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Log In / Register | Mar 20, 2010

Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg.

Supreme Building Technologies filed suit against Elite Manufacturing, LLC alleging breach of contract regarding $1.7M in unpaid fees.

July 3, 2008, Supreme Building Technologies, Inc. filed a lawsuit against Elite Manufacturing, LLC. for breach of contract, trade secret misappropriation and unfair competition. In short, SBT alleges that Elite has stiffed them for $1.7M in fees for inline construction of Cuppy's Coffee stores, and fabrication of Cuppy's coffee kiosks, carts and mobile units.

Cuppy's to testifyAdditionally, SBT alleges that Elite Manufacturing has reneged on its contract by working with their subcontractors directly, cutting SBT out of the process - and revenue.

The lawsuit and list of invoices are posted at Unhappy Franchisee .

The complaint alleges that:

In January, 2007, Elite manufacturing (a "franchisor of coffee shops") hired SBT to perform its inline and modular construction and act as general contractor for all of Elite's franchise buildings and structures. For inline construction, SBT was to receive 10% upfront as a downpayment, 30% when a building permit was issued, 30% on commencement of build-out, and 30% final payment within 10 days of completion. For modular construction of mobile units, carts and kiosks, SBT was to receive 50% upfront, and 50% within 10 days of completion.

About 3/4s of the inline construction contracts appear to be for either $100,000 or $120,00, though some were as low as $80,000 and others were as high as $150,000. 

Documents filed with the complaint include unpaid invoices dated from October, 2007 to June, 2008 for work done on inline construction totalling $1,427,805.51 and modular construction totalling $324,101.36. The invoices reflect work performed for 44 separate inline franchise locations and 11 franchise mobile units or kiosks.

When the locations listed in the invoices are cross-referenced with the Cuppy's Coffee website, 13 of the inline franchises and 6 of the modular locations are listed as "Open," 14 of the inline and 4 of the modular locations are listed as "Coming Soon," and 17 of the inline locations and 1 modular location are not listed at all.

Who is Supreme Building Technologies, Inc.?
The Articles of Incorporation list Alvin Handshoe of 335 Lane 340 Jimmerson Lake, Freemont, IN as sole stockholder. John Rodesiler has been referred to as SBT President and he and Rob Folk represented SBT at city council meetings.

According to a November, 2007 press release , "The Indiana Economic Development Corporation provided Supreme Building Technologies up to $225,000 in performance-based tax credits and up to $35,000 in training grants based on the company’s job creation plans. With assistance from the Steuben County Economic Development Corporation, the City of Angola will provide the company with property tax abatement."

A representative from the IEDC confirmed that they are "looking into" the situation.

What do you think? Is SBT another victim? Or is this a clever maneuver to avoid paying the many who are owed refunds and payments from Elite Manufacturing?

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Re: Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg. by Guest
As I see it SBT is another victim of Elite and Cuppy's or so approriatly said earlier "Crappy's". SBT is owed money from Elite. There are stores open that SBT had built out. Why was SBT not mentioned to franchisee's? Well the answer is simple. Morg wanted everyone to think that Elite did all of the work for Cuppy's. Morg even went so far as to have SBT employees where Elite shirts when constructing the Cafe's. Here are some facts: 1. SBT, Elite and MBM (which does not exist anymore, heck they don't even have a bank account in there name)are all in the same building. This was done so that the Project Coordinators could have first hand knowledge of each project. 2. SBT owner had used some of his own personal money to finish a lot of the Cafe's build out, even Brian Hayes had done this, which leads me to ask What kind of person uses his own personal money to finish someones construction project? The answer (no matter what you all think) Brian only cares about the franchisee and has tried everything in his power to get that person open. I have seen the frustration that Brian Hayes, John of SBT and Brice Hayes had went through to get the Cafe's done. Unfortunatly once Dale took over it was all downhill from there. Dale stopped sending money to SBT, vendors put Elite on credit hold for nonpayment and the project coordinators in Angola, IN were told by the Florida office to "Spin the truth". Yes that is right to LIE to the Franchisee's. And who were the people telling them to lie that would be Theresa St.Clair, Lori B, Terry, Robin Donlon and Amy Hiller. The very people that some of the franchisee's say are such great people and help them out so much. The Florida office even held a conversation with the Project Coordinators in Angola, IN wanting to teach them how to "Spin". 3. Rob Folk was never employeed by SBT to my knowledge. 4. Brian and Brice Hayes are very good people. As I said earlier these two people were the biggest reason why the Cafe's that did get done, got done. They have both bent over bakwards for franchisee's. If something did not get done to the liking of a Franchisee that would be because Mr.Dale Nabors had put a stop to it. 5. Dale Nabors dose not know much about construction. Brian Hayes has been doing it virtually his whole life. Has Dale??? 6. As for the construction plans, well that would be best dirrected to the one and only person who draws them. I will not mention his name but please do not give him any crap. He is a nice guy and can ONLY do what he is told to do. This would be the main reason why everyone's plans never get to them when they are told they will. According to Florida some people just are not as important as others, which basically means who ever complains the loudest will get their plans first. NOT by when the lease was signed. As I have other things to do, I will stop blogging. But people PLEASE beware, you will not get anything from Cuppy's or Elite unless you scream at them and call them every hour. I wish you all luck as you will need it.
Re: Re: Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg. by Guest
Why would Brian pay out of his own pocket to finish projects unless he really did have a financial interest in SBT? This does not make sense otherwise. Don't the dates on the unpaid invoices preceed Dale's ownership? The money allegedly dried up prior to Dale's acquisition. What about the complaints on the quality of construction of cafes and drive throughs before Dale's acquisition? How did Dale influence those projects? Was the guy who drew the construction plans told to do crappy job? More than one franchisee alleges the plans were poorly completed. SBT was known to franchisees if only because that name appears on those POS plans.
Maybe it's just me by Guest
I don't care how "good" a person you are - if you are being paid, I want competency. It makes no sense to have to do plans 7-8 times. Most of these were because they were for the wrong freaking building! I don't blame Elite for not paying you Jerry, your work is garbage. Your sole job apparently is to do plans, and you fail. Fail, fail, fail, fail, fail. I don't care about how "good" and "wonderful" a person you are, but your professional work is worthless. Should you get paid for producing work that a blindfolded three year old can duplicate - I wouldn't think so. As to Brian, if you have been doing construction your whole life, why is your output still crap? I'm going to have to bribe the health officials to get your work through permitting. I am astounded at the amount you invoiced Elite for in the lawsuit. I am even more astounded since you put a lien for almost double that amount on my property. All I heard from you was apparently what you thought I wanted to hear, and stupid me, I bought it. Come to find out you own the company that you weren't paying, who produced garbage and is now liening me for double the amount. Yes, you are a very "good" person. I don't know squat about Dale. At this point, I don't believe a thing anyone says about anything. I do know that cutting the SBT clowns off makes business sense to me, and I'm throwing my hat in Dale's corner on this one. I don't know how he intends to fix my lien situation, but if you SBT idiots don't take it off, I will sue you myself.
how much did Elite make? by jd

