Cuppy's Franchisees Calling AAFD for Help, Conference Call Scheduled

SAN DIEGO (Blue MauMau) - The American Association of Franchisees and Dealers on Tuesday admitted that many distressed Cuppy's franchisees have been contacting the organization seeking help. The American Association of Franchisees and Dealers sent out this email on Tuesday calling for Cuppy's franchisees to attend a special conference call with the AAFD chairman Thursday morning at 9:30 a.m. Pacific Standard Time. Below is the content of the email.

Hello Cuppy's Franchisees,

We have received many calls and emails over the last couple of days from Cuppy's franchisees urgently seeking options to address the various situations you are in. What we have decided to do is schedule a conference call with myself and Bob Purvin on Thursday August 7th 2008 at 9:30 am Pacific/ 12:30 pm Eastern. Please RSVP to stacie[at]aafd[dot]org with your name, store location, and phone number. If you would like to invite others to the call please have them RSVP as well. Talk to you all on Thursday.

[Conference code info redacted]

To sign up for your Totally Free Conference service, go to http://aafd.freeconferencecenter.com/

Sincerely,

Stacie L. Power
Director, Chapter Development

Scandals and Problems with the Chain from the Beginning

Founded in July 2006, Cuppy's Coffee and associated companies have been plagued with scandal and almost non-stop problems. In its first two years it has seen the imprisonment of its founder, the changing of company names, two acquisitions, insufficient capital, massive layoffs, a lawsuit by construction contractor SBT, stories of non-refunded deposits that lit up the blogosphere, and an estimated hundred or more unopened franchises.

The AAFD presented Cuppy's its prestigious franchise agreement accreditation in 2007. This certifies to franchise buyers that Cuppy's has what the AAFD chairman calls the fairest franchise agreement for franchise owners that exists. Cuppy's new president, Dale Nabors, whose firm, FranSynergy, acquired Cuppy's at the end of April, admitted at the AAFD annual meeting that the coffee chain had fallen short of AAFD's agreement standards. Cuppy's now awaits the decision from the association on whether its franchise agreement will continue to be AAFD accredited.

The chain announced last Friday that its head office will move from Fort Walton Beach to Muscle Shoals, Alabama on September 1.

--

Related readings:

Cuppy's Kiosk
Average: 5 (1 vote)

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Editor's Clarification

Clarification: In writing the AAFD "admitted that many distressed Cuppy's franchisees have been contacting the organization seeking help," the word "admitted" was not meant to connote that the AAFD had been holding information secret. Rather, the word "admit" was meant in the sense of to recognize or acknowledge.

Editor

How many have closed or they are failing????? Cuppy's---

Please go to www.unhappyfranchisee.com you will see that Mary Patrick closed her store in April 2008- there was Kathy Hummel in Arlington, TX, Mary Cordero in Queenz Creek, AZ- the list goes on and on. I am so sorry this happened to you all- please do not support a franchise that does this on a daily basis-
Mary Patrick: Grand Opening to Closing (8 Months)

June 2007 – April 2008 – Grand Opening to Final Closing

Re: Taking Uneducated Employees To Alabama

If Mr. Nabors chooses to take employees of his choice to Alabama, so be it. Of the 10 people he is taking (used to be over 100)they are people that can pack all of their belongings in the back seat of their 10 year old Hyundai. Not one home owner will be making this trip. Mr. Nabors won't even be paying for their gas to move to Muscle Shoals, much less any moving expenses. I guess it's better than waiting on someone from Walmart to call and ask you to come in for an interview.

AAFD Conference Call

This going to be quite an interesting conference call. I wonder if we can get the FTC in on the call also???? I want to know the names of every reference (franchisee) that was used to "sing" to potential franchisee's who were paying their due diligence. Every franchisee that sent money in to Cuppy's or Elite Mfg... the franchisee who was used as a reference (singer) was getting paid more money than they were making at their franchise. Several of the franchisee's worked on the sales floor at the corporate offices (which is against the law) and would also double as store owners and references (singers) and get paid both ways. One for selling franchises and the other being a singer, "whoops" I mean reference. There will be a number of ex-employees on this call as well, they also are lining up to get money owed to them by Dale Nabors. Bring your attorney to this call and your tape recorder.

