Seeking opinions and experiences with Taco Del Mar

I know for a fact, that James received two free tickets to the super bowl in 2006. Correct me if I'm wrong James, wasn't it tdm fish supplier from Bellingham who gave you those tickets?

Re: John Hayes's Seven Habits of Highly Successful Franchisors

I Wish my franchisor would have read this....

Especially the "never blame the franchisee" part. I was working my tail off, trying anything and everything to make my Taco Del Mar restaurant work. My family rarely ever saw me. The store looked amazing, we had a great lunch crowd most weekdays. The dinner was no where to be found. People hit the local bars and nicer higher end places. So I got my beer and wine license and started carrying not only the big name brands, but also some of the local favorites. It started to work, but really just still wasn't enough. I needed catering jobs weekly to pay the bills. So what did I do there, I went to the local high schools and met with the nutrition administrators. We started supply anywhere from 50 to 100 burritos to two local high schools almost every day! It went well for a good while but we were having trouble keeping them up to temp. Also, bringing in people at 6 in the morning to crank out 100 or more burritos isn't great for labor costs. We had to sell the burritos at a discount in order to get the schools to do it.

My store was stuggling and I was having a very hard time paying the bills. One pay roll I had a couple of my employees paychecks bounce, they decided to stage a walk out and I had to close for a couple of days. While closed I had communicated to corporate what was going on. They understood and just told me to hurry and get it reopened.

Without any warning, not even a phone call, I received a letter in mail stating that my franchise agreement has been terminated. I was to take down all the signs, and it was no longer a Taco Del Mar. There comments about this was that I was just a "Bad Operator" and the location just needed to be closed. They picked this location before the picked me, they had tried to pass it off to 5 or 6 other current franchisees before they found me. I actually trusted them in picking the location, thinking they had my best interests in mind, that was my first mistake ever.

I will never franchise again, not that I think that there are some decent franchisors out there, I just have lost trust in franchising all together. By the way, they always collected my royalty each week. This was "my experience", it was not meant to trash on Taco Del Mar, just wanted to put this out there so others could know what kind of practices this franchise practices.

Independent Fran association related to TDM?

I'm a business reporter with the Seattle Post-Intelligencer daily newspaper, seeking opinions and experiences of franchisees with Taco Del Mar. That company is based in Seattle, so its business practices are of concern to me.

Most valuable to me are franchisees who are willing to let their names be used. Less valuable, but still desirable, are those will share their stories but not allow their names to be used.

I am posting this because I received an anonymous but detailed and angry email from a current franchisee, and I need to substantiate some of this person's claims. Please call or email me at the contacts below. I will maintain your confidentiality to the limits of the law.

The owner of this site knows I am making this post.

Thank you for your assistance.

Dan Richman, Business Reporter, Seattle Post-Intelligencer, 206-448-8032, danrichman@seattlepi.com

Taco Del Mar may have a few unhappy zees but any fast growing franchise will always have a few unhappy zees. In my opinion Taco Del Mar is a state of the arts franchise which they discovered a number of years ago developed a 3 tier franchise program with an area development system. As a franchise consultant I worked with them to develop their program after they ask what would be the best program to support their franchisees. The Schmidt brothers had developed an excellent model store program after some problems attempting to develop New England and discovering trying to maintain their model far away was next to impossible and so wanted a program that maximised store support. In all development areas they sold a development franchise for local support of the model store for uniformity, stanardization and communications in all markets near or far. Kevin Hansen their VP of ops was totally dedicated to the success of all stores in the system. They have, to date, if you check their web site they have 269 opened stores throughout the U.S. and Canada. ANy franchise that follows this system has a great chance of success as the franchisor must understand that they are in the franchise business. A successful franchise goal should be that they know what all their zees are doing to follow the model on a continuing basis. The other important factor, is to know in any given market, how the franchise rates as to its franchise benefits as to the overall benefits of franchising.

Taco del Mar

No day at the beach for franchisees

By Julie Bennett
As published in: Franchise Times - November-December 2007

“W e’re opening new stores just about every week!,” announces Taco Del Mar’s colorful Web site.

