Corporate Horror Stories to Amuse
Came across this great story that illustrate getting stuck by the system. I found it and more at corporateoppression.com.
-- At one call centre I worked at it was policy to use the customer's name five times, no matter how brief the call.A friend of mine had a lot of trouble with this, so his team leader decided to coach him: listen to his calls and tell him what he should do differently.
The very first call they received was from somebody asking for a service they didn't provide. The call went like this.
Customer: "Do you provide such and such service?"
Employee: "Can I get your name please?"
Customer: "Sure, it's John."
Employee: "John. John, John, John, John, no we don't, thanks for calling."
--
I have to admit that I've known a franchise or two that follow the ops manual in just about the same way.












cuppys
I just talked to the sheriff’s office in AL and he asked me to tell everyone to contact Don Yarborough of the FBI. His number is (256)764-3613. The FBI is in touch with the attorney general office. They are reviewing all the info to decide if this is a civil or criminal case. The more people who report to the FBI the better it will be for all of us. Please everyone give him a call.
Cuppy's staff of 5 what are you doing?
I would like some questions answered- not just me, but a whole lot of people. Are you all working for free? In this economy who in their right mind would be so stupid? I still can't figure out who would be stupid enough to move to Alabama in the middle of nowhere to work for such a failing company. What are you going to do when it is bankrupt? Move back to Florida? Or did you not think that far in advance. That is your problem you don't think about the future- Who all is contacting the FBI? I think the guests should reveal their names- this is freedom of speech and you did NOTHING wrong- Cuppy's Management did. Please respond, thanks!
Calling Cuppy's Failing Staff of 5.....
I second that. What are you doing? What have you ever done? In my opinion nothing. Made everything worse. Poor franchisees, you need to run if you have the chance!
Today is Day 10
Dale where are you?
Tomorrow is Day 11
After that, Day 12.
After that, Day 13.
After that,______
well, you know the rest.
Dale Nabors... What a cowardly man...
I remember back when Dale first came on as a consultant & mentioned he use to work for the Dwyer Group in Texas several years back. Some of the higher up managers at Medina were concerned about this new consultant coming on board & investigated/called Dwyer Group. Their comment was that they did remember Dale but that he NEVER AMOUNTED TO MUCH & WAS LET GO. That should have been a RED FLAG for Morg at the time. But I guess not. Dale has proven to be an absolute weasel & coward! He tells people such bull (this includes zees, s-employees, current employees, media) that I believe he truly believes his on crap! WHAT A JOKE THIS SO-CALLED MAN HAS PROVEN TO BE. I truly feel sorry for his family. WHEN A PERSON CAN NOT STAND UP AND ADMIT THAT THEY HAVE BITEN OFF MORE THAN THEY CAN CHEW & JUST LAY IT OUT FOR EVERYONE SO THEY CAN MAKE OTHER ARRANGEMENTS… PLUS THIS SAME PERSON CONTINUE TO TELL PEOPLE LIES SO THEY WILL SEND IN MORE MONEY… ALL I CAN SAY IS THIS PERSON IS THE BIGGEST COWARD I HAVE EVER KNOWN!!!! Even if Dale did this now, he has waited tooooooooooo long and most zees are bankrupt because of his delays and deceit. Again… What a coward!!!
Re: Dale Nabors... What a cowardly man...
Dwyer Group has quite a history of its own. If Dale Nabors passed through that organization, he would not be the only one of his type to get his ticket punched as a self-proclaimed experienced franchise exec.
This is where Les Stuart's continued caveat of 'what happens to franchisees when a company is sold' makes a ton of sense.
