Cuppy's New CEO To Improve Operations and Meet Refund Obligations
Editor's note: After 18 days at the helm, Dale Nabors, new CEO of Cuppy's Coffee and affilliated companies, reports on next steps for the troubled chain. His post was originally written as a comment responding to posters who declared that more than new ownership was needed to lift the franchise chain from its current problems.
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As much as I'd like to respond to each and every comment regarding Cuppy's I do not have the time, nor would it be wise to do so. However, this is one which I'd like to provide a short response.
I can agree with some of both guest's comments. I wholeheartedly agree that the company needs and must have more than just new ownership. It has been approximately 20 business days since I acquired Cuppy's, and just 18 if you exclude the day of acquisition and today which has hardly begun. In this relatively short period of time, numerous employees have been terminated and more than a million dollars per year has been cut from the company's operating expenses. In the coming weeks and months there will be more cuts, a few new hires, and many new systems, processes and procedures implemented.
Not withstanding any of the above, the company has a very good product, both from a consumer perspective and an investment perspective. The company has MANY employees who posses substantial knowledge, skills and abilities along with the interest and commitment to helping each and every franchisee to succeed, in their business.
I've stated our objectives very clearly, and quite simply. We will curtail sales, we will focus on opening sold but unopened stores and help every store increase their bottom line profitability. The cuts which have been made and that will be made, are being made in order to strengthen the company and to allow us to deal with mission critical issues like opening stores, improving systems, and providing refunds to those who are entitled to such.
The company did not get into it's current position overnight, and we will not resolve all issues overnight....however, I will tell you now, and my team will show you in the coming weeks and months that we are committed to resolving each and every issue which we are faced with, in a fair and equitable manner, and to building a brand that is both respected and trusted.
Believe & Succeed,Dale Nabors
- Franchise topic:
This study does not exist:
According to the US Department of Commerce, 90 percent of franchise businesses are still operating 10 years, but 82 percent of all independent businesses have failed.
See:
Franchise Statistics Debunked Again!Jim Coen
877-469-3002
Blog: Lets Talk Franchising
Executive Director of the New England Franchise Association
Director & Clerk, Dunkin Donuts Independent Franchise Owners (DDIFO) Board of Directors
Jim Coen
877-469-3002
Blog: Lets Talk Franchising
Executive Director of the New England Franchise Association
President, Dunkin Donuts Independent Franchise Owners (DDIFO, Inc.)
At every IFA seminar I ever attended, the guy who did it would always get drunk with me and joke about what BS it was. After he did it, he was always the honored guest of the IFA at its spring legal seminar meetings. At one point he even wanted me to hire his son into my law firm. I am extremely well informed about this farce.--
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
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
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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
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
I disagree with "Guest" to the extent that there are unanswered questions which are indicative of fraud:
Any person who borrowed money to fund their Cuppy's should find out if all of the money was disbursed yet, and if the money was all disbursed but the construction not completed, the borrower should have their attorney get involved immediately.
"Wait and see" has not worked.
With the prospect of a investigation of Funding Solutions LLC and Cuppy's Coffee by the Inspector General of the cognizant federal agency, certain people may be working overtime burning out the motor in the paper shredders even as they counsel others to "wait and see."
We have all had much sport bashing Bob Purvin rather than following the money, and that was a very stupid and irrelevant distraction (Parenthetically I would note that while the AAFD threw out this franchisor and directed them to remove the AAFD logo from the website, the franchisor still proudly displays the IFA logo ).
Perhaps now the affected franchisees will actually focus on what happened to those tens of millions of dollars. But perhaps not... that would require some hard work and logic-- qualities which seem to be in short supply among both zees and the zor.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Being from the inside, please explain what has been stolen, how things worked, etc.
I know it won't help you out in the future, but it may help the franchisees that you cared about out with their future success or in them trying to get their money back.
Employees and franchisees need Morg to return and paint that glorious vision once again. This time don't settle for just being the best company in Florida. Think bigger.
Morg can give each a great big bear hug to feel good about themselves again.
Sorry, but it's not going to happen unless we can get Cuppy's franchisees to rally Morgy's spirit.
Morgy just phoned me from his beach cabana (located in an undisclosed location lacking an extradition treaty).
