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Dear Franny (Guests Post Questions Here)

Franny answers franchisee questions

Ask FrannyThis forum was created so that readers and members of Blue MauMau can post questions to Franny about issues of interest to small business and franchise owners. Franny sometimes invites world-class subject matter experts to answer tough questions

If your post is answered by Franny, it will be featured on the front page of this journal under the "Ask Franny" column.

In your post, please do not mention your franchisor's, vendor's or your own firm's name. The intent of this forum is not to give press to a brand name but rather to ask general questions that franchise owners within and outside one's brand might find of interest. (There are press release areas to sell what's great about a brand or other forums to tell tales of franchisee rip off.) Your question may be edited for clarity, brevity and frankly, some entertainment value.

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Sorry, not our fault. Sue us.

On the second day of our stay [Saturday, October 11] at a hotel in Mississauga, Ontario, there was an arson fire and criminal homicide in a room nearby our room on the second floor. We were in town to attend the 50th anniversary of our Canadian friends on Saturday, and then a Sunday brunch after they renewed their vows in a Catholic church that morning.
There were several items of concern that I had planned to mention in my hotel review, including how upon exiting the rear side door of the hotel on Saturday afternoon, which was apparently designated as a smoking area for guests and staff as the ground was littered with many cigarette filters, there was a wooden object used to keep the door ajar so a person entering did not need a key-card.
I noticed this same [or a similar] object had been used to keep what appeared to be a nearby storage unit door ajar when my wife and I first arrived on Friday. When we returned to the hotel at about 6.00 p.m. on Saturday, to rest then shower before meeting our friends, the side entrance door was not ajar and most of the cigarette butts had been picked up, but the wooden object was still next to the step.
FYI: I found this comment posted about this door on August 24: "Hotel is in need of a major update. Internet was so slow it would not work on most of the services I commonly use. The restaurant that used to serve a decent breakfast was disgusting. The entrance to the wing I was in had an overflowing garbage can when I arrived and still overflowing when I left. The side door has a 2 inch gap at the bottom so all manner of junk, leaves, dirt blows into the hallway."
To the best of my belief, hotels are responsible for providing and maintaining adequate standards of security for guests. In legal terms, that's a "duty of care" standard. That translates into making sure staff is trained, doors are secure and monitored; making sure that window and door locks work properly; and if a hotel is in a known dangerous location, management has a responsibility to warn guests.
Nevertheless, according to several media reports – An alleged prostitute who advertised online, was killed by one her clients while performing sex acts for money in the burned out room; and apparently this was the fifth murder in the region in the last twelve months.
"Homicide Insp. George Koekkoek told The News this morning the postmortem is taking "a little bit longer" due to the damage the fire caused on the woman's body. Koekkoek added that detectives have seized security footage from the area as they hunt for [the] killer. Police are looking into whether [the woman] was killed at the hotel. Staff there said she stayed there often." Mississauga News, By Louie Rosella
It may be important to you, for me to note here that no alarm sounded in our room, however, my wife heard an alarm sounding in the hallway and opened the door to see and smell smoke. We exited immediately and remained standing outside in the cold waiting for directions from the staff and watching the police, firefighters and ambulance arrive. The on-duty staff was nowhere to be seen or heard from; and it wasn’t until General Manager arrived – long after emergency personnel – that arrangements were finally made for a bus. The GM was professional and pleasant, but clearly overwhelmed and at times confused, or uninformed and or misinformed by investigators.
We had to remain on this bus until interviewed by the police, after which we were given a key card to another room on the second floor in which to spend Saturday night. When we entered the hotel, the second floor had an overpowering smell of smoke and an officer told us that it was a crime scene. We left and made our own arrangements to stay at a nearby hotel – unaware of any other option.
However, all of our personal items and toiletries were still in our original room, which was off of the hallway that was part of the crime scene; so the GM was either uninformed or misinformed. In any case, the purpose for our trip was ruined – and cannot obviously be repeated at a date in the future.
A civil litigation attorney from Mississauga, Ontario, recently advised us that because this is irreparable harm, we should file a claim. We asked the GM for [a] all our out of pocket expenses, [b] a refund of all Reward Points used on our trip, [c] the money we paid to stay at the other hotel, and [d] nominal compensation for the distress and inconveniences we both experienced as a result of the arson fire and homicide. The GM had already given us a refund [of our Reward Points] for Saturday night, and had offered us another room on the second floor [which was frankly ludicrous], but her response to the aforementioned claim request was very frustrating, to wit: "Sorry, not our fault. Sue us."
As my wife and I seriously doubted that the official corporate policy response of a hotelier “with ownership and management focused on a proven, market-sensitive strategy to acquire or build hotels that provide superior overnight accommodations in the mid-price market … that excels in offering services that exceed expectations” would be to invite a guest to sue one of their hotels, we asked the GM to kindly provide us with the name and contact information of the managing partner. The GM refused.
Possibly the wiser course of action would be for the GM to sit down and take a deep breath before making such a response, or taking the seriousness of our security concerns and emotion distress so lightly, just because few people have knowledge of the legal system nor know the basics on how to sue.
Clearly some reasonable action needs to be taken. How do we find out who the managing partner is?
SKB @ 239.775.8425