DALE NABORS + BOGUS INVOICES = FEDERAL INVESTIGATION
I've found out from a former member of the " Alabama Scheme Team," errrrrrrrrr I mean "Alabama Dream Team," that Dale Nabors was paying certain employees at Cuppy's Coffee to blog Robert Morgan. He was having them blog Robert Morgan with vicious lies to make him look really bad with any and all franchisees. This was being done by Dale Nabors before he ever stole Cuppy's. That's right people...STOLE. He wanted to come riding in on a white horese in shinning armour. He hasn't paid anything for Cuppy's, just a "song and a dance." THIS IS A BONAFIDE FACT! Another fact that I found out is...Dale is on these blogs daily defending himself as other people. THIS IS A BONAFIDE FACT! I know that Robert Morgan is no angel by any means, but next to Dale Nabors...Robert is Gabriel coming down from Heaven in all his Glory! Robert Morgan never stole a penny from anyone. He might have borrowed from Peter to pay Paul, but never did he steal or lie or committ FRAUD like Dale Nabors did. Now Mr. Admin, I know that you have given Dale Nabors the benefit of the doubts a number of times on here and tried to put everything on Mr. Morgan, but you were wrong. PERIOD THE END! What I am telling you now is Dale knowingly and deliberately committed outright FRAUD and he is going jail because of it. Morg never sent out BOGUS invoices to the SBA and the banks. Dale Nabors did and people now have definitive proof that this FRAUD took place numerous times. This has now gone from the Attorney General's Office in Florida to the Inspector General's Office and they are ON IT! This will take a little time but it's now in the system. Franchisee's keep your eyes open, because justice will prevail. And if you can believe it, Dale Nabors is still telling the same people he told 3 months ago..."It will be next week, and I will have the money." He will never get any money because everyone now knows what a SPINELESS, COWARD, THEIF, this sorry excuse of a man he really is... If you talk to Dale Nabors long enough you will see that he's not real bright. If you were to stuff his brain up a humming bird's ass, it would be like a peanut rollng around in a boxcar.
Dale Nabors/ Cuppy's Coffee on top ten worst franchises
Cuppy's Coffee has to hit the record on being top ten worst franchises. They have closed sooooo many stores and they are ALL not making profit! Franchisees feel cheated and their lives are destroyed because they invested in a company that was supposed to be "Proven to Work" and it does not. Dale needs to grow a set and contact franchisees and work on issues to help them out but he won't do that. Even his BIG sidekick Amy is too lazy to pick up the phone and do anything to better any type of situation. If you are looking into franchising as you know from your share of research run away from this company or they will take your money and run.
Top Ten Worst Franchises
Stores are closing for 2 simple reasons: under capitalized franchisees and buildout costs that put the franchisees in too big of a hole. First, under capitalized franchisees. All you have to do is look at Sean's site to see what I'm talking about. A disabled vet who cashed in an annuity, franchisees taking credit card cash advances, franchisees taking home equity loans, cashing in 401k's. These are all people that NEVER should have been allowed to become franchisees. They had NO working capital to ramp their stores. Also, none of these folks had any food service experience. They are teachers and retirees and stay at home moms that had NEVER owned a business, and ceratinly had no idea what the food service industry was like. Second, when you charge franchisees $200 per square foot for their buildout (after white box), you're putting these folks in the hole before they can open. Take into account buildout time beyond the construction period and these folks open with NO cash on hand. Did they expect to turn a profit on day one? They might have been sold the "field of dreams" but EVERY business needs time to ramp. That's why retailers report same store sales (sales for stores open at least ONE year).
It wasn't the Cuppy's concept that was a failure. They have great coffee drinks. It was the quality (or lack thereof) of the franchisees and the ridiculous buildout costs.
Yep, this is Dale or Amy
When someone gets that defensive and puts blame on everyone but themselves than you know who it is. Please tell the truth for once! Stores are closing b/c your stores look like crap- you tried to implement a trade dress, and that did not work- you have really ugly stores. Also when you walk into a cafe it is plain and boring, there is no retail and it is very uninviting. Also your training program is horsesh*t- it used to be 2/3 days long then went to a week, and you still DONT know how to TRAIN people! They don't know about the product or about coffee, history etc. A franchise is supposed to be with you every step of the way but the franchisor should actually have a job. Such as, if you are in Customer Service and someone calls with a problem- get it solved! If you call Marketing they should be of some assistance- but Cuppy's didn't have a Marketing team- oh if you call someone that emails you templates of coupons, or tells you on the phone you need to go and pass out flyers all day every day???!!!! Dale wake up it is all a MESS- the build out costs do not help- but you cannot blame a franchisee that was told they would qualify but then gets turned down for financing! Cuppy's Coffee is a horrible company. Oh by the way it was the concept that was a failure- listen to the name Cuppy's Coffee- it sounds Horrible, I would be embarassed if I had to tell anyone that I was going to hang out there.
