TSFA's Open Letter to Quiznos' CEO Brenneman

Posted Mon, 2008/03/24 - 12:43 by Janet Sparks

DENVER (Blue MauMau) - On March 14, CEO Greg Brenneman made his weekly voicemail announcement to franchisees as a "State of the Quiznos System." But on Friday, the Toasted Subs Franchisee Association challenged his remarks in a letter (attached below), asking him for clarification on some of the claims made. The letter was received anonymously by Blue MauMau. Not only do they question the company's past assertion that franchisee profitability is up 60 percent and that many costs are down, but also his remarks regarding litigation. "Mr. Brenneman, we are also concerned about your attempt to belittle franchisee effort to pursue their rights in the court system." They remind him that he was "brought in" as a direct result of the lawsuits and the efforts of the TSFA.

Questions Quiznos' Calculations on Costs, Rebates

The TSFA letter raises a number of issues regarding Quiznos' method of calculation when determining cost reductions and discounts stating, "This apples-to-oranges comparison is confusing and deceiving." But the independent association goes farther than that in questioning Brenneman's claims that as commodity costs have increased over 10 percent this past year, Quiznos has been able to bring prices down on their "market basket of goods." They present the company with a spreadsheet comparing food prices from December 2006 to March 2008, showing the actual price of food has gone up.

While Brenneman claimed in his voicemail that 100 percent of cash rebates from food and paper vendors are returned to the franchise owners, TSFA questions if that includes all vendors or just independent third party vendors. They ask how much markup on products by American Food Distributor (AFD), a main vendor owned by Quiznos, is given back to franchisees, and how much profit is the company making on those markups.

TSFA also questions the company's claims that their pricing is "very, very competitive," wanting to know what it is based on, and asks, "How do you know these things such that you can represent them as fact to the nearly 5,000 Franchise Owners in the United States." Other issues raised are concerning costs on music and bookkeeping services, as well as delivery start-up costs that increase the cost and liability for franchisees.

Brenneman Scolded for Company's Litigation "Spin"

In its letter, the TSFA reminds Brenneman that litigation doesn't just happen. ". . . it becomes necessary only when one party . . .chooses to act with legal indifference to the rights of the other party." The franchisee letter chastises him, and executive counsel Rich Emmett and its PR firm, for "spinning" what the class action lawsuits are all about, saying their efforts are unprofessional and undermines Brenneman's January 2007 "posture as a voice of change at Quiznos." They state, "The hundreds of stores that close every year are more damaging to the brand than any story about litigation in the press."

In closing, TSFA also reminds Brenneman that he was brought in to bring accountability to corporate Quiznos, and "to clean house." In their letter they also remind him he had acknowledged early on that food costs, as a percentage of revenues, were out of line, that there was a lack of communications with franchise owners, and menu and operations systems were overly complicated.

Although TSFA does agree with Brenneman on his voicemail assessment that "we still have a long way to go," it gives its concerns that Quiznos' one-way, one-sided line of communications does not fix the problems. "These voicemails have turned into more of a sales pitch rather than the informational tool they were meant to be in the first place. We only hope you have the courage to honestly answer these questions and share them with all Franchise Owners on MyQuiznos.com."

Blue MauMau expects a response from Quiznos regarding the TSFA's letter, and will publish it upon receipt.

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178 Comments

Still waiting for Q's response by Guest

Submitted by Guest on Thu, 2008/03/27 - 07:18.

They must have their entire legal team and corporate cronies figuring out how to further confuse and double-talk these important issues.

It's going to take by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 14:55.

more than a letter to clean up what the Schadens have created. A mess in the franchise world. Wish I knew the scoop on them before I went into business. I would of ran away from it. Like I would advice anyone going in the franchise world knowing they are connected with it , run don't walk.

Bravo by Guest

Submitted by Guest on Mon, 2008/03/24 - 14:57.

THANK GOD there is an organization like the TSFA to ask the "HARD QUESTIONS".

Will he reply? by Guest

Submitted by Guest on Mon, 2008/03/24 - 15:00.

The "old" regime ignored these kind of questions hoping it would all go away (which it didn't). Lets see how Mr Brenneman and his crew handle this.

A few quick comments by Guest

Submitted by Guest on Mon, 2008/03/24 - 15:08.

Below are a few follow up comments on the TSFA's open letter to Quiznos:

1. You should look to the distribution costs rather than the mark up. While Quiznos may have sworn off marking up items they clearly continue to add a distribution fee. This is never questioned by franchisees or mentioned by the company. It is the loophole that allows them to claim that they don't "mark up" products, while continuing to get paid for distributing them. My guess is that this mark up accounts for almost 7 points of food cost. While the price structure Quiznos charges for their sandwiches are the highest in the competitive set, their food costs do not reflect it. Subsequently owners get the double penalty of having to charge a high price as compared to the competition, while suffering artificially inflated cost of sales.

2. Breneman was not brought on because of the TSFA! If you or anyone else truly believes that they are delusional. He was brought on to take the company public, period, end of story. Get a grip. He invested a substantial amount of capital believing that the path to Wall Street would have been much quicker and surer. Now JP Morgan is driving this bus along with the Schadens. Everyone else is just a long for the ride and hoping that the pay day is sooner rather than later. Monitoring voice mails and demanding action based on moral authority might let off some steam, but it is accomplishing little else. The only thing that will turn this brand around are positive same store sales, a solid franchise base of reasonably profitable owners, and a clearing of the majority of legal threats. Quiznos is actively working on all of these fronts, and by most accounts making headway on a slow but steady basis. Hopefully the financial markets will turn around as well.

3. Despite these posts Q continues to sell new franchises at a rapid clip and open up new stores across the country. The total number of stores has not decreased significantly despite the rash of closings. This trend is expected to continue.

4. Quiznos will be highly focused on marketing and delivery to increase sales. They know that they must substantially increase unit volumes to ever have a shot at unit profitablity. Additionally they get paid royalities on thes revenues, and receive the food distribution fee on the product. Don't expect them to vary from this highly profitable model any time soon.

One last note. Time is on their side. This is still a very profitable cash cow. Breneman has reduced costs at every turn, and continues to deliver excellent returns to the owners. They can play this game for a very long time. Their pockets are just getting deeper with each passing day. Given this reality you might consider altering your tactics.

To date claiming credit and demanding action is getting you no where.

Calling them OUT! Quiznos by Guest

Submitted by Guest on Mon, 2008/03/24 - 15:19.

At least with the Internet and Blue Mau Mau and some good reporting by Franchise Trade Journalists like Janet Sparks, the opportunity is presented to call the ZOR out for a public discussion. Quiznos has been successful as the other big ZORS like MBE-UPS in ignoring the independent franchisee associations and their legitimate concerns --and handpicking their own representatives whom they can control. This is Bremerman's first experience with a franchisor, isn't it?, and I'm sure he realizes that he inherited the sins of the fathers, so to speak. He can't erase the GREED and the abusive exploitation of ZEES that created what Quiznos is today. Quiznos has to continue to encroach and turn and churn perhaps to survive and expand internationally! 'Tis the BEAST that must continue to cannibalize its own franchisees to protect its profits for its owners.

Make them default everyone by Guest

Submitted by Guest on Mon, 2008/03/24 - 20:41.

The below guest is correct. Forget the media--the public cares even less about you than the suits at Quiznos do. Guest nailed it when he said to form your own buying group and start getting your own goods. They will send all sorts of nasty default letters, but if the group is large enough you can safely laugh at it. WHa are they going to do, close everyone? Good luck sellingf ranchises when 1000 shops close at once. Forget the pipe dream of an IPO cash out. The last thing these greedheads want is 10 more years of fighting with disgruntled franchisees. THey want the big paycheck at the end of the line. Anything that speeds that up they will get behind. Anything that slows it down is krypotonite.

Quiznos to respond to TSFA letter by Guest

Submitted by Guest on Mon, 2008/03/24 - 20:46.

"Blue MauMau expects a response from Quiznos regarding the TSFA's letter, and will publish it upon receipt." If Q responds, it will be a first. I guess they are coming to the realization, that ignoring the real problems for so long, have not made them go away ....... Thank you Janet Sparks - you made my day !

Honestly by Guest

Submitted by Guest on Fri, 2008/03/28 - 19:15.

not to say Quiznos doesn't deserve the skepticisim, but has their new CEO been given enough time to even make any meaningful changes? Perhaps it is America's materialistic "me want now" attitude, but these things take time.

Did you read the pdf? by Paul Steinberg

Submitted by Paul Steinberg on Fri, 2008/03/28 - 22:49.

In reading the posts for this thread, I am struck by the fact that none of the anonymous posts criticizing BMM answer any of the specific points raised in the actual letter.

I suspect that many have not even bothered to read the letter, though the starting point for logical debate would be to read the initial statement.

Ms. Sparks has posted the letter as a pdf attachment. After reading all the discussion about "Privacy Act" and lawsuits for disclosing individuals' personal information, I was puzzled enough to read what was in the actual letter, and when I did so I was impressed by the businesslike tone and construction of the TSFA communication.

Whether or not you agree with TSFA, the letter raises specific operational concerns. While there are a few gratuitous swipes, for the most part the letter reads like the same questions which would be discussed at a Board of Directors or shareholders meeting--in other words, legitimate business discussion.

Some of the issues are rather arcane matters, but none of them relate to any personal information of anybody--franchisee or otherwise.

Attacks on BMM or on people's motivation in posting (by individuals who won't disclose their own names, let alone motivation) coupled with the red herring of "Privacy Act" lawsuits are strong indicators that the opponents are not able to rebut the points raised in the letter.

Whether the quality of debate is due to the opponents' not having any knowledge of the company or due to their not being any objective data to rebut the TSFA's premise is unclear.

I read the Quizno's "white paper" some years ago, and while some of the conclusions were questionable, the franchisor demonstrated that it is capable of presenting an empirically-based rationale for its actions. Therefore, I suspect that the postings on this thread are probably by people who are not familiar with the company and we should not jump to the conclusion that all of the points in the TSFA letter have merit.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

Re: A few quick comments by Guest

Submitted by Guest on Fri, 2008/05/09 - 16:08.

A few quick rebuttals: See *** below: Guest wrote: 1. You should look to the distribution costs rather than the mark up. While Quiznos may have sworn off marking up items they clearly continue to add a distribution fee. This is never questioned by franchisees or mentioned by the company. It is the loophole that allows them to claim that they don't "mark up" products, while continuing to get paid for distributing them. *** Q marks up products with the profits going to AFD, their affiliated food company. The independent regional food distributors are paid a "per case" distribution charge which is added on to their cost from AFD. Bottom line - the owners are overcharged vis-a-vis competitive market pricing. 2. .........He was brought on to take the company public, period, end of story. Get a grip. He invested a substantial amount of capital believing that the path to Wall Street would have been much quicker and surer. ............The only thing that will turn this brand around are positive same store sales, a solid franchise base of reasonably profitable owners, and a clearing of the majority of legal threats. Quiznos is actively working on all of these fronts, and by most accounts making headway on a slow but steady basis. *** With 68 items of litigation facing Q, what underwriter is going to touch this IPO ? Positive SSS - sales have been on a steady y-to-yr decline for 3 years, goin on four ! 3. Despite these posts Q continues to sell new franchises at a rapid clip and open up new stores across the country. The total number of stores has not decreased significantly despite the rash of closings. This trend is expected to continue. *** Net store increases have stalled - in fact 2007 had NEGATIVE store growth - a far cry from the 10K goal in 3-5 yrs. 4. ............. They know that they must substantially increase unit volumes to ever have a shot at unit profitablity. Additionally they get paid royalities on thes revenues, and receive the food distribution fee on the product. *** Once again SSS, have been on a steady y-to-yr decline for 3 years, goin on four ! One last note. Time is on their side. This is still a very profitable cash cow. Breneman has reduced costs at every turn, and continues to deliver excellent returns to the owners. *** JPM/CCMP did not buy in for Q's operating profits - they bought to do an IPO. So, time is really not on their side. Anyone can just google "quiznos problems", and read volumes of horror stories. To date claiming credit and demanding action is getting you no where. *** The TSFA attorneys are very capable, and inspite of their age, they will prevail, sooner rather than later.

