Social media accounts of franchisors like PIRTEK & Freshii & associations like VetFran are filled with pictures of the smiling military veterans who invested in their franchises. VetFran never checks to see whether these veterans were successful or whether they closed their doors and lost their investments. While many who promote franchises to veterans don’t want to know the outcome of their “success stories”… we do. Here’s what we found. by Sean Kelly, Founder, Operation Truth for Veterans.
(UnhappyFranchisee.Com) Have you ever noticed that social media is filled with happy veterans opening franchises, cutting ribbons and celebrating Grand Openings?
Once posted, those happy success stories live on forever… continuing to promote VetFran and its member franchisors.
Have you also noticed that you rarely see updates about these veterans in year two or three, or hear of the challenges they face?
And while we know that many of the VetFran member companies that target veterans have high franchise turnover (failure) rates, we never, ever, ever see an announcement that they’ve ceased operation – even from their local papers.
See: VetFran or VetScam? Turnover Rates of IFA-Endorsed Vet-Friendly Franchises
So whether it’s intentional or no, Internet searches for veterans in franchising tend to be filled with happy, smiling faces and virtually NO evidence of failures.
For example, when a veteran opens a new franchise, usually as a result of the biased recommendations of VetFran, they declare it a success story.
The happy announcement shows up in searches and on the franchisor’s website – even if the franchise failed.
So we decided to dig in to some of the happy veterans-in-franchising announcements and stories posted by franchisors and VetFran and check the company FDDs, Yelp and Pacer to find out (as Paul Harvey would say) the rest of the story.
A Disturbing Number of Veteran Success Stories Currently Posted Are Misleading &/or Deceptive.
Franchisors still capitalize on their veteran’s investment in their franchise… even in cases where the franchise fail and the vet’s investment was lost.
In some cases, the happy veterans in the photos are buried in debt, have since declared bankruptcy… and even lost their houses as the result of these franchise investments.
Here are a few we found in a (more or less) random search recently:
PIRTEK Continues to Promote Jim Lager as a Veteran Success Story – Even After They Stripped Him of His Franchise & Livelihood
Google “Jim Lager PIRTEK” and you’ll find more than a dozen press releases & stories of the Army veteran’s financial & personal contributions to the previously obscure Australian-based hydraulic hose franchise.
Already a reknowned Snap-On franchisee when he joined, Jim Lager was PIRTEK’s franchise sales poster boy for a decade, appearing in ads, press releases and even on the cover of their recruitment brochure.
Yet when Australian Glenn Duncan took over PIRTEK USA, he refused to renew Lager’s franchise agreement.
Stripped of the successful PIRTEK franchise territory he had developed, Jim Lager founded the independent Texas Hose Pro – a direct competitor of PIRTEK in the Dallas market.
Why Duncan would turn one of his top franchisees and success stories into a direct competitor is not clear.
Lager can’t comment due to a non-disclosure agreement (NDA) & neither Duncan nor CEO Kim Gubera respond to questions.
But rumors circulated in the years that followed that Duncan was enraged when Lager (who is white) brought his long-time African-American girlfriend to a PIRTEK convention.
She was the only woman of color among the white white white franchisees, wives and girlfriends.
Lager’s prior divorce and then-current interracial relationship was scandalous to Duncan, according to the scuttlebutt. PIRTEK USA upper management determined that Jim Lager no longer projected the desired Wonder Bread-like PIRTEK image.
Some insiders say Duncan replaced Lager with a franchisee from Australia whose 100% Caucasian family “better fit” the PIRTEK image.
So while Lager’s unfortunate lack of racism may have made him a target, PIRTEK USA continues to use his story to promote franchises to vets.
Pay-for-praise 1851 magazine still features the headline “Army veteran Jim Lager finds success with Pirtek.”
In the SPONSORED (paid for and controlled by PIRTEK) story, propagandist Nick Powells calls Lager “an extremely successful entrepreneur as well as a top performing franchisee for Pirtek” and even posts what is arguably an illegal earnings claim of Lager’s sales (“In his first year of opening, Lager’s sales were over $1 million, and over $2 million in the second.”)
Jim Lager is prohibited, evidently, by PIRTEK from setting the record straight, from retracting his endorsement and from sharing his truth with other veterans.
It appears that franchisors like PIRTEK (through NDAs) continue to own the once-free speech of military veterans.
Australian Glenn Duncan continues to demonstrate his devotion to American veterans considering the PIRTEK franchise by forbidding them from hearing the true experiences and opinions of Army veteran Jim Lager and others in similar circumstances..
This Active FRESHII Franchise Success Story Doesn’t Mention the National Guardsman’s Termination, Bankruptcy or Foreclosure
Anyone watching the happy franchisee testimonial video posted on Facebook would think that the Canada-based Freshii healthy restaurant was a dream come true for the 13-year National Guard Sergeant First Class and his family.
