How Blogging Saved the World: A Tale of Java Jo'z and Cuppy's Coffee

Bloggers Expose the Truth and Right a Wrong While Traditional Media Remains Oblivious and Slow — At Least for Some Java Jo’z Buyers

Writer’s note: The "blogosphere" and professional online communities of volunteer reporters like Blue MauMau have opened up issues for discussion, debate and scrutiny to the public that have, in the past, been controlled and largely tucked out of sight with the cooperation of the industry’s trade journals and mass media.

FORT WALTON BEACH, Fla. (Blue MauMau) - Last Christmas season, Ben Scoble and Sean Kelly broke a story of Java Jo’z licensees not receiving their promised $30,000 deposit refunds as the founder of the coffee licensing chain, Roy Snowden, awaited sentencing for tax evasion. These new buyers described the owner’s tax deceptions, the death of Java Jo’z and its obligations, and the firm’s seeming resurrection into another company, Cuppy’s Coffee.

In the current September issue of a franchise trade journal, Doug Hibbing, president of Cuppy’s Coffee, describes blogs as “the Wild West.” Such a comment leaves the impression that those who participate in the blogosphere are unsophisticated, unschooled, unruly Wild West outlaws. But those who helped break and guide the Cuppy’s online story were franchise lawyers, seasoned marketers, professional journalists, entrepreneurs and franchise owners.

Cuppy's Tries To Bully the Blogosphere

Some might say that Cuppy's initial reaction to quiet the blogosphere bears the better resemblance to the Wild West. Cuppy’s early on decided on a strategy to control the messages on the Internet. It recruited a team of hired guns — Internet attorney John Dozier, franchise law firm Nixon Peabody and its own in-house attorney — to stop the criticism.

What has not been reported in the trade journals is the heavy-handedness of the franchisor in trying to control the blogs. Sean Kelly, a contributing journalist for Franchise Times and owner of the blogsite FranchisePick, had his own experience with Cuppy’s tactics. Sean states, “I received a threatening email from Cuppy’s legal department as a result of a post mentioning the company’s dispute with Ben Scoble.”

So did some of the Java Jo’z licensees who were posting online about their losses.

A little later an attorney contacted Paul Steinberg, who had questioned discrepencies from Cuppy's own postings. Paul states in a recent op-ed piece, “I got a threatening voice mail from (attorney) John Dozier, followed up by a (much more polite) emailed letter from a different law firm (Nixon Peabody, attorneys for Cuppy's).”

Sean Kelly also observes, “Fake blogs appeared, loaded with key words in order to distract those using the search engines from finding the discussions. People who had complained on the boards and forums were many times contacted and somehow silenced.” Critical blogs disappeared or were mysteriously replaced with legally worded retractions. Entries that showed links between Cuppy’s and Java Jo’z were deleted from Wikipedia.

Worst of Results

Sadly, the results of such bullying and desire for control were predictable. What had started out small and limited had now become large and widespread as the blogosphere clued in.

Traditional media began to take notice of the story. So did potential buyers, who stopped inquiring.

Doug Hibbing observes, “We saw our leads dry up by 80 percent.” (FT)

Cuppy’s strategy was clearly not working. As one consultant observed, “it was one of the worst possible ways to handle online criticism.”

Company Changes Course

What happened next was a remarkable transformation and change of strategy by Cuppy’s. Instead of controlling criticism, it began to participate in the blogosphere and react more constructively to the firm’s critics.

An invitation was extended from Cuppy’s through Blue MauMau to Janet Sparks, a reporter that franchisees trust to ask hard questions. The invitation was to interview senior members of Cuppy’s team.

The first interview was with Cuppy’s in-house attorney.

Ms. Sparks quickly followed up with an interview with Cuppy’s president, Doug Hibbing. Comments from readers became less critical and fewer in number.

Where Java Jo’z licensees had been coming up empty-handed before, reports were now coming in via the blogosphere and online reporters that deposits were being refunded in exchange for an agreement of silence and the cessation of online complaints. Where once there was criticism, blogs that sounded rather legalese were coming up praising Cuppy’s.

At the same time Rhonda Sanderson, Cuppy’s newly hired PR specialist, did her part to help turn the tide, including posting an informative timeline of events to explain the company’s denial of being linked to Java Jo’z.

To further show its desire for change, Cuppy’s began working with the American Association of Franchisees and Dealers for fairer franchising practices and certification, an extraordinary achievement. And later Cuppy's actually earned AAFD's accredited contract status. (News that was broken to the world by AAFD's chairman Bob Purvin first on Blue MauMau.)

The cowboy insiders of the Wild West blogs were calmed. Some were even impressed.

Epilogue

Java Jo’z founder Roy Snowden was sentenced to four years in federal prison for tax evasion in March.

Questions still remain of the fate of Java Jo’z licensees. Sean Kelly asks, “If Cuppy’s helped Java Jo’z depositors have their money returned, why have the same bloggers been silenced through a gag agreement?”

One franchise consultant joins in asking, “Wouldn’t they want to take credit for this? Why are these people still unable to disclose the outcome of their dealings with the company? Why keep these bloggers silent?”

Ryan Knoll, an attorney with Handler, Thayer & Duggan and founder of long-standing franchisee advocate site FranchisePundit.com, explains a possible scenario. “While Cuppy’s may be willing to pay a higher amount to the most high-profile individuals, it probably wanted the option to settle for much less with others. It makes it easier to negotiate a settlement or partial refund of the franchise fee if you don’t know what others have been getting.”

Moreover, “Giving a refund of the full franchisee fee would have been a very expensive maneuver and wouldn’t have reversed the PR problem. To compel silence and apologetic statements by the disgruntled, the payments would need to be framed as a ‘settlement’ rather than a refund of the franchise fee. Legally, each new agreement you sign requires additional consideration to be binding. So simply refunding a $30,000 franchise fee that was already owed in exchange for silence may have been an unenforceable strategy.”

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Further readings:

• Cuppy's Coffee - Java Jo'z Blog Fiasco Offers Lessons All the Way Around, Scott Allen for About.com/Entrepreneurs
• Cuppy's Coffee & John Dozier: What Franchise Times Won't Tell You, Paul Steinberg