Franchisee Association Not High on Cuppy's Priority List
Nabors said before he took control, Cuppy's had paid the AAFD a considerable sum of money. But when they approached him about starting a franchisee association, he said although he was open to discussing it he felt it was not the best use of their money. "I believed that at this point and time when we have a number of issues to deal with as a company the money could be better used." He said AAFD wanted $100 per location the first year and the $300 per unit the second and third years. After doing the math, Nabors said he just didn't want to commit the franchisees to that expense. Besides, he added, he had already started his own franchisee advisory council to get feedback and share it with other franchisees.
As far as the AAFD's accreditation award, Nabors said the franchise agreement is as fair today as it was when Purvin's group approved it. He said nothing had changed there. AAFD had added Cuppy's to its roster of companies earning its Accredited Contract status, a recognition offered to new franchise systems, or to new ownership and management teams. It highlights companies whose franchise agreements conform to the AAFD Fair Standards, but lacked operating history to evaluate franchise relationships. AAFD made the decision recently to suspend Cuppy's award.
Additionally, AAFD wanted to set up a buying co-op for Cuppy's, but Nabors said when it does form one it then takes a percentage of the total sales of that buying co-op. "I believe that was going to be a 1.5 percentage," he explained. He said he and Purvin went to great lengths on the issue because he had already established a distribution system for Cuppy's when he was a consultant for them, without having the details on what the company had put together with Purvin's group. "The system I already had put together using a company out of Dallas allowed us to deliver a good product on time at a fair price to the franchisees, and it resolved some of the distribution issues Cuppy's was faced with in the past." He again explained, "To increase the cost of the products to the franchisees so that the AAFD could earn a percent and a half was not what I felt was in the best interest of the franchisees, so I said no." Nabors saw no need to have AAFD manage the cooperative.
The other requirement under AAFD was to allow them to mediate disputes. "I’m certainly open to mediation and it can be very beneficial for both Cuppy's and the franchisees. What I objected to was the $325 per hour--or it might have been $350 per hour--that was paid to Purvin or AAFD." He added, "Because the two are kind of intermingled, it’s hard to figure out who the money is going to for the mediation." And when there are other sources for mediation that are less, Nabors said again he didn't want to commit the franchisees to it.
One source he mentioned was the International Franchise Association, which offered through its ombudsman program free mediation. He said they have used it and it worked successfully for them at no cost. He concluded on the subject, "So it came back to whether I wanted to commit to $350 an hour for an unknown number of hours to Bob Purvin or AAFD when I could get the same service rendered for less money or no money. Bob Purvin and I had a three hour conversation about a month ago where I was constantly being asked for my support. And the support came down to economic support. I made the decision that at this time it was not the best utilization of the company's money to pay the AAFD."
Nabors said, "I would like to believe that AAFD has the best of intentions. And I think that Bob Purvin and Julie are great people." But he again states, AAFD is just not high on Cuppy’s priority list.
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- AAFD Accreditation of Cuppy’s Coffee
- Purvin Justifies Decision to Suspend Cuppy's Accreditation
- FranSynergy Cleans Cuppy's House
