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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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Express Professionals - dishonest firm, lawsuit; bad investment?

I have read where the founder Bob Funk is being sued for a 2nd time by his partner for embezzlement. Is Express having financial issues?
What does the typical Express owner make per year?
What does this say about Bob Funk's honesty and character?
Have other Executives been named in the lawsuit?

"Opting Out" of National Brand Promotions

Let's see, just this week I ran into two issues: 1) a Popeyes franchiser assessing an 8% fee ON TOP of the menu prices for using a credit card. (Against bank card merchant agreements, of course)
2) Subway local shop saying no more $5 footlongs no matter what....October promotion "killed" them.

I would just love to take a 34 inch baseball bat and smash in the head of every Spic, Paki, Korean/Viet/Chink slope or shiftless coon who works at a franchise fast food shop.

Most of you must be closet Kikes who bitch and moan when the national chain cuts your margins with promotions but hire workers who have no legal right to work, can not speak English and get less than minimum wage for their effort. I hope your fat ass middle age Jewess women suck lots and lots of black cock. And some crazy Islamo dude filets you for his own fatwah.

A lawyer told me she charges

A lawyer told me she charges $2,500 to read an FDD from cover to cover. Does this sound like a fair price? And also, would it be tax deductible?

Read it and give you good advice are two different things.

A smart lawyer will ne er advise you to buy any business. The franchise agreement is what governs the relationship. The rest of the fed is virtually useless. Contact Richard Solomon on this site. You will get much more knowledgeable advice than you will get from some attorney that will"read an fed".

Is it legal for franchisor to deduct from commissions paid...

I am a franchisee. I own a cruise franchise. My franchisor has been deducting from commissions paid to me commissions the vendors have not yet paid. Is this practice legal? For example, I am expecting commission from a hotel reservation but haven't yet been paid by the hotel. My franchisor has deducted the commission from my latest check paid on other commissions I have been paid on by other vendors.

read up on the coverall lawsuit.

It is legal until you prove it otherwise.

Franchise owner interview

I am currently taking a small business management class for my undergraduate business program. One of our assignments is to interview a franchise owner to get a better understanding of how franchises are opened and operated. The interview consists of standard questions such as: what motivated the franchise owner to become a franchisee? Would anybody on your staff be willing to take part in this interview? It could easily be done by phone or even email. If nobody on your staff is able to do this, could you suggest how I might contact the owner of a franchise? My professor suggested stopping in a franchise and asking for the owner. However, It doesn't seem like the owner is at the business during the day all that much, and most websites don't offer contact information for the owner. Thanks so much for your help,

-Luke Ritchie

A@W

We are looking at purchasing a A@W quick serve and YUM brands are selling of the A@W franchise. We are not sure if this would be a wise investment at this time or to go ahead with the purchase. Any advice would help as we have searched the net to find out what happens after a franchisor sells and with no luck on information. Thanks

franchise conferences

What are the best conferences for potential new franchisees/investors? I've been to small, broker-sponsored events that were thin and didn't have much to offer. Thanks in advance.

Background Screeners of America

Hello Franny,

I recently came across a franchise opportunity called Background Screeners of America. I wanted to
know if you have any information on this company and if it is a lucrative and legitamate opportunity. Any advice will be greatly appreciated.

Thank you

Marci

deduct sales commisssions form room sales to reduce franch fees

Can I deduct travel agent commissions from room sales to reduce franchise fees?

Right...

You put it as an expense right below electricity! Just kidding.

Royalties are typically on sales as defined by your franchise agreement.

Real Property Management

Dear Franny, I'm trying to research the Real Property Management franchise opportunity but don't see anything listed within your site, or in many other sites. Do you have any information on this company? Thanks

Real Property Management

Bill I was wondering if you ever received any information on the Real Property Management opportunity. I have been looking for info myself. Thank you

If you are looking

For anything positive.about a franchise around here forgrt it. This site is overrun by franchise haters who have lost everything in there endeavors and whose goal is to scare anyone and everyone away from franchising.

Can a lawyer be held liable

Can a lawyer be held liable for false statments written in a license / franchise agreement. Example: if the contract has a paragraph that states the relationship is not a franchise when in fact it is/was and the lawyer who drafted the agreement claimed to have franchise expertise.

Re: Can a lawyer be held liable

yes, the question is to whom...the licensor or licensee?

Assist 2 Sell vs Help U Sell

Just wondering if you had any information on which of these companies are financially stronger and sound. Thanks :) joy

QUIZNOS

So what's the latest with Quiznos? Are they well past their legal issues for me to take a chance and jump in as a franchisee? They are certainly pumping up their franchisee search efforts with that low franchise fee. Plus their website indicates they are pumping themselves up as a solid franchisor pretty good lately.

