October 3, 2008
Kindergarten teacher Joshua Miranda and his wife, nurse Clara Miranda, dreamed of opening a Cuppy’s Coffee cafe and operating a Cuppy’s Coffee mobile unit in Apple Valley, CA. They sent refundable deposits totalling $42,000 to Cuppy’s Coffee affiliate Elite Manufacturing and to Advantage Leasing for the mobil unit. After their financing did not pan out, they were unable to get their refundable deposits returned. Elite Manufacturing has defaulted on their refund agreement, and Advantage Leasing, who is suing Elite, refuses to return the Miranda’s $6,000 until they can get payment from Elite Manufacturing.
Joshua Miranda shares his story with UnhappyFranchisee.com, and offers advice to would-be franchise owners.
UF: What’s your background, Joshua? What were you doing prior to seeking your Cuppy’s Coffee franchise?
Joshua: I’m a kindergarten teacher. Clara, my wife, is a nurse at a convalescent hospital. We are leaders at our jobs and were convinced that as leaders we had the skills to hire managers and run a café business while maintaining our current professions.
UF: When did you decide you wanted to own your own business? Describe the process you went through to determine which franchise to buy.
Joshua: We started with the idea of investing to make extra money. The idea was to use the bank’s money and invest it. So, we opened an equity loan to start investing. We had made a previous real estate investment that went bad; we lost money. We started searching on the Internet and came across the Franchise Gator. Franchise Gator showed all this great opportunities to start a business.
We also had read an article that most rich people were business owners. I made inquiries to several franchises. They all called back including Cuppy’s Coffee. However, Cuppy’s made the most promises and made it sound so easy that I went with them. I didn’t bother to check them out because they were members of the Better Business Bureau, had the seal of the AAFD with the highest score ever achieved for fair franchising standards and were recommended by Franchise Gator, an internet service with guidance and information to franchise seekers. I also took the time to visit a Cuppy’s Coffee store. The owner gave me all the encouragement to go with the business franchise.
UF: How did you first learn about the general concept? What did you find appealing about this type of business?
Joshua: Coffee business here in California was booming. Other coffee businesses were making so much profit, so, we decided to sell it too.
UF: How did you first hear about your specific franchise? What attracted you to the company?
Joshua: The Franchise Gator recommended and introduced us to Cuppy’s Coffee. Cuppy’s was a member of the Better Business Bureau and had the seal of the AAFD with the highest score ever achieved for fair franchising standards. I also took the time to visit a Cuppy’s Coffee store. The owner gave me all the encouragement to go with the businesses. What was also attractive to us is that they stated that they did not charge royalty fees: a very appealing offer to a starting franchisee with limited assets.
UF: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Joshua: A contact person got in touch with me. He answered all my questions very politely and was very encouraging. Every time we talked, I ended up with the feeling that I was going to do great and that things were going to be so easy because the franchise will be with me 100%. They stated that my profits will run from $1,500.00 to $5000.00 per day.
UF: How much have you invested with Cuppy’s Coffee & Elite Manufacturing?
Joshua: We have $42,400.00 invested, total. $37,900.00 toward the Cafe, $6,000.00 toward the Mobil Unit and $1,500.00 Credit.
We applied for the Café Franchise in August 2007. We signed a purchase order in September, 2007 and sent $37,900.00 to Elite. We also signed a lease agreement in October 10, 2007 with Elite and Advantage Leasing Company for the Cuppy’s Coffee Mobil Unit. We were going to operate a Café and a Mobil Unit. We had to send Advantage $6,000.00 as a down payment for the Mobil Unit. Advantage in turn sent Elite $28,327.00 to start building the unit.
UF: How was the company’s training and pre-opening support. Was it a positive experience?
Joshua: I never got into training. As soon as they got my down payment, the calls to me stopped. They became very hard to reach, and when I was able to talk to someone, they were rude.
UF: What marketing and promotional guidance, programs & support were provided? Were they effective? Why or why not?
Joshua: They stated that my financial pre-qualification by them looked very good and was directed to start looking for a business location. They directed me to get contact names and numbers from the prospect business locations that were qualifiers by a ranking sheet they provided me through e-mail. They did not call them as they had promised. I started calling them myself and was able to narrow down a location that I was interested in. The owner provided me with a lease. I e-mailed it to Cuppy’s. They in turn, told me that a lawyer had to review it. They introduced me to a lawyer stating that the lawyer was going to charge to prepare the lease. I made a consultation with the lawyer over the phone but there was never a lease prepared. Now, the lawyer is charging me $1,500.00. I turn to Cuppy’s for answers and never returned my calls.
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