He is feeling that his life's work has all been for nothing. His vision was indeed to be #1. But mere millions in fleeced booty will no longer suffice, now that Bernie Madoff has raised the bar.
Morgy is incolsolable, but the Cuppy's franchisees can help.
Call Morgy, and remind him that even though the bank is foreclosing on your home and the kids' college fund is empty... you still love him, are greatful for the opportunity to start over deep in debt, and--most importantly--you will never rat him out to the AG.
The disappointed Floridians must also call Morgy; the honor of their state is at stake. Here in New York, we have low-level goombahs from Long Island who fleeced more bucks from working people than Morgy did. And of course, we also have our hero Bernie whining about being a "prisoner" in his Park Avenue penthouse.
Come on up to NYC and find out how to run a decent pyramid scheme. I hear the Learning Annex is offering a one-day seminar.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
It sounds like Morg had that rare ability to make people feel good about themselves and their future.
Take a look at the video below. I swear the voice of this lady sounds just like an ex-Java Jo'z or Cuppy's Coffee franchisee we've heard here.
The Cuppy's-sounding franchisee in the video, the first story, definitely needs a hug from Morg to feel better about her $400k bad investment.
This could be a good source of revenue for Morg & Dale: selling the names and contact info of the suckers who sent Elite/Cuppy's/JavaJoz millions could net sufficient profit to finance a nice house in Florida, where they have that juicy homestead exemption.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Oh man! I'm trying not to laugh but I can't help myself . . .
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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
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
I wrote a short piece about this telemarketing scam , which you might find interesting.
Michael Webster, a franchisee attorney in Toronto, Ontario, who publishes a website on business opportunities and franchises, called "The BizOp News"
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Oh man! Morg would actually do something?!? You mean like ask for $40,000 more from you?
I don't know what to make of some of the Cuppy's franchisees. These kind of postings make me realize that they would one day leave Cuppy's only to find the next bad investment.
Judging from the statement above and from other stories, there seems to be a significant part of the Cuppy's system that prefers cajoling over reality. To call the honest men cons and the conmen honest.
Strange network.
With due respect, I would suggest that you consider who got the money.
A lot of "depositors" would like to know where their money is. People who paid for build-outs and are paying rent on a white box site are wondering where their money went.
Well???
The real problems of the disappearing money predate Dale Nabors. I realize that Morg Morgan was a warm fuzzy teddy bear who inspired dozens (if not hundreds) of people to give him money. Morg did have that way about him, bless his heart.
... umm, not to be rude but-- where is that money?
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
"Guest" is wrong. As any BMM reader knows, FranSynergy was around long before any of us heard of Cuppy's.
In fact, the famous Exhibit D shows that Dale Nabors arguably assumed a legal liability and pledged the assets of FranSynergy, thereby placing those assets at risk.
All this in the very transaction in which he purchased the Cuppy's-related companies.
"Guest" is demonstrably wrong.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Of course, "Guest" is correct and I am missing a lot of info.
To quote my favorite philosopher, there are "known unknowns" and those make life difficult enough. Add the "unknown unknowns" and we are in the deep muddy.
But I am going on the facts and documents available.
The posting suggested that Dale had siphoned off franchisee money to "launch" FranSynergy, and this is demonstrably untrue. Indeed the reason I stopped speaking to Dale was due to a matter relating to FranSynergy, and that has been discussed before.
Also, I do not have the complete contract. True.
But SBT did not put the contract into the pleading. They did put Exhibit D in the pleading.
So my reply was based on those facts. From what you are saying my guess is that the original post meant to say something other than what ended up being written.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
I don't think there was much planning, and such planning as there was by Dale Nabors quickly foundered on the shoals of Morg's submerged mines.
The magnitude of the unpaid "depositors" was bad enough. But apparently there are people who paid for a full build-out and did not get it; that was not widely known till some time after Nabors took over.
How much Nabors knew about the SBT deal is an open question as well; my gut is that Nabors was shocked to find out what was going on, and I do believe that he was not aware of some key facts until after he bought the company.
Michael Webster has put together the most logical explanation of what happened and why Dale Nabors bought these toxic entities. His explanation covers the known facts and for that reason it is the best current explanation of this story.
And if Webster is correct, then the growing awareness on the part of franchisees who have undisbursed monies is going to throw a potentially fatal money wrench into Nabors' plan.