Hey Dale Nabors
These are all people that NEVER should have been allowed to become franchisees.
But Dale Nabors allowed them. Dale Nabors turned their annuity, cash, home equity, 401k's as his cash on hand and working capital. If you Dale Nabors do have the money when you bought Cuppy's, you wouldn't live on the zee's paid monies. If you have the money, the zee's will get their equipment and buildout, you will pay your FL former employees with their salaries! Where did the zee's monies for the equipment and buildout go?? How dare you Dale Nabors defraud these franchisees! How dare you live on someone else's hard earned monies!
Guest.... Is your name Dale Nabors??
These are all people that NEVER should have been allowed to become franchisees.
It's the likes of Dale Nabors and Robert Morgan who shouldn't be allowed to be zors rathen than the zees putting in their annuity, life savings, home equity, and 401Ks to start up their own businesses. It was Cuppys who forced them to use up their working capital having to wait years before a store gets open meaning paying for rent and SBA loan the entire time. No, they don't expect to turn profit on day one, but they also didn't expect to wait forever after paying hundreds and thousands of dollars. These people never ever received their equipment and buildout never completed. Dale Nabors has all the money tucked in his fat wallet and fat a$$.
Is Cuppy's a good concept? Maybe, that's why these people bought into it in the first place. Is it their fault to be defrauded by Dale Nabors? NO, they just never thought that fraud is Dale Nabor's nickname.
Lawsuit against Medina and related companies
Cuppy’s franchisees are organizing a suit to be filed by a well-known Florida franchise law firm. If you are interested in joining, please email cuppylawsuit[at]gmail.com . Include your name, address, phone number, and potential civil claim against Medina and related companies.
Caution Cuppys
Be exceedingly careful about sending any legal information over the internet, particularly descriptions of "potential civil claims" against any party.
Not only do you not know who is at the receiving end of that email, but also there may be no attorney-client privilege so even if the recipient is indeed associated with a lawsuit, and passes the information along to an attorney, that communication may be discoverable under a subpoena.
Whoever posted this should have a discussion with the attorney handling the case (assuming this is a bona fide posting in good faith).
N.B.: Many attorneys do not use Gmail for any legal matters, but that is a debate I leave to the techies to discuss.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Re: Caution Cuppys
Figure out what firm it is and contact them directly if someone feels uncomfortable. But don't just sit there with a potential claim.
Cuppy's Horror Story
It is rumored that Morg is in AL talking to Dale about taking over Cuppy's. I wonder if everyone will be able to reapply for their old jobs with Morg, the Patron Saint of Miracle Strip Pkwy.
Morg Morgan taking Cuppy's back & Brian Hayes...
will be doing build outs again. What the heck... they're glutten for punishment. Also hear that Amy Hiller is so far up Morgs ass while he is in AL because she sees him being in charge again very soon. She goes whichever way the wind is blowing. It's terrible when someone doesn't know how to stand on their own two feet. Payroll has still not been paid. Not only for the FL ex employees final paycheck but the dumba$$es that moved to AL with Dale haven't been paid for a month and a half. Unless you want to count the bad check Dale gave them that bounced. Does Dale think if Morg takes the company back that he can wash his hands clean of the cluster you know what? I don't think so because Dale talked zees into sending in more $ & he still did not put that $ towards the zees projects. Fraud, fraud, fraud! Also, Morg is not in the clear either! The lawsuits are piling up against the company, Dale & Morg. You can run but you can't hide!
Morg keeps zees happy
Why do you think that Morg's return would be a "horror story"?
Morg was hugely beloved by the franchisees and employees. All the folks that lost their money to Morg were happy as clams till Nabors took over.