Ex-Employees owed money

Please explain.

New Business Model for AAFD?

Is this the new business model for the AAFD?

Create a fire, and then ask for money to be the fireman?

Clever, and would only work in the franchise industry.

Re: New Business Model for AAFD?

Who has been asked for money by the AAFD?

There is absolutely no possibility that the AAFD can provide

any assistance whatsoever to the victims of the Cuppy's disaster.

The Cuppy's disaster is a disaster for the inescapable reason that all financial resources requisiite to remediation are missing. The money is simply gone.

The AAFD "leadership" is completely impotent. That they believe they have anything constructive to offer represents delusions of adequacy. It is way past time when people with good sense stop trying to support this ridiculous organization and its moronic leadership. In all these years, the AAFD has provided nothing more than fig leaf, apparences only franchise cosmetology.

--

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

Tempest in a Coffee cup

Richard,

This tiny bump-on-a-log system proves nothing as it relates to the decades of dedicated efforts by the individuals associated with the AAFD. If the potential remedies were over-sold than that was the minor offence.

I found Purvin's The Franchise Fraud a very important link in understanding franchising. As were your Tutorials, Richard. You both deserve credit for swimming against the stream.

To me, ridiculing group action is irresponsible.

This will be especially so when the Promised Land of pre-sale investigations will be proven so barren in detecting, preventing or remedying post-sale franchisor opportunism.

But then again, those that profit from the status quo seldom seek to change anything other than the optics. Lots of heat; little light.

Les Stewart MBA
Understanding Franchising

The promised land...

This will be especially so when the Promised Land of pre-sale investigations will be proven so barren in detecting, preventing or remedying post-sale franchisor opportunism.

The Promised Land of Pre-Sale Investigations is right here: the Internet. As Einstein said, "We cannot solve our problems with the same thinking we used when we created them." The same institutions that gave us the current system of pre-sale disclosures are not going to suddenly, miraculously blossom into a meaningful system... at least anytime soon.

What will provide the solution? Honest and open discussion, reviews, debate, analysis, ratings... just like the scrutiny other products receive, like movies receive, like stock offerings receive.

Franchising is not going to be regulated into fairness... it's an open market. I believe the real potential is right here with opportunities being discussed debated, praised, criticized... and people can make their own good and bad choices based on real info.

Disagreement and debate are not bad things. That's what democracy and capitalism are about... right? Nothing wrong with shaking a little life into this old industry, is there?

But, as you said:

...those that profit from the status quo seldom seek to change anything other than the optics. Lots of heat; little light.

 

The problem or the solution?

Sean Kelly writes--"What will provide the solution? Honest and open discussion, reviews, debate, analysis, ratings... just like the scrutiny other products receive, like movies receive, like stock offerings receive."

Yet when an organization like the AAFD attempts to foster honest and open discussion, analyzes and rates franchise agreements and assists in the formation and administration of independent franchisee associations that can and do make a difference, they are exclusively the target of your derision and scorn, including your lame photoshop efforts. 

Oh well, at least you manage to sprinkle in the more than occasional links to your own website(s), which, after all, are bastions of honest and open discussion, delivering more light than heat......

"Nothing wrong with shaking a little life into this old industry, is there?"

