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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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Firehouse Subs

I love your website and enjoy reading the news. However, I am upset that there are three articles about Firehouse Subs that ring completely untrue. I have been a supplier for over 20 years and also involved in a franchise business with them. I have never experienced anything but professionalism, generosity, support, and loyalty to their franchisee's, suppliers, and employees.
Can you please remove the articles as they are slanderous, and completely untrue. It seems Mr. Roger's has an axe to grind and motivated for reasons I do not understand.

Thank you.

wtwald@aol.com

Franchise vs License

Hello,

I am thinking of buying a restaurant. However, the owners of this particular establishment is offering licenses to operate, not franchisees? What's the difference??

Re: franchise vs license

A franchise is a license but a license isn't necessarily a franchise. There are all kinds of licenses, including franchised licenses. My guess is that the seller is either selling a business opportunity, where he gives you a sort of plan on how to build your business and then you go out and do it. Or, he is selling you a franchise license in which he trains and controls/supports the way you operate your business, but does not want to admit that it is a franchise so that he doesn't have to pay fees to comply with franchise registration and regulation.

Jenny_Buchan's picture

my FDD question

Hi Don

Please don't publish the reason for my question about sourcing FDDs as last time Uri and I surveyed franchisees we got some push back from franchisors. We also (of course) don't want franchisees have a heads up abotutour survey. 

Thanks.

and, I ran into Liz last weekend at a law teaching conference. She looks really well and is, by now, in your country somewhere. 

Best wishes

Jenny

Jenny_Buchan's picture

Free FDDs? Helip!

Hi Don

How's things over your way?

Uri Benoliel (Israel) and i are going to do some research on how franchisees rate the chance of their franchisor failing, and if so, how they think it will impact on them. We want to survey franchisees via their emails and therin lies outrcurrent challenge.  

Are you able to give me any help with sourcing free FDDs? I can access the Minnesota ones easily enough but can't get a reliable link to Wisconsin. The Californian ones don't seem to list current franchisees' email addresses, just their phone numbers - not much use for research f they are on a 'do not call' registry.

I've looked at the links you posted on BMM in 2007 but they don't seem to work for me now. Thanks for any help you can provide. The research should be very revealing.

On another matter, I've just (with 2 friends) signed a book contract to write about all the law that affects franchising in Australia - quite a big project. Our completion date is Sept next year.

Best wishes

Jenny

private-club

is private eclub another boris bugarski entity?

Failure Rate

Do you know what the failure rate is for Mac Tools Franchise?

FRANCHISE I AM LOOKING AT

Hello. Where can one go to find out info on a smaller franchise such as how many franchisees they have, any negative/positive news, avg. costs and earnings. I can easily find info on the LARGE Franchises but very tough to find out info on the smaller ones. I can always find their websites but I am looking for third party info that may not be biased.
Thanks.

Burgerim

Hello Franny. I would like to know if you have heard of the franchise called Burgerim and if you have any information on them.
A recent opportunity came up for me to get into the franchise and I would like to know what people are saying about them.
Please and thank you.
Kayvan
You can reach me at kayvan.hayati@gmail.com

Background Screening

In today's world it means more to know your employees or volunteers beyond a resume or a smile. Many graduate students are attaching to their resumes their background screening information to push them ahead of other applicants who dont.

With I9 Forms being a federal requirement, sex abuse screens, social security checks, fingerprint impressions, terrorist watch lists to name a few issues in our social world, franchisees should screen their employees.

These screens only costs a few dollars and helps your brand or local franchise build competence and loyal confidence.

This note is to build a knowledge level beyond franchise core business solutions.

For example does anyone reading this know how criminal records are processed and where they originate?

The Book: The Glee-Fee-Me-Free-See-We Stage

Where can i purchase this book?

Updated content

Everytime I read this Blue MauMau - I notice that the majority of the articles are from 2011 and earlier. Is this a credible site or just a place for you to post advertising and make money off the advertising?

Interlake chemicals sure step

FranNY I'm so confused about this franchise I'm about to pull the trigger and getc the franchise
So is it legit franchise to purchase or not.

California Resident

Dear Franny,

I am a California resident and am interested in purchasing a franchise in the State of Arizona. Do you know if there are any franchise rules that would prevent me from purchasing in Arizona because I reside in California?

Thanks so much!
MF Limon
bashful243@aol.com

Franchise Fee Refund

In December of 2015 a franchise fee of $30K was paid to Sweet & Sassy Franchise.
However, it's been 7 months later and we are still unable to secure financing with good credit due to lack of alternative income. Our franchise agreement states "The Initial Franchise Fee is used to defray our costs related to providing you with the pre-opening training and opening training and assistance. The Initial Franchise Fee is uniform for all franchisees and is deemed fully earned and non-refundable upon payment". We unfortunately wont receive any of the terms in which the fee is used to cover.
We feel litigation is necessary as the Franchisor won't acknowledge our emails and previously stated it's nonrefundable. Can she give us a "Trump University" experience without recourse ?