In the video, the enthusiastic franchisee, who survived a tour in Iraq, announces that his first trendy Freshii restaurant franchise has been open for 4 months and he just started making money.
He’s a basketball coach who’s proud to provide his players and the local community with a fresh, healthy alternative to fast food.
He and his wife, a local art teacher, say that they are in the process of opening two more locations by the end of that year (2019).
However, the recent Freshii Franchise Disclosure Document (FDD) filed with a state agency reveals that Freshii Inc. “terminated” the franchise agreement and the couple never opened the additional locations.
Our research revealed:
- The veteran’s first Freshii closed 13 months after the video was posted (right before COVID).
- His 2nd and 3rd locations never opened.
- The couple were crushed beneath $620,000 in debt, including $400,000 in bank loans.
- The young family declared Chapter 7 bankruptcy 3 months after closing
- Their family home was sold and the proceeds went to the bank.
- Freshii received nearly half a million dollars and the bank will be repaid by the taxpayers (SBA guarantee)
VetFran Features Many Smiling JDog Franchisees Like This Air Force Veteran Who’s Out of Business
The JDog Junk Removal franchise only sells to veterans.
JDog is a highly celebrated three-star member of the IFA’s non-profit VetFran.
JDog is regularly celebrated as a Top Franchise for Veterans, and a Vet-Friendly company.
Yet JDog also has one of the highest turnover rates of any franchise in the nation: 120%
But in Franchiseville, the opening of a Veteran-owned franchise is declared a permanent success story no matter the outcome.
No one bothers to update or delete the story, or warn veterans that many of the celebrated success stories, like that of Service Disabled Navy Veteran Toby Catlett’s JDog franchise, ended in premature closure and a lost investment.
VetFran Features This Marine Corp. Captain & Many Others.
They Don’t Tell You They Likely Lost $200K Each on VetFran-Endorsed Pinot’s Palette
VetFran-endorsed paint & sip franchise Pinot’s Palette appears to have ceased franchising after suffering many franchise failures.
VetFran featured Marine Corp Captain Waylon White and his wife Victoria’s Pinot’s Palette in Lawrence, Kansas as a success story.
VetFran never posted an update that the White’s closed their Pinot’s Palette in Lawrence and moved out of state in 2019.
Pinot’s Palette may have ceased franchising. Its 2020 FDD reflects a 50%+ franchise turnover rate, pre-pandemic.
VetFran Currently Touts This USMC Vet’s Success on Facebook.
They Don’t Tell You Both His Locations Have Closed.
VetFran aggressively promotes any franchise seller willing to offer a discount & pay their fee.
While they pretend that they serve the interests of veterans, they promote both stable, proven franchises and those with outrageously high failure rates.
They promote profiles of happy veterans like Willie R. Smith Jr. who opened 2 Juice It Up! franchises in Temecula, CA.
VetFran either doesn’t know or doesn’t care that both of the 27-year Marine Corps veteran’s franchises closed and his $400K investment is gone.
VetFran is not interested in warning veterans about the high failure rates and financial risks; they simply want to sell more franchises for their members.
This Smiling Air Force Veteran is Currently Featured on the VetFran Facebook Page.
Not Only is Her Franchise Closed & Investment Lost, The Franchisor Has Ceased Franchising.
The franchising industry professionals of the IFA and VetFran won’t share the industry’s dirty little secret with veterans:
Most of the trendy or hot new franchises they promote won’t survive as long as the term of the franchise agreement.
Excited new franchisors exhibit at their Expos for 2-3 years and are then replaced by another crop of excited new franchisors.
Past “hot new concepts” include of the past included meal preparation kitchens, eBay drop-off stores and now are paint-and-sip art concepts like Pinot’s Palette & Bottle & Bottega.
No one warned USAF veteran that the neither the unproven concept nor the VetFran franchisor would be around long enough for her to recoup her time and $200K+ investment.
We are the only ones willing to expose the industry secret that franchising works when duplicating a proven, established concept & system, not an unproven, flash-in-the-pan concept that won’t survive the next economic downturn.
NOTE TO VETFRAN, IFA, FRANCHISORS & INDIVIDUALS DISCUSSED: We invite you to provide corrections, clarifications, explanations, rebuttals and alternative interpretations. We welcome respectful dialogue and rely on it to refine our reporting for accuracy. We will share submitted on-the-record comments and respect correspondence made off-the-record.
NOTE TO VETERANS & FRANCHISEES: We welcome your input, experiences & opinions & value your right to confidentiality. Please email us in confidence or leave a comment below. Your email address will not appear publicly.
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