Re: Problem/Solution

While Sean may go over the top on the AAFD and Cuppy's situation, that is partially the fault of the AAFD.  They were the ones that didn't separate a fair contract vs. an accredited franchisor for at least 3 months.  How many people do you think Cuppy's told to look into their AAFD accreditation?  For all you know the Cuppy's people were using that as an advantage telling them that they were an accredited franchisor and when they went to the website it was confirmed.  I mentioned it in Dec 07 and it wasn't changed until Mar 08.  For all anyone knows, it could've been mentioned earlier,

I'm curious, is what he is saying consistant with the feelings of Board of Directors of the Organization?  I believe that you (I'm not sure if you are a board member or not) and Michael have stated that he should really be quiet on the situation for now.  He's really the one that is bringing the Organization down.  You don't hear Sean, criticizing you or Michael, because you two seem to be impartial and refrain from commenting until Michael issues his report (which I think many are looking forward to reading the report).  Assuming that Michael's report will be made public, (not sure if it will or not, but hopeful), I'm sure that I will be critical and ask questions that maybe are important but weren't answered in the investigation.  These questions won't be a 'knock' on Michael, but will be to gain a better understanding of the report.  

Finally, Bob comes off sometimes like he is the knight in shining armor saying that he helped facilitate between these depositors and Cuppy's.  These people complaining were encouraged on Sean's website and here to contact the AAFD, because it's supposed to be about 'Fair Franchising'. 

 

 

 

Report

The AAFD with its accredited contract status is aiming to find young or startup franchise systems, outfit them with a viable IndFA, and promote collaborative franchising.  

This goal was clearly not obtained in the Cuppy's situation - whether or not Dale Nabors turns around the situation.

One solution is to simply give up on this project - but I believe that is wrong.

My report will highlight all of the material information that Cuppy's should have presented to the AAFD in order that we could make an informed judgment about the contract and operations.

Most of the information could have been obtained, and I will welcome suggestions, criticisms and elaborations.

The creation of viable IndFA's are too valuable for the process to continue to fail. 

Michael Webster PhD LLB
Franchise News

AAFD Contract Suggestion

Michael writes: The AAFD with its accredited contract status is aiming to find young or startup franchise systems, outfit them with a viable IndFA, and promote collaborative franchising.

This goal was clearly not obtained in the Cuppy's situation - whether or not Dale Nabors turns around the situation.

One solution is to simply give up on this project - but I believe that is wrong.

Michael: I don't think the idea of contract accreditation is wrong. The problem is making it an "award" and allowing it to be used as a "badge of credibility." The "badge" is going to primarily attract those with dubious reputations to obfuscate or appear to repair.

Bob has stated that a good contract is not a reason to buy - but just one thing to check off the list. If it's positioned like that - Here's the list of contracts that are free from the worst legal provisions - it wouldn't be a problem.

It would be more useful - and would bring AAFD lots of positive press - if they did a cursory review of all the most popular contracts for the list, not just those who applied.

Of course, it would also go a long way for the AAFD to formally acknowldege that it screwed up in the case of Cuppy's Coffee, and are seriously addressing the issues raised.

Read through a few of the stories multiplying at UnhappyFranchisee.com (Cuppy's Franchise Interviews) and you can see this was already a complete mess at the time the award was granted and the company was being praised and defended.

Or the AAFD can keep gathering facts and analyzing the situation prudently.

glub... glub... glub...

Review of Popular Contracts

Sean writes : "It would be more useful - and would bring AAFD lots of positive press - if they did a cursory review of all the most popular contracts for the list, not just those who applied."

Mufflerman has correctly pointed out the prohibitive cost in doing this.

But I think Sean is on to a good point - we could review the top 15 franchises according to anyone's list and grade them just on one standard.  An important standard such as termination, or advertising.  That I think would be useful, doable and worthwhile.

I will bring it up.

Michael Webster PhD LLB
Franchise News

Contracts review and ratings don't appeal to me, because there

are only a few provisions that I hate - liquidated damages provisions - arbitration clauses - acknowledgement and merger clauses that purport to exonerate misrepresentation  (that are now, thankfully, invalidated - we hope - by the new FTC rule).

The essence of good/fair franchising is that the franchisees are substantially profitable.

If they are substantially ptrofitable, I approve of strict contract language. Without strict, enforceable control capability franchisees who are profitable quickly become rebellious, wanting to tell the franchisor how to run his business.