Re: Honestly by Guest

Submitted by Guest on Sat, 2008/03/29 - 14:41.

GB has been at the helm of this company for 15 months now. When he took over, there was serious evidence of prolonged neglect and decay of the brand that needed immediate attention. For those who actually read the attached letter from the TSFA, the central point is the high food costs charged to the owners. While Q's officers continue to hold a large ownership position in the company owned food distributor (AFD), the situation will not materially change. I have personally spoken to a former GM of a national food distribution company in the Northwest, who confirmed the large delta in pricing between what AFD actually pays it's vendors, and what they charge store owners. He added "I don't know how these people sleep at night ?" Most large franchise companies have formed food co-ops to establish competive bidding in order to provide fair market based pricing to the stores. Unless Q takes this step, the slide in the number of stores and their reputation in the franchise world will continue to decline. That's just the long and short of it from a longtime store owner ........

Quiznos by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 15:50.

is the poster child for all bad zors. Wish someone could stop their unethical business practices. It kills me to see so many people abused by such greed.

Actually it should be a UPS man eating at a Quisno's. A double whamy. Take care of 2 bad ones and put it on a poster.

What's happening now by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 15:43.

in the world of franchising is they are targeting people who are more educated. If not in college but life. People who have had some success in life. They are taking advantage of good people who have been responsible all of their life. What happens is people are communicating their experiences on the internet. Talking to the media. Which more people need to do. Get our stories out to warn the public. This is not anti-franchising talk. It is to inform people the wrong doing in the business.

People who have any sense will share with others their experiences. Targeting people with some intellegence will not just sit back and take it.

I talked with another wise man today and what he says makes sense. You target more educated people then you are more likely to tell others via internet or the media to tell people the truth of their experiences. I have to believe there will be justice because of this.

Sure we have to take responsibility for some of the things we did wrong. But we have to tell others what they have to do to protect themselves. If you never had been in the franchise world who would think such bad people would purposely have a scheme to rob us like they did. Writing on the interenet is a resourse we have to tell our stories and warn the person who doesn't know how much due diligence is involved. Tell them about franchise lawyers. Not just any franchise lawyer but a killer franchise lawyer that will help you with killer due diligence. This is honorable and not whining!!!

Brenneman and This Quiznos Mess by Guest

Submitted by Guest on Mon, 2008/03/24 - 16:20.

When Mr. Brenneman came on board the sinking Titanic ship named Quiznos, most franchise owners were estatic. Now after 15 months, we are no better off. The goal to put an extra $15 thousand dollars in each owners pockets each year is laughable. Sales are down, transaction counts are down and we hear each week how delivery is the answer out of our mess. The problem is that delivery is nothing more than throwing good money after bad. Delivery is truly a nightmare. Now we hear that Quiznos is now making "legacy" vendors bid for our food business. I would bet dollars to donuts that Rick Schaden is getting back-door rebate money in his pockets at the expense of franchise owners. Can anyone out there enlighten me why any company would have legacy vendors who did not bid on business? I'm disgusted with this sleazy organization.

Guest - Pardon me...I'm a bit slow. by Dan Maizner

Submitted by Dan Maizner on Mon, 2008/03/24 - 16:26.

Guest - Pardon me...I'm a bit slow. I understand most of your critique of the TSFA but do not understand your proposed solution. You are heavy on tactical analysis and provide some good minutial points but you are light on how to correct the overall strategy.

You seem to indicate that TSFA management is employing tactics based on an impossible-to-obtain overall strategic goal. Rarely will even the best executed tactics overcome a flawed strategy (I know what some of you are thinking…Don’t even go there.)

If you were the "Head of Strategic Planning" for the TSFA, what would you change strategically? If you were a strategy consultant to the TSFA, what advise would you give the leadership based on your knowledge and observations of the overall Quizno’s situation?

Please advise.

Also, you state:

"The only thing that will turn this brand around are positive same store sales, a solid franchise base of reasonably profitable owners, and a clearing of the majority of legal threats."

Question: What do you mean by "clearing of the majority of legal threats"?

"Time is on their side. This is still a very profitable cash cow...They can play this game for a very long time. Their pockets are just getting deeper with each passing day...taking credit and demanding action is getting you no where."

Question: What is TSFA's tactical alternative to "demanding action" if TSFA’s implied mission is to get the franchisor to first recognize an independent voice and then pressure them to make substantive changes…changes of the type that you seem to personally endorse?

Who are you? by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 20:56.

I hate to be rude but you sound like an a__ h___!!!! Maybe you work for Quiznos or one of their other franchises.

You must work for the corporation by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 21:05.

You have never heard of some of the very wealthy going to jail? You do not sound like a wise person at all. You are in complete denial of the truth of what's going on. I am all for supporting good franchising. As long as it is a win win situation. If people are hurt in the name of greed it is not a success story. They might have money but they are empty inside. No class. Non-feeling SOB'S. The funny thing is they probably know it and don't care. They would probably kill their own mother for a buck. They will not go down in history as great men. You never know what will happen. What goes around comes around. It may take some time. But it always seems to.

Quiznos won't respond to specifics by Guest

Submitted by Guest on Mon, 2008/03/24 - 22:41.

The Quiznos spin doctors won't respond to specifics. They will say the "food cost" percent is lower than last year. They won't say that portions were drastically cut back and they went to cheaper quality meats. They won't say we had to raise our prices to lower the food percent. They won't address the fact that Subway's food cost percent is lower than Quiznos even though they sell at a lower retail price. They won't comment on their goal of putting an extra $15k into the franchise owners pockets last year. They won't comment that our food rebate dollars are less than last year and they did away with another program that put thousands of dollars into the bank account of many owners. They won't address the ridiculous comment that franchise owner profitability was up 60% last year. (outright lie) They won't comment on the fact that they screwed franchise owners on the POS system, delivery program packages, marketing materials, etc. Nope. They will just say that they are working hard to make franchise owners more profitable. They will pat each other on the back saying this guy in this department is doing so good and that guy will pass on accolades that so and so in another department is doing so well. The drill for the executive bunch is to sit in a big circle and pat each other on the back while Rick Schaden sits in the middle of the circle counting his money that he stole from franchise owners.

Quiznos Won't Respons by Guest

Submitted by Guest on Fri, 2008/03/28 - 02:37.

How can you defend the indefensible? Quiznos will not respond to the TSFA's questions because they know that TSFA is right and they are wrong. With the roll-out of the Sammies line, our menu is sooooo complicated now. It takes team members weeks if not months to learn receipes for sandwiches. Food costs are still out of line with the competition. The business model won't work on $2 Sammies. We don't have the customer base to crank out enough Sammies to change the profit dynamics at store level. (partly due to encroachment) How can Subway and Jimmy Johns be so much more profitable than Quiznos? They have low food costs and they keep their operations SIMPLE and easy to execute. Why would that business model not work with Quiznos? The answer is that it would work if the so called "dream team" executives would make no-brainer decisions.

And Do, you didn't know about by Guest

Submitted by Guest on Tue, 2008/03/25 - 17:51.

the Schadens because . . . ? Because you didn't do your due diligence? Or no one told you (common sense) that you needed to know? Or the FTC didn't bother to call and tell you? The SBA and the President of the USA forgot to clue you in that before you inivest with someone you DO, Do, check them out? You ask questions. You look for references. You investigate and explore. You didn't hire an attorney? You did hire an attorney and he didn't tell you? The franchisor lied to you? The franchisees lied to you? I know. It was a conspiracy. EVERYONE was out to get you! And they got you. What was it?

Answer Me This? by Guest

Submitted by Guest on Fri, 2008/03/28 - 19:23.

Why would any business want to air their dirty laundry in public? Do you honestly believe Q or any other company for that matter will want to dispute problems in the realm of the internet?

Operational Concerns by michael webster

Submitted by michael webster on Sat, 2008/03/29 - 00:05.

Paul, I agree that the letter raised some interesting operational concerns.

But I would not have put the operational concerns together with the remarks on the updates regarding the lawsuits.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Good Job Paul by Guest

Submitted by Guest on Sat, 2008/03/29 - 09:18.

It seems that the whole community is constantly commenting on issues that have nothing to do with the topic. I apreciate our community and I am continuing to find out how important it is to make the right comments, so I am not belittled.

Re: Answer Me This? by Guest

Submitted by Guest on Sat, 2008/03/29 - 14:45.

That answer is really quite simple. There is only one way communication between Q and store owners. Again, this is clearly outlined in the TSFA letter.

Tactical Answers by Guest

Submitted by Guest on Mon, 2008/03/24 - 17:05.

This may help: 1. Hire a competent lawyer. As a franchise owner I have been in numerous legal actions and have been succesful by utilizing the best talent out there. I know from personal experience that there are attorney's that have done battle with Quiznos and come out on top. They are not publicized on these sites as they are strictly prohibited from doing so as part of their settlements. Do some research as to who has been in arbitration with Quiznos in the last several years. Get there names and take their advice. I am not a legal professional, but I do take direction from proven, highly competent professionals very well. This may require patience, and they may tell you that you don't have a legal standing as you are currently situated. Either way get the best help you can find and leverage the advice. 2. None of the current legal cases have a prayer. They are poorly constructed and will only continue on if you get lucky in some very liberal state. Quiznos will appeal each and every case and then settle out of court at the last minute. In the end they have already set aside more than sufficient funds to cover all of these losses. To them it is an acceptable cost of doing business on the way to the public market. 3. I do endorse your desired outcome, but your tactics to date have been ineffective. Again, legal councel would have had you set up your cases differently from the get go. In order to fix the system I think you may have to go back to the beginning. Example - form a buying group, use it. Let them default you and try to close you down. Then bring suit for the right to use the buying group. To date you claim to be getting ripped off but you have not taken the steps in good faith to prove it.

Re: Who are you? by Guest

Submitted by Guest on Mon, 2008/03/24 - 21:50.

Do D - I cannot figure out how on earth you came to that conclusion ? Even though I am posting as guest to protect my identity, I am a long time Q FO's and a card carrying, dues paying member of the TSFA. My point was Q has ignored us for so long and pretented we did not exist, or were a small group of disgruntled owners. By responding to the TSFA letter, all that may change - if ever so slightly ........

Boy do I feel stupid by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 23:06.