“So grab your surfboard, let’s head out and catch the next wave together.”

Caution is advised. Taco Del Mar, a casual Mexican concept, was launched in 1992, not on a beach, but on a pier in Seattle by two brothers, James and John Schmidt. Their inspiration—and their surfboard and fake palm tree décor—came from the burrito shacks that lined Southern California beaches during James’ college days. In 1996 the brothers formed a franchise company, with James as its CEO. “We adopted the business plan of Subway,” James Schmidt said, “and sold master developers their own territories to run for us. They’d find franchisees and help them find locations and we’d give them half the franchise fees and half the royalties.”

Expansion started slowly along the Washington, Oregon and California coasts, then took off as master developers moved inland. “We’re growing, growing, growing!” the Web site proclaims.
But a group of current and former franchisees, who call themselves ‘The Truth about Taco Del Mar,’ said that while some franchisees who caught the wave are riding high, others are swamped by high food costs, knocked adrift by poor distribution systems or floundering without support.

Problems are so deep that franchisees are closing stores almost as fast as new ones are opening. Or faster. When we began our research, Taco Del Mar had 269 open locations; by press time that number had sunk to 265. When we asked CEO Schmidt about the closings, he said his team calculated that 27 stores had closed this year, but that final numbers would not be available until December.

Our count is closer to 50. According to its most recent UFOC, Taco Del Mar had 264 franchises operating in the U.S. and Canada as of December 31, 2006. But when we checked their addresses against the 265 open locations on the company’s Web site, 49 were no longer listed. Because the same number of new taco stands had opened, it appeared that the concept was at least holding still. But we also found that 16 of the stores still open are for sale, some at fire-sale prices. “Owners want out” proclaims the classified ad for a Taco Del Mar in California, selling for $50,000. The seven listings for Washington State include one “priced to sell” at $70,000, and another listed at $99,000 for a restaurant that cost $250,000 to build.

Drowning in food costs

The most common reason cited for the closings is high food costs. Darryl Thompson of Fort Worth, Texas, was a retired civil servant when he caught the wave. He opened a Taco Del Mar in October 2006 and said he was prepared not to make money the first year. The franchisor does not make an official earnings claim in its UFOC, but does publish a P & L (profit and loss) report for five stores in the Seattle area. The stores average $378,000 a year in sales, with food costs averaging 31.2 percent of that. New franchisees are told to aim for food costs of 30 to 32 percent.

Thompson said his food costs were almost 39 percent no matter how carefully he watched inventory and portions. “I shopped around, buying cheaper produce at farmers’ markets,” he said, “and found a local supplier for tortillas, some paper products and cleaning supplies. I was putting in $5,000 a month of my own money just to stay open. We had a good site, in a center anchored by a Wal-Mart and a Lowe’s (home improvement) and I wanted to be successful, but each time I ran the numbers I knew it wouldn’t work.” Thompson lost his $300,000 retirement savings, closed his store in July 2007, and filed for bankruptcy. “We’d always paid our debts before,” he said. “Now, at age 62, I’m looking for a job to help clean things up.”

Franchisees from “The Truth” group and others we called at random also complained about high food costs. One from the Seattle area said he came up with so many marketing ideas for his two stores that he won the Taco Del Mar annual award – a free PT Cruiser to drive for a year. But he couldn’t drive down costs enough to make a profit. “I was borrowing money from my wife’s parents and still a couple of employees’ paychecks bounced. When they walked out, I had to close,” he said.

Schmidt said, “We have franchisees in every market with food costs of 29 percent to 32 percent. If franchisees’ say food costs are so high, it means that employees are stealing from them, they’re over-portioning each order, they’re buying incorrectly or they’re doing the math incorrectly. Ask the people not doing 32 percent if they’re doing their weekly food cost inventories and calculations. I’ll show you they didn’t.”