Having represented numerous franchisors whose franchisees made good money, I know that whips have to be cracked, and that occasionally throats must be cut. Dale Carnegie goes only so far.

So, to me, contracts grading is kindergarten nonsense.--

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

Webster & Solomon both wrong

Both of you are looking at this in a non-productive manner. Yes, if you speak of "grading" a contract, that is kindergarten nonsense indeed.

But if you note the presence of certain provisions and discuss the pros/cons of those, a prospective zee can make up his/her mind as to the appropriate course of action.

And as a note to the non-legal readership, I should point out that the clauses which Solomon finds hateful are sometimes desirable in contracts. I agree that in an adhesory contract between parties of unequal bargaining power the clauses offensive to Solomon are often abused.

But in my business sale contracts I have all of them: liquidated damages, arbitration, and merger clauses. I even have a "no reliance" clause to boot. The issue is not the clauses themselves, but the context of the parties relationship.

Parenthetically, I would note the limits of reliance on contractual provisions in long-term adhesory contracts vesting unfettered discretion with the dominant party. And perhaps that is what accounts for both Solomon's position regarding contract review and for Webster's position regarding the importance of "fair franchising" initiatives. 

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

I hate 'em, but I use 'em too when my clients want 'em.

In franchise contracts with newer franchisors, I worry about the prospects for abuse when I'm doing due diligence for a prospective franchisee..

With newer franchisors you don't know where they are likely to go, so the risks are greater with those clauses than they might be in other contexts.

While I respect your insights, I have mine and they have served me well. Like you, I live on a situational plane - what the cient wants dictates what I put into an agreement. I don't ever suggest to any client that they underprotect themselves. If someone will sign it, I'm happy to put it in.--

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

First on the

First on the list!!!!

 Tasti Dlite please! 

RE: AAFD Contract Suggestion

Sean,

Out of curiosity, who would you suggest subsidize the grading of all the most popular contracts, especially since the vast majority of them will undoubtedly fail miserably to meet the AAFD standards?  Do you think franchisors will be lining up to pay the dollars required to have it made public that their contracts fail to make the grade?  Do you think existing franchisees will pay to be told that the agreements they have already signed are unfair and unreasonable, thereby diminishing the value of their current investments and accepting the fact that they were naive or foolish to not have reviewed their contracts thoroughly before putting their dollars at risk?  Or would you simply advocate we lower the AAFD standards to a level that would allow more contracts to receive favorable grades to attract more people to the party? 

Pretty simple, really

 Pretty simple, really.

Email me if you'd really like to know.  I'd print it here, but don't want you to get scooped by the AFA.

AAFD grading

Mufflerman writes: Or would you simply advocate we lower the AAFD standards to a level that would allow more contracts to receive favorable grades to attract more people to the party?

My understanding is that years back, Sean Kelly was advocating precisely that position to Bob Purvin (how times have changed!).

Loosening standards is not as foolish as it sounds. If so few franchisors can meet the current standards, and one of the franchisors which does meet the standards (albeit for its Franchise Agreement) turns out to be such a complete Ponzi scheme...

...perhaps it is time to go back to basics.

  1. Take a look at systems with high franchisee satisfaction, and
  2. those with low franchisee satisfaction.
  3. That will provide an indicator as to what franchisees think is important, not what lawyers or academics think is important.
  4. Then see what "standards" would create an environment similar to that found in systems with high franchisee satisfaction.

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

Congratulations, Paul. Your franometer is clicking loudly.

Indeed,satisfaction in any endeavor is the answer to the question of 'what works'.  

While a lifetime can be spent arguing about 'endorsed' paperwork or due diligence 'caution signs', logical franchise selection based on satisfaction will always win, and win without drama.

The trick is to take the spotlight off of our 'highbrow expert' selves and shine it directly on the client, meaning the client as a whole person.

Anyway, congratulations on pressuring the ‘truth’ shale.