That is a shame, since if Webster is correct Nabors did have the only non-bankrupty path to setting this company on course.
The problem is that the only significant source of revenue (particularly after stopping the sale of new franchises) is that money in the pipeline. And if those borrowers get wise to the potential for some of their money being shifted to cover the unfinished construction and make payments to all of the franchisees currently under "installment" repayments...well, those borrowers might just tell the lender not to disburse to Elite.
Let's face it: does anyone know what Elite brought to the table?
It took scads of cash (from f'zee wire transfers and bank payments) and promptly sub-contracted the venerable SBT firm to actually do the work.
At least I think that SBT was contracted to do the actual work, but given the soup of entities in what Sean Kelly famously dubbed "The Angola Love Shack" it is difficult to determine who was supposed to do the work.
Whoever that was, much of the work was not done.
So if those borrowers still in the pipeline have a burning desire to run a coffee shop, they just may get a local contractor, source on the Internet for cups and beans, and voila.
Even if the borrowers really want to open a Cuppy's shop, they may get bids from local contractors and find out what the construction is really supposed to cost. And using a non-Cuppy's contractor means that none of that money will flow thru Elite's coffers.
Avoiding money flowing thru Elite may be a smart move for any borrower, given the past history of money which flowed thru Elite.
A corollary to that history is the potential for claims against Elite and a possible bankruptcy filing, which could put the borrower in the position of being an unsecured creditor getting pennies on the dollar but responsible for paying back all the money he borrowed from the bank.
Ironically, SBT deserves a big "Thank You" since that lawsuit filing led to the information which Webster used to piece together this puzzle.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Get real. Dale and Morg where like best friends. Dale came to help Morg sell the company and ended up buying it. Remember the accountants in the offices everyday for months on end. Dale and Morg were making sure they could take the money off shore.
This doesn't fit. If Nabors knew about the unfinished work, the shoddy construction, the complaints from zees, the ownership of SBT, etc...
...then why buy Elite in the first place? Why sign Exhibit D?
Rather, he could have set up a new entity and gotten decent work at a decent price.
I'm not saying "Guest" is wrong, but it just doesn't fit the current set of facts.
Am I missing something?
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
I agree, and actually it was Michael Webster who based much of his analysis on this very point. Indeed, many people have argued that Cuppy's is actually a construction scheme masquerading as a franchise.
But given that there was no money in the Elite coffers, he was only assuming liabilities--there were negligible assets, since my understanding is that the franchisee could cancel the Elite contract.
In any event, given the financial instability a lot of banks would have been very wary of disbursing money, especially if the borrower was keeping the bank appraised of the true progress of the construction.
The only way this makes sense is if he was looking to get the undisbursed loan money and use that to build-out both the unfinished units and the units which he would actually be getting the undisbursed money to build.
And he would have been better off using a virgin entity for that, rather than Elite.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Could you maybe go into detail as to what some of the ramifications might be for the parties involved if these allegations are true?
For example:
- Assuming that you are talking about SBA and government-guaranteed, would the SBA drop Cuppy's from getting SBA backed loans? If so, I would imagine that the depositors that haven't finalized financing, might have a tougher time in these lending times.
- What would happen to the zees that have had their loan already disbursed but no construction done? Would they be liable for their loan if the build-out doesn't take place?
- If this started with the prior management, what would the liabilities be to the new management?
- If employees knew what was happening (past or present), could they be held liable in some fashion?
Thanks Paul for bringing this to light. I think it's important that people stop using this 'wait and see' approach.
I'm glad to hear that you are going through with your build-out on your own, since you haven't been able to get any assistance from the Cuppy's/Elite team.
So, a couple of questions for you:
1. Are you finding the build-out is costing you more or less than what Elite quoted you?
2. Are you planning on staying a Cuppy's franchisee? If so, why, considering all of this that they have put you through?
3. Have you went to your SBA lender and asked where the your money was disbursed to? If so, when was your money disbursed?
I wish you the best of luck, because even though it sounds like you've been screwed over by Cuppy's/Elite in the build-out process you aren't afraid to go it alone. good luck getting that $150k back. I hope that you've spoken with an attorney to try and get it back.
