Lady Bug Pest Control is a small eco-friendly franchise company that has generated a complaint from one of its few franchise owners.
Franchisee Lisa Alfaro claims she was sold a Lady Bug Pest Control franchise despite the fact that she did not qualify for the proper license.
She claims it was an “illegal set up” and now she feels like she is in a David vs. Goliath battle with her franchisor.
[ADMIN note: This post was originally published December 13, 2012. We invited Lady Bug President Lisa Miller to respond to Ms. Alfaro's complaints when this post was first published. We didn't receive a response.
On 1/3/13, a law firm representing Lady Bug Pest Control demanded that we take down this post as they claim it contains "false and defamatory" statements (they wouldn't say which ones). See their letter here: LADY BUG PEST CONTROL Franchise Warning
See our response here: LADY BUG PEST CONTROL Attacks UnhappyFranchisee.Com, Fails
We've added language to this post make it clear that Ms. Alfaro's claims are her own and not that of UnhappyFranchisee.com's. We've added language to make it painfully clear that OUR statements are just our opinions and are neither fact nor the result of divine revelation :)
We once again invited Ms. Miller to provide clarification, comment or rebuttal to our opinions or Ms. Alfaro's complaints]
Are you familiar with the Lady Bug Pest Control franchise? Please share your opinion below.
The first was the (in our opinion) crass, get-rich-quick feel of the franchise pitch.
[The pile of money "Franchises How Fortunes Are Made" graphic is from the Lady Bug Pest Control web page. The characterization of it as "crass" with a "get-rich-quick" feel is solely our subjective opinion]
The franchise page has a tacky (in our opinion) graphic with the words “Franchises How Fortunes are Made” superimposed over a pile of money.
The second warning sign was the (in our opinion) get-rich-quick approach of their area development structure and their (in our opinion) blatant “earnings claim”:
The minimum investment for an Area Representative is $100,000 for a territory for a population of 3,000,000, and another $100,000 available for working capital to grow your franchise system.
Within the Lady Bug System, an Area Representative Franchise Owner receives 50% of each franchise fee and 50% of the royalty income. As an example, which is for explanation purposes only, not a guarantee, the current franchise fee is $30,000 per unit and the royalty each unit owner pays up to 10% of their gross sales.
For each unit opened in the development territory, the Area Representative would receive $15,000 (50% of the $30,000 franchise fee). By selling 35 units in this territory, an Area Representative would receive 50% of these franchise fees, and then the Area Representative would also receive 50% of the royalties. Each unit generally starts off by paying a royalty of 10% of their gross sales which equals a 5% royalty to the Area Representative.
As franchisee’s increase their revenue, the Area Representative’s royalty stream can increase each year. Area Representative’s also operate their own unit, generating even more income annually. Within 5 -10 years, depending on the Area Representative’s own unit growth, and the success of their franchisees, the financial rewards could be very substantial.
So it struck us that (in our opinion) Lady Bug Pest Control may be looking for people who want to make a “fortune” in pest control by buying a territory for $100,000 then selling 35 franchises that will bring in $525,000 in franchise fees for them.
Unfortunately, (in our opinion) this kind of structure can be a disaster both for the Area Representatives, who are desperate to sell enough franchises to recoup their investments, and the franchisees, who feel they got the hard-sell and little-to-no support. We’re not saying this is the case specifically for Lady Bug Pest Control, just that we’ve seen it happen in the past. And it’s just our opinion, anyway, not a statement of fact.
Expressing her own personal opinion which is not necessarily shared by UnhappyFranchisee.Com, Lady Bug Pest Control franchisee Lisa Alfaro writes:
I am currently a franchise owner of Lady Bug Pest Control Specialists trying to get out of a bad franchise.
There are some very questionable business practices.
One is that the franchise was to provide insurance because I did not have the proper license.
I contacted the insurance company for Lady Bug and found out that if I had a claim they would not have covered me.
Research and get the proper kind of attorney. I got an attorney to review the contract and little did I know I should have had an attorney who knew pest control law. It was an illegal set up.
Right now I am David and Lady Bug is Goliath.
If you’re thinking of buying a Lady Bug franchise, maybe you’d be better off flying away home instead.
But that, of course, is just our opinion… not a statement of fact.
ARE YOU FAMILIAR WITH THE LADY BUG PEST CONTROL FRANCHISE OPPORTUNITY AND LISA MILLER? SHARE A COMMENT BELOW.