You are a QFO. You couldn't know all that with out being one. I am so sorry. I have little tolerance for Quiznos knowing all the horror stories. Plus we bought into another Shcaden scam. 123 fit. He has another franchise called Smash Burger. One franchise after another. They are very bad people. I hope your doing good.

Mr Tactic's addresses do diligence comments by Guest

Submitted by Guest on Tue, 2008/03/25 - 14:17.

Dear Mr Do Diligence, I have noticed from your other postings that it is generally hard to follow your logic or to comprehend exactly what it is that you are trying to say. You seem to misconstrue virtually everything everyone else says, and then post a very emotional response. You are welcome to go through life acting on your emotions as evidenced by your comments, but I think some basic business logic would better serve you. People generally go to jail for breaking the law. As far as I know the executives at Quiznos can only be accused of reaping windfall profits on the backs of the franchise owners. I believe that they legally disclosed their intent to do so in their UFOC, and therefore met the legal hurdles required. I have made and lost mamy hundreds of thousands in this game, and know what it's like to be in debt with no light at the end of the tunnel. I also know that taking responsibility for your mistakes is the first step in recovering from these losses. No one is going to make you whole, you have to get back in the saddle and work your way through it. Best of luck in all of your endeavors.

I already commented how by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:16.

how STUPID I Was! Ignorant, dumb, niave, idiot, totally a sucker. Do you honestly think I would of bought it if I knew what I know now? Why do you think I post here.

It is a Conspiracy! that enables and emboldens by Guest

Submitted by Guest on Tue, 2008/03/25 - 18:34.

Yes, it is a conspiracy that has become public policy and the status quo. We do a disservice perhaps to our children to not expose them to political science in their early years and to teach them that all is fair in love and war and business and that government is not to be trusted because they so often protect only the special interests. Franchising serves the interests of the franchisors, the bankers and lenders, the Landlords, the developers and the investors, and the local and federal government, and franchisee fodder just fades away into the sunset in failure. Franchisees are intentionally diverted from the odds of success or failure of the concept and the ROI because of the red herring of the UFOC. There is a conspiracy to hide the odds of failure of franchise investments from that portion of the public who buy franchises. Just as slavery and strike breaking and child labor and segregation and many other evils were protected by the rule of law, the regulation of franchising is a creature of the special interests and is the ugly status quo protected under the rule of law. Not hard to understand that all of those who benefit from the present regulatory policy jump in here to defend what is indefensible. It is, of course, only the franchisee, who is merely a resource of the franchisor, who takes the risk and who loses everything to prove the franchisor's concept in the marketplace. Franchisee bones can be picked with immunity and impunity under the present state of the law, and "yes" franchisors do lie and spin because they know that they can bring you to sign the contract, underlain by the UFOC or the FDD, where all the lies and the spin can then be disclaimed. They know that once you sign the contract, they are home free! They are enabled and emboldened by the state of the law. The malicious legal trap that is set for franchisees under the law is not anything to be proud of. Not surprising that the rule of law is about money and not about fairness and justice and principles. You try to shame us for whining but it is you who should be ashamed of your complicity in this ugly status quo that supports rampant fraud. Some say the Congress is the biggest whore house in the country but I think the ABA has the classiest and the most expensive whores around who always deliver what they are paid for.

By the way by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:49.

All the wise men on BMM already went over everything you just did. Please I am re-living what I did 2 months ago. Do you think it is easy to learn how stupid you were in the first place and admit it to the whole world. I will do it again if someone happens to read our discussion and be saved from financial hell.

I agree. To me that is the by Guest

Submitted by Guest on Fri, 2008/03/28 - 19:50.

I agree. To me that is the fundamental problem with blogs! All these bloggers have something to say, and they fall into a couple of categories... 1. Self promoters - trying to sell their services, promote their website, etc... 2. So called experts - they are experts because they say they are, and other bloggers agree with them 3. The random blogger - just comments to vent, feel smart, enjoy stirring the pot, etc... 4. The general public - a possibly naive person that is just trying to find out information 5. Corporate PR/Marketing - trying to put their spin on it 6. People that are ACTUALLY, DIRECTLY involved - whether venting, ranting, trying to get even, looking for someone to "be on their side" 7. People truly trying to help... Many, not all of these bloggers, are driven by pure self interest. The "consultants/experts" always DEMAND that companies publish all contracts, discuss business practices, air dirty laundry, respond to every rant, and this is just RIDICULOUS! Business in America is NOT conducted that way. Oh and by the way, in blog most speach is "protected" (very sarcastic)! 1. No proof or facts are required. Or only the facts that I want people to talk about or prove my point! 2. "Protected" free speech 3. No name - and yes I am posting this anonimously, I don't want to be banned or verbally attacked 4. The webmaster can censor what is added - but of course BlueMauMau would never do that... 5. And the webmaster can/does look at IP addressing to "see" who is placing certain comments - uhh see number 3 above 6. Little or no LEGAL repercutions

Privacy Act by Guest

Submitted by Guest on Fri, 2008/03/28 - 19:52.

Companies can't answer specific questions in this type of forum. They cannot give out anyones personal info. And when someone complains as a guest how do you defend that???

Laundry by michael webster

Submitted by michael webster on Sat, 2008/03/29 - 00:07.

Guest writes: "Do you honestly believe Q or any other company for that matter will want to dispute problems in the realm of the internet?"

Does it matter whether they want to or not? Gonna happen -best to have your say or get swayed away.

No place to hide. Anymore.

Michael Webster PhD LLB

Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Quiznoose is a bad example for this notion by RichardSolomon

Submitted by RichardSolomon on Sat, 2008/03/29 - 10:28.

Quiznoose's history reveals - to me at least - that they really don't give a tinker's damn who knows about what they choose to do. --

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Truth and Tactics by Guest

Submitted by Guest on Mon, 2008/03/24 - 17:29.

The truth is that tactics for franchisee associations like TSFA who are not endowed with great amounts of money are somewhat limited. But, at the moment, free speech is still a tactic that can be used to call franchisors out. We have to hope that the entire government and our elected officials haven't been purchased by the IFA and that someone will listen to the rising voice of franchnisees in this country. Even if franchisors don't answer the call and hide and use the courts and their superior position under regulatory policy, that is stacked against franchisees in and out of court and arbitration, to continue their abuse and exploitation, franchisees have to continue their protests and hope that there will be some kind of justice in the end. Quiznos makes no secret of the fact that they KNOW that regulatory policy and the law of the exploitive take-it-or-leave-it contract protects them in the courts. This is why they always loudly proclaim that franchisees lose in court; this, and the fact that they let the ZEES know that they will countersue when they are so inclined. It is because they have been able to stack the deck in the law that they have become so abusive and exploitive and greedy. Absolute power always corrupts and Quiznos is a good demonstration of the truth of this statement. They know that the average franchisee is just trying to survive and can't play the game on the court, in the court, and that the AAA doesn't arbitrate fraud. The name of the game is hard ball and franchisors have cornered the market in hard balls. Sure they settle now and then when it is the cheapest way to go!

TSFA's Strategy by michael webster

Submitted by michael webster on Mon, 2008/03/24 - 17:44.

Tactical Answers writes: Again, legal councel would have had you set up your cases differently from the get go. In order to fix the system I think you may have to go back to the beginning. Example - form a buying group, use it. Let them default you and try to close you down. Then bring suit for the right to use the buying group. To date you claim to be getting ripped off but you have not taken the steps in good faith to prove it."

I would like to call this excellent advice, since I already promoted the idea earlier in the discussion about the Quiznos class action in Ontario - undertaken by the way by top notch litigation counsel.

It is part of my overall: stop w'ing and start doing advice.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

If you are a QFO by Barbara Jorgensen

Submitted by Barbara Jorgensen on Mon, 2008/03/24 - 22:28.

My deepest sympathies. If you are successful I am happy for you. ( You would be the first success story I have ever heard of.) I hope you are wrong. I am hoping for justice for the Quiznos owners and those who paid franchise fees that never found a sight. I am for what's right. It takes time to know someone on an internet sight. So I apologize for taking you wrong. But still how would I know you were a Q owner. My experience in the franchise world has made me a bit cautious. I hope your doing okay if you are.

This is really great advice by RichardSolomon

Submitted by RichardSolomon on Tue, 2008/03/25 - 06:42.

If you go to the Dady & Garner website and check out the lsit of franchisors they have opposed, you will see Quiznos listed. Since D&G is one of the premier franchise litigation firms in the USA, good sense would have been to seek them out. They don't being bozo cases/argue against long established legal principles (such as the bozo claim that vendor requirements represent antitrust violations) --

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

I have learned by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 14:52.

I have taken responsibility for many of the things that we did wrong. I have felt like I should post here so other people will learn also.

Oh by the way are you a first generation zee, second generation zee? Or are you in with the company? Tell us your whole story. Maybe we can have more insight about what you believe or why you have had success in the franchise world. (Or failures.)

I have to admit you seem to be very intelligent. Wise is totally different. Do you know what I mean?

I also admit the business world is not for me. I can't mess over anyone for money.

I'm not sure how it's a conspiracy by Guest

Submitted by Guest on Tue, 2008/03/25 - 19:00.

Guest writes: There is a conspiracy to hide the odds of failure of franchise investments from that portion of the public who buy franchises. Really? How so? I have purchased 3 franchises to date. In each case I received a UFOC. In each case I read it several times (and did not just hand it to my attorney). In each case I investigated the franchisor, the individuals, to find out what I could about their ethics and businesss practices, their backgrounds, and their successes and failures. In each case I spoke to no less than a dozen operating franchisees and visited at least a couple of them. I had INTENSE discussions with them and looked at their actual operating numbers. During my due diligence the franchisees shared with me their losses and their profits. They told me about what they liked and disliked. They helped me negotiate. They told me where I would need extra help. They led me to good sources of help, including attorneys, accountants and contractors. All of this I learned as a result of finding information in the UFOC. All of the "odds of failure" I learned from the franchisees. I had no special skills. No special help. Wasn't anyone special. Just a member of the franchise buying public who knew that it was important to investigate before investing. Isn't that common sense? Do we not teach that to our children? Fortunately my parents did. So where there's a conspiracy, I just don't see it. However, I do know that there are plenty of people -- even people who were my fellow franchisees -- who, when they fail, latch on to the conspiracy theory. It makes sense because it's so much easier to blame someone rather than to take responsibility. I really don't mean to shame you for whining. I regret that things didn't work out for you. I could also believe in some few cases that there WAS a conspiracy to hide something within a particular chain, or that the franchisor was fraudulent, or that you got a raw deal. It happens. Of course it happens in a free enterprise system. But to believe for a moment that I am part of an "ugly status quo that supports rampant fraud" . . . my goodness, you've got a problem. I am proud to be part of a status quo that has afforded me many benefits -- it didn't give me anything, it didn't do me any special favors, I earned it through my hard work. Seeing that it's not only franchisors who you are railing against, but the ABA, too, I now understand more about you. Indeed there are bad attorneys and bad franchisors . . . but there's no conspiracy in franchising or the ABA. But hard core folks like you and a few of the others who show up here probably are not interested in common sense or accuracy or just plain old facts. You like conspiracies and indeed you should have them in your life.