All the whiners who are threatening lawsuits would melt like butter in the face of Morg's soothing sweet nothings. Indeed, many of them who are now pleading poverty would likely come up with more money once Morg is back running the show. Plus the Jones clan loved Morg, and the "Angola love shack" will be back in operation; likely with a whole new layer of shell companies. No doubt John Dozier will reprise his role as Legal Terrorist and Lou as Consigliere, and the bad blog postings will vanish into the silicon mist.
I don't even pretend to understand the Cuppy's franchisees or their devotion to the man who took their money. I don't understand why Funding Solutions didn't cut Morg off when all the SBA money was being "misplaced." I don't understand why anyone would let themselves be strung along (for years in some cases) and gently go into the abyss of bankruptcy.
But like masochists who have found their dominatrix, the love affair between Morg and the sucker sheep is a match made in heaven.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Cuppys
I received a copy of this e-mail I believe was sent to Dale Nabors today
Dale, I sent you a text message early today "begging" you to please help us out for the sake of the two small children's lives you are affecting,my grandaughter Kaliegh and my grandson Triston.They are both just two years old and they certainly deserve better than what is about to happen to them because you can't seem to find it in your heart to help us in these dire times for us. Our power will be cut off in the next few days,if we don't have rent by tomorrow we will be asked to leave our home.We have nine dollars in our bank account and can,t even get a response from you.I was obviously wrong about you,you are not a good person.Imagine if your children were put in the position that you are putting these two year olds in.I know for a fact that each and everyone of your employees would give the shirt off their back for the sake of your kids.But not you.You are about to get what you deserve.If I don't receive my full paycheck tomorrow then I will be contacting the SBA administration and letting them know that I know for a fact that you committed fraud[Steve Ottjepka and John DeVine] and I will follow up with all the state investigating agencies.If this was about me then I would let it go but when you lack the human decency to treat people with the respect they deserve and refuse to do the right thing for the children then you are a person that does not deserve to continue to enjoy even the simple pleasures of life[watching your kids grow].Even after all of this is over[you filing bankruptcy seems to be the rumor] I am the type of person that will not rest until you have gone through exactly what you have put my family through.Do you know that Amy Rynearson is pregnant and is expecting December 1st? How can you do this to her family? You have asked people to follow you to Alabama and you are prepared to leave them stranded with no regard for their families.Do not take this as a threat,I have been loyal up until today but the loyalty ends today.You need to be taught a lesson of life and if God has put me in the position to teach you that lesson then I will devote whatever time and energy is needed for me to fulfill this mission.You are about to suffer the consequences of not showing common decency to your fellow man.Even as I write this e-mail I will ask God that your soul be spared and that your children never be put in the position of having to rely on the morals of a person such as their father.Whatever actions I will be taking in the future regarding you I trust that the Good Lord will forgive me for he knows the task I am about to take on.God save the people you have screwed[Franchisees and Employees].So if my paycheck does not show up tomorrow then I will put my plan "B" in motion[I always told you I would have a plan "B"].You and I will see each other again,I guarantee this,I am not sure when I will be there but rest assured I will show up either at your house or at work so that you and I can "settle our differences".It might not happen tomorrow or next week but it will happen eventually.The last thing I have to say is stop stringing your employees and Franchisees along.I have tried to let as many people I can get a hold of that you have no intentions of getting them built out and I hope the employees are starting to see that you have destroyed Cuppy's and you are prepared to take them down with you. May God have mercy on your soul.
RE:Cuppys
I must say... You have balls sir.
I am in shock that you would complain about missing 1 or 2 checks from this company. You worked for the company, you were well aware of what this company was doing yet you want the very franchisees that you helped rip off to feel sorry for you? I am an ex employee. I had nothing to do with the money that was coming in from franchisees but I knew deep down that something was fishy with the company. I just didn't have any proof. You on the other hand do have proof yet you with held that from the proper authorities. I am appald that I even worked for the company, I am even more appald that there were so many crocks that worked for this company, not just Morg or Dale but employees as well. As you have just proven some of the employees fall into the same catagory as Dale and Morg. Yes Morg and Dale wanted everyone to believe that everything was all hunky dory and that is what they sold to franchisees and employees but as I said before I knew something was fishy. If you are one of the employees that truley believed that everything was on the up and up then you are a very nieve person. If you are one of the employees that has proof of what was happening to the franchisee, then you deserve to be in jail right along side Morg and Dale.