I'm glad to hear that you do have an attorney working for you, I would make sure that he does have experience with the world of franchising. Someone that has a good background in franchise law may give you a better chance of getting out of the agreement.
I always suspected that they were really overcharging for the build-outs. I believe someone stated that this was their way of getting royalties early and which makes their 3% royalty look all the better to prospective candidates.
I think it says a lot when the company has to 'prepay' for construction, yet no construction was performed for you.
It seems like lawsuits are starting to pile up and as someone mentioned on another website, Morg's own step-son is suing them for commissions not paid.
Good luck with your store. I'm not convinced that a coffee shop is a good investment, but i think you have just as good of luck as an independent than as a Cuppy's franchisee.
...does this strike anyone else [2 by 4 to forehead] as an unbelievably stoooopid idea: To take over building out a concept that is likely imploding as we speak?
Dear Ee,
And this is without any no-brainer sunk cost arguments, control of trademark, supplies, worldside recession, Starbuck turtling, etc.
Les Stewart MBA
Understanding Franchising
Les Stewart MBA FranchiseFool :: WikidFranchise
If Funding Solutions was involved, you should discuss that in detail with your attorney.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
JD: thanks, but actually it was Webster who put these pieces together and gets the credit.
As to your other questions: this is still a developing situation and any affected borrowers should really get appropriate legal advice--sooner rather than later.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
You are likely correct about Nabors not perpetrating anything, since he just took over the companies.
But as to perpetuating: I would assume that he is aware of everything that has been coming to public light, and that he has been aware of this since taking over the companies. And given the information which Webster uncovered, the signing of the Exhibit D makes a lot more sense and does not necessarily cast Nabors in a favorable light.
Now if the money approved but not disbursed has been choked off, this may pose a bit of a cash problem... not to mention if people begin to subpoena the invoices supporting the bank disbursements and putting 2+2 together.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
but, Cuppy's/Elite have a few open cases in Okaloosa County, that they were served summons on this week, so maybe that is what this poster was stating.
Sounds like some of the depositors are tired of waiting.
You are right right, bad real estate, changing demographics, economy, etc are all common reasons for store closings.
The major difference between Starbucks and Cuppy's is that Starbucks is an established brand that is publically traded with company owned stores, when Starbucks closes 8% of their stores it is diluted among millions of shareholders.
When Cuppy's closes a store a franchisee may have lost more than they are worth.
In my opinion the franchisor has a greater responsibility to lead franchisees down a path that includes good business decisions that are well thought out and the risks are throughly caclulated, rather than just "selling" franchises.
I will say that over the years here on BlueMauMau I've come to trust that Dale Nabors the new owner of Cuppy's takes his responsibilities seriously.
Some franchisors don't worry about the franchisees risks because it's "not their money".
Good franchisors view it as a brand value, its not who is making the investment but what is more important is whether that investment adds to the overall value of the brand.
Jim Coen
877-469-3002
Blog: Lets Talk Franchising
Executive Director of the New England Franchise Association
Clerk, Dunkin Donuts Independent Franchise Owners (DDIFO) Board of Directors
Jim Coen
877-469-3002
Blog: Lets Talk Franchising
Executive Director of the New England Franchise Association
President, Dunkin Donuts Independent Franchise Owners (DDIFO, Inc.)
Why don't you post specifics as to how the new regime has helped and how you find the Cuppy's franchise system to be advantageous? What has the new ownership done to improve the life of existing and open operations?
Please do tell......
If "Guest" really worked in the industry, he would realize that rationalization of the supply chain is critical in QSRs. This step was a result of work Dale Nabors did as an outside consultant, and indicates a grasp of the importance of unit profitability and how to achieve it.
Foodservice (and retail foodservice in particular) is a business where fractions of a cent make a difference, as does throughput (especially peak throughput)-- both issues addressed by Nabors' action.
Based on old BMM postings, I always thought Nabors was a lot of hot air. But as someone who attended a Subway meeting ages ago where the issue of cup lid sizing was a hot agenda item, I can tell you that when I heard last month that one of Nabors' achievements was dealing with "cup issues" I was quite impressed.
The blithe dismissal of a concrete action which any foodservice professional would recognize as attentive operational management illustrates the larger issue of why readers should take "Guest" postings with more than a grain of salt; sometimes they are informed postings by people with reason to remain anonymous... but not always, and not in this case.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Not about anyone's butt. It's about our wallets.
