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Java Jo'z & Cuppys: Lessons Learned?
Quick (hopefully non-actionable) recap: A number of individuals claim that they paid refundable fees of $20K & $30K to a company (Java Jo'z) contingent upon finding a location. They can't find locations & ask for their money back. They are told that the assets of the company the individuals paid have been sold to another company (Cuppy's), and their money is gone. Sorry. The individuals are confused because the new company looks like the same people sitting in the same desks in the same office as the old company, but now their logoed shirts say "Cuppy's" instead of "Java Jo'z." The new, improved company hires high-powered lawyers to patiently and emphatically explain to these people that the new shirts mean they should go away quietly and leave them alone.
What are the lessons here for prospective franchisees? Don't ever put money down on a franchise, even if refundable? Insist on an escrow account? What are the lessons would-be franchise buyers can take away from this unfortunate situation?
What are the lessons here for franchisors? Can you really transfer assets without the bad will and unresolved complaints coming along? Is it cheaper in the long run to make amends and show good faith, or to use legal and PR efforts to silence the debate? Has blogging made tactics of the past obsolete?
What positive lessons can we learn from this debacle?
Sean Kelly
Sean Kelly, Ptolomy, and MauMau
Was recently at the new Bibliotheca Alexandrina; with a nod to the Ptolomaic past they are aiming at nothing less than a re-imagining of how information is disseminated. Certainly, MauMau is in that spirit, and Sean is on to something.Just as Gutenberg's press made possible the Reformation, the Internet is making possible a reformation of the franchise industry (along with other business models which are predicated on imperfect dissemination of information).
But this does not ipso facto obviate a pre-existing need for franchise relationship legislation, if such need existed. Rather, it suggests that the greater information available may enable more narrowly-crafted legislation which would have less potential for constraining economic growth.
As to legal recourse: Assuming the validity of some of the facts set forth on this board (a big assumption, I know) the presumptive victims may have remedies at law and may be able to obtain redress via regulatory channels. But that is why they should get a good attorney (and this isn't a pitch for business, I only practice locally).
Good luck.
--Paul Steinberg, pwsteinberg@msn.com
Beware
I submitted this on the Famous Reviews Blog but it does not appear to be news worthy as it has not been posted. I wonder why; do they have something to hide?
Dear Readers:
Please beware of what and whom you are listening to. It appears that Mr. Isaksen has experience in the name calling section himself. I understand that some people do get bitter and want to lash out at just anyone and it appears that there are people that have way too much time on their hands. I will admit that it can be intriguing to punch in a few names here and there and look out world here comes anything you can find that is nasty does it mean that it is the truth? Let’s get involved and find out if our author/owner of Famous Reviews has anything to say. Now please view the information for yourself at
http://badbusinessbureau.com/view.asp?id=160678&view=printer
Locations?
I am still researching Cuppys Coffee franchise company so far I have to say I am amazed that they have a very intelligent network with a nation wide real estate firm working with them and their franchisee's. They actually have a Real Estate Department. I have also learned that this particular Franchisor doesnt charge the franchisee the extra money that the company is paying to locate those sites. I dont know about you but this indicates to me that they do care. I have also researched other Franchisor's that do not offer any assistance at all! They require the franchisee to find the location themselves. I am researching all of those that I am interested in and will be confident when I have made my decision. Just beware of what you read for it may not be the truth is the point I was making. Go visit whomever you are interested in to see and feel the operation.Finding locations
I have worked with over 100 franchise companies in the past 18 years. In my experience, very few will "find you a location," though many will help you negotiate your lease. Part of this is liability... site selection is not an exact science. They will "approve" or "disapprove" a location, but even approval is not an endorsement. If a location turns out to be a loser, it's on the franchisee, not the franchisor. And the franchisee, being local most times, is in a better position to study the location and assess the risk - with the franchisor's guidance.Most outsource to brokers, but some play a more vital role. When I was part of the growing Auntie Anne's franchise system, the Auntie Anne's real estate department aggressively sought out and found locations (in enclosed malls), negotiated the leasing payments and terms, then offered the locations to the franchise prospects we had lined up. It was the prospect's decision and responsibility still. One major exception is Hollywood Tans , which not only finds locations and negotiates leasign payments & terms, but actually guarantees the lease... assuming some of the liability and being able to secure better terms.
Sean Kelly
seankelly@ideafarm.net
IdeaFarm , Franchise Pick
Franchisor Marketing , FranBest
Keeping Relationship Regulation Independent
Paul,I agree fully. Relationship regulation will result from widely disseminated information sharing.
