CURVES: Curves Posts on Unhappy Franchisee
July 11, 2010 by author · Comments Off
Unhappy Franchisee has been following Curves International and the issues facing Curves franchise owners since 2008. Prior to that we published Curves news and hosted discussions on FranchisePick.com (now archived at EveryJoe.com). We have also followed and written extensively on other franchised fitness concepts, including Contours Express, Butterfly Life, Cuts Fitness for Men, Diversified Health & Fitness, and more. You may contact us at UnhappyFranchisee[at]gmail.com.
[updated July 11, 2010]
Most Commented Curves Posts
CURVES: Robert Lay’s Story March 10, 2009 (854 Comments)
CURVES: Negotiating the $10,000 Closing Fee October 12, 2009 (133 Comments)
CURVES FOR WOMEN: Business Broker Slams Curves Franchise and Franchisor November 15, 2008 (124 Comments)
CURVES: Can Indie Clubs Thrive Where Curves Failed? January 19, 2010 (53 Comments)
CURVES Franchisee Regrets Not Sticking It to Others January 7, 2010 (39 Comments)
CURVES DISCUSSION: Benefits of a Franchisee Lawsuit? August 18, 2008 (39 Comments)
CURVES: Should Failed Franchises be Resold? March 31, 2010 (33 Comments)
Most Recent Curves Posts
CURVES Franchise Owners React to Comments That They’re Being “Pruned” July 10, 2010
CURVES: 1000 Franchise Clubs Failed Last Year July 8, 2010
Failure Rates of the 10 Most Popular Franchises April 26, 2010
CURVES: 5 West Virginia Curves Close Abruptly February 22, 2010 (3 Comments)
2009 Curves Posts
CURVES: Complaints of Unauthorized Membership Charges November 18, 2009 (7 Comments)
CURVES: “Another Curves nightmare. Please advise!” November 10, 2009 (7 Comments)
CURVES: Franchise Resale Complaints, Comments October 31, 2009 (1 Comments)
CURVES: Franchise Resale Buyer Alleges Fraud October 31, 2009 (1 Comments)
CURVES: In Oregon, Curves Franchises Die Alone October 18, 2009 (1 Comments)
CURVES FOR WOMEN: Advice on Buying a Franchise Resale February 24, 2009 (15 Comments)
2008 Curves Posts
Curves Franchisee Blames Economy for Closing December 21, 2008 (1 Comments)
CURVES FOR WOMEN: Nearly Half The Palm Beach Clubs Have Closed November 15, 2008 (17 Comments)
CURVES FOR WOMEN: Franchisee a Victim of Fraud? September 14, 2008 (22 Comments)
CURVES FOR WOMEN: Is McCord Brokers Required for Resales? August 13, 2008 (3 Comments)
CURVES FOR WOMEN: An Unhappy Franchisee Tale August 13, 2008 (6 Comments)
CURVES FOR WOMEN: UFOC dated March, 2008 June 23, 2008 (0 Comments)
Another Curves Shuts Down Abruptly June 14, 2008 (1 Comments)
Cape Girardeau Curves Franchise Closes June 10, 2008 (0 Comments)
WHAT DO YOU THINK OF UNHAPPY FRANCHISEE’S COVERAGE? IS IT USEFUL? FEEL FREE TO SHARE A COMMENT BELOW.
CURVES Franchise Owners React to Comments That They’re Being “Pruned”
July 10, 2010 by author · Comments Off
More than 1/3 of the domestic Curves fitness club franchises have closed in the past 3 years.
In 2009 alone, more than 1000 Curves franchise owners lost their dream businesses… along with their savings, retirement accounts and, in some cases, their homes.
But there’s no cause for alarm, according to Curves International President Mike Raymond.
According to Raymond’s comments in the Wall Street Journal, what may be the largest mass-closing in franchising history is all part of Curves International’s master strategic plan:
Franchisees and industry experts point to a failure to keep up with changing trends—including more flexible hours for busy working women—cheaper competition and the tough economy as major reasons for Curves’ decline.
The company disagrees with its critics, contending that much of the club closings were intended as part of a plan to “prune the system,” according to Curves President Mike Raymond. Some owners had bought into Curves for the wrong reasons, he says, “they were motivated primarily as investors rather than owners.”
No Cause for Concern. Corporate Profits are Up!
