TACO DEL MAR: Ex Franchise Owner Blasts Franchisor, Master Developer
Is the Taco Del Mar franchise a great opportunity to gain the support of a franchisor dedicated to franchise owner profitability… or is it an unmitigated disaster?
It depends on whom you ask.
Taco Del Mar: “great franchise partnerships create great successes.”
The Taco Del Mar franchise website states:
“Taco Del Mar believes that great franchise partnerships create great successes. We have built our organization in order to develop positive and profitable relationships with our franchisees… We begin each day focused on franchise profitability… We developed our system to return the highest ROI to the franchisee in the shortest time… We believe in you.”
Taco Del Mar: A franchise “disaster.”
Former Maryland Taco Del Mar franchise owner Suzanne Todd has a different opinion, calling her experience with the company a “disaster.”
According to a Wall Street Journal story, Todd claims she was recruited as a franchise owner by Master Developer and franchisee Thomas Murphy, who told her Taco Del Mar was the “next Subway.” She claims Taco Del Mar executives “lured her to join the team by predicting future positive financial returns,” and “‘placed a great deal of pressure” on her to sign a franchise agreement before the prices increased.”
She signed in April 2007, paid a $20,000 franchise fee and opened her Frostburg, MD restaurant in December 2007.
Claims her Master Developer “doomed her… restaurant to failure.”
Todd claims her own Master Developer Murphy doomed her restaurant to failure by his alleged “ineptitude” and non-compliance with the system he was representing:
She blamed Murphy’s “ineptitude” as a master developer, deeming his flagship restaurant a failure that then doomed her own restaurant to failure. Why’s that? Well, Todd said Murphy’s branch had food that “was not up to standard” because it didn’t rely on the chain’s recipes. The branch used supplies from the wrong brands, handing out Cinnabon cups, Subway paper products, and – gasp – Wal-Mart-brand tortilla chips. And customers had even filed health safety complaints regarding food poisoning alleged to have resulted from eating there.
Franchisee Todd contends that the franchisor provided inadequate sources for food and supplies, and poor support especially in advertising. The Maryland Attorney General’s office accused Taco Del Mar of violating Maryland law with regard to the offer and sale of the franchises. The state and the franchisor struck a deal in February 2009 that gave Todd the option of rescinding her franchise agreement. She jumped at the chance and her branch closed that same month.
Taco Del Mar bankruptcy halts arbitration proceeding.
Suzanne Todd initiated an arbitration proceeding against Taco Del Mar for $500,000. The proceeding was halted, along with all other “creditor actions,” when Taco Del Mar Franchising Corp. sought Chapter 11 protection in January, 2010.
According to the WSJ article, Taco Del Mar blamed its bankruptcy on “ several years of financial losses it experienced on poor expense management, lawsuit expenses and its selection of ‘poor franchisees and poor sites’ for its new restaurants.”
Despite its troubled past, Taco Del Mar and its Master Developers continue to promote the Taco Del Mar franchise opportunity on its franchise website.
WHAT DO YOU THINK? IS TACO DEL MAR A GREAT FRANCHISE OPPORTUNITY DESIGNED FOR FRANCHISEE PROFITABILITY? OR IT A FRANCHISE “DISASTER”?
logo: Taco Del Mar
3 thoughts on “TACO DEL MAR: Ex Franchise Owner Blasts Franchisor, Master Developer”
I received an email asking “what’s a franchise Master Developer?”
Here’s my take: A Master Franchise (sometimes called Area Representative or Area Developer) agreement generally grants an individual or group the right not only to open their own franchises in a given territory, but to sell franchises to others and then support them once they’re open. For this, they get a % of both the franchise fee and the ongoing royalty.
For example, a franchisee went to a Curves-like fitness club called Butterfly Life with the idea of opening a club. Instead, they told him if he paid $250K he’d have the right to sell 50 franchises and get a return of several million over their 10 year contracts. He had no experience in franchise sales and no staff to support the franchisees. His own club struggled, the few franchises he helped sell folded (he could give them little to no support) and he lost it all.
The company got $250K with no risk and no work, and could lay the blame on the Master Franchisee.
Incidentally, this is how most of the janitorial franchises work. You can see the problems in that section of the site.
Taco Del Mar operates on a Master Developer model. It’s clearly spelled out on their website. My question is: What qualifications do they demand of an MD? Are they adequately capitalized and trained to effectively advertise & sell franchises? Do they insist MDs have a support staff and visit schedule?
Does owning 2 Subways qualify someone to take over the job of a franchisor?
Master Developer agreements are standard practice in International franchising where an MD develops their home country, but I have serious questions about whether Master Developer agreements domestically are anything more than a windfall for franchisors at the expense of both the Master and unit franchisees.
We also are Taco Del Mar franchisee’s. Our franchise purchase was $23,000. The Franchise is horrible, they were taken over by Doctors Associates Inc in 2010 and wanted to amend our contract with ridiculous modifications (company wide) which included: us never being able to bring lawsuit against anyone in the Corporation; if we close down they take all of the equipment, even though we had purchased it; and a number of other one sided additions. Our lawyer told us we would be idiots to sign it. After our refusal to sign, the harassment started. Constant corporate inspections, where they find the smallest thing wrong and threaten to shut us down and dissolve the contract, and then a corporate level person would stop in(just passing thru) and say things like “you know, if you would sign the amendment this would all go away”. or another one said “We will force you to sign the new contract”. Now, they’re famous attorney, Dara Solan, told us we owe them $10,000 for a “punishment” because our freezer broke down! Arbitration costs thousands each time, they just frivolously arbitrate all of your money away until you can’t fight anymore. TDM and Franchise Brands are always against us, no help, no support, no marketing(even though we pay 1%of sales + co-op buy in). Our purveyor claims the Corp gets “kickbacks”. The Higher level people in previous companies, did the same low life stuff, bled the franchisee’s dry, and moved on to another company. Do not buy into this RIP-OFF, these people have no soul.
They are just crooks trying to sell you the franchise and pocket the money- and then it is see you later and thanks for the money