Howard R. Morrill's picture

The initial franchise fee

should be damn near the least of any potential franchisee's concerns.  I'm sure I'm not the only one here who has counseled against accepting a no intial fee (supposedly "free")  franchise. 

Anyone Know About Newk's Cafe franchises

What they have their on their website sounds impressive!

A Proven Concept
Our food is not the only good thing we’ve got going. Our Franchise Disclosure Document shows that our company stores open at least a year had revenues between $2.336 and $3 million in 2008. The total investment necessary to begin operations of a Newk’s restaurant franchise is $719,500 to $1,054,500. Our FDD also discloses our expense structure for each of our corporate units and can be obtained during our franchise candidate discovery process.

newkscafe(dot)com

Appreciate some help with my franchise research.

Newk's

Website info looks good!

Is it really a franchise/biz opp?

I want to offer a "how-to start you own..." manual on an exclusive basis in defined markets based on my personal success in a particular business.  The cost would be under $5,000 and would include a custom logo design (not a common trade name shared by others), marketing ideas, etc. along with step-by-step instructions on how I set up and am running this business. There would be no royalty fees, no on-going fees or any requirements placed on the buyer/s except for an annual fee of under $1,000 to maintain the "exclusivity" by restricting me from selling the same/similar program in that market.

 MY QUESTION:  Does this plan require the federal/state filing of franchise or biz opp documents? 

Candy bouquet

I can't find the forum on Candy Bouquet...was it taken down, and if not, how do I find it? Thank you...

Franchising ratios

Hi,

I have scoured the internet searching for some information on typical profit ratios for franchisors vs. franchisees. I am looking for some industry averages -- ideally for the quick service F&B sector, but I'd accept just general franchises if that's not available -- showing what kind profit or income a typical franchisor makes vs. what a typical franchisee makes. For example, if a franchisee typically earns a net income of $75,000 per annum (i.e. after all franchise royalties, overheads, etc. have been paid), what is an average income for the franchisor, i.e. the typical annual amount earned in royalties (not one-time franchise fees)? I suspect there is some kind of industry average for this, e.g. 50% of the franchisee income, the same level of income, 2x, 5x, that income, etc.? I can't seem to find any benchmarks or industry standards that speak to this particular subject.

Thank you in advance if you can cite any statistics and/or point me in the right direction!

Cheers,

Andy

Burger king franchise

Need to talk to someone who know the franchise agreement and relationship with burger king very well.

Franny's picture

National Franchise Association of Burger King owners

Dear Nevin,

National Franchisee Association of Burger King OwnersThe best place to get to know the franchise is through Burger King's franchise owners. You need a place where they openly and candidly discuss and try to resolve their issues without fear of reprimand from the franchisor. Nothing beats independent franchisee associations for that. That's different from associations in which the franchisor pays for, selects, and houses the staff of a franchisee council.

You can go here to see more on the independent National Franchise Association of Burger King owners.

Because of the sensitive information that association members discuss, these groups sometimes feel more like a private club, focusing on their own existing franchisees whom they know well. The NFA already is in the fore front in that they have their own website that you can find out about them. Associations often do little to reach out to potential new members, those looking to buy a franchise. That's too bad because association meetings are perfect events for investors who want to find out the inside scoop of a franchise system. Franchise investors will need to be fairly assertive in finding out and trying to link up with these associations.

Fudgie Wudgie

Hello - I am writing to ask if you have heard anything about Fudgie Wudgie.  I am talking with them now about the possibily of being a licensee.  They are telling me that franchising is in the works and, of course, it will cost more to wait.  I have heard this before and would like to know if you know anything (good, bad or otherwise) about this company. 

Thank you,

Joseph Pennington

Fudgie Wudgie

What ever you do, run as far away from this company as possible. I am an unfortunate individual that bought their hype about how I could make money if I bought into their company, not only I but 5 other's as well. Needless to say, 1 had a nervous breakdown, 2 went bankrupt and we are just now beginining to see the light of day after almost loosing everything we owned. The owner and his wife are top notch con artists very good at persuasion. Their product when fresh is very good, but because they are so shifty they will sometimes substitute old product with new. They also promised us a certain amount of high producing shows a year, only to find out that they took all the money making shows and forced us to scramble around trying to find carnivals etc to display and sell their product.

I could tell you horror after horror story, but please be advised, this company is the worst, please whatever you do, don't continue any dealings with them. You will save your self alot of worry, headache and financial ruin.

Fudgie Wudgie fudge Co.

I am a former employee of this place and EVERY negative comment thats said about this company is true!!!Please save yourself and STAY AWAY from this place....just watch the article on this company by channel 4 news that ran on 7/19/11..S T A Y A W A Y!!!!

