If ever there were a group in need of an economic bailout, it would be the hundreds of victims of the most blatant franchise scam in recent history: Cuppy’s Coffee. Just in case any government official or agency cares (why start now?), there are three distinct groups of victims struggling to recover from their own financial Katrinas:
Cuppy’s Coffee “Depositers”: As many as 100 or more individuals paid upfront construction deposits ranging from $29,500 to more than $100,000 that were to be returned if they failed to find a location or secure financing for the project; however, when they requested their refunds they got nothingbut a runaround.
Cuppy’s Coffee “SNO-ed” Franchisees: Dozens of Cuppy’s Coffee depositers who were able to secure funding commitments from lenders for their $150K – $300K investments ended up in the industry category of “Sold Never Opened” (SNO). Since the Cuppy’s construction entities (Elite Manufacturing, Supreme Building Technologies) were more efficient at collecting payments than paying subcontractors, fulfilling commitments, not getting sued and avoiding bankruptcy, many SNO-ed franchisees ended up with unfinished sites, liens on equipment they paid for, massive debt and no coffee shops.
Cuppy’s Coffee “Orphan” Franchisees: The final group of Cuppy’s Coffee victims consists of those who somehow battled through the process, incurred extra expenses of $100,000 or more, and somehow managed to get their cafe or drive-thru unit opened despite the fact that the parent company and related entities have disappeared and the corporate officers seem to be in hiding. Of course, the challenges facing these businesses are enormous, as they are burdened with extra debt and expenses while receiving none of the franchise support they were promised.
Despite the odds, orphaned Cuppy’s Coffee continue to open somehow. Some recently opened locations include:
Cuppy’s Coffee – Wilmington, DE Claudia & Alan Robbins managed to open in November, 2008.
Cuppy’s Coffee – Eagle, ID Franchise owners Larry and Marci Addleston opened their cafe December 8, 2008
Cuppy’s Coffee – Clawson, MI Franchise owner Steve Ott opened January, 2009
Cuppy’s Coffee – Mansfield, OH Franchise owner Bill Lewis celebrated his Grand Opening February 6, 2009
[Photo, right, Claudia Robbins promoting her Cuppy’s Coffee in Wilmington, DE with a local team mascot. Claudia is the one on the left. Photo courtesy Cuppy’s Wilmington]
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