Co-Op vs Independent Franchisee Association

Can you describe in two simple bulleted lists, the differences between a Co-Op and an IFA?

Jim Coen's picture

Co-op vs Independent Franchisee Association

A Co-op is a buying group that has strict IRS guidelines. Any "profit" that the Co-op realizes is returned to the members in the form of a rebate check and is subject to tax just like any other 1099.

An Independent Franchisee Association is a group of franchisees dedicated to working together to increase brand value for all stakeholders.

There are also hybreds.

For instance Dunkin' Donuts has a Co-op owned by the franchisees that supplies each shop will all product, 100% of the franchisees are members of the co-op.

They also have a DDIFO which is an independent franchisee associaition where only about 30% of the franchisees are members

Meineke has a hybred called the Meineke Dealers Association they act as a buying group and a franchisee asssociation I don't think they are technically a Co-op, but definately a franchisee asociation.

Wenger stands ground over Mourinho confrontation

Agen Bola Terpercaya Cityholidaybet Reported - Arsenal manager Arsene Wenger admits that he pushed Chelsea counterpart Jose Mourinho "a little" during their Premier League clash on Sunday but has no regrets over his behaviour.
Wenger entered Mourinho's technical area and laid his hands on the Portuguese's chest before Atkinson called both coaches over to calm tempers.
The Frenchman explained his actions in a post-match press conference and was unequivocal in his response when asked if he regretted the incident.
"No," he replied. "What is to regret after that?
"I wanted to go from A to B and somebody confronted me in between without any sign of welcome. B was Sanchez, to see how badly he was injured. Honestly, I don't listen to what [Mourinho] says."

Di Maria: Leaving Real Madrid for Manchester United a step up

Agen Bola Terpercaya Cityholidaybet Reported - Angel Di Maria says that leaving Real Madrid for Manchester United this summer has been a boost to his career.
Di Maria has settled in superbly to Old Trafford, scoring his third Premier League goal in Sunday’s 2-1 win over Everton, and he is convinced that the transfer was the right decision for him.
He told MUTV: "Leaving a club like Real and coming to as big a club as Manchester United makes you grow as a player and helps you progress in your career.
"It was a very important moment and I'm really happy here.
"With every day that goes by, I feel much more relaxed and settled here. I've got a house and my family are happy."

Are there any good franchises

Are there any good franchises out there to invest in?

Re: Are there any good franchises

I think this is the best and they got rid of the franchise fees.

www.gumbusters.com

Pro Forma

I signed a franchise agreement with the understanding I would receive the Pro Forma. This was basically on a handshake. I was already familiar with the type of bussiness. I am now aware I was supposed to be in receipt of this documentation 14 days previous to signing. Do I have any recourse to get out of the agreement. I have copies of the emails sent to sign the receipt and he would date it. What can I do? It is not generating what they promised . Thanks

treating all franchisees equal by the franchisor

if the franchisor isn't treating all franchisees the same thus impacting some franchisees in a way that negatively impacts their financial statement thus resulting in their ability to obtain bank lines is their any recourse for the franchisee? and as result could puts them out of business

RE. treating all franchisees equal by the franchisor

I'm interested to discuss more about this topic.