Nick Bibby is an international franchise consultant and a program developer dedicated to excellence in entrepreneurship. 

Standards

Paul writes:

  1. Take a look at systems with high franchisee satisfaction, and
  2. those with low franchisee satisfaction.
  3. That will provide an indicator as to what franchisees think is important, not what lawyers or academics think is important.
  4. Then see what "standards" would create an environment similar to that found in systems with high franchisee satisfaction."

 

Complete waste of time.  Finding franchisees who are satisfied is simply finding franchisees who are making money -irrespective of the franchise agreement.

Michael Webster PhD LLB
Franchise News

Bob, turn off the lights

Webster writes: Complete waste of time. Finding franchisees who are satisfied is simply finding franchisees who are making money -irrespective of the franchise agreement.

Ok.

  • Franchisee satisfaction simply depends on whether they are making money.
  • "Fair franchising" is irrelevant.
  • The only thing that matters is system profitability.

Unless AAFD is going to turn into McKinsey, the AAFD should just turn off the lights and go home.

I have seen no indication that AAFD has any expertise in the field of improving unit-level profitability, but perhaps the AAFD could volunteer to send in a team and show Quiznos or UPS how to get their units in the black.

Oh wait-- maybe they should start with Cuppy's, seeing how they have an existing relationship.

Seriously: if the AAFD thinks the franchise agreement is not important, and unit profitability the only important thing (a legitimate position, I agree) then it should focus on what is important and stop debating "fair" franchise agreements.

 

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

Re: Standards

'Complete waste of time.  Finding franchisees who are satisfied is simply finding franchisees who are making money -irrespective of the franchise agreement.'

Isn't that the goal, to make money?  I think more people looking at a franchise would put that above a fair franchise agreement. 

Making Money

jd writes:    "Isn't that the goal, to make money?  I think more people looking at a franchise would put that above a fair franchise agreement. "

Yes, that is the goal.  But the only way you keep the money is to have a fair franchise contract.

Michael Webster PhD LLB
Franchise News

Re: Making Money

'Yes, that is the goal.  But the only way you keep the money is to have a fair franchise contract. '

Please explain that comment to the Cuppy's franchisees that are trying to open stores, but can't because Cuppy's/Elite used their money for other expenses and now they can't pay SBT or another builder. 

(Above comment is assuming a post made on one of Sean's websites is accurate)

That fair contract won't give them squat if Cuppy's declares bankruptcy. 

"Making" vs. "Keeping"

So, "making" money is "irrespective" of the Franchise Agreement, but "keeping" money depends on a "fair franchise contract."

Have you been off in Inuit court today? I think living in the tundra has addled your northern hemispere.

 

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

Normal people complain constantly amd never own up to

financial success if they can avoid it. Smart folks hide wealth. Only in Texas is your money something to brag on because Texas money is always new money in the hands of people who aren't used to having it.

If franchisees were to admit satisfaction, most franchisors would believe they were too lax about everything - especially that they were not imposing enough fees or populating territories densly enough - Subway is a good example of that.

Only independent franchisee associations that are well funded can defend franchisee turf.

The AAFD can't possibly defend anything. All it can do under its present leadership is chat, and that rather ineffectively. An amalgam of poorly funded bozo associations is as useful as cojones on a bloody priest--

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

It's a Wonderful Franchise!

Is this the new business model for the AAFD?

Create a fire, and then ask for money to be the fireman?

I think you are giving them too much credit.  Way too logical and, as you say, clever.  Unfortunately, the AAFD still doesn't get it.  Even I understand the meaning of "aiding and abetting" and "perpetrating a fraud,"  and my legal training consists entirely of watching Law & Order reruns and collecting Richard Solomon comments in a special scrapbook.

If the AAFD would like a new business model, may I suggest it take over and operate Cuppy's Coffee units like the one pictured above.  I hear it's got one the fairest contracts in franchise history and comes with proprietary wood blocks and extra batteries.  Judging from the photo and caption (A Cuppy's Coffee franchise in Kentucky finds a site location for their kiosk) , their site selection is also first rate.  While I can't read the handwritten sign in the window, I'm sure it has to do with contract accreditation. 