Mr. MauMau has commented that BMM needs more discussion of operational issues to round-out the discussion on BMM.
He has a point. Good operational tips are one thing we can all benefit from.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
In my less than humble opinion, it is the franchisees who would be the most productive innovators and improvers in any franchise system. Far more really good ideas come from them than ever come from the franchisor.
But franchisors don't seem to incentivize the contribution of great ideas from the field.
What techniques are there that can be used to stimulate the great participations of the franchisees in improvements? Now this is a thread worth pursuing.
Thanks, Paul --
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
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
Excellent suggestion, Guest.
Now is not the time to be wishy-washy or use ‘Rome wasn’t built in a day’ excuses. - Guest
Fortune favors the bold. Virgil (And he's Roman.)
Boldness has genius, power, and magic in it. - Goethe (not Roman, but has a street in Chicago named after him. pronounced Go-thee)
Sean
seankelly[at]ideafarm.net
Franchise Pick
Franchisor Marketing
seankelly@ideafarm.net
IdeaFarm, Franchise Pick
Franchisor Marketing
Logic has never been a strong suit of most internet discussion boards, but BMM tends to have a higher level of discussion and people who actually know what they are talking about.
From what I have heard, the operating zees of this particular system are not disgruntled and several zees have praised Mr. Nabors' efforts to increase unit-level profitability, in particular a successful effort to reduce raw materials costs.
The complaints are coming from people who did not open stores, and the current problems therefore seem to be with the question of which of them are contractually entitled to be refunded monies and the promptness of said refunds.
What most bloviators have missed is the 800 pound gorilla: Intermediate and long-term structural issues which require immediate attention. Indeed, several AAFD attendees were more concerned with those issues than the dozen refund claimants, and their concerns are well-founded.
Ironically, Mr. Nabors' post is the first BMM post to deal with the fundamental issues facing the franchisor; a proactive approach which has been lacking in Morgan's management.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Guest: Basic business wisdom warns “Never Believe Your Own PR”, and I can assure you that I do not believe that I’m as good as some franchisees have described me, but I will always strive to become so. Of the dozens of unsolicited testimonials which have been received, none have been edited, nor does any author have a reason to believe that they’ll benefit from writing one. My top two testimonials to date: a franchisee who had never paid a royalty sent in a check with a note saying “I now feel as though the company deserves this”; and the one who called in tears to say, “Thank you for saving my investment”.
As for the posting from “the lady in Arlington” which I can not locate, nor validate that it was actually posted by the zee, your reference is the third time that it’s been mentioned here on BMM, the first two occasions can be found here and here. It is true that the Cuppy’s Café in Arlington was closed, approximately one month prior to my acquisition of the company. Prior to acquiring the company I had spent many hours trying to facilitate a more positive outcome to this particular situation. It was a very sad day indeed, when one of the very first Cuppy’s closed. Shortly after my acquisition of Cuppy’s I received separate emails from both husband and wife.
SHE WROTE:
HE WROTE:
I’ve shared the above with the BMM community in an effort to show that there are always two sides to every story, and sometimes one side may take more than one position depending on the audience. With that said, their story is one of many which caused me to purchase the company, and I hope to use the lessons learned to help prevent others from facing the same challenges in the future.
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com
Dale work on solving Cuppy's problems and forget about doing it publicly on BMM.
The Truth Shall Set You Free!
TIF
The Truth Shall Set You Free!
TIF
Guest....Please alow me to explain why one should care about "Anonymous" postings by way of example.
Do you really think that I'd make a post, under my name, and then fabricate verbiage and claim it to be from a known franchisee? Absolutely Not! However, it is easy for you to hide behind anonymity and suggest such.
And to clarify, I did not make the post and include the text from the e-mail to share an "apology" but to show how there are two sides to every story, and the presentation often changes based on it's intended audience.
Furthermore, I omitted names because I was sharing information about a former franchisee who had been identified in a specific way, and out of respect to them, I did not want to provide additional identifing information.
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com
I have had my differences with Dale Nabors, but we don't need to be rude to someone who is not the perpetrator of this scheme. Indeed, Nabors first got involved after the Snowden/Morgan transfer, and as I understand he worked to lower the food costs for f'zees.