A Washington State franchisee who asked that his name not be used because he’s trying to sell his store, said he does his weekly calculations and his food costs consistently run at 37 percent. “I thought I was the only one,” he said, “and felt like an idiot. When James said my employees must be stealing from me, I fired them all and hired new ones. The problem persisted.”

Ashley Kapur said, “I’m a soccer mom who opened a store in Federal Way, Washington, just 10 minutes from my home.” The location was fortuitous, because Kapur said she had to work “24/7 just to reach a point where we were almost breaking even. I think the only people making money with Taco Del Mar are the master developers, because they’re earning royalties from the rest of us.”

Jeff Masterjohn is a master developer for southwest Washington and Oregon, but said his seven Seattle-area Taco Del Mars have made money for years and other operators he knows are also profitable. “There will always be disgruntled franchisees who make most of the noise,” he said.

Stranded too far from the sea

Inland franchisees are also making noise over distribution problems. Terri Turner, of Memphis, spent years helping to run the 13 Subway stores his family owned and said he was attracted by Taco Del Mar’s Subway-like model. Turner signed on to be the master developer for Tennessee and Mississippi and his girlfriend, Rhonda Brown, quit her banking job, cashed out her savings and became his first franchisee, opening a store in Southaven, Mississippi.

“Our first order for products was fine,” Brown says, “because we’d placed it with Sysco, our distributor, long before we opened. But the first time I called Sysco to restock supplies, I was told we couldn’t get certain items, like mild taco sauce, for several weeks,” Brown said. “And they told me they could only continue to deliver protein (meats) if I ordered a minimum of five cases at a time. My freezer wasn’t big enough to hold that much.” When Brown complained to corporate that she was about to run out of ground beef, Bruce Lane, Taco Del Mar’s director of operations, suggested she drive to the Sysco warehouse in Jackson, Mississippi, about four hours away, to pick up meat products herself every couple of weeks. “They fed us false hopes and dreams,” said Brown, whose store was destroyed in a fire and has not reopened.

John Nelson, Taco Del Mar’s director of purchasing, admits there is a problem stocking outlying stores. “We use Sysco nationally because we want all our franchisees to have the same products. But there can be delivery problems until each cluster of stores gets to critical mass, of five to ten in a marketplace.” Single stores in several states, in fact, have closed.

Is the model broken?

Even profitable franchisees admit there are problems. Retired Army Major Jim Templin was a Subway franchisee in the Tacoma, Washington, area, who in 2003 signed on as a master developer for the Austin, Texas, market for Taco Del Mar.

Templin sold two franchises in Texas, then stopped because both were failing. “I think Taco Del Mar’s model for expanding into outer markets is broken,” Templin said. “You need to have a lot of stores developed quickly in an area to build brand awareness. And you need to reduce costs, because franchisees in outer markets are paying more per case of product to cover transit costs. In Texas, Sysco didn’t stock every item because there wasn’t enough volume. Franchisees had to do special orders, and delivery wasn’t reliable.”

Templin and fellow franchisee Robby Fuller, who has two stores in the Portland, Oregon, area, recently started a franchisee association to “open up a dialogue” with their franchisor. Fuller said other problems include communication—“Franchisees are not being taught correctly,” he said—and master developers who are so keen on collecting franchise fees that they let new franchisees open in poor sites. “I just want everybody to know that the problems are fixable,” Fuller said. “This is a good concept with great food, and franchisees should be happy doing it.”
Udo Schlentrich, director of the William Rosenberg International Center of Franchising at the University of New Hampshire, encourages such dialogue. “Even McDonald’s was in trouble a few years ago. Everyone had to sit down and explore what was wrong.”

Schmidt said he’s willing to talk, but he believes that selling even more franchises is the best solution. “When we have 1,000 to 1,500 stores nationwide, our franchisees will be predominantly making money,” he said.

Not surprisingly, some of the disappointed franchisees are talking about taking legal action against Taco Del Mar. In his emulation of Subway, Schmidt may have forgotten an important detail. During the 1990’s Subway had more franchisee lawsuits than all other franchise systems put together.