  BFF!Good luck with the conference call.  Here are some of the talking points in advance, from Bob's impassioned and insightful call for fairness a few months back, when he praised Elite & Cuppy's, minimized the complaints of the depositers and implied that no operating franchisees had complaints. 

"...let me offer a few facts and observations about the AAFD handling of the 5-6 complaints about Cuppy's Coffee and Elite Manufacturing"

"The AAFD has not received one complaint from a Cuppy’s franchisee in business."

"We have not yet determined if Cuppy’s or Elite has violated either the AAFD's Fair Franchising Standards or our licensing agreement..."

 "Cuppy’s is prepared to hold itself accountable...Cuppy’s has not once denied its obligation to make refunds, and has admitted to financial pressures due to the current banking and credit crisis."

" I suggest that some of our critics go rent the movie, 'It’s a Wonderful Life'..."

Maybe if you're all good, Bob will make popcorn and have everyone over to watch "It's a Wonderful Life." 

Further reading:

AAFD: Franchising Watchdog… or Lapdog? Part 1

AAFD: Franchising Watchog… or Lapdog? Part 2

Purvin-bashing

Sean, a lot has been disclosed in the past few months. I seriously doubt that Purvin would make those same statements today.

I was very skeptical when the AAFD award was given in the first place, but Purvin did honestly believe these people would change.

And it should also be noted that Purvin had an open floor at the AAFD meeting a few months back, and considerable opposition to his position. While AAFD is not a state actor, the "due process" analogy does have some merit; where I part company with Purvin on this is around the time of the "depositor"/Elite scandal, where payments were made to a non-franchisor for no logical reason other than avoidance of statutory and regulatory constraints.

I do agree that Purvin has been unduly optimistic and followed a course of action with respect to this particular franchisor which is not in accord with views he has espoused in the past.

At very least, Purvin has decided to speak on this. While the timing may be problematic given the non-issuance of the Webster report, you should at least see what he says tomorrow. A brief cease-fire might be in order. 

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

There may have once been a time when Purvin had something

to say, somewhere in the primordial mists of Aamco era franchising - before the McAlpine case - prehistory.

Today, however, he is but some long faded dead flower/weed. If you could wrap him in paper and smoke him, he might again become relevant. NOT--

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

Law and Order

is a great reference for all of your opinions. What do you do for a living?? Seems to me playing on the computer and Franchise bashing should be a hobby not a career, however I see that you try to make a career of it. I have been reading the blogs for a while now and laugh every time you come on. You act like you actually know what you are talking about. For some reason all of the lawyers that I have met were very professional and then I come on here and read what they have to say with their gutter talk. Guess that makes them important too. I realize they are ambulance chasers and are just on here to get down and dirty in the gutter with the rest of you in order to drum up business. Maybe it would be better if you all collected SS benefits for emotional and intellectual problems or unemployment for lack of a decent trade. Awaiting my ID,

Bailey Baker

Welcome Bailey Baker

Welcome, Bailey Baker.

In my case, a lot of the smartaleck comments, cynicism and "gutter talk" are a sort of deflector shield needed to enter the BMM atmosphere without burning up. 

Your own comment indicates the very reason for it:  you immediately go personal with your attack (ambulance chasers, emotional intellectual problems, etc.).  Most will, because they are part of those who wish to protect the economic machine that has been geared toward fraudulent practices.  They don't want to deal with the actual issues, so make personal attacks on those willing to post with their own identities and stand for something.

I am not franchise-bashing;  to the contrary.  This is not franchising.  Franchising is the creation of an equitable, cooperative arrangement in which franchisor, franchisee and vendor work together with the goal of long-term mutual success.

What I - and many of the other "ambulance chasers" here - bash are those who have used the cover of franchising to perpetuate fraud and create situations where they profit at the expense of - not in cooperation with - others.