Sure, thousands of club owners may be devastated and their club members forsaken, but there is a silver lining: Curves International actually increased earnings as a percentage of sales, with 2009 earnings of $16.4 million on revenue of $84.1 million.
So the story has a happy ending after all… unless, of course, you are one of the prunees.
Unless, of course, you are one of the thousands of franchise owners who actually believed Curves International when they said that, as one of their franchisees, you’d be going into business for yourself but not by yourself.
To be fair, if Curves International had stated that their franchise would give owners the opportunity to be, say, superfluous twigs to be eventually pruned from their corporate money tree, Curves never would have become the fastest growing franchise in history…
Now would they?
CURVES FRANCHISE OWNERS:
Share your feelings, opinions and experiences with founder Gary Heavin, President Mike Raymond and the board of Curves International, below.
Contact us at UnhappyFranchisee[at]gmail.com
Also read:
CURVES: 1000 Franchise Clubs Failed Last Year (More on the WSJ article)
Robert Lay’s Story (Featuring 850+ Curves franchisee comments)
Curves Posts on UnhappyFranchisee.Com (Directory of posts & discussions about Curves)
photo credit: stefano lubiana wines License: creative commons
SOLARTEK ENERGY: Jared Coad Claims It’s a Franchise Scam
July 3, 2010 by author · Comments Off
Jared Coad claims he is a victim of franchise fraud perpetrated by SolarTEK Energy and SolarTEK CEO Brant Ira Patton.
Jared Coad has vowed that unless his $35,000 investment for the Arizona license rights is returned in full, he will dedicate his life to spreading the word that Solartek Energy is a scam.
June 14, 2010, Jared Coad pasted angry complaints & warnings against SolarTEK Energy on numerous consumer complaint sites, including RipoffReport.com, ComplaintsBoard.com, and WhoScammedYou.com.
Brant Patton & SolarTEK Energy quickly returned fire.
On June 21, 2010, SolarTEK issued a press release announcing that it had terminated the Arizona License of Jared Coad (aka Refined Solar) after he had failed to reply to a 30 day notice prompted by numerous consumer complaints.
On June 24th, Patton & 2 SolarTECH employees posted rebuttal comments on the complaint sites, alleging that Jared Coad is a scam artist, disputing his claims and attesting for the integrity of SolarTEK Energy and its CEO.
What do you think? Share a comment below.
Jared Coad’s Allegations Against SolarTEK Energy
Jared Coad’s warning for prospective licensees of SolarTEK Energy on Rip-off Report includes several allegations:
1) “They have ripped me off for 35,000 for the purchase of a Phoenix franchise”
2) “They have not… trained me and my staff as contracted”
3) “they… have tried to resell the franchise that I bought for 35,000”
4) “Their staff have sent me emails of trying to let them resell and they will do a partial reimbursement, they have said to take this to Arbitration if I have a problem….I paid 35,000 and I want my money back 100% in full.”
The indignant Jared Coad doesn’t hold back on personal attacks:
“They stole my money and they will steal again. Brant Ira Patton is a scam Artist and his Assistant Chris Gray is a Scam Artist. And lets not forget the final Scam Artist of their Pack “Terry Crawford… As for you Brant… You are one Scumbag!”
Jared Coad encourages supporters and other “victims” to contact Brant Patton (he posted Patton’s cell phone # and email address) and to complain to their Attorney General.
SolarTEK Energy’s Allegations Against Jared Coad & Refined Solar
In rebuttal to Jared Coad’s complaints, SolarTEK Energy CEO Brant Patton posted his own allegations:
1) “Jared didn’t receive the remaining two weeks of training because he never reimbursed the second week of training expenses.”
2) “He also ripped Terry Crawford (one of our sales guys) off by not paying him any commission on over $30, 000 in sales he made…”
3) “we received three calls [from Jared Coad's customers] to corporate that they feared being scammed by Jared as they had each given thousands in deposits last year. No work was done and they were being lied to about the causes of the delays.”
4) “I told Jared he was owed zero of his money back, he is the one that defaulted on the agreement. However, I offered to meet him halfway and refund half his fee. Or, we both simply commit to binding arbitration and he will get back whatever the arbitrator feels he is entitled to. He refused to present his story, whatever that is, to the arbitrator. So I’ve terminated his license.”
