FranSynergy Cleans Cuppy's House

FORT WALTON BEACH, Fla. (Blue MauMau) – Not only has Dale Nabors acquired Medina Enterprises and all its entities, he has also taken on some of the baggage that goes with it. In an interview today he said, "We acquired pretty much everything, assets and liabilities." And that includes the current and potential litigation that will come into the new company." That litigation will be addressed as quickly as possible, according to Nabors. "As is well known, there are refunds that were done and we are evaluating those on a case-by-case basis. We hope to get those resolved as quickly as possible." But Nabors emphasized, "My number one focus is on the Cuppy's Coffee brand and the contracts it has to help develop other brands."

Last Friday Nabors made the decision to go forward with the acquisition of the holding company which includes not only the controversial Cuppy's Coffee, but also Planet Wings, San Gelato Cafe', Elite Manufacturing and Specialty Coffee Co-Op. Although the purchase is in his own corporation, FranSynergy, he said they have a number of partners that have committed resources. "We are holding them at the moment and based on discussions with my advisors and partners, we are going to look at how best to structure the overall entity and move forward."

In the process, Nabors said he had to purchase Elite Manufacturing because there are stores that are not opened that have entered into agreements with Elite. He said, "In order to protect the interest of our franchisees, I had to make sure I was in control of Elite."  Specialty Coffee Co-Op was also part of the acquisition, but he explained that it was a distribution methodology that was used in the earlier days. "I had been working in my consulting capacity with the company in developing a better distribution model which would allow franchisees to have better service, delivery and pricing where it would help boost their bottom line profitability." Nabors said they have entered into a distribution agreement with Figaro Bros. which will provide franchisees with considerable savings on products. He said, "We expect our franchisees to realize a 20 to 30 percent savings across the board on product."

Cuppy's currently has 73 stores open and approximately 135 that have signed franchise agreements and are waiting to open. Nabors said some have secured real estate and are waiting to have their construction programs completed. Others are still in the pipeline looking for leases or land they can acquire. As far as the status of the franchise system, Nabors said, "We have no franchisees that are as profitable as I want them to be and we probably never will." They do have franchisees that are profitable, franchisees that are happy and franchisees that are growing to the point of breaking even. But they also have those that haven't reached that point. But Nabors explains that all Cuppy's stores are young, that they are only about a year old.

The Cuppy's Coffee franchisees have been officially notified of the acquisition. Nabors said they did that in two stages. "We reached out to a handful of franchisees that I had personally worked with because we felt that we needed a few operators that were familiar with me to break the news to all the others."  One franchisee, Joe Mancuso, stated, "I have worked with Dale extensively over the past year and his experience and skill set is exactly what Cuppy’s needs to go to the next level. I’m 100% percent behind this.”

The franchisees do not have an association at this time. Recently, the company had formed a franchise advisory board consisting of several franchisees that were working with them at corporate. But Nabors said they are working with the AAFD on developing a franchisee association in the near future.

As far as where the headquarters will be, Nabors said that was still in discussion but it would remain in Fort Walton for now. Regarding staff members, he replied, "There were a couple of people that absolutely had to go, and part of the condition of the transaction was that Robert Morgan turn in his immediate resignation," as was the case with Ben Doyle. Doug Hibbing remains as interim president while they find another person to fill his shoes. "I have reached out to a number of friends that I have in the industry and are currently interviewing them," Nabors said. "We hope to announce a new president that has the skill set needed to take Cuppy's to the next level."

In addressing whether they will keep the same attorneys, Nabors said he has his own legal team and he will be meeting with them next week. Lou Manganello is still employed as the company's attorney, but he said, "Whether he will stay is yet to be determined. Those who can pass our standards and contribute to the bottom line will stay. Those who can't will not."

Dale Nabors has over 20 years of experience working with small business owners, focusing primarily in the franchising industry. Prior to launching FranSynergy, Dale had been employed by the Dwyer Group, a multi-brand franchisor headquartered in Waco, Texas, from March 1995 to August 2000.

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