innocent people.
They are still out there trying to sell Ricky’s franchises at the expense of all the previous owners. They have no feelings what so ever for the franchisees that have lost the homes they lived in, some have even lost their vehicles. Many were forced to claim bankruptcy, divorce, have medical conditions, etc. These are all responsible people who had decent jobs, excellent credit, etc. and have lost it all due to buying a Ricky’s franchise. The franchises were bought when the ecomnomy was booming and the downfall had nothing to do with the present economy. MORE LIES!
One of the partner’s wives has a business where she is actually making money being a spiritual counselor to those in need. As stated aboe $100.00 an hour, maybe we should go to her for help. How can she be married to someone and couselling peopole in need while her husband is defauding innocent people. The other one goes to church on Sunday and in his spare time he goes to the beach to restore his soul. Sounds like they have not lost anything and the franchisees are all stuggling on a daily basis. This is all because of a fraudulent scam which these individuals put together in their spare time.
Can someone with knowledge please tell us how come the Attorney General cannot get involved here. If you can advise on in any manner please do.
If there are any more individuals out there, please contact thru this web-site. You can even go on the Ricky’s web-site which still has many stores listed with their e-mails.
Please get involved in order to protect unsuspecting indivuduals that may fall into their trap.
From http://www.secinfo.com/d19T7u.u4.htm
“RCCC currently operates one store located at 140 Nassau Street, Princeton, New Jersey…. As shown in the accompanying financial statements, the Company has had recurring losses from operations. For the years ended December 31, 2006 and 2005, the Company had a net loss of $122,519 and 142,517 respectively; and, has a net retained deficit of $433,887 and a net working capital deficit of $413,887 as of December 31, 2006.”
“…The Company owes money to an affiliated corporation, Ricky’s Franchise Group, Inc. (RFG). RFG loaned funds to the Company and is payable on demand to RFG. No interest has been accrued on this amount. The total amount outstanding was $59,397 and $13,700 for the years ended December 31, 2006 and 2005 respectively.”
This seems to indicate the Princeton prototype was never profitable and kept afloat from interest-free loans from the franchise entity… meaning franchise fees. Correct?
“Can someone with knowledge please tell us how come the Attorney General cannot get involved here. If you can advise on in any manner please do.”
The Attorney General protects “consumers” and this would be classified as a business dispute. The FTC says it will not act on individual cases like this. That’s why franchise scams are such a good business. You are stuck financing your own legal case, usually against individuals and companies with little, no or well-hidden assets.
Has anybody brought an issue to a State level AG’s office??? I took a quick look at my states AG website and found a 3 page form to fill out and send in. The focus of the forms is more to help find a resolution. Now, the odds of any meaningful recovery from Rick Barber or Charles Alario is slim.
Maybe the question is at what point do the actions of these guys become criminal?
Where is the lawsuit going? What does your attorney say?
If you want to build a case you are going to have to prove any criminal activity. What all of you have stated about what he supplied the SEC and the way he operates he committed plenty of felonies and I am sure that is only the start – I would also bring this to the public ,govt officials , IRS- if its in the papers and you have contacted govt officials I am pretty sure the Attorney General would want to get involved.
I am the reporter who wrote the story about the Nassau Street store closing. I would be glad to do a follow up article or an article for another publication if there is another story to write here about the the history of the company and bigger problems than just the economy. I can be reached at KrystalKnapp@aol.com
p.s. Thanks for mentioning my article on your site!
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