Not only is Nabors not in a hole, but TiF is heading down a road where Nabors may ultimately go and if Nabors does that it will not be good for those who seek to get money from any of the old Morgan entities.
Nabors has certain priority claimants on the corporate assets. Then there are various unliqudated, liquidated, and contingent claims. Nabors has just recently taken over, but he has files and he has a pocket calculator.
In lifeguard training, they teach you that if you try to rescue someone who is hysterical and tries to pull you down, you push away and let the person drown rather than take both of you to the bottom.
Here, Nabors has a pool of existing operating franchisees and a debt load which is likely unsupportable. Couple that with rumblings from prospective claimants who are balking at settlement and do the math.
Nabors is not a stupid man, nor is he unskilled in business. To pretend that he is not taking stock of his options is to assume a level of incompetence which may have been present with Robert Morgan but which would seriously underestimate Nabors.
Dale Nabors is not in the hole, the claimants are.
That may not be fair, and the claimants can go cry on Sean Kelly's shoulder. But those who actually want to try and get any money should focus on the money, not the morality of Morgan (or anyone else).
Can anybody say "cram down?"
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Wow you are absolutely right! What was I thinking? I am commanding Steinberg, Webster et al to suspend reality immediately and I am summing the power of the gods to make all Cuppy's victims whole.
Now that the matter is resolved are you satisfied? Anything else I can do for you would be my pleasure!
The Truth Shall Set You Free!
TIF
The Truth Shall Set You Free!
TIF
You should fix this, TiF.
Much as people were talking privately, nobody wanted to state the obvious, but since you were edging toward scooping me, I quipped about "cram down".
Then Webster had to explain the punchline to everybody and now the cat's out of the bag.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Everyone else does.
The Truth Shall Set You Free!
TIF
The Truth Shall Set You Free!
TIF
Les Stewart MBA
Understanding Franchising
Les Stewart MBA FranchiseFool :: WikidFranchise
for people to write their stories to warn others. Honorable people do not think like a crook. The more stories the better so everyone will be aware. Cuppy's at least is trying to make an effort. It doesn't make sense why it is taking so long.
People need to educate themselves before they decide to give money to a franchise. The only thing I don't understand is people sending money without signing an agreement. Can you explain why and how this happened?
Don't feel bad my husband and I were taken by a bad zor. I am just interested in your story so other's will be warned.
... on so many levels.
Should be on the "depositor zee" escutcheon ;)
On that note, goodnight.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Guest writes: "By the way, we believe he is in the "hole" thank you."
So you think that the company is insolvent. Then, why on earth do you think that you can get paid any money as an unsecured creditor - and someone who helped in pulling the plug?
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Mr. Webster: You are an overly-legalistic fool who doesn't understand the pain of the unsecured creditors.
11 U.S.C. is merely a suggestion which any moral god-fearing federal Judge will ignore once the unsecured creditors tell him of their pain.
And any priority which the IRS and any secured creditors may have under 11 USC 507 will be waived once the unsecured creditors start crying on the blogs.
We who are not as heartless as you Canadian attorneys have already made plans. DoDil even baked an apple pie for the Judge to remind him of the values learned at his mother's knee. Unfortunately, Sean Kelly ate the whole pie, and now DoDil won't bake another one till Sean promises to behave.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
It is not a threat, it is reality.
That discussion of a prepackaged Chapter 11 is a surprise to you is significant: this has been on the table since day one, but nobody broached it publicly till now.
That you find a normal discussion as would occur in any corporate boardroom under such circumstances to be a "threat" indicates that you might benefit from taking a more businesslike perspective and anticipating your opponent's next moves.
For those of us who do this every day, thinking strategically and acting accordingly are part of the job. It would be like playing chess and not thinking ahead. I'm a lousy chess player, but we've discussed that before...point is, I am telling you the same thing that Dale Nabors is hearing from his legal and financial people, and the same thing that people have been saying privately for weeks now.
But hey, be proud of your ignorance. Wallow in it, and shoot the messenger who tells you the facts.
Such a legal analysis as I have made today is no different in nature from the analysis I made a year and a half ago regarding the initial conveyance from Snowden to Morgan.