For the franchisee, I hope to god that you all get your money back and I am very sorry for being a part of such a crocked company. Keep fighting. I have heard that there is another employee that has written proof of fraud. Hopefully Dale and Morg will be in jail very shortly.
Re: Cuppys
I just love it when people find God when they get what is coming to them but conveniently forget #8, You shall not steal, when paying rent with dirty money.
Cuppy's Employee
Are you freakin' kidding me?? How dare you get on a website that is a discussion board where franchisees have been trying to get advice about how to salvage their lives and talk about YOUR paycheck.
"I have been loyal up until today but the loyalty ends today."
So you were fine up until today knowing that you were helping to defraud people and lie to them about their businesses? Not until you weren't getting your portion of the pie do you give a damn. THEN you want to start talking about God. . . Do Cuppy's employees get a pamphlet when they start work that is a "how to" manual about calling forth the name of GOD to get people to believe in you? Never spoke to Dale but Morg was a master at that. Too bad for him I beleive religion that would have him as a member. (old WC Fields reference)
Do you really beleive in your heart of hearts that you have been wronged. When you play on the "bad" guy's team sometimes you get screwed. Don't get too upset if you find little support here!!! Go get another minimum wage job!!
Get facts straight/ Cuppy's
I have to let you know there were some good people that worked at Cuppy's, very few but some. Problems were with Management.... Let's see you have Amy Hiller that doesn't know how to even organize her closet at home and she is Operations Manager? Kelli Burgess was an Executive Assistant and she worked at a Payday loan place before. Trinetti McDonald don't know where she came from but she had no clue what she was doing. You have Roy's wife that was in the Training Dept- and the training programs were horrible. I could go on and on- then you have Dale. He came in thought he knew what he was doing, and obviously does not. There were a few that actually cared about the franchisees and would do whatever it took to help them out. Those people know who you are and thank you for all you did. Dale- do you ever plan on paying ex-employees? You may have to put your life savings up like the franchisees did, but you cannot go without paying YOUR OWN employees. Also, how are you not going to even tell shalimar, fl Cuppy's Employees that they no longer have a job? They have to come to work to find out the lock is changed- grow up and be a real HUMAN BEING! This company makes me ill, and hopefully soon it will all be over b/c you can't afford to stay afloat!
Cuppys Employee
If its possible that there are people out there that can get scammed[brainwashed] for $30,000+ don't you think these people can scam[brainwash]a group of employees into believing that what they are doing is on the up and up.You are nothing but a hypocrite if you think that you as a group are the only ones that can get brainwashed[scammed]into believing what they were selling.If everyone used the same logic that you use then all companies with bad leaders who don't belive in God-the employees of that company would automatically follow suit.Surely you have learned something since you were scammed.
Cuppy's Employee
I would respond to the scammed/brainwashed post but I have no idea what the point is.
Morgan brainwashed em all
I think that the point is an attempt to draw an analogy between each single franchisee who got scammed and the group of employees who scammed that franchisee.
The analogy is flawed, and not merely because one person got fleeced and a group of people did the fleecing.
A single franchisee may rightly have believed that the company was on the level. And indeed, the employees at the outset may have believed that the company was on the level.
But with the passage of each day, it became more and more clear to the Cuppys/Elite/Medina/Emerald/JavaJoz/SBT/MBT etc employees that this was a giant scam.
A new sucker just stumbling across the "opportunity" to buy a franchise from Cuppy's (oops, I meant to say buy a franchise from Elite. Or wait, were they buying from Cuppy's? Oh, thats right, there was that matter of impound and escrow) may have been remiss in not conducting complete pre-purchase investigation.
But that is quite different from the employees who were there each and every day seeing what went on and dodging the phones ringing off the hook.
And again, it is important to remember that until Dale Nabors took over and started cracking the whip, those employees were content to pull in new suckers by the day.
All of a sudden (ha, ha), they realized that they had been scamming the life savings from people for the last 2 years.