Who’s the scammer: Jared Coad, Refined Solar or Brant Patton, SolarTEK Energy?
Who’s the scammer: Jared Coad, Refined Solar or Brant Patton, SolarTEK Energy?
Which of these two should be avoided in future business dealings, solar or otherwise?
Hopefully UnhappyFranchisee.com readers familiar with these individuals and companies will share some perspective by leaving comments below.
ARE YOU FAMILIAR WITH JARED COAD, BRANT PATTON OR SOLARTEK ENERGY? PLEASE SHARE A COMMENT OR INSIGHT BELOW.
Companies or individuals discussed can respond directly below or email us at unhappyfranchisee[at]gmail.com.
10 Reasons NOT to Boycott BP
June 22, 2010 by author · Comments Off
(UnhappyFranchisee.com) by Sean Kelly
We can’t solve problems by using the same kind of thinking we used when we created them. – Albert Einstein
Despite the “oil crisis” in the 1970’s, the catastrophic Exxon Valdez oil spill in 1989, and two oil-related Gulf wars, we continue to choose convenient self-delusion over logical, intelligent, honest and actionable thought. We Americans prefer the illusion of environmental action to any path that might require us to modify, even slightly, our own oil-dependent lifestyles.
There’s no better illustration of this misguided thinking than the boycott of BP service stations. Despite the obvious inanity of this non-solution, the Boycott BP Facebook page has nearly 700,000 fans.
BP franchise owners have become convenient, local scapegoats. They’ve had oil-soaked animal carcasses chucked on their doorsteps, and had to withstand protests, vandalism, verbal abuse and sales declines… but to what end?
If you are boycotting BP stations or considering it, here are ten good reasons to reconsider:
#1 BP Stations Aren’t Owned by BP
The 11,000 BP-branded gas stations in the U.S. are owned by independent franchisees – not BP. BP makes a tiny portion of its profits from retail gas sales, and can simply sell excess fuel inventory to other retailers… like the one boycotters are burning an extra gallon of unleaded to patronize.
Bottom line: Your boycott won’t hurt BP.
#2 Gas at No-Name Mini-Market May Still be BP Gas
Boycotting BP gas isn’t as easy as you think. Even if you fill up at Joe’s Mini-Market instead of a BP station, you may still be buying BP-refined gas. BP, like other oil companies, sells “unbranded” gasoline to a wide variety of local gasoline retailers.
Bottom line: Even if you bypass BP stations, odds are you’re still buying BP products.
#3 You’ll be Attacking Small Business Owners, Not Big Business
Think your boycott is anti-big-business? Think again. BP franchisees are small business owners with the misfortune of being locked in to franchise & fuel purchase agreements with the corporate giant. Some even chose BP because of its alleged corporate responsibility.
Bottom line: Depriving BP stations of your gas/cigarette/green tea purchases isn’t an attack on big business, it’s an assault on small to medium-size employers.
#4 Boycotting BP Hurts Local Economies
BP franchisees are small business owners. They are employers, taxpayers, homeowners & community members. They write paychecks to local citizens, pay local taxes, purchase good & services from other businesses and draw traffic to the local area and nearby businesses. What if your boycott is successful? Is a vacant lot, boarded windows, and a longer line at the unemployment office your idea of success?
Bottom line: You’ll hurt your neighbors more than BP with this boycott.
#5 Korn, Lady GaGa & The Backstreet Boys
No catastrophe is so devastating that attention-starved celebrities won’t exploit it for their own financial gain. To promote its upcoming album release, rock band Korn is exploiting the BP Boycott with a publicity push so inane it borders on self-parody.
Korn’s enlisted fellow 2D media hoors like Lady GaGa (pictured left) & The Backstreet Boys to take the bold step of filling their gas-guzzling tour buses at non-BP stations.
Bottom line: You’ll help the environment more by boycotting Korn, Lady GaGa & The Backstreet Boys. Demand that they cancel their energy-sucking, oil-wasting tours altogether.
#6 You Can’t REALLY Boycott BP
In an The Atlantic Wire article, John Hudson quotes Kait Rayner at WJBF in Augusta: “BP does more than just sell gas. their petroleum is used to make tires, sunglasses, and cleaning supplies. It’s in your lipstick, your shampoo…and even in your toothpaste.”
Bottom line: Boycotting BP completely is pretty much impossible. All you can do is pretend you’re boycotting BP.