Um... was I right on the money there?
And I reiterated at the AAFD meeting that I believed the Snowden-Morgan transfer was not bona fide arms-length, and that the "promissory note" being attached by the IRS was the best thing that happened to the people owed money by Java Joz.
I'll stack my record at accurate analysis against yours any day of the week. Oh wait, you are anonymous.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Well, you said the "B" word first, not me.
A pre-packaged Chapter 11 would be one of the options that anyone in Nabors' situation would have to take seriously. Given Nabors' knowledge that this ship was taking on water, he likely looked into this as part of his planning during the acquisition phase.
For the existing franchisees, such a filing might be the best thing in the long run. Of course, the filing would have to be disclosed in the FDD, but let's face it: Nabors problem is the backlog of sold-but-unopened units, and a sophisticated investor would look favorably on a cleaned-up balance sheet with liabilities extinguished.
I know that here and on FranchisePick there will be the de rigeur bashing by anonymous bloggers, but shooting the messenger won't change the facts.
What TiF wrote publicly is exactly what a lot of people have been saying privately: from a hard-nosed business perspective, attempts at accomodation with the "depositor zees" may jeopardize the survival of the "operating zees."
No good options here, but this death-by-a-thousand-cuts is not an option at all.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Guest writes: "how about just staying off the web altogether and crawling back into your hole along with the other opportunists?"
Yes, guest why don't take your own advice. Either engage in constructive debate or leave.
It is obvious to most reasonable people that anyone with a complaint against Cuppy's will sign their name -but some of those complaints will be resolved in Cuppy's favour. Which will produce a torrent of complaints from guests.
If you have got legal case, and you are not happy with your current state, then litigate.
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
The Truth Shall Set You Free!
TIF
Dale you should handle your deposit refund issues on an individual confidential basis and forget about gaining approval that you will never get here at BMM.
The Truth Shall Set You Free!
TIF
The Truth Shall Set You Free!
TIF
My guess is that "Guest" writing the "TIF, Webster, etc." posting has nothing to do with Cuppys. And my guess is that a lot of actual Cuppy's franchisees have a more pragmatic view since they have cash at stake.
Anyway, you are correct about one thing: Webster does know about this company, and knows more than you.
And he's no apologist for Morgan and the shuffling of cash among various Morgan entities.
You might consider that from all that knowledge Webster has stated that there will be no outcome to this story which will be satisfactory. But there may be an outcome which at least preserves a source of future cash to repay depositors.
Those for whom Webster-bashing has become almost as much fun as Purvin-bashing might not care. (And I must confess that Canuck-bashing is indeed almost as much fun as Cali-bashing)
But operating franchisees and depositor franchisees seeking to preserve their money might feel differently than you.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Why thank you kind guest for the compliments?
Oh by-the-way you can register anonymously too...and good karma is on my side in good times and bad times.
Have a nice day!
The Truth Shall Set You Free!
TIF
The Truth Shall Set You Free!
TIF
Guest writes: "Someone gives their name and they are automatically given respect? How about recognizing the value and situation of those who cannot openly give their names?"
Why cannot you openly give your name?
Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
"Guest" wants Webster to "counter with facts" Well...
The posting in question stated that TiF should be demanding "the truth" be uncovered.
You can't handle the truth!
The truth is that people gave a bunch of money to a construction company which should have been placed in an attorney escrow account but was spent (on who knows what) instead.
Now, there ain't enough bucks to go around. Morgan is gone, and Nabors is going around with the bucket brigade cleaning up Morgan's mess.
That is the truth. You know the truth. We all know the truth.
The truth sucks.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
In fact, my wife gets pissed since I MUST stop any channel surfing and watch whenever it is on. So, is TiF really Tom Cruise?
All debate aside, why wouldn't these people contact the Attorney General in Florida and seek a criminal remedy against the prior owners? Wouldn't that bump them to "the front of the line" and seek personal restitution from these guys?
Isn't it just like a kitchen contractor who takes a bunch of deposits, moves the money and then claims BR?