Dear Guest,

Copying and pasting a full article from another author or publisher is against copyright laws. I have unpublished the article.

Fortunately, Franchise Times has the article online. For future reference, all a contributor to Blue MauMau needs to do is paste the URL of the story into the body of the text. After that, please say a few words on why you posted it.

Here's the story:

• Taco Del Mar, No Day at the Beach for Franchisees (FT, Nov - Dec, Julie Bennett)

What is of particular interest is the group of "current and former franchisees, who call themselves ‘The Truth about Taco Del Mar'." They are saying that everything is not so bueno at the chain.

Problems? Food costs, for one.

Such investigative reporting on franchisee issues from Ms. Julie Bennett is good to see. There are some big stories out there in which her reporting is sorely needed.

Mr. Blue MauMau

Well it’s been about a month since I last posted on this discussion board. Here's a quick recap on what has happened at Taco Del Mar over that time:

• David Huether resigned to work on another business opportunity. Kevin Hanson is now the COO and James is now the CEO. Seattle Times article
• Neal Hollingsworth has “resigned” to move to “a fantastic job opportunity”. God help the franchise partners and coworkers that have to deal with him next. Seattle PI article
• James has come out with an everyday value menu asking franchisees to cut their prices to grow their sales. (see above article on Huether’s departure)

This is a good start because it’s a sign that changes are happening within the company. But there is still a lot more than needs to be done to fix the problems that Taco Del Mar has. Just changing a few people who are mentioned on this thread does not mean that future franchisees are any safer than those of us who have already lost everything to Taco Del Mar Franchising Corp. David Huether is still involved with the company despite his resignation so there isn’t that much that has changed. I hope that Taco Del Mar Franchising Corp is taking more action that’s not being released to the public. Just in case it’s not, I’d like to outline four problems that still exist and what Taco Del Mar Franchising Corp should do to solve them.

1. What is being done to lower operating costs for franchisees?
2. What steps are in place to stop other executives from taking kickbacks?
3. How will Taco Del Mar Franchising Corp provide more promotional and operational support for franchisees / master developers?
4. How are you changing the way that you recruit franchisees?

Food costs

James, your supply chain is compromised. We don’t have a complete picture of the suppliers who are inflating their prices to the franchisees because of kickbacks. Asking franchisees to lower their prices right now is suicide. Do you really think that your customers are going to purchase that much more with lower prices? Are they going to tell their friends to start coming to TDM for lunch because of the really cheap burritos? No, it’s just going to reduce the money that franchisees have to run their stores and take care of themselves. You need to go to your suppliers and demand that these people cut their prices first. If they don’t cut their prices then you need to start looking at other vendors. If you don’t do it then the franchisees should do it themselves.

Franchisees, if you can get better prices from Pepsi and Neptune / GFS over Coke and Sysco then you should go ahead and do it. $5,000 is a lot of money and you can do a whole lot of Local Store Marketing with that. Taco Del Mar Franchising Corp might grumble about this at first, but they can’t sue everyone and it’s better than loosing your shirt following advice from corrupt executives. Besides, they’re going to get their pound of flesh from the increased royalty payments you’ll be making with a more profitable business so they should be happy about that.

Stopping kickbacks

Neal Hollingsworth’s reign of terror at Taco Del Mar is over, but who’s to say that other executives aren’t on the take from other suppliers? I wish that all of you knew how long I had to wait to explain The Truth about Taco Del Mar to someone who would take action. Like a lot of you, I’ve gone through my own share of grief and humiliation to reach this point. It should not be this difficult to stop corruption in a franchise like Taco Del Mar in the future.

So James, I want to challenge you to run a progressive company in 2008. You need to hire an independent ombudsperson to look out for the interests of the franchisees within the walls of The Whale Building at 400 Boren N and beyond. This person should have the power to make changes that influence the way that your management team operates. Give this person the power to affect what you pay all Taco Del Mar employees (including you) so that you reward your people for being honest and ethical. This person should report only to the franchisees and run an ethical audit every year. If there are any problems with any of your people, this person should be able to terminate the employee. Think of it as an investment to prove to us and to future investors that your team has changed and is now trustworthy.