#7 This Guy
Speaking of self-delusion, behold the picture of the fun, jolly guy who’s put more thought into making his pirate hat than thinking through the impact (or lack thereof) of the boycott he’s promoting. The fact that he feels he’s taking meaningful action by promoting a counterproductive boycott keeps him from putting his time and energy into endeavors that might actually have a positive impact.
Bottom line: Feel-good boycotts divert time and energy from activities that might yield real, positive results.
#8 “Bankrupt BP!” Lunacy
We want BP to spend lots & lots of money cleaning up the catastrophe in the Gulf, right? We want BP to continue to spend lots & lots of money for years to come, right? So where is the logic in trying to diminish the revenue they’ll have available to put into clean-up efforts? Where is the logic in diverting our gas dollars to competitors that are not being required to put a portion of those dollars into cleaning the gulf?
Bottom line: Cutting off BP revenue threatens its ability to finance aggressive and long-term cleanup efforts in the Gulf.
#9 Lack of a Worthy Alternative
So if you are going to award your business to a more worthy oil company, which pillar of ecological responsibility will it be? ExxonMobil? ConocoPhillips? Citgo? Chevron? Valero (Diamond Shamrock)? QuickCo? Sunoco? How about Shell?
Can you name an oil company you feel good about? Maybe that’s why neither the Sierra Club, Greenpeace nor UnhappyFranchisee.com backs the boycott.
Bottom line: As Sierra Club spokesman Dave Willet says, “This is broader than just BP.”
#10 It Lets YOU Off The Hook
BP & 32 other companies are drilling deepwater wells in the Gulf for a simple reason: to keep up with the demand created by you, me and our fellow oil-addicted Americans. We’re consuming 800 million gallons of petroleum per week, and 25% of the world’s oil. Will switching gas brands change that?
Bottom line: Let’s stop doing things that make us FEEL LIKE we’re taking action, and actually TAKE ACTION.
#11 (Free bonus reason!) Let’s Boycott Stupidity Instead
We’re a smart, educated nation but let’s face it: the public puts more energy into choosing the next American Idol than addressing our energy addiction. Let’s demand more fuel efficient automobiles. Let’s demand greener energy practices for both individuals and businesses. Let’s replace any governmental watchdog agency that’s laying down with the dogs they’re supposed to be watching. Let’s actually develop and use the alternative sources we’ve been talking about for 30 years.
Most of all, let’s boycott our own stupidity. Boycott laziness. Boycott apathy. Boycott convenient self-delusion. Let’s start by boycotting the moronic BP Boycott, and stop using phony environmental activism to attack innocent business owners.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Sean Patrick Kelly is a writer, consultant and publisher who is not funded by Big Oil. Connect with him via FaceBook, LinkedIn, Twitter, his FranBest.com franchise blog, or email (seankelly[at]ideafarm.net).
* * * * *
Photo credits: BP Sign by dno1967, Lady GaGa by Michael_Spencer BP Pirate protester by Infrogmation. Gas brand signs by anolobb NY BP station (World Naked Bike Ride) by bitchcakesny. All licenses: Creative Commons
BOYCOTT STUPIDITY: Support BP Franchise Owners!
June 19, 2010 by author · Comments Off
BP franchisees are small business owners.
They are employers, taxpayers, homeowners & community members.
They have expenses, loans, payrolls and mortgages to pay.
They have families to support.
Yet their American dreams and livelihoods are under attack by a huge insurgency of adversaries calling for their demise and plunge into bankruptcy.
Some of these adversaries are well-meaning but misinformed activists who are either too callous, too lazy, or too empty-headed (or all of the above) to actually think through their call for the destruction of local small business owners.
Others calling for a BP station boycott are rich & powerful groups and celebrities who are shamelessly exploiting an environmental catastrophe for their own gain.
Exploiters range from multimillionaire energy-wasters like Lady GaGa & Justin Bieber to has-beens like Korn & The Backstreet Boys.
Shameless opportunist celebrities and their teams of publicists are all too willing to toss hardworking franchise owners under their gas-guzzling tour buses for easy headlines and a little more attention from their moronic fans.
BOYCOTT STUPIDITY! SUPPORT BP FRANCHISE OWNERS WITH YOUR PATRONAGE… AND A COMMENT BELOW!