From what I know from my limited studies so far there's ways in which franchisees are treated equally and ways in which they're treated different depending on their needs and individual situations.

For example when it comes to financial obligations, my understanding is that both in respect to royalty fees and marketing fees, franchisees should be treated equally in terms of being charged the same percentage rates for each of these fees. That being said, naturally, the bigger the operation, the more they'll obviously contribute as these percentages take an increased amount from their profits, but in the greater sense as profits increase, and fixed costs are set, high performing franchisees should still be able to generate higher levels of profit even after paying larger amounts in dollar figures to the franchisors.

In terms of non-financial arrangements between franchisors and franchisees, some of this seems to depend on the relationship and communication between franchisors and franchisees. As is often the case, the squeaky wheel does get the grease in that franchisees that call on franchisors for more help will often receive more than their average share of time and assistance from franchisors. This can go both the way of well performing franchisees that then seek more support as well as under-performing franchisees that want assistance to boost their bottom lines.

I think that most franchisors will put on area managers whose role is to support franchisees on the basis of managers across a particular country looking after roughly the same number of franchisees to try and allow for a similar amount of cover of management's support in terms of time and effort devoted to each franchisee. And I would assume that franchise operations management would try and suggest that these area managers spend a roughly equal amount of time with each franchisee wherever possible.

Again, although I am not an expert on the subject, I would have to think that there may be some instances where if a conflict arises between a particular franchisee, and the relationship between this franchisee and the franchisor is adversely impacted, how they are treated may change for the worse and have some impact on their business and financial viability. If this were the case, it would be up to the franchisee to review the terms of their agreement with the franchisor to see if any breaches have been made or any obligations are not met. Additionally they would need to prove that they are not receiving the same treatment of other franchisees to mount a case for recourse.

It's an interesting discussion and I'd like to hear more views on this and what the nature of such claims area.

Thank you.

Mark

French Fry Heaven

Does anyone know of or have any information concerning French Fry Heaven? I've noticed that stores seemed to have closed in New Jersey and Lubbock Tx. There seems to be a lot of buzz about the franchise but no indication of success.

Can a new owner negotiate transfer fees in Cold Stone Franchise

I am wanting to buy an existing cold stone creamery in California and was told the transfer fees is 27k. Can we negotiate the transfer fees with the Franchiser as I feel that is way too high.

Can a new owner negotiate transfer fees in Cold Stone Franchise

I am wanting to buy an existing cold stone creamery in California and was told the transfer fees is 27k. Can we negotiate the transfer fees with the Franchiser as I feel that is way too high.

Everything is negotiable. If

Everything is negotiable. If you think it's too high and don't see the value in it, run while you can.

Can a new owner negotiate transfer fees in Cold Stone Franchise

I am wanting to buy an existing cold stone creamery in California and was told the transfer fees is 27k. Can we negotiate the transfer fees with the Franchiser as I feel that is way too high.

PCI Compliance

Franny - All businesses that take credit cards are supposed to be PCI compliant. Is that something the franchisors do for the franchisees since they dictate the systems used?

Super constructions

Thirdly, and most importantly, a split level house is more affordable compared to full-story homes. Diverse Design. Though we've described the typical http://plane.site11.com split level house (3-way-splits), there are many other unique layouts out there that would qualify as well: Bi-level: This layout consists of two stories. When entering the home, you step into an area between the two floors; a foyer that immediately opens up to two staircases, one taking you up to the kitchen, living room and bedrooms, one leading you down into a partially submerged basement/family room. 4-Way: Using the same design as a 3-way-split, there is sometimes a fourth addition below the lower family room: a partially excavated basement (which is great for regions with high water tables) that can be finished off or used as storage. Raised Ranch: It uses the same layout as a ranch, except half the house is slightly raised to form an upper story for extra bedrooms and baths.

failure rates

When are you going to post the 2013 failure rates?