Harrassment Policy for Employees

Do you have a sample copy of a harassment policy for employees to sign? Or can you tell me where to get one?
Thank you

KLA childcare

I am looking for information on KLA preschools/childcare franchise. They are a fairly new company, started in Miami, FL.

Question about advertisements

Dear Franny,

I feel confused about the advertisement fees required in FDD. Will we know how the contribution is used? And is it true our contribution will only be used for promotion in local markets? Does every franchisee contributes the same rate?

Thank you for answering the question!

Franchisor Seems to Have Given Up

Dear Franny,
Our franchise is over 10 years old. We have under 100 franchisees in the system, however just a few years ago, we had over 200. The founder blames the lack of growth on some franchisees who, historically, badmouth the franchise for lack of execution, common system/products, marketing and growth.

I'm specifically, I'm concerned about growth. The founder is in his 70's and at the tail end of his business career and enjoys exploring other ventures. Since 2010, the franchise has closed more stores than opened and we continue to lose more stores every year. Other than "throwing our name in the hat" with business brokers, there is no plan for growth or resources committed to growing the brand. Our investment as franchisees depreciates every year with each store closing.

Many franchisees left the system and have gone off on their own as there is nothing proprietary or unique about this business.

There's an old saying in business, "once you stop growing, you're dead". Any recommendations for us or other franchises in similar situations?

Signed,
No Growth, No Glory

Ownership of franchisor

Should I be concerned? The ownership of a franchise I am looking at was sanctioned bt SEC?
http://www.wsj.com/articles/sec-official-puts-broker-dealer-issue-back-on-private-equitys-radar-1465342234

Don't know if it impacts franchisee support or relations?

Franchisor selling product resale in franchises territory

Does it hurt the franchise when the franchisor deices to sell products at retail outlets other then inside the franchisees shop, example Dunkin Donut selling their coffee, Panera Bread, selling loafs of bread at grocery store. And I just heard the star buck is going to start sell the tea in already made.

Status of Univ. Bill of Rights

Is there a current status at the fed level for a univ Bill of Rights. I see very little of the last 4 years.

Updated franchise failure rate chart

Is there a recent failure rate chart? I am a franchise broker and I'd like to furnish this information to my clients.

Jenny_Buchan's picture

Franchisee or employee?

Is anyone able to provide me with a list of the US states that have legislated (or have a bill in progress) that a franchisee is purely and simply a contract counterparty of its franchisor and is NOT an employee?

I am going to wade right in at the deep end and look at the consequences of this for franchisor and franchisee bankruptcy. 

Thanks for any thoughts. Jenny

franchise changed owners and things went south

My franchise was picked up by a franchise company, after being developed by an educator. Over a decade later, she wanted the franchise to herself, and bought it back. That was 3 months ago. Before, we were not being held to a minimum monthly fee, but now, they want us to begin paying a minimum monthly of $900. Before, they asked for just a marketing free of 7% and franchise fee of 3%. So, 10% of our earnings was the royalty to the company. So, this month, I made only $500. I provide services at schools, and I was invalid for four months, so no business. I just got an email from the owner saying I owed another $870. Needless to say I was upset. I emailed back that I needed to dump the business if this was their new approach. Then, the lady who developed the business called me and was very sympathetic, but insistent that we need to pay extra money now, because the business costs them so much to run. How is that my fault?

So, here is the pickle. I cannot afford this. I have limited buiness income as it is, and she is saying this will give me incentive. I work the business a lot, and it is just not working because I started on a shoestring. I spent all my reitrement savings and put myself into debt to tune of $60K to start this up. I had my car repossessed because the franchise does not make as much as they claimed it would make, in the first place, and I banked on earning more, using credit cards to support my household. It never paid off, and now I believe I will have to file bankruptcy. The new owner sent pictures of her daughter's bat mizvah in NY City in this gala suite - I'm sure it cost o ver $50,000. She literally had to ask me what bankruptcy meant. She has no understanding, period, of what it is like to struggle. So, here I am, no income and they want $900 a month. If I don't earn $900 in royalties (the 10% previously mentioned) I have to pay $900 anyway.

Do I have any recourse at this juncture? I signed a piece of paper which asked me if there were things promised, and I sent them a detailed email stating I was promised to earn more, in the first year -- which is true- and that I have gone broke because I have not earned that much. I have worked this program just like they say to, but the income is very sporadic and does not pay off until you have multiple locations and multiple staff hired. I have not been able to build the program out without operating capital.