Exactly!!! If a company DID by Guest

Submitted by Guest on Fri, 2008/03/28 - 19:59.

Exactly!!! If a company DID respond with names, dates, details, then they would be SUED, in court, not just the court of blog opinion, for doing that. Damned if you do, damned if you don't... That is what makes many of the "defenders of the little guy", err I mean bloggers, think and feel that they are smarter than the rest of the world...

Then Who Benefits? by Guest

Submitted by Guest on Fri, 2008/03/28 - 20:08.

Then who benefits from information posted on sites like this? The consumer? The passerby or the people that advertise on forums? The internet is that shot heard around the world. Can people really benefit from the conversations be it real or just like you stated "6. People that are ACTUALLY, DIRECTLY involved - whether venting, ranting, trying to get even, looking for someone to "be on their side" All I'm saying is that both sides of that coin need to be thoroughly reviewed...OBJECTIVELY unlike some posts I've read around this and other sites that seem personal in nature.

Why Do Diligence Posts by michael webster

Submitted by michael webster on Tue, 2008/03/25 - 21:30.

You post for the some reason a mark needs to be cooled off.

You could look it up.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

BMM has helped me by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:16.

Guest should register then post. I love this freedom of speech. It has helped me understand the world of franchising. You must be a zor that doesn't want people to know what is going on in the world of franchising. The internet allows people to write their stories and get educated about how the world of business is.

As far as the franchisees still in business I hope and pray they never have to go through what many of the people who post here. Can all these horror stories be lies? They are consistant and so they must be the truth.

Discussing something that is in every neighborhood should be discussed. People who post their stories want to understand what happened to them. It is their right to seek the truth with professionals and ask many guestions.

To me being able to write your true life experiences is their right. This is journalism at it's best. Getting both sides of the story.

I see no names except for the obivious bad guys in the industry. Which everyone knows their names. If your not doing anything wrong than you have nothing to worry about. If you are doing something wrong than you have plenty to worry about. Because if it can be proven in court then you should worry. Get it?.

Specific Complaints by michael webster

Submitted by michael webster on Fri, 2008/03/28 - 23:22.

It might help if you were specific about your complaints -who knows what you are talking about.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Dear Tactic, can you tell me by Guest

Submitted by Guest on Mon, 2008/03/24 - 19:49.

how I can get some of the IFA's payoff money? I'd like to do that with my franchise. They must have a lot of money and probably do a good job of hiding it when they payoff franchisors . . . and since you know so much about it perhaps you can tell me how to get some of my hands on it.

Re: TSFA's Strategy by Guest

Submitted by Guest on Tue, 2008/03/25 - 01:06.

Spoken like a true PhD, Mr. Webster. Acedemic elites are always heavy on theory and lite on reality. The reality is that you will never get a bunch of broke Quiznos franchisees to stick their necks out further by going into more debt to form an unapproved buying group selling unapproved products. The TSFA is using the most powerful tool available today--the internet. This tactic is very cost effective and very intimidating to big companies and governments alike. Quiznos continues to try to isolate franchisees from each other, but the TSFA is stopping them at every turn. Thanks, but no thanks for your "advice".

It's me - Mr tactical by Guest

Submitted by Guest on Tue, 2008/03/25 - 08:55.

I think I began this chain with my "tactical" advice. I'm not sure I understand the difference between tactics and strategies, but here goes: 1.Some good input from Mr Solomon amd Mr Webster can be found here for free. They seem to fully comprehend the realities of our legal system and that of Canada. They also seem to be directing you to some expert legal counsel, again at no cost. It would be foolish of anyone, myself included, to ignore their experience and expertise. By the way, I do not know either of them outside of this forum. 2. I have experience as both a large franchisor and a multi unit franchisee throughout North America. Why franchisees take comfort in the court findings from another country is beyond me. While a group of Canadians did win a small court victory, it was very small in financial terms, did not make any of the franchisees whole in any sense, and was well below what Quiznos was prepared to pay to make the problem go away. In Quiznos eyes this is termed a win. Collect millions in distribution fees and markups over a period of years, and pay out a couple of million in fees and fines. That's a no brainer. 3. I do not believe that I have seen a well thought out potentially winning strategy on the part of the disgruntled franchisees. If this process can be likened to a chess game, then Quiznos is making all the right moves, while the franchisees are simply reacting as expected. Unfortunately for the franchisees the outcome of this game is predictable. Other franchise groups have played this game before and done fairly well. It would seem reasonable to follow a proven strategy, as long as those leading the charge understand all of the ins and outs. Again, this requires experienced and proven legal councel, intestinal fortitude and fairly deep pockets. Maybe I should have gone into the legal field since I keep pointing people in that direction. 5. Franchisees cheered when the previous management team was replaced with the new management team. The previous team was comprised of actual franchise owners that had invested their life savings in the brand. The old team were actually owners of the brand and operated stores of their own. The new team, I suspect, invested in the brand at a senior level. The new team has a clear mandate, monetize the sharholders investment as quickly, and profitably as possible. Make sure your strategy aligns with their goal, help them achieve their desired outcome while achieving yours, and your chances of success are much higher. That means you will have to put aside the emotions and rantings, and get down to business. In closing I do feel for the individuals that have lost their life savings. Conversely I read numerous comments where they "hope" that Quiznos gets what they desrve. As has been said many times "Hope is not a Strategy". Figure out what it will take to win in the end and get after it. Set aside the accusations, help build the brand so that you can potentially make some money from this mess, and simultaeously follow the direction of your counsel. Best of luck.

tactics learned by Guest

Submitted by Guest on Tue, 2008/03/25 - 15:52.

As I stated I have been an owner of both multiple franchises, and franchise companies as well as serving as a senior executive for large franchised brands. I can tell you that there are very successful franchise brands that treat their owners with respect, and have very sound financial models. Unforunately they are few and far between. Here are a few ground rules I follow when sizing up a franchised brand, wisdom 101: 1. If the total average revenues are much below $1 Million per year than it will always be essentially a mom and pop business disguised as a national brand. If the gross revenues are not high enough you can never afford to layer in the professional mangement needed to own more than a few stores. That means you should be prepared to work from sun up to sun down every day that the business is open. What would you earn in income and benefits doing this in a normal job without the risk of investing your life savings? Are the profits sufficient over and above what you could earn somewhere else given the time required worthwhile? Make sure you are prepared for this reality over the long term, it has killed many a marriage and even a few owners. 2. Concepts based on being the low cost alternative are always vulnerable to someone coming in underneath and doing it cheaper. The smaller, newer companies can often do it cheaper since they have less overhead. Just ask the pizza guys, it's hard to make a living when you live on price instead of quality. A small regional brand will often pop up, sell for less, and take just enough market share to ruin your profitability. 3. If it's such a great business than the franchisor should own a number of them, and not just a few flagship locations located in an airport etc.. If they are not operating a significant number of stores themselves, you have to doubt the stregnth of the business model. If the basic business model is not proven in a number of varied locations, than wait until it is. the opportunity will still be there six months from now. You may have to let one particular location go, but there will always be others. 4. Speak to EVERY owner in the system and ask to see their financial statements, most people that are making a good profit will show you their numbers. Many people that won't share actual finacials are embarassed because they are losing money. Assume that your store will perform no better than the average store currently in the system. Is this return on investment acceptable given the risk associated with the investment? If not walk away. If you are not proficient with this analysis then get a qualified CPA to help. Don't ever take advice from someone that represents the brand in any way. 5. If you can't afford a good business consultant/financial advisor and a franchise attorney to review all of your franchise agreements, financial projections, lease agreements etc. than you can't afford to go into business yet. Most of the deadly mistakes made by new owners were easily avoidable with a little input from a professional. Following these simple rules will vet 90% of the bogus businesses currently out there. Good luck!

You purchased three different franchises! by Guest

Submitted by Guest on Tue, 2008/03/25 - 19:13.

You are quite unusual. If you have purchased three different franchises and have been so successful with them, maybe you can share the name of these three franchisees with us losers. You, who are obviously such a good business person don't find it strange that the past and present performance statistics are only available from the franchisees, past and present, and not from the franchisor who is the seller. If a franchise is an investment, why isn't it regulated like a security? Would you have to consult with other buyers of a stock to find out how it performed if the FTC regulated securities? Here on Blue Mau Mau, the only recommendation for a good franchise appears to be McDonald's. We have been trying for over a year to get someone to vouch for five good franchises that delivered success to the first-owners over the term of the contract. What does free enterprise have to do with lying and cheating and hiding the risk of an investment from the inexperienced investor. I can't wait to hear the name of the three good franchises that you have owned!

Was your 3 franchises by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 19:18.

Quiznos? Were you the second generation zee? Where you took it from a first generation zee? Did you get the business for pennies on the dollar? All this must be disclosed so we can understand why you are successful. Did your parents pay some of the cost? Were you in with the company? An area director ever? Becoming a zee has opened my eyes a bit. Until you disclose the material facts of your situation then it will give you creditablity. I would not buy any franchise ever again. Not even a second generation zee. After experiencing what the first generation zee must go through. Someone's life has been ruined. That is too big of a cost for me to ever want to buy a franchise. I am all for franchising with fair business practices. A win win situation for all.

Anti Conspiracy Theory by Guest

Submitted by Guest on Tue, 2008/03/25 - 20:45.

I agree with your experience. You didn't mention but perhaps you walked away from some opportunities during the process you describe. I found franchisees to be pretty helpful as I investigated different concepts, most remembered how grateful they were for information when they were doing their research. I can think of at least four concepts that I choose not to develop for various reasons including one where I thought I just wouldn't have the personal skills required. Another I wondered if the concept had the staying power to last the 20 year lease or investment required for a free-standing building, even though as a customer I loved their business. I also saw a UFOC that had proformas in them based upon a relatively small number of company owned and operated locations, which I believe was worse than no information at all. That concept has probably opened a 1000 stores since then and is no bigger than it was. It had been in business for 20 years, but had completely changed their facility to a new larger format, and gone from in-line to free-standing locations and that was what the proforma was based upon. All of those stores also happened to be in their headquarters city where they had done business for 20 years. Those proforma numbers were probably only reached in a very few instances. For a while I sold franchises and had ongoing responsibilities for open locations. I was amazed at how many people didn't do any due diligence, and some who got upset that I wouldn't tell them how much they would make, and when they opened didn't want to spend any more time than they had at their job. Every day I see some new penny stock scam or people being caught in real Ponzi schemes where later investor's money provides the return to earlier investors so government regulation isn't the answer.

FRANCHISEES by Guest

Submitted by Guest on Fri, 2008/03/28 - 20:15.

What about the Franchisee who has a decent business going and then people read something bad about the Franchisor and by pass their business. Who is getting hurt here....the poor franchisee.

I agree. But most of the by Guest

Submitted by Guest on Fri, 2008/03/28 - 20:23.

I agree. But most of the experts, reporters on this sight and many other are biased against franchises. When a franchisor posts anything on BMM, it is like a feeding frenzy for all of the BMM "regulars" Most of the "regulars" make their living off of giving "advice" to prospective franchisees or current franchisees. These websites and their owners are making money each and everytime someone hits their site or a link to an advertiser. BMM and other sites are the ONLY ones directly BENEFITTING from this conversation...