Supporting Franchisees

A lot of people have invested in Taco Del Mar franchises over the past few years. Some of them have more experience in the quick service restaurant business than others. The people who have less experience need more support from Seattle than a couple of manuals and the odd visit from a BDD to help them get up and running. There are Master Developers who also need help with their businesses. James, you need to figure out a way to give them that support… it’s part of the reason that they bought into a franchise instead of building their own chain. If you are being stretched that thinly maybe it’s a sign that you should hold off growing for a little while and focus on building burrito sales with the people that you have instead of selling new locations. That’s why you’re a franchise instead of a multi-level marketing company.

Ethical Recruiting

We’ve spent a lot of time on this page talking about kickbacks and how they are hurting all of the franchisees, but I hope that we haven’t lost sight of this situation with Jeff Masterjohn. Taco Del Mar Franchising Corp needs to learn that deceiving new franchisees by having someone like Jeff misrepresent himself as a fellow franchisee is wrong. If David Huether’s resignation was related to my messages in any way, I suspect that it had to do with revealing Jeff’s real identity and the obvious conflict of interest there. I can’t believe that the SEC would condone that kind of behavior without it being disclosed in the UFOC. Federal regulators need to study what happened here and figure out a way to close this loophole before more franchisees get hurt. In the same spirit of stopping kickbacks, maybe the same ombudsperson in my first recommendation should be responsible for an ethical audit of Master Developers and their recruiting practices too.

Ok, so. I get that for the most part in this forum there are mostly unsatisfied Taco Del Mar people. I had to look around at other franchise blogs to make sure this was not just a TDM thing, which it is not. I was glad about that.

I have to say that I LOVE TDM. I am excited about the possibility of owning one.

My question would be this. Do you think the fact that your TDM did not make it is because of where you are located? May that be the state or the actual location of the TDM.

Are any of you in the Oregon/Washington area?

I was reading on another page that when we go into any business whether its a franchise or just opening a mom pop store that its a risk. In the olden days mom and pop would open a store and they would hold each other and pray it worked. Is this really that different? I mean we do have the luxery of going into a proven commodity. But I also know its still a risk. I know when I pull out large sums of cash to invest in the stock market I am praying while I am doing the short term investing that the market does not crash or do anything weird. I do it anyway and its a risk. You had to have known that when you purchased a franchise like TDM that you did not buy a McDonalds or a Taco Bell. Even though the food is much better at TDM the other places are global restaurants. You can not go anywhere in the world (for the most part) and have people not know what those two place are. The same does not ring true for TDM, yet. They are new in quite a few areas. You have to build your base and pray it takes off in your area. Its a risk. Isn't that what business is, is a risk?

How many unhappy franchisees are there on here that are complaining? It really looks like about 6. 6 very loud and unhappy people that have found a place to sound off. Well, I get that you are upset but you really should move on. You took a risk and it failed. NEXT!

I got a little chuckle out of the blog from Paul.  Thanks for noticing my spelling errors.  I am actually a real potential franchisee that is interested in TDM.  That would be cheesy though, wouldn’t it?You (ROI & Risk) make a lot of good points.  TDM gives a list of every owner.   There were over a dozen pages of names and numbers along with about a dozen previous franchisees that sold or transferred their TDM.  I will not move forward without talking to quite a few on the list.  I guess I just wanted to create some real conversation and I guess get to the bottom of the real issue.  Is it food costs?  Does work need to be done on negotiating the price that TDM pays for food or are the kickbacks the real issue?  I’m really not one to complain, I am a solution driven person.  I don’t want to sit around and complain about an issue I want to solve it.  I mean the prices that TDM is charging to eat at their places are not cheap.  I almost had a heart attack when they said it was $2.99 for chips and queso.  That is ridiculous.  I pay it, but it’s crazy.  Chips used to come free with every burrito you ordered and it was like a dollar to add queso.  Has there not been a difference with the price increase?   I mean if you order a burrito and the chips and queso you are looking at $9.00 per person to eat and if you get a drink its more.  Has anyone taken James S. up on his offer to call him?  I know I will.  And also, why are you not willing to sign your name?  Why be anonymous?   I am willing to sign my name.  Let me be the first.A. O’NeilMt. Hood, Oregon