And even then, do you remember what they blogged about? That damn day care center being shut down.
Franchisees are having their homes foreclosed on due to this scam, and the scamsters that hounded them for money are whining cause they have to hire a babysitter!
That's rich!
That employees would even have developed a "Plan B" (as one of them put it) to make sure that they could extort their paychecks from Dale upon threat of going to the SBA tells you that they knew that this was a scam, and that if they got their money they would have kept their mouths shut.
You know, if Morg came back all of these employees would hug him and beg for him to hire them for the next scam.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Morg
Paul writes: "You know, if Morg came back all of these employees would hug him and beg for him to hire them for the next scam."
I am sure that he is considering it as we speak.
Michael Webster PhD LLB
Franchise News
Cuppys employees: karma's a bitch
"Rely on the morals" of Dale Nabors?!!!
Now that's the pot calling out the kettle!
So if you got your money, all would be well and you would keep the secrets. But if you are not paid, then and only then will you go to the SBA.
You disgust me more than Nabors, Morgan, Hayes, and Snowden combined.
You had no trouble taking your paycheck each week, knowing that paycheck was coming from the proceeds of this fraud which you daily assisted in perpetrating.
Spare us your lectures. Take a look in the mirror.
If you really feel that bad, give back all the money you made from working this con game.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul you a tiger
All the lawyers on BMM are tigers!
Cuppys
Paul-you are as ignorant as they come-the employees as well as the Franchisees were all scammed by these folks-we just didn't have as much to lose as the franchisees.I guess in your books if you didn't lose more than $30,000 then you don't qualify to be in this group.I am surprised that you didn't see that this employees e-mail was used to entice Dale to pay his employees.The SBA investigation has already begun[this employee has already been contacted and has cooperated with the investigators].You think the Franchisees are the only ones that have been lied to regarding operations,disbursements,equipment orders?Can we please get somebody more qualified than this "Paul" to comment?
My apologies to Cuppy's employees
My apologies. You are correct.
All the web postings over the past 2 years.
All the threats from Cuppy's lawyers against zees who lost their money.
All the "deposit" money that disappeared.
All the stories about the Snowden "sale" to Morgan.
All the calls from franchisees asking where their money went.
All the franchisees who showed up (some with lawyers in tow) at the Ft Walton office.
All the shell companies.
All the mark-ups as construction contracts were flipped like it was a poker game.
All the hidden ownership in the construction companies.
All the employees pressuring zees to wire money today.
All the "escrow" money that was never really in escrow.
Yeah. You didn't know 'nuthin. Nuthin at all.
Yeah. You didn't say 'nuthin. Nuthin at all.
Stealing millions of dollars is ok, so long as you take the kids to church on Sunday. Hey, if Jesus had wanted that franchisee money put in the escrow account, he woulda put it there himself.
But let Dale Nabors cut off the gravy train, and we're ready to spill the beans.
You didn't talk to the SBA when you were living off the misery of those franchisees for whom you now cry crocodile tears. The franchisees are not that stupid as to believe that you are helping them for any reason other than revenge. No need to suddenly get a conscience to justify your clarity of vision, revenge is a perfectly rational motive for your newfound loquaciousness.
Guess it goes to prove the old axiom: No honor among thieves.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
My apologies to Cuppy's employees
Paul I think you need to stop commenting-you are showing your ignorance even more.Have you talked to any employees directly to get the facts? No,you just continue to group all of the employees in one bad bag because it is easier to justify your comments.I hope you don't handle your other cases this way-I would hate to think that you just get the facts that help your side of the argument and then act like you are "right and just" and anyone that has more information that would prove you wrong has to be on the "bad" side.Surely you are a better lawyer than that.Is a Franchisee attorney like a real attorney?
What was your role in fleecing the Mark?
I didn't steal money from franchisees and then have the gall to whine about it.
That whining is what is so annoying about Cuppy's (or whatever entity du jour employed you) employees.
Under Morg's leadership, you suckered the marks out of millions of dollars. Then you whine about missing a lousy one paycheck while the marks are getting foreclosed on the courthouse steps.