Photo credits:
BP Pirate protester by Infrogmation. License: Creative Commons
NY BP station (World Naked Bike Ride) by bitchcakesny. License: Creative Commons
MAKE & TAKE GOURMET: Defendant Attorneys Off The Hook
May 3, 2010 by author · Comments Off
Make & Take Gourmet was not one of the largest of the ill-fated Meal Prep (Meal Assembly Kitchen) franchise fiascos, but it continues to be one of the most notable.
It seemed pretty clear from public news stories on Make & Take that the founders sold unregistered franchises in violation of franchise laws, that they freely touted prohibited earnings claims and, when the concept didn’t work, the company founder Michele Bellso blamed the franchisees for their failures.
Our stories on Make & Take Gourmet are cautionary tales for both franchisees and young franchisors:
Make & Take Gourmet, Michele Bellso Accused of Franchise Fraud (AG)
MAKE & TAKE GOURMET: 3 Franchisee Groups Reportedly Suing
MAKE & TAKE GOURMET: Franchisees Sue Meal Prep Franchisor
Meal Prep Franchisor Blames Franchisees…
In a recent lawsuit, Make & Take Gourmet franchisees were unsuccessful in including the Bellso’s attorneys in their lawsuit… probably bad news when it comes to actually collecting any judgements. Here’s the ruling upholding the dismissal of Bond, Schoeneck & King, PLLC from the suit:
TYSZKA v. MAKE & TAKE HOLDING, LLC
2010 NY Slip Op 03680
SHAWN TYSZKA, LISA TYSZKA, LAT HOLDING, INC., TYSZKA, LLC, CHERYL GRENGA, EUGENE GRENGA, GINNYJO, LLC, BRIAN CLARK, LISA CLARK, MAKE & TAKE GOURMET — CLIFTON PARK, LLC, FORMERLY KNOWN AS FRESH COAT PAINTING, LLC, PLAINTIFFS-APPELLANTS,
v.
MAKE AND TAKE HOLDING, LLC, ET AL., DEFENDANTS, AND BOND, SCHOENECK & KING, PLLC, DEFENDANT-RESPONDENT.
CA 09-01876.
Appellate Division of the Supreme Court of New York, Fourth Department.
Decided April 30, 2010.
EINBINDER & DUNN, LLP, NEW YORK CITY (MICHAEL EINBINDER OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
BOND, SCHOENECK & KING, PLLC, SYRACUSE (JONATHAN B. FELLOWS OF COUNSEL), FOR DEFENDANT-RESPONDENT.
PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, SCONIERS, AND GORSKI, JJ.
It is hereby ORDERED that the order so appealed from is unanimously affirmed with costs.
Memorandum: Plaintiffs entered into agreements with defendant Make and Take Holding, LLC (Make and Take) to operate franchises, and they commenced this action seeking damages based on alleged violations of the Franchise Sales Act ([Act] General Business Law § 680 et seq.) after the franchises were closed. Supreme Court properly granted the motion of Bond, Schoeneck & King, PLLC (defendant), a law firm, to dismiss the complaint against it for failure to state a cause of action. The first cause of action alleged, inter alia, that defendant willfully and materially aided Make and Take in selling the franchises and thus was liable pursuant to General Business Law § 691. Pursuant to section 691 (1), a person who offers or sells a franchise in violation of specified sections of General Business Law article 33 “is liable to the person purchasing the franchise for damages . . . .”Section 691 (3) provides in relevant part that “[a]n employee of a person so liable[], who materially aids in the act o[r] transaction constituting the violation[] is also liable jointly and severally with and to the same extent as the . . . employer.” We reject plaintiffs’ contention that defendant is an employee of Make and Take. Section 691 (3) does not define employee, and we thus interpret that term using its common law definition (see generally Nationwide Mut. Ins. Co. v Darden, 503 US 318, 322-323). Under the common law, “the relationship created between an attorney and his [or her] client is that of principal and agent” (Burger v Brookhaven Med. Arts Bldg., 131 AD2d 622, 624). Defendant was thus either an agent of Make and Take or an independent contractor, and was not its employee (see Bynog v Cipriani Group, 1 NY3d 193, 196, rearg denied 2 NY3d 794).