Do not rely on SBA failure rates

Several franchises, especially childcare related franchises that sell building as part of the franchise do not mark the loan as franchised loan. Therefore, SBA records do not indicate any relation of those failed loans to the franchises. Do not rely on these failure rates only. For example, Discovery point childcare franchise shows very low failure rate, less than 10%. In reality,out of the 15 new starts in 2006-2007, 10 went bankrupt with closure and/or owners handed over the business. Several of the remaining are behind payments and banks and the franchise are ignoring the late payments to avoid more failures. The franchise is not losing money as Cliff made nearly half a Million Dollar profit from each of the centers personally.

Fsn online hair shop

hello. i am new to here.Nice to see you all.
Can someone tell where I can find hair extensions purchasing agent??

Considering a franchise

do you have any information regarding the spa for girls called Sweet & Sassy?
What questions should I ask of them?

Failed Franchisor

What if a franchisor decides to go out of business. Just quits.

Jim Coen's picture

Franchisees would have to fend for themselves

That is one of the benefits of forming an Independent Franchise Owners Association. Franchisees that are organized are much better prepared when a franchisor closes, sells, or is acquired.

The best thing for franchise owners to do is form an independent franchise owners association.

There can be numerous

There can be numerous consequences resulting from quitting a franchise, including unearned future royalties. Of course, there might be other financial pitfalls, including unpaid vendor bills, years left on a lease, outstanding bank loans, to name but a few problems that could crop up once you shut your doors.

My firm, Bridge Management Consulting helps franchisees and other small businessmen with these issues. Fell free to call me @401-390-3801, for a free consultation, or visit our web page at www.bridgemgt.com.

Franchisor/Franchisee relationship

If a well known Pizza Delivery Company takes a step back from any responsibility from a franchisee's employee who kills a person while speeding to a delivery - how is it that they send Area Supervisor's to lower a person's store status (score) for low DOT (delivery on time), therefore encouraging speed?
If a franchisee is being virtually threatened for low DOT's - isn't that an issue of double standards?

This happened in March with a Southeast Texas woman.

Does my franchisor break laws?

I am a franchisee of a fast food chain.

I am wondering my franchisor is breaking the law or not by collecting payment of credits or debit cards of costumers directly from banks instead letting these payment go directly to franchisees from banks.

My franchisor pays the plastic cards money to the franchisees twice a week now after some franchisees made complaints,,before once a week.

In this way,franchisor almost control half of my cash flow.They can spend that money in their way without my consent.

Is this a wrong doing?
Franchisor gets more protections than government and banks if they manage the money flow in this way.

Thank you in advance for your reply.

This business does really work?

I am thinking start a cooking oil filtration service in area by myself but I did some investigation about this business i found what get a good filter machine, filters, etc. is not a problem but my real concern is the demand... Is there a real demand for this business? and how much charge for the service? other insight about it..

thank you.

Is there a future in QuickPrint?

I quick print franchise has recently been listed for sale in my area. Is there a future in this business model?

Discovery Point in NC with new website

After failing to promote Discovery Point in the existing states like GA, TN, FL, they are now trying in NC. Rumor is that an immigrant is being targeted. If you know the potential buyers, please alert them of possible fraud. Tell them to read about Discovery Point frauds before investing. A totally new website is created to fool the potential buyer - http://www.discoverypointraleigh.com/

Discovery Point in NC proceeds with construction in Wake Forest

Some franchisee is doomed. Feel sorry for them.

http://constructiondatacompany.com/construction-projects/108326/discovery-point-wake-forest-nc/

Keep Chens in your prayer - they are ready for a long suffering

Chens are opening a new Discovery Point. They are perhaps going to suffer and paid for that service. New market, new target, new SBA arrangements. This franchise changes corporation names during closing and SBA cannot track them with the loan failures. Noticeably another immigrant couple, who believed in the US system- they will soon have a lesson of a life time from a college drop out.