First, congratulations to you on purchasing a Taco Del Mar location. I sincerely hope that you have a better experience than most of us who lost everything have had with Taco Del Mar restaurants in the past. I can appreciate how you’re excited about your purchase and the possibility of making money owning a Taco Del Mar restaurant. I don’t want to discourage you, but we all had similar feelings when we first bought into Taco Del Mar. Considering that you’re a new “franchisee” (or some might say a victim) of Taco Del Mar, please allow me to address some of your questions and share a few things that have happened to us so you can hopefully avoid the same fate in the future.

Did your Taco Del Mar restaurant because of its location?

It’s ironic how similar your message is to what Taco Del Mar Franchising Corp is now telling people to explain why their franchisees are going out of business and filing for bankruptcy. James Schmidt also said that “some stores suffered from underlying problems like bad locations”: (read it here in the Seattle Times). There may be some merit to that statement, but consider that many of the Master Developers choose the locations and insist that their real estate broker negotiates the lease for any Taco Del Mar restaurant in their area. They then take a kickback on those leasing fees from the realtor which you typically don’t know about.

Just because James makes that suggestion doesn’t mean that it’s true or that it’s the only problem with Taco Del Mar. Some of the executives and master developers are taking kickbacks and that money is going to come right out of your pocket. That will affect your return on investment regardless of your location.

Taco Del Mar is a risk, just like any mom and pop location

Yes, all businesses are risks, but Taco Del Mar sold itself as a franchise that had a reduced exposure to risks than your typical mom and pop restaurant. We were told that we would receive support from people who had experience with the franchise restaurant business. In reality we were exposed to greater risks by having to pay additional overhead which ultimately went directly to the people who were supposed to be helping us: the Taco Del Mar Franchising Corp. executives and Master Developers. Neal Hollingsworth, for example, convinced us to invest in certain advertising and then pocketed half of the fees from the media buyer without telling us. If you were running your own business and got a media buyer to take half of the usually fee, wouldn’t you rather have that money to reinvest in your business or take as profit? Ladies and gentlemen, this is a kickback to a Taco Del Mar executive that deliberately hurts all of us who tried to make money as Taco Del Mar franchisees.

There are two examples of kickbacks that Taco Del Mar, its executives, and its Master Developers are taking at their franchisees expense. They completely undermine the trust that exists between franchisor and franchisee and makes you second guess any advice that you receive from Taco Del Mar Franchising Corp. I’m not sure about the exact number of franchisees who are posting on this forum, but this is a small sample of what a lot of franchisees are going through. The reality is that there are many more stores on the verge of bankruptcy and a lot of people you probably haven’t spoken with who have lost everything. James doesn’t know what he’s talking about when he says that most people are making money. Between the master developers and corrupt Taco Del Mar executives, he’s completely isolated from his own restaurants and that’s why new leadership at Taco Del Mar is required.

So, A. O’Neil from Mt. Hood, I won’t tell you how to spend your money. But at least you have a better idea of what you’re getting yourself into now. In 18 to 36 months, we’ll see if you’re as optimistic about your investment in Taco Del Mar.

PS – Looking at the most recent version of the UFOC, there are at least a couple of locations with incorrect or inaccurate franchisees listed in the appendix. Call people on the list, but try to find some of the locations that no longer exist and talk with those owners. Texas, Arizona, California, British Columbia, and Boston are all markets where Taco Del Mar has destroyed dozens of investors.