The second cause of action, which was asserted only against defendant, alleged that it aided and abetted the violation of the Act in derogation of the common law. Section 691 (5) provides that, “[e]xcept as explicitly provided in this article, civil liability in favor of any private party shall not arise against a person by implication from or as a result of the violation of a provision of this article or a rule, regulation or order hereunder. Nothing in this article shall limit a liability which may exist by virtue of any other statute or under common law if this article were not in effect.” We agree with the determination of the court in its written decision that “[t]he final sentence of the provision preserves [preexisting] common law claims which would exist under the common law if the Act were not in effect, [but that], here, the only violation alleged as against [defendant] is aiding and abetting a violation of the Act itself, not a free-standing common law violation. For claims arising out of statutory violations of the Act, the Act itself provides the plaintiffs with their exclusive remedy.”
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
KUMON: “Why I Sold My Kumon Franchise”
April 26, 2010 by author · Comments Off
According to the Kumon tutoring services franchise website, “One of the largest and most established franchise businesses in the world, Kumon has nearly 250,000 students enrolled at more than 1,500 individually owned and operated Math & Reading Centers in U.S. and Canada alone.”
As we reported in the post KUMON Franchise Owner Complains of Overexpansion, some franchise owners of Kumon North America are increasingly disturbed by what they see as burdensome new regulations, encroachment and intentional oversaturation by their parent company.
David Joseph, an outspoken owner who has posted his concerns on UnhappyFranchisee.com as well as his own blog, recently decided to sell his franchise and leave the Kumon system.
He explains why below:
“I received requests to explain why we decided to sell our Kumon center. There were several factors that led to our decision to sell but ultimately we decided to pursue an opportunity that gave us the best chance to meet our personal and professional goals.
“We took ownership of our center in December, 2005. Shortly after we took over the center, we saw the potential for further growth and found ourselves thinking about moving to a larger space. The estimated cost to build out a larger space was $40,000 while remodeling the current space was approximately $10,000. We weighed the pros and cons and opted to move to a larger space because we saw long term potential with our business. After receiving approval from Kumon franchising, we opened our new larger space in November 2006. The space was zoned commercial office, had good visibility, and was in close proximity to several shopping plazas. Kumon was so delighted by our new space that a member of the franchising team suggested that we sign a 10 year lease to reduce our rent. We instead chose to sign a 5 year lease to be in better alignment with Kumon’s 5 year franchise agreement. Enrollment grew 80% in the new space over a period of 2.5 years. Business was good and we generated a nice profit. The $40,000 investment paid back very quickly.
“In February 2009, we received notification that Kumon’s 2010 franchise agreement (FA) will require centers to be located in space zoned for commercial retail; with the caveat that Kumon can grant exceptions. In addition, Kumon corporate had the right to change a center’s hours of operation if Kumon corporate deemed it beneficial for the community. We were concerned about the language and asked how the new language will impact our business. The head of franchising explained that it was not Kumon’s “intent” for our center to be impacted by the language in the 2010 FA. Unfortunately, a business can not make long term decisions based on the “intent” of Kumon’s franchising department. We knew, based on the experience of other owners, that it was not easy to find a new location. We also knew from other owners that Kumon corporate did not help identify new locations or help address zoning issues. We did not like facing the possibility of having to spend more money on moving to a new location. Just 2 years earlier, we spent $40,000 on building out a new larger space. We also did not like Kumon corporate having the power to dictate hours of operation. After all, we are owners, not Kumon employees. The changes to the 2010 FA really made us consider selling the business.
“Another issue that factored into our decision to sell was Kumon’s changing furniture requirements. In early 2009, the regional leaders visited our center and declared that we did not have approved Junior Kumon furniture. However, we purchased the Junior Kumon Kit from Kumon in 2005. It turns out that the furniture to which the regional leaders were referring was the same table we already had but with a different laminate top and chairs that were black instead of blue. Although this may seem like a minor issue, we felt this was another example of Kumon changes that may lead to additional costs to an owner. At this point we began seriously wondering how many Kumon changes were in store and the costs we could incur because of those changes.
“We then started hearing about new franchise locations being placed in close proximity to existing successful centers; some new locations were less then 2 miles away. We thought that Kumon was changing their market penetration targets and was trying to implement a saturation strategy. There were already 5 Kumon centers within a 5 mile radius of our center according to Kumon.com. We were concerned about the possibility that another center could be placed within 2 miles of our center. It turned out Kumon corporate had plans to aggressively expand the number of centers in North America and in some areas, increased target market penetration rates.