At least Dale isn't whining. And Morg played the game, knew when to fold 'em, and my guess is that he is judgment proof.
Yes, I am a "real" attorney.
And you are a real con artist.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
what was your role in fleecing the mark
Why Paul,are you name calling?
If the shoe fits
Do you really want me to continue and give a more explicit road map to someone to sue your thieving butt?
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Some Additional Facts
You might also want to consider these facts.
1. There are documents which show that Dale drew down on an SBA approved loan using an invoice which was falsified.
2. The alleged trust set up for the benefit of the Java Jo's depositor's no longer has an attorney overseeing it, and appears not to be paying out.
3. The total amount of SBA loans that Morgan/Dale was able to access was $27 million. Where are the $27 million of construction?
4. Cuppy's and Elite made illegal earnings representations to Funding Solutions, who were agents of the franchisees, in order to access SBA approved lenders. This may have the element of a RICO claim.
Michael Webster PhD LLB
Franchise News
Hair o'the dog @ Cuppys
The sad irony is that the only thing that might have worked to salvage this wreck is a hair o'the dog : by getting the loan money disbursed based on an artificially-inflated invoice and then using the "profit" to fund completion of the other buildouts (the ones which Morg got the money for and did not construct).
The problem is that once the banks cut off the spigot, that plan was dead.
....oh, and there is that tiny matter of the federal guaranty making such action a federal offense....
It is unfortunate that Nabors took over at precisely the time that people were wising-up to this whole scam, but my guess is that Morgan's timing on the sale to Nabors was not coincidental.
If Webster is correct, I agree that it does not excuse Nabors. But...
It does go to the issue of motive, and suggests that Nabors figured out the only way (albeit an illegal one) to save this franchise system...and not incidentally, to save the life savings of the open franchisees as well as the depositor/unopened franchisees.
Kind of sadly ironic, if that is what went on.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Irony and Fraud
Michael Webster PhD LLB
Franchise News
Means justifying the ends?
Paul,
What Dale did was not primarily ironic; it was clearly illegal. But a lovable scamp nonetheless, eh?
You barely made up with the "vacationing in Barrie" reference.
Les Stewart MBA
Understanding Franchising
Nabors clarification
Les: the irony is that the scheme perpetrated by Morgan was illegal. Yet, continuing the scheme (only using the money to actually do the buildouts) was the only way to salvage the franchise system.
No, I don't find Nabors "lovable" and I have been critical of his ethics, as you are well aware.
But I do think that Nabors genuinely believed (rightly so) that this was the only way to salvage the company. Certainly he did not do this for altruistic motives; he figured that once he got thru the crisis and had 300 stores open that he could cash in his chips.
So having sought the monetary reward, I have no problem with him paying the price for failure (if we did that with Fannie and Freddie, we wouldn't have socialized failure).
But it is still not a happy time, and this failure is going to be another blow to all of the franchisees who have been slaughtered by Snowden/Morgan/Hibbing/Hayes/Nabors and their ilk.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
The lesser of two franchisors
Paul,
That may be so in the final analysis.
Just so another of your points isn't lost from this situation, from the franchise investors' point of view:
Maybe it's true: You'd lose your lunch if you saw how hot dogs were made and that Dale's bad luck is that BMM was simply recording the events accurately.
Les Stewart MBA
Understanding Franchising
IFA party line
Les, the IFA position is that all franchisors are created equal. This is simply not true, and Cuppy's (which remains an IFA member in good standing) is an example of why the IFA is wrong.
Most franchise systems don't skirt the law by having a "construction company" (which incidentally, doesn't actually construct anything) sell franchises.
Most franchise systems don't fake invoices and submit them to banks to get federally-guaranteed money f/b/o a franchisee, and then take that money and spend it on god-knows-what.
The franchise industry maintains this fiction that franchisors can do no wrong in the erroneous belief that any chink in the armor would diminish the clout of the unified "voice of franchising" and open the door for regulation.
That belief is erroneous precisely because legislators and regulators can see for themselves that there is a problem and that bad actors are not suffering any reputational damage or otherwise being constrained by their industry peers.