"Owners, Jan and Hong Chen, are excited to open the first Discovery Point Child Development Center in North Carolina. “Our goal is to build a premium childcare facility where quality and care are top priorities,” said the Chen’s."

Franny's picture

Dear Franny, I Want to Sue My Franchisor

Dear Franny, I am a former franchisee in Illinois who needs advice on suing [my franchisor]. Regretfully, Ms. Yvana Sue

Franny answers this question in her column, here.

Red Hot Franchises

Anyone knows how the red hot franchise website ranks franchises? The list has so many unknown names - how do they decide on these rankings? Is it how much the franchiser pays? Saw that questionable Discovery Point is ranked 22 and it is national ranking. So it is portrayed as the top childcare franchise in the nation, ridiculous. I am sorry, had to bring this up and hope the angry boss does not initiate another virus attack to this site.
http://www.redhotfranchises.com/franchise_list/

Red hot

List is determined by who advertises on their site

Capriottis

Do you know anything about the Capriottis Franchise?

Cappriotti's

I am familiar with Cappriotti's. Long before franchising was ever a consideration for me, I frequented Cappriotti's. Phenomenal product, that attracted a loyal following - that was almost 23 years ago while attending the University of Delaware!

23 years later, I am a multi-unit owner of a national franchise. I have looked into some of the my college favorite concepts, but can not seem to justify the 7% royalty... I would agree with Granville Bean that Cappriotti's does not have national "brand" recognition. That may not matter, but why are you paying 7%, and $40,000 for a franchise fee - they make subs.... f I was on a road trip and saw one, I would stop! If you are in the Delmarva area, then maybe it is worth it; they make great turkey subs... If you are in So Cal, maybe do your homework and do it yourself... What ever you decide dig into the brand..... Call every current franchisee you can that matches your prospective market, and call ALL franchisee's that have left that system in the last 3-5 years....

Granville_Bean's picture

Capriotti's: never heard of them (and that says something)

The primary value of a franchise is that its brand name brings in business. NOT its "proven system". Also, a system that has one or two or even three locations per state in scattered states is a yellow flag. It means it is not likely to be able to afford more advertising in any local market than a local Mom & Pop so what's the good of being a franchise?

Yes, MCD jumped from SoCal where the McDonald Bros. had their restaurant, to the Chicago area where Ray Kroc was from, but usually concentric regional growth is a better model to build critical advertising mass and name recognition.  But if you are SURE you're going to get in on the ground floor of the "next McDonald's" by being first in for your state, go right ahead, it's your money.

Discovery Point is better at hiding, Legacy Academy has been ...

Ichter Thomas, LLC Obtains $1.155 Million Verdict For Former Franchisees of Legacy Academy, Inc.

http://www.ichterthomas.com/2013/04/ichter-thomas-llc-obtains-1-155-million-verdict-for-former-franchisees-of-legacy-academy-inc/

Currently, Legacy is involved in five (5) other lawsuits with former Legacy franchisees, all of whom are represented by Ichter Thomas, LLC, and all of who have similar claims alleging fraud and/or a pattern of racketeering activity.

Unfortunately Discovery Point's Clark had been more slippery and destroyed all evidence and pretends to be sick while thinking of more ways to escape. Cary Ichter once saved Clark from a franchisee named Miller. So, even if he knows how to get him, cannot do it.

Two more bankruptcies for Discovery Point

Discovery Point #50 at Dawsonville and #55 at Fayetteville, GA went out of business last week. These were multi-million dollar loans guaranteed by SBA but SBA logs did not show that the loans were franchise related. The franchise corporate injected imaginary money from the profit to make the loans happen. There were perhaps overseas money transfers from these transactions. Each closing of these centers also had a parallel cash transfer among business entities owned by the Franchise owners and it happened in the closing attorneys office at the same time as the closing. Hopefully these discussions come up in search results so that future franchisees can make an informed decision. Bluemaumau has been blocked in primary search by this franchise.For example, if you Google "Discovery Point", these discussions will not show up.