“At this point, we thought selling the center was our best option. Within 2 years of expanding our center, Kumon changed zoning requirements, furniture standards, and market penetration targets. We also felt that Kumon corporate did not respect the amount of money current owners already invested in their business. If Kumon did respect the amount of money invested by owners, subsidies and assistance would have been offered to owners that are impacted by Kumon changes. We thought our best move was to cash out.
“Selling the center was a whole other ordeal, mainly because of Kumon franchising. We know we are not the only ones disappointed with the franchising department because we’ve been contacted by other franchisees (existing and potential) that are having issues with Kumon franchising in the NJ/PA area. I will not get into details, but let’s just say the leadership, professionalism, and skill sets in Kumon franchising is lacking. I’m sure there are some people within franchising that have the requisite skills, unfortunately we did not have the pleasure of dealing with those people during our sale. I may share details on our experience at another time. We have already sent a detailed account of our experience to leadership functions within Kumon corporate. I encourage the people that contacted me to share your experiences with the franchise department with Kumon leadership.
“My intent in writing this post was to explain why we decided to sell our center, not to dissuade people from buying a Kumon franchise. We did not believe that putting more money into this business was wise for us. We were concerned about a corporate organization that did not seem to value the investment made by Kumon owners. We also thought we could find opportunities that were better investments in terms of time and money. Once we opened ourselves up to selling the center, a better opportunity did present itself. In the end, we decided to pursue the better opportunity and sell our center. We could not be happier about our decision.
“Please feel free to continue to contact me if you have Kumon questions, need a different perspective, or just need to vent.
“Wishing everyone the best of luck,
“David Joseph”
ARE YOU FAMILIAR WITH THE KUMON TUTORING FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
LITTLE SUNSHINE’S PLAYHOUSE: Stormclouds, Franchise Lawsuits
March 30, 2010 by author · Comments Off
Little Sunshine’s Playhouse & Preschool franchise website welcomes visitors with a fairy tale:
“Once upon a time there was a happy place where children played in a kingdom of creative encouragement. Where Little Sunshine, Riley B and all their friends across the land grew by leaps and bounds in their magical home away from home.”
However, the Little Sunshine’s Playhouse fairy tale franchise has turned into a nightmare for both the fledgling franchisor and its early franchisees. The franchisor alleges two of her first franchisees refused to pay royalties and renamed their day care centers, but continue to use her trade dress. She is suing them for trademark infringement.
The franchisees accuse the Little Sunshine’s Playhouse franchisor of not providing agreed services and abandoning them by moving to Hawaii.
Little Sunshine’s Enterprises Inc. complaint against its franchisees
In “Little Sunshine’s franchisees split off” the Missouri’s Springfield Business Journal reports:
Springfield daycare franchisor Little Sunshine’s Enterprises Inc. has filed federal trademark-infringement lawsuits against two former franchisees, and the defendants have responded with counterclaims.
Two suits in U.S. District Court for the Western District of Missouri name Springfield entities Paschke Enterprises LLC and Brodersen Wyrsch LLC as defendants, and seek a combined $200,000 for alleged trademark infringement by the franchisees, which have since dropped the Little Sunshine’s name by court order.
“They initiated a cooperative royalty strike,” said Little Sunshine’s Enterprises owner Rochette Dahler, claiming the franchisees in August stopped paying her company’s 6 percent royalty fee, which amounted to $2,500 to $4,500 per month.
Paschke Enterprises operates Storybook Children’s Academy in south Springfield, and Brodersen Wyrsch operates Pinnacle Children’s Academy in Rogers, Ark.
Rochette Dahler personally operates two Little Sunshine’s Playhouse centers and franchisee Joyce Harrington runs the third location. Dahler founded the concept in 2002 and began selling franchises in 2005.
Franchisees’ complaints against Little Sunshine’s Enterprises Inc. & Rochette Dahler
The counterclaim filed by Paschke Enterprises makes several claims against Dahler:
That “…Dahler was not available to assist with the operation of the facilities, that she moved to Hawaii and was not available to provide support, and that she made false representations regarding Paschke Enterprises’ Cardinal Street location.”
That Dahler “misrepresented the number of children that would be enrolled in both locations as 80, when in fact the maximum licensed capacity was 72.”