Fudgie Wudgie Fudge

Please do not support this company or even think about buying a franchise. They are a living nightmare with horrible management, disorganized, insolvent several times a year. They do not pay people that work 10 1/2 hour days on their roadshows, until months later, and I mean months. They commit contract fraud, violate interstate trade laws, and laugh at their temporary employees who beg to be paid over 100 days later. I worked for them for almost 7 weeks over the holiday and was one of their number one sales performers and they treated me like dirt.... Do not get involved with any of them they are baaaaad news and should be shutdown. They managed to sucker people into working for them for Easter shows and Valentines Day shows. You can trust they have not been paid and are in for a very long wait. They also seemd to delete every negative comment about their failure to pay Christmas roadshow employees of the web..

I was duped....

I was one of those idiot independent contractors that agreed to work for Fudgie Wudgie over Valentine's Day. I did a road show for them over Christmas that went really well, I was also told I was one of their top producers. I made a great check and even though it arrived a little later than I expected, I still got paid in full. When the opportunity rolled around to work for them again in February, I cautiously accepted. I guess I wasn't cautious enough. I worked one show and my fiance worked another for them. We also hauled their product from one location to another, they provided a rental truck. It's been over 6 months since then and we still have not been paid a dime. I started out dealing with Molly Pepper, I think she has since left the company. Chris Warman provided me with his personal cell number after I had some communication issues with another employee named Chris DiRubbo. I've called Chris Warman every month and more recently every week to find out about getting paid. He has a different sob story each time I speak with him and I am fed up. He has now passed the burden on to Tim Grzegorczyk from the accounting department. I left him a message yesterday morning and have heard nothing back so far.

Is anyone else in a similar situation? I know that Fudgie Wudgie is involved in multiple law suits (according to the story done back in July on Pittsburgh's Channel 4). Is anyone aware of a class action suit for temporary employees? I have called the news station to see if they are interested in a follow up story and to find out whether the folks on that segment have gotten paid since the story aired. I'd love to get in touch with anyone else who has been screwed by Chris Warman and his shady business practices.

The "sip and paint" industry???

I have recently come across several of these sip and paint studios where an artist leads a class of people to paint on canvas while they sip away their favorite wine, beer or whatever. Most are BYOB locations. I have seen several franchises: Painting with a Twist, Pinots Palette, Sips N Strokes, Wine and Design, etc. Is this a trend that will fade away in a few years. I love the concept!!!! Most franchises require a $25,000 franchise fee, and state that the initial investment is between $50,000 to $100,000.00 Then I came a cross and independent owner that is not a franchise, but they offer consultation services & partnering studio options with no royalties attached. According to them you can get into this type of business for a flat consultation fee of $15,000.00, another I found offers consultation for $6,000.00... Both said that you can open your studio for $16,000 to $40,000.00; so now I am so confused, franchise or independent consulting service. The consulting service type offers access to all paintings databases along with your own website, and own studio name....support for 6 months, another unlimited support. One of these independent studios has opened 4 studios and own two of their own with more than 5,000 fans alone on FB, more fans than any other studio or franchise. Obviously they are doing something right...its hard to choose with who to go into business...??? Confused!

Granville_Bean's picture

been to any classes yet?

Yet another guest writes: "Obviously they are doing something right...its hard to choose with who to go into business...??? Confused! "       

So have you been to many classes yet?  Try a few different ones with various franchises and independants.  Then ask yourself what the value is that you would be getting by paying a franchise fee, a royalty, a monthly fee, etc. Are you the artist who would be conducting these, or will you be hiring artists?  (To me, sounds more like an art teacher than an artist. Or a baby sitter for drunk adults.)

...I researched and some

...I researched and some studio owners teach their own classes, others have artist on a contract basis...usually teachers, graphic designers, illustrators...someone that has an art background to teach and recreate the painting of the night. I have been to 5 or 6 classes and its very addicting and classes are usually packed...the wine helps, but I am yet to see someone getting drunk with two glasses of wine...lol!!! Still researching...so far I came across: Painting with a Twist, Pinot's Palette, Canvas & Cocktails, The Paint Bar, Arts N Spirits, Color-Me-Happy, Sip N Paint, Wine and Design, A Piece of Work, Sip n Swirls...and finally Paint & Wine.... interesting.

Franchise Sales Organizations

Hi-

Could anyone tell me where to find a good list of franchise sales organizations?

Thanks!

Trends Research for Franchise Industry

Hello,

I am Alex, working in the trends' research team of ExpertPortfolio.com

We are running a research of the demand trends in the franchise industry.

And though the general trend of search interest to franchise business has been declining (we are talking about people searching for franchises in search engines), there are still some very interesting positive trends that have a great future.