Then who benefits from information posted on sites like this? by Guest

Submitted by Guest on Fri, 2008/03/28 - 20:29.

"Then who benefits from information posted on sites like this?" BluMauMau and other opinion blog websites!! They are the only ones who DIRECTLY benefit from this conversation, through web hits and advertisments.

Got it Michael by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 21:53.

Good article. No one wants to be scammed. It makes you feel awful.

Then you haven't been posting by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:31.

on BMM for long. There are zees, zors, franchise lawyers, CPA's, real people who post here. You get both sides of the story. Mr. Blue Maumau is neutral. This is freedom of speech at it's fullest. People sharing, people learning, people growing with the cast of BMM. So far I have gottem to know some of the cast. They are good people who really want to help people gain some wisdom and knowlege about what is happening in the real world of franchising. You get both sides and you have to decide what is the truth.

Re: BMM has helped me by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:37.

Actually I am a franchisee. I look at BMM and other sites just to see what is being said. I have been an independent bar/restaurant owner for over 12 years, and a franchisee for the last 2 years. It aggravates me that people complain and cry that they got screwed, when many times it is their own fault. Whether they did not do their do diligence, they got "sold", they were under funded, they expected to get rich quick, they did expect to have to work so hard, etc... When I opened my first bar, with my savings and a loan, I kept my day job at a financial company for over 2 years, until the bar was profitable and I was opening a second location. Many people are not willing to work that hard to be successful. And, in my opinion, if you are not willing to do whatever it takes to be successful, it is your own fault. As a franchisee that, whose franchise is occasionally bashed on BMM and other sites, it hurts me as a businessman. It means that I have to work that much harder, thanks whiners. And the fact is that you DO NOT get both sides of the story. Business should not have to be conducted in the court of public opinion in America. The franchisor could and would be sued, if they disclosed information about a franchisee. Therefore these blogs are very one-sided. All of the franchisees that are claiming that they have been wronged, rather that ranting in a website, should take their EVIDENCE and go to an legal court and present their case. If they aren't willing to do that or can't prove their case... And that's my rant for the night...

Being Objective by Bob Frankman

Submitted by Bob Frankman on Fri, 2008/03/28 - 22:22.

You keep getting it wrong. These posts are called comments. Both sides of the story do not need to be heard in a single comment.

Various viewpoints are typically reported in each of the the hour by hour news of this site.

Business is partly an art form. Franchise leaders tend to dish out opinion for investors like:

5 things about buying the right franchise
Or, 10 things to protect your business

Expert advice = opinion. Expert advice written as a blog is opinion. Expert advice written with ink on paper is also opinion.

You could specialize in the Amicus Brief by Guest

Submitted by Guest on Mon, 2008/03/24 - 20:19.

You could go to law school and then work that side of the fence where there is more money in defending than in attacking ---or you could become an IFA lobbyist if you are smooth, attractive, and can be sufficiently dishonest on behalf of your employer. You could become a business reporter and get lots of free lunches and stuff for planting articles on how wonderful franchising is as a means of attaining The American Dream. Or, you could become a researcher who earns a good living producing statistics concerning the success of franchisors while ignoring the failure of their resource, the franchisee. Or, you could become an arbitrator for the AAA and you get to be a judge but don't have to go to law school. If you really are a franchiSOR as you suggest, you already got your payoff because you get to play with the stacked deck!

This is Mr Tactical in defence of Mr Webster by Guest

Submitted by Guest on Tue, 2008/03/25 - 09:14.

Ignoring Mr Webster's advice is just what Quiznos would like you to do in this chess game. They are pouring millions into SEO strategies and web sites every year to make sure they run you over on the internet highway. Just Google Quiznos and see what comes up. The majority of hits are sponsored, written by or generated from their PR efforts. Almost all of them are very positive and tell the "success" story of the brand. This is not theory, this is a fact! While the internet is "cost effective", it has had little to no actual positive effect on generating your desired outcome to date. If I were Quiznos I would be happy to let you occupy yourself and spend your energies as you are currently doing. You can always take solace in reading the sympathetic comments written by like minded franchise owners on sites like this one. Good luck with that.

Mr. Tactical by michael webster

Submitted by michael webster on Tue, 2008/03/25 - 09:16.

Mr. Tactical writes: "The new team has a clear mandate, monetize the sharholders investment as quickly, and profitably as possible. Make sure your strategy aligns with their goal, help them achieve their desired outcome while achieving yours, and your chances of success are much higher. That means you will have to put aside the emotions and rantings, and get down to business."

Best piece of negotiation advice that has been written here -ever. Look past the zero sum contest on the rebates or distribution fee.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

This is also good advice by RichardSolomon

Submitted by RichardSolomon on Tue, 2008/03/25 - 09:25.

The alternative to doing what should be done - which takes a lot of guts and good sense - is to do triage. The broke and whiny cowards who use their misfortune as the excuse to do nothing effective, should simply be ignored and allowed to go through their death throes. Mercy killings are a form of assistance, you know.

Either get real or take your lumps. NOW THAT'S REALITY!--

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Wisdom 101 by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 15:58.

I have to admit I am impressed.

Tactics Learned ---Excellent Advice But---- by Guest

Submitted by Guest on Tue, 2008/03/25 - 16:21.

Again, the writer of this advice is aware that many buyers of franchises do not perform adequate due diligence and that they are disarmed by the constructive fraud of a government disclosure document that underlies a boilerplate take-it-or-leave it contract that permits the franchisor to take advantage of the franchisee and imunize himself from charges of fraudulent inducement to contract. Buyers of franchises are not told that they shouldn't depend upon the Item 20 references that are a flawed and ineffective means of doing due diligence. Item 20 due diligence protects the franchisor who uses the franchisees, past and present, to avoid disclosing the material information that should be disclosed by the franchisor --the seller of the franchise. Everyone who posts about franchising talks about the necessity of doing due diligence and the rampant fraud. If the government is aware of this, why don't they serve notice in the UFOC's or FDD's that franchising is "dangerous" and that it is imperative to obtain experts to perform due diligence on the offerings. Instead, they say merely that franchising is "complicated" and "if possible" show your papers to experts. The majority of middle class citizens who buy franchises are not using discretionary money and are in NEED of a job or additional income to live and are not experienced and sophisticated investors. It is obvious that government works to provide this pool of naive and inexperienced investors for the purpose of providing cheap labor and cheap venture capital on which the franchisors can prove their franchised concepts. Pretty disgusting public policy!

DUE DILIGENCE? by Guest

Submitted by Guest on Tue, 2008/03/25 - 18:45.

How successful can due diligence be when the ZOR will default / terminate any ZEE who speaks negatively / disparages the ZOR? Thank goodness for reporters like Janet Sparks who is telling the truth and saving a few souls from bankrupcy or even suicide. (It is my understanding that at least 4 Quiznos FO's have taken their own lives.) Quiznos uses intimidation practices often to keep the cash cow alive. As a former FO I am awaiting my day in court. The ZOR certainly has made no attempts to resolve my legal issues. In fact, they have shown a complete disregard for the legal system during discovery & motions.In fact, they are bordering on being held in contempt for the shenanigans that they've already pulled on the court.I hope that justice will be had for all of the unsuspecting and innocent FO's.

Yes, you are right, how stupid by Guest

Submitted by Guest on Tue, 2008/03/25 - 19:30.

I must be not to know that free enterprise has everything to do with lying and cheating and hiding . . . it's perfect, free enterprise, for conspiracies. Yes, indeed, let's get out there and take advantage of more people, let's form a conspiracy to hide the truth from them, don't worry that as we create more failures and they talk badly about our conspiracy that we run the risk of exposing what we're doing, this is free enterprise and we can lie and cheat and hide and if that doesn't work we'll hire those whores in the ABA to protect us, cause they got their own conspiracy. Indeed, how did I miss all that . . . was I just too busy doing what needs to be done to succeed?

Not Confusing Comments With the News by Bob Frankman

Submitted by Bob Frankman on Fri, 2008/03/28 - 21:02.

"BluMauMau and other opinion blog websites!!" - Guest

You are posting this comment under a news story as opposed to the blog section. Are you saying that this news of TSFA posting an open letter to Quiznos' CEO is conjecture and not a real event?

Or are you saying that the comments under the news stories are opinions and that these opinionated comments make this a blog site?

This is full of it by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:22.

So many people benefit from BMM. It has been fun and exciting. No one here has tried to solicite their services unless I choose to call them. I have received advice for Nada. I have learned and grown. More people should post their stories because it is the only way we can make things right. If people don't speak no one will hear you.

Targeting The Franchise by Bob Frankman

Submitted by Bob Frankman on Fri, 2008/03/28 - 21:29.

"most of the experts, reporters on this sight and many other are biased against franchises." - Guest

It's difficult for franchise readers to be biased against franchises. It is, after all, who we are. As I understand it, this site focuses on delivering information for franchises.

News for franchisors to know about franchising can be found on other sites.

So what if by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:39.

they get clients. The lawyers here are good franchise lawyers. Exactly what people need when looking to buy a franchise. They very well may help you be saved from financial hell.

Unless you register why should anyone take your comments seriously?

NO YOU DON'T by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:40.

get both side. You may hear complaints and advice but you get no details from the franchisors side because they can't. All you can get from them is general info.

Yes, I walked away from some opportunities by Guest

Submitted by Guest on Wed, 2008/03/26 - 02:38.

after asking some questions and considering the possibilities. All franchises are not created equal, some are better than others and I believe, as you must, that it's my responsibility to figure out which are the good ones and which are the bad ones. I'm not much interested in hearing what anyone on this site or any other site thinks is a good franchise opportunity, or a bad franchise opportunity. For me and my family, and my money, I'll make that decision. All this nonsense these folks spout about the government stepping in to regulate franchises the way they do securities. Makes me wonder: Have they purchased any securities? It's not very difficult to do--you can do it online!--and as many a stockholder has discovered, the price of stock can plummet overnight and you, the stockholder, have absolutely no say, no control, no opportunity to do anything about it. At least with a franchise you can know what you're getting into before you put up the money, and if you're operating the business you can have some control over how much you're going to lose if things go south. I believe the franchise regulation that was passed in 1979 has served us well for nearly 30 years. It's not perfect, but it provides good protections while also providing the information that I need to do my own investigatioin. I don't need the government to enable me or do the work for me. Yes, I, too, have experienced people buying franchises who did no due diligence. I recall people buying frozen yogurt and bagel franchises in the 1980s thinking these were the "hot" franchises to buy. They may have been "hot" but they also required people to work! Too many people who invest in franchises do so thinking they are going to put the business on auto pilot and walk away a millionaire in a few years. And when it doesn't happen they blame the franchisor. Even in the successful franchises I've been involved with through the years there are whiners and complainers and there have been failures. Some of the folks who post on this site, if you introduced them to a good franchise they'd spend their time looking for the whiners, complainers and the former franchisees who failed so that they can prove their point that franchising doesn't work. For them, it doesn't work. For them, no business is likely to work. For them, whatever success they can achieve is called a J-O-B. And there's nothing wrong with that, business owners and franchisees need people who need jobs.

Poor franchisee getting hurt? by Bob Frankman

Submitted by Bob Frankman on Fri, 2008/03/28 - 21:49.

