But Continues to Sell Franchises 

Reporter's Note: Blue MauMau made arrangements for an interview via email with iSold It's CEO, Ken Sully. After receiving our questions, Mr. Sully declined the interview.

SOLANA BEACH, Calif. (Blue MauMau) - Earlier this year iSold It's CEO Ken Sully wrote an open letter to franchisees in which he stated that "the company has not been profitable since 2004" and that reorganization and liquidation were being considered. Since then a new, “redlined” version of iSold It’s California Uniform Franchise Offering Circular (UFOC) has appeared. Among its first amended words are:

"The iSold It franchise system is still new and unproven. We are concerned about financial losses incurred by many early franchisees. The system is subject to ongoing change as we work to lower overhead, increase revenue and generally improve the profitability of our stores. We cannot and do not guarantee that your store will be profitable, either under the present system or under the system as it evolves." - (page 2 of iSold It's redline UFOC, May 25, 2007)

Regarding "redlined" UFOCs, Mark Leyes, Director of Communications for California's Department of Corporations, explains: "For the state of California, a redlined UFOC is a revised Uniform Franchise Offering Circular that the state requires because of pertinent material changes that affect the required disclosure of a franchise system. Words that are added are indicated with a line under them. Words that no longer apply are crossed out with a line."

Nick Bibby, a franchise consultant with over 25 years of franchise experience, observes: "Until a system is proven, it has no business being franchised." He continues: "But I believe that most successful businesses can be systemized and made ready for franchising under the proper leadership."

The International Franchise Association writes that one of the key elements of buying a franchise, as opposed to setting up one's own business, is that a franchise provides a proven concept. "A franchise increases your chances of business success because you are associating with proven products and methods." (Introduction to Franchising, IFA, pdf p.10)

When asked why iSold It amended its UFOC, Robin Day Glenn, an attorney at franchiselawteam.com who represents the company, declined to comment, citing attorney-client privilege.

Meanwhile, the troubled franchisor of eBay drop-off stores continues to sell franchises on its website (see above photo). Its newest franchise recently opened in Hesperia, California.