These positive trends nicely correlate with what you are actually doing with your business model. That is why in this research we would like to quote your magazine as one of the examples of "riding the right trends" in this industry.

Do I have your permission to quote your business in this research? (of course, after I send you the completed report and you check/verify it)

Looking forward to hearing from you.

Kind regards,
Alex,
Trends' Research Team of ExpertPortfolio.com

Quiznos

Rumor is they are getting bought out....can you investigate this?

And who ever is buying them

And who ever is buying them is going to need to do some cleaning up as Rick has left a major mess of the brand....even worse than any other time in it's history. I guess this would explain him stepping down as CEO and cutting half of their staff....to make the financials look pretty.

Cold Stone Creamery - bad investment?

Has this company cleaned up their act, is this still a dead-end investment. Reading all the blogs and feedback on these site gives me cold feet.

Can a franchisor be a good person?

My business is growing like crazy and it looks like the best thing for me to do is to actually franchise it. I have begun all of the technical steps to make this happen but as someone who has experienced the ugly side of franchising (I've been an abused franchisee) I feel strange about it. I know that I am not evil and that I would treat my franchisees as partners, but I still feel weird about the whole thing. Are there actually good franchises out there? Is there a way to learn best practices? What do you think?

Basically, how can I be a good franchisor and a good person at the same time?

Regards,
Franchising Wannabee

Franny's picture

Dear Franny, Can a franchisor be a good person?

Dear Franny, Can a franchisor be a good person? - Franchising Wannabe

The answer to your question will appear in an Ask Franny column soon.

Good Guy Franchisors

Although you posted your question some time ago, the answer is an unqualified 'YES!" Visit our website at www.AAFD.org and learn about AAFD Accredited Franchisors, all of whom have met our significant criteria by the vote of their franchise owners!

Peter Birkeland's picture

re: Can a franchisor be a good person

The decision to franchise is a complex and significant one as you know from your experience as a franchisee. But you're getting ahead of yourself. The first question is, "what is your purpose, what are you trying to accomplish?" And the second question is, "what is the best way-to-market approach, strategically, for what I want to accomplish?" Only after you answer those two questions can you begin to think about best practices of franchisors. And, you should know that answering the strategic question involves detailed pro formas for both the franchisor and franchisee with a good bit of sensitivity analysis on various factors that might impact financial returns.

A franchise consultant will tell you that nearly every business is franchiseable, but that's a myth. The real questions are what you're trying to accomplish and what makes the most sense strategically.

Re: Can a franchisor be a good person?

What a stupid question.

You should not become a franchisor since you'd be a danger to yourself and others.

Franchise Agreements

7-Eleven has one of the most controlling and intrusive Franchise Agreements under the sun.  There is almost nothing left of the "independent contractor" status that once existed.  I would like Don or another writer do an analysis of the benchmark cases in California which defined the parameters which define that status of "independent contractor" and the many ways SEI is violating those definitions.  It appears more and more that 7-Eleven Franchisees are under so much SEI control, that they are actually less independent than actual employees.  Also do a comparitive with other Franchises like Subway and KFC, etc.  I wonder if Franchisees are really seperated employees with increased liability exposure without benefits.

Thanks for listening.    Keep up the good work...

Area Franchisee for UPS Stores

Given to understand that Area Franchisee Operations survives on the royalty earned from the stores under it. How this can be profitable? What are the key challenges of this business?

Ideas for a business?

When starting a business it's hard to have a great unique idea of what kind of business to start cause it seems that all are in the market. I dont want to be stuck as an employee, I want to have a business of my own.

Does anyone have an advice?

General Release - Cold Stone

A 2nd generation franchisee is buying my store. Cold Stone has a General Release clause in the transfer document. But they are not ready to execute a mutual general release. What is the drawback if I transfer without a mutual general release? Only other option is to close the store. But this does not get me a general release either. Has anybody out there been able to get a general release from Cold Stone? Any help or suggestion will be greatly appreciated. Thanks.
.

Facts Weekly's picture

I am NOT a franchise ...

I want to make sure that it is ok for me to use the website/forums even though I dont fit the definition of a franchise. Many of the people that contact me are looking for a franchise opportunity so I typically have to explain the difference between what I offer and a how a franchise functions.

I enjoy your website and have used it in the past.  I decided it was time I make it official and sign up for an account.

Thanks!

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About Franny

Franny's picture

Public Profile

Franny is a columnist for Blue MauMau who answers questions about running and owning a franchised business establishment. Those who have questions can post them under the Ask Franny forum. Readers may comment on the questions there. If the post is answered by Franny, it will be featured on the frontpage of Blue MauMau under the "Ask Franny" column. Franny sometimes invites Subject Matter Experts to answer. Please do not mention your franchisor, vendor or your own firm's name in your question.