Do you have evidence that consumers are buying less Quiznos sandwiches - hurting store sales - because of news about store owners suing the head office that they read here?

If you are saying that it hurts Q owners because stores are not sold as easily after reading what the independent association and franchise owners publish in press releases and here, I leave that to the many Q owners to answer that.

Don't shoot the messenger. Somehow Q's franchisees are quite stirred up and are initiating these messages all on their own.

Re: Then you haven't been posting by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:51.

Actually I have been posting on this site for almost 2 years. I refered to this site when I was doing my due diligence. I post under GUEST, because if you post under a specific name and you make unpopular posts, you are subject to personal attacks from the good people that post on this site.

Get use to it by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:35.

The internet is here to stay. If you are a good business man you have nothing to worry about. If you know the truth about how you conduct business again no worries. Right?

I also worked hard all my life and I respect you for your hard work. I wish you many years of success.

Do Diligence by Guest

Submitted by Guest on Tue, 2008/04/01 - 06:16.

Get a life. If you want to state your opinion over and over, do it in another forum. Your opinions stated the sixth or seventh time actually carry less weight. You sound like a person who suffers from the "short man syndrome". Give us a break. Unless you have anything new to say; keep your fingers away from the keyboard!

SEO Tactics by michael webster

Submitted by michael webster on Tue, 2008/03/25 - 09:20.

What is odd about this is that the Quiznos franchisees have a great counter strategy: local marketing on the web which would drive their presence and take advantage of their ability to create user generated content and traffic at a much lower cost.

While I am a big fan of litigation, there is much more to business strategy that court room strategy.

You have to maximize your natural advantages.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Mr tactical says thanks by Guest

Submitted by Guest on Tue, 2008/03/25 - 09:44.

To give you some idea of my intellectual capacity the 'Math Question" answer always takes me a few moments to calculate. That being said I accept your cudos with great satisfaction. Maybe I will go to law school after all.

Re: This is Mr Tactical in defence of Mr Webster by Guest

Submitted by Guest on Tue, 2008/03/25 - 12:34.

Google all you want, but the general public is not the TSFA's audience. In fact, the TSFA doesn't want John Q. Public to know about the internal problems between Quiznos and it's franchisees. The TSFA's audience is: 1. Quiznos franchisees, 2. Potential new Quiznos francisees, 3. Franchisees with other companies. Oh, and let's not forget that Quiznos monitors every single bit of TSFA communications they can get their hands on. You can use the internet for very targeted audiences, not necessarily the entire world, and that's what the TSFA is doing. The TSFA is growing every day and, yes, more franchisees are joining the lawsuits every day. The armchair quartbacks on here may be surprised in the future.

Re: This is also good advice by Guest

Submitted by Guest on Tue, 2008/03/25 - 13:06.

Once again, spoken like a true academic elite. You're the smart one and we're all just a bunch of whiny rubes. Stop YOUR whining, Dick.

I agree by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 16:42.

I don't think most franchises have very good ethical business practices. They need to disclose the risk factor and exactly what due diligence is. Most of the zees I talked to never understood what due diligence was or they didn't know what a franchise lawyer was. Why would they if they never bought a franchise before? Ignorance does not stand up in court yet the zor should have some responsibility in disclosing material facts that would help the zee make an educated decision. If it is "buyer beware," then we should be considered consumers. It's like we fit no where in the business world. Yet they can use our capital for build outs, branding their name. We were decieved and that is all there is to it. Misrepresentation in most contracts makes the contract unenforecable.

Wrong! by RichardSolomon

Submitted by RichardSolomon on Tue, 2008/03/25 - 16:37.

They are disarmed by their not getting competent due diligence help. Competent help keeps them from being scammed. It's their fault. Scammers are everywhere. If you don;t know that you ought to go take a vow of poverty, cause you gonna be mighty po anyway.

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Not a Question of tactics by Guest

Submitted by Guest on Tue, 2008/03/25 - 17:17.

The vast majority of franchisees never even read, never mind understand, the disclosure document. It's hard to blame public policy when the franchisor in ALL cases discloses in full their sovereign rights and intent in advance. To get mad at them for doing what they told you they would do in writting in advance of actually doing it is a little ridiculous. They give you the name and contact information of every franchise owner in the country in writting. Should they also verify that you actually called and spoke to these owners? How you deduce that the goverment is in cahoots with the franchisors after they have regulated that you be disclosed in full in writting a minimum of 14 days ahead of actually being allowed to write a check is beyond me. Should they come to your house and force you to read it or maybe they should hire an attorney to do it for you. Franchisees don't want to hear the truth, it gets in the way of their dreams of getting rich! That's human nature.

Your were too busy by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 20:07.

When I was in business I was too busy. Now I am recovering the after math of the whole mess. How long does it take? I don't know because I'm still going through it. Yes most of the anger is toward myself. When people mess with people's lives it is a serious thing. I know now of 5 suicides connected with franchising. You have to admit people are vunerable beings. Yet the strong always want to blame the weak. (or naive) You say we blame the zor yet don't you think there is any responsibility the bad zor has? The analogy Fuwa used was a young man chasing after a young women. Only going after one thing. That young man will say anything the young women wants to hear. Isn't possible this is a similar thing. Bad zors razzle, dazzle you and tell you what you want to hear. Yes that women is stupid if she falls for it. Only to be dumped after he gets what he wants. A bad zor looks at the naive zee who has money. After they have sucked you dry financially you are left with no money, (The landlord and the zor got it.) To be stripped of our financial security and a life style we had enjoyed. What I meant by the bad zor knowing what they were doing, I meant they knew we were going to fail. We disclosed how much money we had for the build out and working capital. (Never disclose how much money you have for the build out or working capital. It is a mistake.) Like the young man who got what he wanted the bad zor got what they wanted. All our money.

I am saying... Or are you by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:22.

I am saying... Or are you saying that the comments under the news stories are opinions and that these opinionated comments make this a blog site? But also that the "news" that is published on sites like this is not held to the same standard as print and TV journalism. The story is news, but all of the comments are just someone's, like you and I, opinion. On this site and most other blog/news sites, comments are left in numerous locations. Many of us occasional bloggers may or may not comment in the correct place. I just commented on the comments posted by others.

You will get the by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:41.

good, bad and ugly facts of franchising here. Don't you want to see all sides?

Re: Targeting The Franchise by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:42.

Well according to BlueMauMau's homepage and tagline... "sharing franchise news, to prosper and amuse" BMM has reporters, sounds like a franchise NEWS site to me.

Why don't the zors post and register by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:44.

then it would get exciting. I assure you BMM will grow even bigger. People sharing their real life experiences makes this interesting. Different opinions and I love it.

Bring it on but by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:47.

you need to register. There is nothing to be afraid of unless you have something to hide. Guest are normally not as credible as the ones who register. It is hard to carry on a conversation with someone you don't know.

Re: So what if by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:48.

How do you KNOW they are good lawyers? Have you personally checked with their local and state bar associations? 90% of the comments on this site are posted by GUEST. So by your logic, 90% of this entire site should not be taken seriously?

This is why our country is great! by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 21:57.

We have freedom of speech.

If any zees are being hurt by this it needs to be discussed.

I won't go to Q because I don't like their business practices. Other wise why would there be so many Q lawsuits?

Besides Q has great food just lousy people at the top. They won't get hurt they have plenty of money. If you blame people writing on BMM then whose fault is it? The truth is the truth is the truth. Most people don't have the money to buy a franchise. Like Webster said they do have good food.

Fair business practicing in the franchise world is what burnt zees want.

Re: Poor franchisee getting hurt? by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:59.

I am not an expert on the Quiznos situation. What I am stating is that IN GENERAL a franchise grows based on all franchisees and the franchisor working together. If my franchise is subject to constant, unproven, negative publicity, it hurts me and my franchise store also. Again, this is IN GENERAL, not Quiznos specifically. You are asking for "evidence that consumers are buying less", again IN GENERAL, these posts have any REAL EVIDENCE, positive or negative, and that IS the real problem with blogs.

Actually who cares by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:01.

if they attack you. I am do diligence and I changed my name because they continually threw that into my face. With out someone correcting you when you are wrong how will you learn and grow. I was beaten up so much. Only to realize that they were right and I was wrong. Register and I guarantee you will learn and have fun.

Re: Get use to it by Guest

Submitted by Guest on Fri, 2008/03/28 - 22:36.

I wish you success also.

That is not true by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:55.

We have had zors on here. In which attacked me to learn. You have to post on here regularly to know what BMM is about.

You lost me by Barbara Jorgensen

Submitted by Barbara Jorgensen on Wed, 2008/03/26 - 18:05.

on that "franchisor in All cases disclose in full their sovereign rights and intent in advance. My husband and I discussed this last night. Our's did not. They mailed us our UFOC. So that is not a true statement.

Many of the phone numbers were disconnected. Meaning they had already went out of business. Only 2 had closed according to them. To find out later more than 2 had closed.

Don't assume all franchisors do the right thing. Like you said there are bad everything. There are good zors and bad zors. More bad than good. Other wise why would we have to hire a killer franchise lawyer to do killer due diligence. Stop mis-leading people and telling them this. They have to verify everything disclosed period. This will save them from financial hell.

No! Not Wrong! Government "fronts for the Scammers" by Guest

Submitted by Guest on Tue, 2008/03/25 - 16:52.

The FTC and the regulators "front" and "shill" for the franchisors and just pretend to regulate franchising in the interests of the franchisees. If the government has no obligation to protect potential unsophisticated franchisees, why the hell did they decide to PRETEND to regulate franchising to protect franchisees? Is it because franchisees would then be deprived of consumer protection laws and the protection of the FTC act? If there is a "sucker born every moment" the FTC wants to ensure that the IFA gets plenty of them to suck on! I bet they spend more money on the ALE Schools to save franchisors than they do on enforcement of the Rule. The ABA aids and abets this ugly regulatory policy. I still think your $1,000 NEGATIVE due diligence search, Richard Solomon, is the best defense out there but unless we can clone you in a hurry and pass you out with the FDD's, it is business as usual in franchising.

Ignorance is bliss by Guest

Submitted by Guest on Tue, 2008/03/25 - 16:56.

Wow, you are really in the reality avoidance mode. 1. Google - if you are completely trumped on Google with potential owners, and you are, than you don't have much of an audience anywhere. This means they are now defining the audience and controlling the converstaion with virtually everyone! 2. The last time I checked the internet is all about cost effective mass communication, and they seem to be controlling it. Who cares if they monitor your communications or even join your meetings. Get a life and get proactive in your strategy otherwise you are playing the game according to their rules. They really don't care what you say, do or think since you have not made yourself relevant to their priorities. Believe me, they spend a lot less time thinking about you then you think. They are busy following there proactive strategy, which includes stringing you along ad infinitum. 3. Joining a law suit with little to no legal standing is like getting a good spot on line for a seat on the Titanic. Make sure you bring your own life boat because when the ship goes down it's gonna get ugly. It will be too late to do anything about it then because once the real action begins it will happen very quickly. 4. I have been invloved in many of this cases, hearings, arbitrations etc.. on both sides of the table. I have numerous friends and aquaintances that have picked up big checks from the very people you are arguing with. I can tell you that none of them followed the route you have been on for a long time now. If my insistence on facing reality makes me an arm chair quarter back, then break out the lazy boy! I feel sorry for everyone that is suffering the very real losses I have known all to well from my own experiences. Consequently only a well thought out winnable strategy deserves the additional time, effort and money that will be required to win in the long run. Good luck.