I am really sorry and was not trying to minimize the situation you and your family are in and going through.... I was just not clear, sense no one says who the heck they are if you people are even real TDM franchisees. I mean you could be the CEO of Baja Fresh sitting at your desk causing problems.
I mean they thought I was a corporate TDM person. Why couldn't the same be true of everyone on here that does not address who they are. The internet is the best way to be anonymous and say what ever you want with out saying who you are. It could have been ANYONE saying the things you are saying.

Ya know.. I had a huge long "history" statement that I was going to post, I even talked to Dan Richmand at the Seattle PI about my story and he really wanted me to go on the record and state my name, but I do not have the energy or desire to "re-hash" how we lost over $200K+, no bank loans, not personal loans, just hard earned $$ that was taken from me and my family. I also do not put it past anyone at TDM to come after me for my post.

Basically this franchise sucks.. I would not wish this on anyone. Our location had strong sales, but NO profits.. and HUGE out of pocket expenses. I was discieved, lied too, and "shined on" to open my store. Their OFOC is a sham!! I would be more then willing to "HONESTLY" speak to anyone about my experience.. Respond with your info and I will call you back..
Also: If you are a current owner who's store is failing, or you have have to put $$ in every month to survive.. DO NOT BE ASHAMED OR EMBARASSED ABOUT YOUR LOSS!! I was for a long time, I did not want to talk about it in any way. The more who "come out" the better.. there is power in numbers.. and lets keep this from happening to others,,,

If you keep this going you may want to make up accounts so there is a better idea of how many of you there are.

Has this been considered? I would sign on in a heartbeat. I do not want anyone one else to suffer my fate nor the fate of the other owners I know that are not making it.

A lot of us Taco Del Mar franchisees are suffering from the poor profits and artificially inflated costs that Taco Del Mar Franchising Corp is imposing on us through their kickbacks and shoddy support systems. Many of us have lost our homes, our families, and our savings so that James Schmidt and the fat cats in Seattle can convince (or some might say defraud) other people to pour their hard earned money into another Taco Del Mar franchise. Watching Taco Del Mar Franchising Corp executives pocket tens of thousands of dollars from our vendors is frustrating. But it certainly doesn’t justify this…

Earlier today, someone burnt down the Taco Del Mar restaurant at 680 W. Broadway in Vancouver, British Columbia (see Arsonist to blame in explosion [at Taco Del Mar]). The news reports say that the subsequent explosion destroyed a Starbucks and about two blocks of the city. They don’t say whether the owners of this restaurant had anything to do with the fire. But we do know that this store, like many other Taco Del Mar restaurants, was not making money. I am writing this message to other franchises that are loosing everything while running a Taco Del Mar. If you are considering some crazy notion of burning down your location to collect insurance money, PLEASE DON’T DO IT!

A lot of us on this forum know how frustrating it is trying to dig your way out of a loosing Taco Del Mar restaurant. Landlords want their lease money; the bank wants their loan payments; Sysco, Coke, and other vendors want their money too. And, of course, Taco Del Mar wants their royalties and a little extra money on the side too. It’s enough to make you pull your hair out. It hasn’t been easy waking up from the financial nightmare that is Taco Del Mar, but those of us who got out did it legally. Talk to your creditors to make payment arrangements. Use the liquidated assets from your store to help pay off your debts. Maybe you can change your location into a more profitable independant restaurant. If you have to, file for bankruptcy and find some work that will keep you alive and help to pay off the debts.

It’s also wrong to try to get out of a Taco Del Mar restaurant that clearly isn’t working by convincing other people that it’s a profitable business investment. A couple of brothers in Seattle started doing this several years ago by way of franchising and look at what it’s done to the rest of us. The Taco Del Mar brand was born, but dozens and dozens of frarnchisees and their families have been destroyed in order to keep it alive.

So let's be more responsible than the Schmidt brothers were back in 1992. Arson isn't the answer to a getting out of Taco Del Mar. The right way out is to work together to stop Taco Del Mar Franchising Corp from hurting more people and bail ourselves out of this terrible company at the same time. Who will file the first lawsuit and stop Taco Del Mar?