To move toward that goal quickly, I believe the information sharing process should remain but spawn a reputation mechanism. The memory of this system will deal with the bad faith allegations and reward good faith operators.
However, I think a Reputation Mechanism should remain, even after relationship regulation is in affect.
Danger: Regulatory Capture
Over time, the regulated tend to gain control of the regulator. The more economically advantaged take over.
Keeping the Reputation System will act as a brake against this very real danger.
Summary
Relationship regulation is the goal.
I believe we get there faster, cheaper, and keep it by implementing a very simple Reputation Mechanism like eBay.
This, I see, as the next greatest challenge for what there is of a collective franchisee community.
- Internet info sharing now (keep talking, innovation).
- Investor satisfaction system next (Reputation System for both parties: failsafe).
- Relationship regulation (to codify it and raise the good faith watermark).
All we need is the will and a few resources.Les Stewart, MBA
Industry Investment Analyst
FranchiseFool.com
Huh? The Question was...
Thanks, Truth Seeker. But the question was... and still is... are there ways that prospective franchisees can safeguard themselves from these types of traps? There seem to be a lot of problems with downpayments prior to finding a location... whether they're refundable or not.RE: Truthseeker's Rip-off Report dirt on Isaakson, or whoever... I have a hard time mustering sympathy for someone who sends in $197 for something titled "How to Make A Million Dollars Without Leaving Your Kitchen Table." I know it's insensitive... I'm working on it.
Sean Kelly
seankelly@ideafarm.net
IdeaFarm
Franchisor Marketing , FranBest,
Re: Beware?
I was wondering why on Earth you posted that, until I saw that guy's Java Joz article.
No wonder he has you all upset. So this guy has some unhappy customers that didn't like his stupid home business course. At least you have to give him credit for bringing the facts to light. Compare apples to oranges all you want, the facts are the facts, and I don't care who writes about them, as long as it keeps others from being ripped off by Java Jo'z/Cuppy's.
Oh, and let's try to stay on topic, shall we? You're beginning to look panicked.
Bad Business Bureau ----Rip Off Report
I think this Internet Site is great. In my experience, they don't edit and they don't remove Rip Off Reports unless they are proved to be untrue. The Bad Business Bureau is a wonderful alternative to the Better Business Bureau who so often "front" for bad businesses who have paid their membership fees.
Researchers can find personal testimony on the Rip Off Site that is not available anyplace else. It is even possible to criticize government and other large institutions on the Bad Business Bureau if you think they are ripping off the public.
In fairness, any entity who is reported on the Rip-Off Site is allowed a rebuttal, or as many rebuttals as they want to post.
Free speech promotes democracy! It would be wonderful to see franchisor-frannchisee reports on the Rip-Off site but we don't, of course.
Truth Seeker
I'm not sure what type of Cuppys you are looking at (ie Fixed unit or Kiosk) but you may want to read the UFOC on this one, unless it's been updated from their initial UFOC. Quoting the UFOC under Site Selection-Fixed Units:"....You are responsible for locating the Premises for the Fixed Unit and negotiating a lease or purchase-agreement for the property as provided in the Franchise Agreement..."
They can tell you all that you want to hear and maybe they would help, but that quote above in a signed agreement could nullify anything verbal that they tell you. Read through the UFOC carefully, and the franchise agreement and make sure you understand everything. IF you don't understand it, make sure that you have your attorney look at it and get clarification before you ever sign that binding contract.
Good luck with your search.
Re: Locations?
I couldn't have said it any better if I was a Cuppy's employee trying to talk up my company while making a weak attempt at pretending to be a potential franchisee. Classic!Topic?
I thought we wer discussing rip off artists? Listening to anyone and everyone just because it is on the internet doesnt make it the truth. Am I upset not in the least. I know what I am looking for and I am not afraid to do the research to verify the truth. I am like you and wanted to state what I felt. Is that so wrong? Does my view differ from yours?Re: Topic?
Here, let me help you out with the TOPIC of this thread. It reads as follows: Java Jo'z & Cuppys: Lessons Learned?
Not "rip-off artists" in general, specifically Cuppy's and Java Jo'z. Whether or not your view differs from mine depends on what decision you ultimately make. There is a lot of information out there. Do enough research and you will find the truth based on the facts, which will consequently lead you into making the correct decision for yourself. I wish you the best of luck!
Thank you
Thank you for wishing me luck. I have been doing my research on Cuppys as you will read on a later post after "Beware". Sometimes we get so uptight that we only see the negatives and I was here to let you know that as a Franchise they are not all negative from my research. Sorry if that upsets you.Post new comment