Solomon how about by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 16:59.

the law of common sense? Where the zees won. Doesn't that state something? By not disclosing material facts it is misrepresentation. The risk factor is important in order for people to make educated decisions in buying into a franchise. Are you saying it is legal for them to lie? Are you saying the zee doesn't legally have anything to go on unless they have done their killer due diligence?

Yes I believe there are scammers out there. In our case they lied about everything from the equipment to the icon that was suppose to be in the company. Yes I believe we were decieved. All of us. I have said I take responsibility for allowing them to lie. Yet you are saying it is legal for them to lie? Because of the UFOC.

Ladies of America won in court because of the Law Of Common Sense.

Do, do tell us how you know by Guest

Submitted by Guest on Tue, 2008/03/25 - 17:46.

that "most franchises" don't "have very good ethical business practices." How do you know so much, Do? Do tell. I assume you have analyzed the ethical business practices of "most franchises" or you at least read a reliable, unbiased report that said so. Or are you guessing? Ah, don't tell me you are guesssing, Do. I'd be so disappointed because then how could I trust all this "wisdom" you share with BMM?

Ours didn't disclose sovereign rights and intent in advance by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:05.

They mailed to us. (UFOC) Yes we did read it. Did we understand it? No. Did we get a competant lawyer? No. Did we have a lawyer read it? Yes. He said everything was okay. Tis is the beginning of a franchise horror story.

Did we do killer due diligence? Not even close. I understand it now. We tried to call the 2 clubs that closed. Their phone numbers were disconnected. We visited 2 clubs. (The killer due diligence should of involved someone like Solomon.) Did we know about BMM? No we didn't. Many of the clubs were in the first year or less. (The material facts that more had closed isn't an issue because according to them they had closed after we signed. More than 2 had closed before January 2006.) Did they give us a list of clubs to call? No. The fact that we were the second wave isn't a good thing. Not enough out there to do killer due diligence. Except I admit they bragged about being founders of Quiznos. We thought they were extremely successful. (Which they are.) After we opened that is when I discovered BMM. That is when I saw all the horror stories about Quiznos. I looked over the whole internet to discover more horror stories. All of this contributed to my gut feelings. Something was wrong.

Do I understand due diligence now? Yes after studying on here. It involves a tremendous amount of effort plus time. I agree you should work in a club or store for 6 months to a year. Buying a franchise is a very serious thing.

Yes I admit we were ignorant. Yes we regret ever hearing of our franchise. Do I take the blame? Yes

Did they lie to us? Yes. But we allowed it. Do I believe they knew what they were doing? Yes. And the rest is history.

Dearest Do Diligence:.. by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/03/25 - 21:19.

Do Diligence:

Out of curiosity, why have you not pursued Real Estate related opportunities?

Curious,

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Re: You will get the by Guest

Submitted by Guest on Fri, 2008/03/28 - 21:45.

Again, you don't see all sides. You only see the facts that some poster wants you to see. Every story has multiple sides. Most businesses in America don't do their business in an open and anonimous forum.

I agree America is GREAT. I by Guest

Submitted by Guest on Fri, 2008/03/28 - 22:03.

I agree America is GREAT. I don't go to Quiznos, because I prefer Subway. But if I prefered Quiznos, I might have to consider not eating there. Not based on the posts in blogs, but based on legitimate lawsuits, which there are a number... Everyone wants fair business practices. But the fact is that business is business, and it usually is not fair. Ask people that did business with Microsoft, Enron, and Bear Sterns.

People are here to learn by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:08.

and grow from their bad experiences. I will not write my story again because I already did. I feel I gained so much knowlege for me to go on with my life. I am here to help people one who have been hurt in franchising.

I was honest with my story because I needed help to learn what happened to us. No, no one speaks in general.

You would have to verify your disclosures of your store being hurt by BMM. Then everyone will discuss it. I wish you great success in your franchise. No one wants to hurt anyone here.

Re: Actually who cares by Guest

Submitted by Guest on Fri, 2008/03/28 - 22:09.

I learn and grow by doing my own due diligence. Not by being berated by random people. People are more than free to comment on my posts as Guest. I read them and take from it what I will. Being a restaurant owner, I don't need more people directly berating me because they don't like the way I think or do business.

Franchise Owners, Served Poorly By Print and TV Journalism by Bob Frankman

Submitted by Bob Frankman on Fri, 2008/03/28 - 22:36.

"But also that the "news" that is published on sites like this is not held to the same standard as print and TV journalism." - Guest

I look at print and television news about franchises very frequently. The journalists tend to be business generalists and have a tough time understanding and reporting accurately on our industry.

It would be quite difficult for any journalist to write here. It is intimidating, precisely because there are so many knowledgable individuals who can pick apart what isn't accurate and will do so within minutes of when a news article is published. One-sided and shallow reports on franchises just will not make the grade here.

I have personally talked by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:50.

to the lawyers. Richard is a tough, knowlegeable lawyer. He very wise and I know he hates the fact people are getting hurt. Paul is a walking book. Michael I have never talked to but I know he tells it as it is. His writing tells me he knows what he is doing. All very wise men.

I encourage guest to register because then you can get to know one another. Plus you can send people e-mails if you want to discuss something in private. Pick a different name. Like I'm Do Diligence.

This is more fun than watching television. You can get hooked on it. Plus you gain a wealth of knowlege.

Hidden documents brought to light by Bob Frankman

Submitted by Bob Frankman on Fri, 2008/03/28 - 22:59.

It's hard for me to address generalities. News stories are not unproven, negative publicity. They are around events. So, this article is about TSFA issuing an open letter.

One of the things, among many, that differentiate this site is that such open letters are dug out through heretofore hidden corners of the franchise world. They are often attached in the stories so that the reader can read the original documents. This story in particular says of the TSFA letter, "The letter was received anonymously by Blue MauMau."

How cool is that?

Print journals do not provide original document attachments.

Please read history by Paul Steinberg

Submitted by Paul Steinberg on Tue, 2008/03/25 - 17:10.

Guest writes: If the government has no obligation to protect potential unsophisticated franchisees, why the hell did they decide to PRETEND to regulate franchising to protect franchisees? Is it because franchisees would then be deprived of consumer protection laws and the protection of the FTC act?

The "Franchipedia" portion of this website has a passage on the history of franchise legislation. You should look at that; it discusses why regulation came about and the reason why the auto dealers got a different regulatory scheme.
Your premise is wrong as a matter of law. Whether you agree with it or not, franchises are not "consumer" purchases in that franchise purchases are not for individual or household use. That doesn't mean you can't have a regulatory scheme, just that to piggy-back on "consumer" law is not an argument which will fly in the courts or the legislatures.
The reasons why Section 5 is not used to regulate franchising have been discussed in the Franchipedia article. Suffice it to say that while I think one can make a case for relationship legislation, the FTC does have a very good argument as to why there should be a direct Congressional mandate (assuming Congress wishes to see relationship legislation) and not this back-door utilization of Section 5-- which might not even survive under Chevron deference, but that's another story.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

I Agree! by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 17:11.

I have said over and over I wished I noticed BMM before I bought a crappy franchise. Studied like I have in the last 2 months. Yes I would have no problem having Richard Solomon advice us. All I can do now is when I come across someone who wants to buy a franchise tell them to call Richard Solomon.

Do Diligence by all means how by Guest

Submitted by Guest on Tue, 2008/03/25 - 17:42.

about the law of common sense? Do you think prospects for buying a franchise should use common sense? Or is common sense only expected of franchisors . . . or only those who plan too turn their franchisees into indentured servants or slaves as they lie to them and rob them of every last red cent? The whiner franchisee who didn't use any common sense . . . I suppose we should turn our heads the other way for him or her and find a way to blame it on that satantic franchisor!

Are paragraphs to much to ask? by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/03/25 - 17:49.

Many of us will not read a wall of words.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

I believe Ladies of America by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:30.

won because the zor disclosed what they should make. Which wasn't the truth.

Do, you're making progress by Guest

Submitted by Guest on Tue, 2008/03/25 - 19:19.

and I am proud of you! Now if you can see your way to admitting that "most" franchisors want to do the right thing, and "most" do not lie and "most" will provide the information you need to make an informed decision, and "most" foster and support successful franchisees . . . wow, you'd really make me proud. But keep your guard up because there are rotten franchisors, rotten franchisees, rotten attorneys who pose as franchise lawyers, rotten accountants, rotten wives and husbands, really rotten kids, horribly rotten politicians . . . So there are plenty of conspiracy opportunities out there -- keep your guard up and you'll do just fine, Do.

I am Fuwa by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 21:52.

I have a lisence in California and Washington. Plan to get my broker's lisence. Should of done that instead of bought a crappy franchise.

By asking many many guestions by Barbara Jorgensen

Submitted by Barbara Jorgensen on Wed, 2008/03/26 - 00:17.

God knows I have practically been spending all my time here on BMM. Where I believe this is a valuble source of information. (Or should I say Mr. Blue Maumau knows.)

I also check out the other internet sights. Many complaints with similar stories.

Plus I lived my own story. And while I was running the business I managed to do a thorough investigation on our zor.

Plus I talked to many different franchise lawyers. Of course I have respect for the three lawyers BMM has.

Did you put me through the wringer? Boy, howdy!

Now I am getting it from you. Please give me a break. I'm here to learn and console people who have experienced my current reality. Most of the people from our zee are really good people. It is interesting most people from the same zee I talked to think people as being good and not bad. Could that be the mistake we had in common? I think so.

Plus I am not a young girl anymore. I am a grandmother and a mother of 5 children. I believe if I have no wisdom by now it will never happen.

I also talked to several other zees from other zors. Same story. Long hours and little money. They want out.

You sound like our by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 22:32.

Area director. Hi B. I am not guessing.

If there is nothing to hide by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 23:01.

you can post here. How do you know about most businesses? If you don't have anything to hide you will not be afraid of sharing your experience. Your identity is protected and not given out by BMM.

I agree business by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:16.

is not fair. But if everyone shared their stories about what's happening in business maybe things will change. It's why it is wise to be part of net-working groups. So you can do business within that group. Therefore your changes of getting burnt is limited because if someone finds you unethical, you can tell on them.

Maybe the internet will change things in business. Because now we have the greatest resourse available to imform people of bad business practices. This is exciting to be in an age that we have the tools to tell people what is happening.

Q did hurt themselves by poor business ethics. And they have themselves to blame. Don't worry the people at the top are still rich. I really hope things will change for the zees.

Re: People are here to learn by Guest

Submitted by Guest on Fri, 2008/03/28 - 22:16.

I appreciate your candor. I too have learned from BMM, but like anything else you have to take what is here with a grain of salt. Many people may not be completely and fully honest in their posts. And their is no way to verify that. So, in my opinion, many statements on blog sites are very general. I appreciate your support. And I hope that no one here would be out to hurt someone or their business, but the fact is that unverified negative rants about a specific franchise, do hurt other franchisees that are in the system. If these rants discourage people from purchasing a franchise, then eventually it will make the franchise die. Because without growth, there is only death. Sorry, i didn't mean to be so pompous...