The truth is that these same talented individuals are like parasites on the host of legitimate franchising, and legitimate franchisors need to realize the damage that they are doing - and the thousands of prospects and millions of investment dollars they are diverting from them.  

Address the issues seriously and you'll likely get a response in kind.  Go for the personal attack, and be ignored... or be treated as a punchline.  If you're out to defend the status quo, you are the one wasting your time here.

If you want to converse seriously, I'm easy to find. 

Sean Kelly
seankelly[at]ideafarm.net

Franchise  Pick
 

There is only one franchise industry

Sean,

You seem to be saying that there are "good" franchisors and "bad" franchisors and that they divide so nicely and simplistically.

Sorry. You are inaccurate.

How severely their franchisor opportunism is exercised is a situational and managerial choice. As is personal evil.

If only there were evil people somewhere, insidiously committing evil deeds, and it were necessary only to separate them from the rest of us and destroy them. But the line dividing good and evil cuts through the heart of every human being. And who is willing to destroy a piece of his own heart?

Aleksandr Solzhenitsyn

Evil is as natural a part of the human heart as is predation is to franchising.

Les Stewart MBA
Understanding Franchising

In franchising, no one can hear you scream...

Isn't it a bit inaccurate to represent what I seem to be saying and then criticizing it for inaccuracy?

If I had actually said that good franchisors and bad franchisors fall neatly in two distinct lists, I would join with you in criticizing me.  Which I may do anyway, because it's kind of interesting.

I agree with Les Stewart in attacking what I seem to be saying.  What I seem to be saying is simplistic and, if I may say so, naiive.

 In 20 years in franchising I CAN tell you that, on one end, there are franchisors who are simply running a con game and, on the other end, there are franchisors who are dedicated to the strategy of creating win-win-win relationships with franchisees and vendors.  Of course, as you eloquently point out (and Solomon has in the past) the industry reflects both the good and bad sides of human nature, and so most fall at various points in between.

I'm certainly sick of the Cuppy's story in many, many ways, especially now that it the culpable have effectively disappeared in the gulf coast fog.  But in some ways the situation reveals a lot about the state of things and serves an important cautionary tale for prospective franchisees: Do your homework diligently before purchasing, because in franchising, no one can hear you scream.

It's also time for good franchisors with solid programs and dedicated support to start getting the word out there about what real franchise programs look like...  

Sean

seankelly[at]ideafarm.net 

 

 

A Word too Far?

Was it something I said or something I failed to say?

Les Stewart MBA
Understanding Franchising

different Franchisor Opportunism for different investing Folks

Sean,

Yes, Cuppy's is one example of many that could be used. To generalize this specific to a blanket condemnation of the AAFD is, however, unfair.

I like your continuum idea very much: blatant scammers on one end to responsible corporate governance on the other. Pre-sale you measure abusive nature as if it were a constant. Like an ohmmeter or voltmeter.

Where we may differ is that each system management team uses their discretion across that range of activities depending on the situation. And this variable opportunism capability is applied differently to different investors.

CHANGES: Each system's opportunism "needle" rocks back and forth between Dr Jekyll and Mr Hyde on an hourly or daily basis. Trying to determine a potential franchisor's abuse potential to a single person [me] should be much more like a Smart meter which shows (1) current abuse and (2) range of opportunism available. 

  • Choosing Brand X because it on average [for the majority of its investors] is good [on their best day], over a 10 year timeframe, is a gamble few small businesspeople will take.

Hence, the role of deceit on the pre-sale and denial, post-sale.

Study of Arguments

"Just look harder before" is a thought-terminating cliche whereby:

The most far-reaching and complex of human problems are compressed into brief, highly reductive, definitive-sounding phrases, easily memorized and easily expressed. These become the start and finish of any ideological analysis.

see Thought Reform and the Psychology of Totalism

Les Stewart MBA
Understanding Franchising

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