If you are looking for a franchised childcare and you are a family with children, be careful because you are targeted for destruction. The owners of Discovery Point Franchise are childless but are in child related business (go figure!). They have no clue what it takes to raise a child but understand that the effort makes these families vulnerable and easy to prey upon. Past records indicate that they were after happy families with children - Craigs, Padins, Vahids, Duttas, Schuchmanns to name a few. All these franchisees were personally bankrupt under the supervision of the Discovery Point corporate. An exception: One franchisee was a Police Officer, who bought the Mall of GA location, and promptly rescinded the contract but did not bring these near criminals to court. The police officer should have done that to stop the destruction of so many franchisee families. Franchisees lost home, got divorced, lost retirement savings, could not support kids' colleges because all was sucked in by the franchise and the bank. Most of these loans were made possible by Jackie Hart, who worked with the franchise to increase the center price by a Million in a few years and simultaneously helped to increased the sale volume. She also allowed false cash injection from the franchise's profits.

These center failures are not reported in the Disclosure document and one cannot do a thing if there are lies in the FDD. FTC does not monitor each of these FDDs, GA does not have any regulations, and one cannot sue a franchise for lies in FDD. Rogue people like these use Franchise as a license to commit financial fraud with government protection.

Jackie Hart, Vice President, worked with reputed banks

Those of you do not know, Ms. Jackie Hart was a respectable vice president of a publicly traded company with stock ticker "LION". There was no reason to suspect a fraud by the franchisees in these deals. She is now jobless but still free to roam the streets and owns a mansion bought with Discovery Point transactions.

Approved SBA Lender? Again?

Jackie Hart is listed as approved SBA lender by SBA
http://www.sba.gov/content/community-advantage-approved-lenders#Georgia

Jackie Hart
Phone: (770)880-1032
Email: [email protected]

There are so many bankers working with SBA program but Jackie manages to list her contacts as an approved SBA community advantage approved lender. Though aceloans.org does not list her as a significant member.

Cliff Clark's picture

Someone was looking for a picture of Cliff Clark. Earlier they were deleted but now it is reappearing. Pictures are available at their website. Happy hunting!

Tim hortons

How do you feel about Tim hortons? I am in central Ohio and am considering investing in one.

Franny's picture

Dear Franny, How about Tim Hortons for me?

The answer to your question will appear in an Ask Franny column soon. I've asked a leading quick service restaurant analyst to answer this question.

Pat your own back

This is how you pat your own back-
First create an award and reward yourself with that award. That is exactly what happened here.
http://www.discoverypoint.com/news/gcca-award-given-to-cliff-clark/

The Clark-Vinson Leadership Award was established by the Georgia Child Care Association (GCCA) to honor the contributions and dedication to the child care industry made by Cliff and Diane Clark of Discovery Point Franchising and by Pat and Janice Vinson of Kids ‘R’ Kids International. Many of GCCA’s legislative accomplishments over the past several years have been made possible through the generous support of the Vinsons and the Clarks.

The first recipient of the award is Cliff Clark, who sponsored the award from zees money. No one should be surprised if Vinson gets the award next year.

Charity in their name too

These people have created a charity in their name too. Dirty money is being used for buying fame! Was their any foul play? No one will know- the burial was quick.

Diane's Devotion - posts get erased

There were a few posts on the truth behind Diane's Demotion here. But those were quickly removed. Is someone complaining about the truth and using the legal muscle power acquired from Franchisees hard labor to erase them?

Publicly traded franchisor info

 

Hi-

Can you point me to the best resource to get a listing of publicly traded franchisors? I am doing research on segments and valuation to guide my hunt for opportunities.

Thanks!

Kevin Cushing 

801-560-2448

Yum

Why do you not list any information or conversations from Long John Silver's or A&W on you site?

Voluntary Insurance Offerings

Thank you! Is voluntary insurance such as auto, home and life typically offered by insurance carriers to:

1. Corporate personnel (only)?
2. Franchise owners?
3. Franchise employees.

Is there an online resource I can go to with all the insurance info?

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