As we have seen from recent events in the financial markets, when a lack of self-regulation leads to negative externalities (particularly externalities borne by taxpayers) then it is not simply the offenders who may be punished, the entire industry may end up subject to increased scrutiny and regulation.
Here, the Cuppy's fiasco will likely result in a number of families losing their homes and declaring bankruptcy, and given the weak housing market the SBA may end up still forking over money even after foreclosing on the Cuppy's franchisees.
Of course, maybe the SBA could seize some of those infamous Coach handbags ;)
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Ignorant???
You show your own ignorance by calling Paul names. He's more honest than anyone my husband and I ever talked to, he shot from the hip and was full of true character. We saw very little of that from anyone we dealt with at Cuppy's. Someone is not ignorant simply because you do not like what they say.
The anger and moral indignation that former Cuppy's employees are voicing is absolutely hysterical to me. These are the same people that would not return calls and lied to people over the phone as they waited for their stores to open and their financial futures were ruined. In addition, aren't you the same employees that were getting on the blogs and telling the public how crazy the bloggers were? That Cuppy's was a fabulous company, a real family!! What a freakin' joke. Take your indignation and shove it up your cuppy!!
Paul ignorant???
How do you know these are the same people? Again you have people telling you information and just like when you got scammed you are believing them unconditionally.I think the problem with this scam was probably you.
Paul Ignorant???
Just because I said Paul is ignorant is not name calling.This simply implies that he does not have the knowledge or all the facts to be voicing his opinions and have any credibility to them.Your opinion of Paul can not be credible either because lets be honest here you got scammed into believing in this company and look where that belief got you
Paul Ignorant??
We may have gotten scammed but I am not nor have I ever whined about it. We have just watched all of this unfold with interest as we file personal bankrupcy. We started the process back in 2005 when there was none of this imformation out there. I have little sympathy for the people who continued to give any of them money after the news broke from the Scobles in Jan. 2006. Unfortunately we had just opened and it was too late for us. I do however take exception with people like you who seem to have no real stake in any of this except for morbid curiousity which begs the question why you don't have more in your life!
My opinion of Paul is just that, an opinion. However, yours is a personal attack, which I have every right to respond to. As for Paul not knowing anything, he knows the law and if there is information he does not have he is always very careful about saying that he needs more info or to research the topic further.
"Just because I said Paul is ignorant is not name calling" Sounds like it to me! Anyway go find another hobby and let people who are really trying to salvage an answer out of this fiasco, keep discussing!
Paul ignorant
Don't you see what you have just said? Yes Paul might know the law but yet he continues to voice his opinion on whether or not that employee was just ignorant or a bad person.He doesn't know what that particular employee'grasp of the entire situation was-he just says what the Franchisee wants to hear and then the Franchisee automatically thinks he is correct because he is a lawyer.The people that choose to buy into that line of thinking deserve to be scammed and Paul is doing that-he has you believing him without knowing all of the facts.
Paul Ignorant
No, I don't know what I just said that would make you think that I deserved to be scammed. The point that you miss is that, excuse me, the biggest of the points that you are missing is how absolutely ludicrous it is to hear you harping about one small element of what I've written and ignore the rest.
Paul does not work for us, he gets nothing for helping people sift through the foolishness that is Cuppy's on this forum. What "facts" am I missing? You're right that many of the people that we dealt with back in 2005-2006 may not still work there, or be the ones getting cheated out of their paychecks. However, I would venture to say that the ones that worked there most recently may even be worse because they were hired during the fiasco. Since the day they were hired, if they were hired after Jan. 2006, Cuppy's has been ensconced in controversy.
By the way, if all of these employees were just scammed like the poor franchisees, why are they all threatening to go public with "what they know?" That doesn't sound like people who are innocent to me!
Follow the money
Umm...no.
They ain't buying anything from me. I practice locally and have not gotten a single dime from any Cuppy's franchisee.
Unlike you, who make your living off of getting dimes from Cuppy's franchisees.
Oh... sorry. Forgot you are on the unemployment line now.
Well, the Dept of Labor can chase after Dale for that last paycheck. Hope you choke on the money; it is the money sucked out of all those franchisees you fleeced.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400