1. Guests can register so we know who we are talking to.
2. I encourage any employee, former or otherwise, to discuss what they know.
3. But facts and reasonable discussion is most important: not mere speculation and shots in the dark.
4. The cost of litigation is related directly to what your attorney thinks your chances of seeing money are. You might want to reflect on that reality.Michael Webster PhD LLB
Franchise News
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Dale,
Over the last 10 years of careful and direct observation of the U.S. and Canadian franchise industry, it has been my experience that individuals will do and say just about anything that will further their short-term self-interest with deceit (opportunism).
And this should not be surprising since franchising is simply a subset of all effectively unregulated free market systems. Franchisors exercise their opportunism more frequently simply because they have the chance to do so.
I see no reason to exempt anyone (including yourself) from this economic reality.
Les Stewart MBA
Understanding Franchising
Les Stewart MBA FranchiseFool :: WikidFranchise
Les is correct. And we should commend Les for his self-criticism that he is furthering his self-interest with deceit. Now, I do want Les to take the next step and expand on the nature of the deceit which he and the anonymous bloggers are perpetrating.
Les is correct, and this is why we cannot trust individuals. It is only through the unity of the proletariat that the bourgeoisie can be defeated.
Dale Nabors has assumed control of the means of production and it is incumbent on all of us to stop him. In naming Ryan Knoll, Don Sniegowski and Bob Purvin as being fellow-travelers, Comrade Les has performed a great service to the proletariat. His actions are an example to all of us to name names and reeducate backsliders.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
..with your wit.
Les Stewart MBA
Understanding Franchising
Les Stewart MBA FranchiseFool :: WikidFranchise
He assumes that Comrade Steinberg is directing any witticism at him. Nothing likely could be further from the truth. My understanding is that Comrade Steinberg merely meant to express the insidiousness of the current bourgeoisie usurpation of all facets of life, including but not limited to, humor. Consider that generally laughter is directed against someone or something and as such reflects the hostility generated by competitive capitalism. It is obvious that would-be members of the revolutionary vanguard who provoke humor are objectively aiding the bourgeoisie by splitting and wrecking the unity of the working class - this is clearly a Trotskyite tactic.
Comrade Steinberg demonstrates that it is necessary that proletarian humor must be the exact opposite of bourgeois humor, not only in humor but in content. Bourgeois humor dissipates the energies of the masses through laughter, by fruitless practice (e.g. rolling in the aisles) and by masochistic behavior (e.g. thigh-slapping). In contrast, proletarian humor directs the workers to the fulfillment of their revolutionary tasks.
The proletarian response to proletarian humor would be a grim smile of determination followed by the clenching and raising of the fist. No frivolous petit-bourgeois individualistic snickering would occur.
So forgive Comrade Steinberg, as his crude attempts at bourgeois humor were merely meant as practice for when the revolution comes We will need comrades such as Comrade Steinberg, who should then be adept at weeding out the capitalist saboteurs in our midst as they will be easily identifiable by their responses to Comrade Steinberg's attempts at bourgeois humor. These saboteurs would then be put to death, preferably using heavy doses of helium (laughing gas), so that their deaths may prove to be a suitable object of horror and negative reinforcement to the broad masses of workers and peasants.
- liberally borrowed from a piece by Tom McLaughlin
Logic has never been a strong suit of most internet discussion boards...
I hate to meddle with tradition, but when you say From what I have heard, the operating zees of this particular system are not disgruntled, is it fair to deduce (or infer?) that the source of this information is the award-winning franchisor and/or the award-giving AAFD? Would it be correct to infer (deduce?) that the zees of this system are indeed happy based on their say-so?
One logical fallacy used quite frequently in these discussions, and not by the infidel class guests, is that silence = contentment. Or happiness. Or the satisfaction from basking in the warmth of franchise fairness. Silence from existing franchisees could also mean a lack of support for the franchisor. Or intimidation from non-disparagement clauses. Or being weak from hunger or having slipped into unconsciousness. Or that lawyers have advised them against discussing upcoming litigation.
And when Uncle Bob tallies up all those successes in the "contracts accepted" column, silence indeed means negotiated settlements with gag orders, not happiness at partial payments or protracted repayment schedules, does it not? In this instance, silence is about as golden as the AAFD's opposition to inhibiting franchisees' freedom of speech.
Sean Kelly
seankelly[at]ideafarm.net
Franchise Pick
Franchisor Marketing
seankelly@ideafarm.net
IdeaFarm, Franchise Pick
Franchisor Marketing