With that kind of attitude by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:24.

then you do not belong here on BMM. We find solutions and we learn from our mistakes.

And you never berate people ever? I doubt it. You can dish it out but you can't take it? Come on you are stronger than that.

Boy isn't that the truth by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2008/03/28 - 22:38.

Thanks to men like Bob I have learned. Did I say thanks Bob for picking me apart. I appreciate it.

Traditional journalists by Les Stewart

Submitted by Les Stewart on Fri, 2008/03/28 - 23:02.

Bob,

You are quite right: mainstream journalists are ill-equipped to be thrown into the deep end of franchising at first. They rely on information that is readily available and verifiable independently.

Until Blue MauMau, those three information criteria (reliable, available and verifable) were the monopoly of legal service providers. Almost 100%, I'd say.

If it were not for journalists, I don't think I would have gotten hooked on understanding franchising. If you need to blame anyone, I'd have to finger a cynical, s.o.b. now-retired Toronto Star reporter.

Train a Reporter Today: They Write for a Lifetime
Franchising's strength and weakness is its repeatable nature.

Once I spend a few hours with a single journalist (with their editor normally in tow), I know they will never view a franchisee story again in the same way. Of the 1,000s of hours I have spent in understanding franchising, some of the most enjoyable were in hearing reporters get the due diligence, sunk cost, opportunism bits.

The industry has neither any economic room for dissenters nor tolerance for jesters. Their lack of imagination has forced me to have 2 or 3 original thoughts per year.

Sadly, others have been swept up into my delusional thinking: I am McFamous.

Les Stewart MBA
Understanding Franchising

Les Stewart MBA FranchiseFool :: WikidFranchise

"Standards" of journalism by Paul Steinberg

Submitted by Paul Steinberg on Fri, 2008/03/28 - 23:08.

Depends what you mean by "standard" of journalism.

In terms of technical matters such as grammar and punctuation, BMM has some of the more fastidious members on the web but still not what one might expect from a print publication.

With respect to opinion pieces, some of us are in dire need of a good editor and perhaps a Valium or two.

With regard to substantive matters and factual claims regarding the industry and laws applicable thereto, BMM is much better than the general media, and for much the same reason as the trade press in any given industry is of superior quality to the mass press.

As Frankman points out, this can be an intimidating place. At least for those of us whose name is attached to our writing, we are attentive to accuracy precisely because a portion of BMM's readership almost certainly knows more about any given aspect of franchising and will correct us when we err.

That's more than one can say about Dan Rather or Maureen Dowd.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

Webster lingo by Paul Steinberg

Submitted by Paul Steinberg on Fri, 2008/03/28 - 23:16.

DD writes: Michael I have never talked to

Well, that's another reason to go to the AAFD meeting next month.

Just remember to throw in a few French phrases and end every sentence with "Eh?"

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

Search here on BMM by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:09.

the case of "Ladies of America"

People who have never by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:26.

been in a business should never buy a franchise. They should take classes on business or at least talk to other franchisees out there. There is a zee on every street corner. I believe before buying a zee people should take 6 months to a year. Especially is it is a new zee.

People who have never by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:27.

You are so far by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 18:34.

off what I think. Yet the zor should have a fiduciary duty to disclose the truth to people. No lies should ever be involved in any business transaction. Yet it is rampant in the franchising world.

Wrong! Exchange "Most" for "Some" and its an OPTION by Guest

Submitted by Guest on Tue, 2008/03/25 - 19:36.

While it is true that "some" franchisors want to do the right thing and "some" don't need to lie and "some" will provide the information you need to make an informed decision, they opt to do this and are not required to do this under the law. If you play cards with a franchisor, you have to play with his stacked deck and he deals himself all of the aces. Your "smug" post to Do Diligence doesn't make me proud! The truth is hard to refute and you stoop to "looking down your nose" at us losers. Information is not disclosed to franchisees upon which they can make an informed decision. This is the problem. It is undemocratic to conspire to hide the risk of franchising and it results in not getting "informed consent" from the buyer of the franchise.

Why Regulation Came About? by Guest

Submitted by Guest on Tue, 2008/03/25 - 22:06.

Apparently, regulation came about because of rampant fraud that the Congress couldn't completely ignore. However, the AAFD Chairman, Robert Purvin, in a letter to the FTC pointed out that the regulation of franchising, in effect, worked to allow the franchisors to make oral statements that could be disclaimed in the actual contract. He indicated also in another instance? that: "The Rule in securities disclosures is that all material information known to the seller must be disclosed, and the seller is liable (by private right of action, no less) for misrepresentation......There is no reason why franchisors should not be placed under the same or similar mandate by the FTC franchise rule as issuers of securities have long accepted."

A bit of unsolicited advice by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/03/25 - 22:47.

A bit of unsolicited advice, you might want to learn the ropes of the private mortgage market and financing.

There is money to be made in this market by those who know how to pull deals together.

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

A smart Mother of five ---I admire you! by Guest

Submitted by Guest on Tue, 2008/03/25 - 23:01.

I admire for your courage in posting and for your desire to understand what happened to you. Not only did they "steal" from you, they took this money from your children, from their inheritance. The targets of franchising now may not just lie down and roll over and may try to get the word out. Have you followed the big fuss they are making in Australia? Just as the rampant fraud in the 70's resulted in regulation in the late 70's, maybe the rampant fraud today will result in franchising being regulated at least as well as securities are regulated by the SEC. There is going to be as big shakeout in this country because of the short term schemes to maximize profits and why shouldn't franchising be part of the shakeout? Why do they even bother to regulate when apparently the franchisors can get UFOC's and sell their concepts at any rate of failure as long as they are compliant with the UFOC --that protects and covers for them --and the SBA will guarantee loans on these franchises with high failure rates of first generation franchisees. It is fraud to misrepresent success or failure but the UFOC permits them to ignore success or failure of the concept in disclosure and disclaim in the contract that they have promised you any success or failure or profits, etc.. in the sale of the franchise. The Item 20 references completely protect the franchisors and they are "home free" when you sign the contract. The only time franchisors get into any trouble at all is when they aren't compliant with the UFOC ---but even then, as seen in the Coffee Beanery Case, regulatory policy will not make them whole and the franchisee is still destroyed. They use the state of the law to churn and turn and cannibalize first owners of franchises. All the business about making "earnings claims" etc.. without backing them up is part of the exercise that makes it look like there is some serious oversight of franchising by the FTC. The FTC is an enabler and they enable fraud and misrepresentation in franchising. Who watches the store for the people?

Re: I agree business by Guest

Submitted by Guest on Fri, 2008/03/28 - 22:18.

Well put...

Re: With that kind of attitude by Guest

Submitted by Guest on Fri, 2008/03/28 - 22:28.

See that is exactly my point... Because YOU don't agree with MY attitude and MY opinions, then I DON'T BELONG HERE ON BMM. That is not a "good attitude" in finding solutions. That is the attitude of lets all just complain and agree. And that way everyone here will feel like they are right and that they have been wronged. I don't anonimously berate people. 90% of the posters are anonimous. I chose not to make myself a target for anonimous berating.

Webster is an anglophone... by Guest

Submitted by Guest on Fri, 2008/03/28 - 23:24.

He disremembers all things french.

Eh? by michael webster

Submitted by michael webster on Fri, 2008/03/28 - 23:25.

Not every sentence, eh. And don't bring up the Leafs - losers since 1967. Thank god I am Habs fan. Oh, and don't bring up Patrick Roy and fighting either.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

A wise lawyer by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 19:43.

said most are not good. So I have to agree with the word "Some."

I am a Mama Bear by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 23:12.

When I feel my family has been hurt in any way I do not take it very easy.

I really hope this chapter in our lives plays out. Because I believe we were deceived and taken advantaged of.

No one should have to experiece this.

You are a brillant man Fuwa by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/03/25 - 23:22.

Plus business is not for me. I cannot take advantage of people to make a buck. My values are ingrained in me since I was a child. As a realtor I wrote many contracts the first six months. Only to let 3 go through. I would strave to death in business. I'm really seriously thinking of pursuing a carreer in nursing. Something I should of done as a young girl. l

I believe there will be by Barbara Jorgensen

Submitted by Barbara Jorgensen on Wed, 2008/03/26 - 01:35.

more zees communicating with each other because of the internet. Long gone are the days where people cannot compare notes.

I believe the internet will expose many of the bad zors and they will have to clean up their act.

Why do we have strict laws in real estate? Too many unethical realtors. Are there still uenthical realtors. Yes. But if caught there are stiff penalties.

Same laws should be made for sells people who sell franchises. Especially since the baby boomers will be looking for a source of income. I feel an obilgation to protect my fellow baby boomers. Especially since many aren't computer savvy. Hopefully the word will get out to them. And many are loosing jobs because of age.

Actually I don't want anyone to get hurt like we were.

Remember I am not anti-franchising. I am for fair business practices in franchising.

Are you a communist? by Guest

Submitted by Guest on Wed, 2008/03/26 - 02:20.

You ask: Who watches the store for the people? Uh . . . how about THE PEOPLE?

At least Webster knows a vowel and a consonant! by Guest

Submitted by Guest on Fri, 2008/03/28 - 23:32.

E before h.

What? by michael webster

Submitted by michael webster on Fri, 2008/03/28 - 23:40.

How can I disremember all things french? Ce complètement incroyable!

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

No one is berating by Barbara Jorgensen

Submitted by Barbara Jorgensen on Sat, 2008/03/29 - 00:07.

They may be blunt. If only you saw my comments in the last 8 weeks. I got slaughtered. You don't have to agree with me and I don't have to agree with you. That is the beauty of a debate and freedom of speech.

Try it out and if they disagree with you, so what. You are entitled to your opinion. Sometimes disagreements are interesting. You hash things out. That's okay also. If I offended you I am truly sorry. I am a direct person and I do not want to hurt anyones feelings.

People who write their comments here do get corrected if they are wrong. The cast on BMM will continually correct you until you get it right. The cast are very educated, wise and correct you for your own good. Sure sometimes I felt hurt. It took me months to figure out what they were trying to teach me.

Again I am sorry if I offended you. I hope you start posting here and register and give your opinions. It is a blast.

Do, you're making progress by Guest

Submitted by Guest on Tue, 2008/03/25 - 20:03.

and at this point that's good enough for me because a couple of days ago I had written you off as a lost cause. There's hope for you. Unfortunately the Guest who thinks pretty much like you do needs more work, perhaps more time. Unfortunately he sees himself (herself) as a loser so any real progress would have to begin from there. I don't see you or Guest as losers--unfortuante, perhaps, and misinformed no doubt, but I don't think you are losers. But hey, if "some" franchisors pass your muster then there's hope for franchising because "some" can teach "more" which can lead to "most." We're moving in the right direction. Perhaps I can also help you learn that YOU can determine which franchisors are good and which are bad . . . just as you can also determine which lawyers are whores and which are not. In my experiences most are not, but I can understand that you may say only "some" are not. In my experiences most franchisors want to do the right thing, but I can accept that you and some of the hard core here think otherwise. And tomorrow is yet another day.

TSFA's Open Letter to Quiznos' CEO Brenneman

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