Looking at the SBT complaint, it looks like they charged Elite $100/sq ft for their construction costs.

If you look at the UFOC, that leaves $89,500 for the furniture/fixtures & signage.   What would be a reasonable cost for furniture/fixtures & signage for a 1,000 sq ft store?  $89,500 seems a little steep to me, but I could be wrong. 

Spoiler alert: AAFD vendor of the year? by Sean Kelly
Sean Kelly's picture

Does the AAFD have a franchise supplier of the year award? 

This could be a tough match-up between Elite and SBT.  Perhaps a sing-off will be in order... and the boys better brush up on the old soft shoe.

Was there a musical version of GlenGarry, Glenross? 

A Supreme Building Technologies employee described the litigation as "a real bad elementary school playground fight."  Maybe West Side Story... or Everything I Know I Learned in Kindergarten:  The Musical.

Sean Kelly
seankelly[at]ideafarm.net

Sean Kelly
seankelly@ideafarm.net

IdeaFarm, Franchise  Pick
Franchisor Marketing
Re: Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg. by Guest
Yep. I smell a rat, or with Rob's involvment a big turd. SBT and Crappy's/Elite are probably connected. Crappy's/Elite files bankruptcy so they don't have to pay SBT which is a sub of Crappy's like Elite. They also then will get out of paying those who want a deposit refund. It's called the shell game.
Re: Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg. by Guest
If Rob Folk is involved it's a scam. He learned from the best...Morg Morgan and the Crappy's team.
Re: Re: Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg. by Guest
Rob Folk WORKED for Elite! I have emails from him using rob@medinamgt.com . And he owns a drive-thru unit. Now he represents SBT? How convenient.
Rob's Drive Thru by Truth
Rob Folk never opened his drive thru. He sold his property to CVS for quite a bit of money. He has never opened a Java Jo'z or Cuppy's, just claimed to for what reason? Who knows? I guess it made him feel good acting like he had a clue.
Rob Folk posted on BMM as a Java Jo'z owner by Guest
http://www.bluemaumau.org/comment/7423/Franchise_Pick "As a an owner of a Java Jo'z, I appreciate that Franchise Pick and Blue MauMau have taken the time to address both sides of this issue. All of this controversy affects me as a man trying to run a reputable business. Many of the allegations hurled at the Snowdens, Cuppy's, Java Jo'z, and by proxy me could hurt my reputation in my community. Are there problems between licensors/licensees and franchisors/franchisees, of course. But as businessmen we have to address our issues and keep moving forward." Perhaps the key words are "trying to run a reputable business". LOL
Folked Up by Sean Kelly
Sean Kelly's picture

Actually, that reference came from the City Council minutes from November, 2007 when they approved the economic incentives for Supreme Building Technologies.  The minutes said that John Rodesiler, President, and Rob Folk represented SBT at the meeting.  That doesn't mean that Folk was necessarily employed by SBT.  

Sean Kelly
seankelly@ideafarm.net

IdeaFarm, Franchise  Pick
Franchisor Marketing
Re: Folked Up by Guest
He represented them with no compensation and while employed by Elite?