That Dahler “misrepresented income generated from certain government programs, including subsidies for low-income families, food reimbursements and grants, which were all unavailable at the Cardinal location.”
That Little Sunshine’s Enterprises “failed to live up to the franchise agreement terms by failing to send an experienced school administrator to the Cardinal location for a week before and two weeks after it opened; failing to assist with grant writing; and failing to make Little Sunshine’s corporate staff accessible.”
According to the Springfield Business Journal article, the counterclaim alleges that the Cardinal location “has never made profit and has experienced substantial losses since beginning operation.”
Ain’t no sunshine when she’s gone…
Franchisee Paschke claims to have invested $435,000 in the once-franchised daycare location and has eight years remaining on a $10,500 monthly lease. However, her ex-franchisor and bitter courtroom enemy Dahler said she has signed a contract to purchase the land and building occupied by Paschke Enterprise’s day care from the landlord Tillman.
Hell hath no fury like a preschool teacher – or franchisor – scorned.
ARE YOU FAMILIAR WITH THE LITTLE SUNSHINE’S PLAYHOUSE & PRESCHOOL FRANCHISE? SHARE A COMMENT BELOW!
Franchise Food Fights
February 3, 2010 by author · Comments Off
Franchisees and Franchisors go to war over discounting, advertising.
Marketing strategy and use of advertising funds has always been an area of heated debate between franchisors and franchisees, especially in the foodservice segment of franchising. The recession, declining sales and a trend toward deep price discounting and product giveaways has heated the debate past the boiling point for many franchise organizations. Some franchisees are banding together and publicly voicing their discontent, while others filing lawsuits against their own franchisors to protect their interests.
The structure of the franchisor-franchisee relationship makes conflict nearly inevitable. Franchisors generally receive their income in the form of royalties paid as a percentage of their franchisee’s gross sales… regardless of whether those sales are generating a profit for the franchisee or not. Franchisors can make money on a promotion that drives top-line sales even if the franchisee is losing money on every sale. Additionally, franchisors that are publicly traded are under constant pressure to increase their revenue, not the franchisee’s profitability.
Franchisees, whose advertising contributions fuel much of the systems advertising, are constantly questioning the franchisor’s motives. Lately, many have joined with their fellow franchisees to make their displeasure heard and to put pressure on their franchisor by any means possible.
BURGER KING: Is BK Punishing Franchisees With Lawsuits?
BURGER KING Franchisees Sue Over $1 Cheeseburgers
QUIZNOS: Franchisees Lost $2.25 per Sub on Giveaway
QUIZNOS Franchisee Blasts HQ’s Coupons and Discounts
Franchise Owner Claims It’s “Impossible to Make Money” With Quiznos
McDonald’s
McDONALD’S: What Franchisees Make on a $1 Burger
SUBWAY: What Do Franchisees Make on $5 Footlongs?
LITTLE CAESARS: What Franchisees Make on a $5 Pizza
JANITORIAL FRANCHISE ISSUES
February 3, 2010 by author · Comments Off
Starting a business of buying a really bad job?
Jani-King (#8). Jan-Pro (#11). Stratus Building Solutions (#13). Vanguard Cleaning Systems(#30). ServiceMaster (#30). Bonus Building Care (#32). And Anago Cleaning Systems (#49).
Entrepreneur magazine has named 7 commercial cleaning franchises in the top 50 positions of its 2010 Franchise 500 rankings. (Coverall, which hasn’t participated since 2007, would have made 8). With low cost of entry, (often) guaranteed cleaning accounts and some of the most aggressive franchise advertising in the industry, janitorial franchises will surely continue to recruit many new franchise investors despite (and maybe because of) these tough economic times.
Are you starting a business or buying a job?
The Commercial Cleaning segment of franchising has long been a target of criticism as promoting buy-a-job scams that especially target unsophisticated, minority and/or immigrant buyers. In fact, the FTC and Maryland Attorney General issued a guide to commercial cleaning franchises. Here are some of our recent posts discussing the complaints, allegations and controversies around janitorial franchises.
FTC Guide:
FTC Guide to Buying a Janitorial Services Franchise
Jan-Pro Posts:
JAN-PRO: Janitorial Franchise Warning
JANI-KING Posts:
JANI-KING Franchise Complaints
Other Janitorial Franchises:
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