It looks like here is someone that is willing to use thier name.

http://www.bluemaumau.org/comment/31483/posting_fulled_lies

I dont understand why all the people against Taco Del Mar just give general statements and ask if anyone else is filing a law suit?

If they have grounds, why doesn't that person just file a law suit or at a minimum expose any facts about illegal activity? These comments without facts seems like slander.

Im suprised that Taco Del Mar has not sued those making the general comments. Then again, I guess you can not sue people unwilling say thier name.

Seems pretty shady to me.

First off I’d like to say that I’m saddened that the women in BC would go to such extremes if her business was failing. She obviously had way more problems than just a bad business to do such a crime and then top it off with a leap off a cliff.

I’m a TDM franchisee and I know how hard it is to have a franchise fail. I’ve had some myself. As a matter of fact I closed two stores in the other system I’m involved in myself due to bad locations however never at anytime did I blame the Franchisor. In that same system I have two very successful stores that make a tremendous amount of money. Lets face it, they the company do all the product creation, R & D creative design and systems. For that they get 6% or what that franchise charges to use their system plus co-op fees, the franchisee has the other approximately 90% to pay for food, labor and overhead. Try opening that same restaurant yourself and see what you go through, I’ve done it. Supply lines, advertising discounts, systems creation and equipment buying power. All mentioned are much more costly doing it yourself. My description of a franchise is, going into business but not by yourself. This doesn’t mean they have step in every time someone fails for whatever reason. Also if they could guarantee every location would be a winner they would open all of them and not even bother with franchises.

You probably did lose a lot of money for whatever reason, however when you point your finger at someone else there’s always 3 fingers pointing back at you. Let’s ask some key questions here.
1. Did you do your due diligence on TDM, bet not? You probably did even call one franchisee to see how they were doing in this company.
2. Did you operate the store yourself? Your CPA should have told you, if he or she has any knowledge about restaurants, that you’re lucky if you make money the first 3 to 4 years. This means 60 to 80 hours a week in your store the first year or two. Most franchisees make the same mistake, they open, work a few weeks or months then let someone else take their investment right to the toilet.
3. Were you portioning correctly? If you weren’t there how would know? If you were there, did you portion correctly? Again this is a common mistake, not portioning will cause inconsistent experiences in your restaurant and if you’re not there how do you know what the customers service and food were like. It’s a fact 8 out 10 people will not complain, they just don’t come back.
4. Were you advertising? Yea I know you gave the 1%, face it that’s gone when they take it. Forget about it, it’s gone; anything you get from it is gravy. Yea you were probably in a co-op at 2% to 3%, this, you should have had some say over. Now here is the real shocker. Shoe leather marketing, did you do it? I know you did when you opened, what about a month later, 6 months later, a year later, how about 5 years later. After 15 years in the other system, I still to this day, go out and greet business owners all the time. Heck when I did my due diligence when looking at TDM, I talked to a few businesses around a few TDM’S and found most of them didn’t even know TDM did catering. What’s that tell you? It tells me most franchisees don’t go out and local market their store. This is 50 to 70 percent of what will make you successful.

In closing, I’m sure a lot of the complainers on this page lost lots of money. Let’s face it, TDM does, like all franchise systems, take in franchisees that have no business doing a restaurant. TDM only take’s 7% of the gross sales with ad contribution, you take the rest. So take all the blame yourself for your failures excluding that 7% and move on. Please do yourself a favor and work for someone else for a living and let the people who know how to run and make money in the restaurant business do our thing.

P.S. I saw a Pizza Hut that closed the other day (the most successful Pizza Chain there is). I wonder if he’s on a Pizza Hut Blog complaining about his company right now. Maybe I’ll go check.

A Successful TDM Owner.

Firstly, I would like to thank all the unsuccessful zees who are able to speak out about their situations. It's definitely unfortunate to hear about such painful experiences, yet admirable that they're willing to educate those people that are interested in a TDM franchise. I have been considering this franchise for over a month, and am glad that I found this site, as I'm now pursuing other opportunities. I feel as though I just saved a whole lot of money.

Once again, thank you!