Can I just quit? What can I do?

Verifying truth from posters

Dear Franny: Does anyone check the accuracy of the posts I see on your website? If the franchisors described there are as awful as they would appear to be, I do not see why anyone would ever purchase one of their franchises. It appears that the posters either have no idea of the subject matter or are merely disgruntled franchisees. Every franchisee is NOT destined to be either rich or great in their chosen business. From SBA information, many franchisors have many successful franchisees. There is no practical way to determine numbers, but I see many local franchisees operating for many years. That would not happen if they were losing money. Help me understand why only unhappy franchisees post information on your site. Do you filter the good comments? Thanks for an answer.
Puzzled in Atlanta.

franchisor lowering prices raises top line lowers bottom line

what can be done when a franchisor mandates lower priced deals that cause franchisees to lose $ but raises topline higher profit for franchisor?

government agency

what government agency oversees franchisors? thanks!

Re: government agency

For most states that require registration, it is their attorney general's office. For example, Maryland's Attorney General's office handles securities and franchise fraud. In Illinois, Michigan, and Connecticut franchises are too.

DOOH Market

Can you comment on the DOOH market and where you see franchise opportunities for this growing industry?

More current data

Are there any plans for this web site to update its delinquency statistics?
Thanks.

No witness signature on franchise

Hi there,

I have a list of a few issues I have with my franchise agreement, however the main one is there is no witness signature, would this allow me to get out ?

Franchises

Hello Ms. Franny I am 17 and one day I would like want to open my own Franchise. My question is how would I no which franchise to invest in so I may have a great return in the future?

Facts Weekly's picture

Why do all my posts fail?

Why do I get this message everytime I attempt to post?

 

Validation error, please try again. If this error persists, please contact the site administrator.

 

Top Ten Percent franchise

Dear Franny,

There is a new franchise started a year ago by Jerry Clum, Jr. called The Top Ten Percent. I reviewed the FDD and it lists only one franchisee. Should I invest or run away ?

You need to know the depth of the business

ts ssc results is an franchise which is runned by the great businees man in india he invest $100k he seen lots of return profits but we need to know more details before we move on to

Dear wannaberich

Every franchise system had one franchisee at one point in time. :) Here's a quick update for you. Since the first of the year, we now have 15 franchised locations which is pretty amazing growth for a company that just opened up national franchise expansion approximately six months ago. Another important thing to consider is that the founder and CEO of TTP was also the Founder and CEO of another franchise system that became one of the fastest growing franchises in history, which also happens to have one of the highest success rates in the country as well as one of the highest franchisee satisfaction ratings in franchising. He led that company into the top 50 of Entrepreneur Magazine's Franchise 500. That person is the same individual replying to you now. I encourage you to open up discussions and let's see where it goes. Keep in mind that the evaluation process is a mutual one. While we currently have 15 franchised locations, it would be nearly double that if it wasn't for the candidates that during the evaluation process we felt were not a good fit for our system and did not move forward with.
Sincerely,
Jerry Clum, Jr., Founder/CEO
TTP Franchising, Inc.

The smell is strong with this one

Dear Jerry, you are full of crap. Starting and maintaining a few failing businesses is really not all that hard. I looked you up... a junk shop, a spa with no takers, and an empty warehouse masquerading as a real estate office? Dood....

SBA Loan Default Rates for Franchises 2013 and/or 2014

Hello,

I was wondering where I can get these rates for 2013 and 2014?

Thanks!

SBA Default Rates

This information is no longer available. Not even through the FOIA. Congressmen and Senators are not even privileged to this info any longer

Transparency at it's best

Fair trade?

Here is a hypothetical, there are state and the franchisor decides to hold a special event at one of them, giving that store national advertisement and a limited edition item to hand out for free to customers on a special day. Obviously the other franchisees in the state are angry. People aren't going to come to their locations that day, others will come and be mad because they cannot get the limited edition giveaway, and the favored store is getting free advertising. I have heard that certain states have laws to protect against this. What is your view?

Kids Korner child care services in australia

In the super competitive job market both parents often have to work just to keep up and with so many many single parents the amount of child care service providers needed has increased dramatically in the last decade. For investors that enjoy being around children the need for child based franchises has created an opportunity like no other. Children franchises are often small like a daycare operated from a home or much larger fully staffed child learning franchising opportunity. If you end up being one of the lucky few that operate a small home day care franchise; you can stay at home and secure your own wealth and financial future. With a large child care franchise for sale you have the ability to make a much larger income, but there is also a lot more work and time involved.

quiznos

It seems to have been awhile since hearing anything about Quiznos in quite some time, it does not appear the current ownership is doing much/enough to turn things around since emerging from bankruptcy? How many locations are left at this point?

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.

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

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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.