SuperCoups - information
I was having a look at the SuperCoups Franchise and received their UFOC. After asking them for their recommended selling price ( not selling prices being achieved ) I was given the surprsing answer that they couldn't give me that as it would be an earnings claim? You can get MSRP's from car dealers, menu prices from food concepts etc. so I don't see how a recommended selling price is an earnings claim.
All franchisors are very careful about earnings claim litigation but not giving a selling price seems extreme.
I'm now going to start checking to see if they've ben involved ina disproprtionate amount of litigation with franchisees.
Is there anyone out there who could shed some light on their reticence or give other relevant info on the system?
Much appreciated
Maybe SuperCoups has no earnings?
Martin,
Let me try and understand this, if you wanted to buy an ad from SuperCoups they can tell you the price, otherwise how could you buy an ad, but if you are interested in buying a franchise they can't tell you the ad selling price because that would constitute an earnings claim?That goes down as one of the most asinine things I've ever heard in sales. It just begs the question, what are they hiding and why?This is the same company that used "Fuzzy Math" in the 2007 Entrepreneur 500 making the appearance they are growing by selling franchises.
It appears they sold two franchises last year, with the answer you just received I'm surprised they were able to sell any. Have they sold any this year?
Maybe prospective franchisees have wised up and are starting to avoid companies that have a 20 year track record but an unwillingness to divulge any financial representation including suggested selling price.
You would think a product oriented franchise company that has been selling (or trying to sell) franchises for over 20 years would be able to make some sort of financial representation, without fearing repercussions. Keep in mind this a company that is owned by Valassis/Advo a Billion dollar publicly traded company.
Jim Coen
Email: Jim@franchiseperfection.com
Blog: Lets Talk Franchising
Unclear of the Term 'Selling Price'
Martin,
An article, SuperCoups using fuzzy math from Jim Coen, may help shed some light.
I am unclear of what you mean by "selling price". Do you mean the selling price of an existing outlet when the franchise owner sells it? Or sales per store? Or price point of the merchandise / services?
Sorry for being muddle headed. I just need some clarification.
Frankman
Getting a Rough Earnings Claim
Look at their financial statements, at the royalty and ad income streams. Divide by the number of stores and you will get a rough earnings claim.
And for specific locations, I believe that the FTC allows for site specific earnings to be disclosed without it being an earnings claim.
If you are buying an existing franchise, you really need to match up the financials the seller is giving you with what was reported to the franchisor.
Michael Webster PhD LLB
Misleading Advertising Law
Martin, SuperCoups, Retail Pricing
Martin:
I seem to be interpreting your question differently than did Frankman or Michael.
Some franchisors are more cautious than others in providing any information which may be construed as an earnings claim. As a result they do not provide a 'Suggested Retail Price'.
What I'd encourage you to do is first contact existing SuperCoups Franchisees in your 'general' vacinity; and franchisees in markets similiar to yours in population and see if you can learn about what their going rates are. As part of your 'Due Diligence' and competitive analysis you should also contact other similiar concepts like Valpak and find out what their going rate is.
Ultimately you'll need to calculate your overhead, cost of goods, owners salary and desired profit , then add in royalties and ad fees to derive your retail price.
Should you become a franchisee, you'll find that the franchisor will become very willing to share all of this information with you. I hope that this somehow helps. Best of luck in your evaluation, selection, and future as a franchisee.
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
Selling Price
Hi,
I was referring to the selling price of the product ie. their coupon service, or the merchandise / services as you mention.. I saw the fuzzy math article on my first visit to this site, quite informative.
Martin
Rough earnings claim
Thanks,
It isn't an existing franchise unit situation.
I'm used to zors running a mile when the words potential earnings are uttered. I was interested in comparing their recommended selling price of their service ( which they have to pretty much give to all prospective customers anyway ) to the pricing level of competitors. Unfortunately they don't operate in our state so I asked the person selling the franchise as opposed to one of their franchisees. I was quite surprised that that they wouldn't give the info .
Martin
SuperCoups retail pricing
Dale,
That's pretty much what I was talking about. I asked the H.O. as there are no franchisees in my general vicinity. I have the Valpak rates as they are in the area. That's why I thought it was a fairly innocuous bit of info. I was interested in doing the calculations mentioned by you, and extrapolating a selling price and then compare this to their recommended selling price as well as that of actual competitors.
Alas, it was not to be,
Thanks
Martin
Supercoups earnings
Jim,
I never got to find out about potential earnings. I am starting to understand why they have sold so many franchises lately. I couldn't figure what the big secret was regarding product pricing, so yes, asinine would be fitting. I don't know what they have sold this year - the UFOC isn't that up to date.
I was interested in them because of their 20 year history and also because I am somewhat familiar with Advo. I read that the Valassis takeover wasn't that smooth though and that Advo had to sue Valassis to complete the deal after they tried to back out.
Perhaps the Valassis influence has yet to be felt. The share price is doing well though - ticker symbol VCI.
I'll continue my quest.
Martin
Martin & Retail Pricing!
Martin:
Ultimately it is the ValPak rates which will be your direct competition. So with that you'll be able to begin establishing some preliminary pricing and crunching through the numbers. You'll also be able to back into the number of sales required.
One of the things you'll want to pay close attention to is if they have a maximum retail price, if they do it will be disclosed in the UFOC and in the Agreement. If they do it becomes much more imortant what that price is, prior to proceeding. If they do not, that's good - provided your business planning shows that you can obtain your objectives while remaining price competitive with the existing Valpak business.
Another thing you'll want to take a close look at, is how they address pricing in their 'cross-marketing' opportunities between franchisees. This 'Cross Marketing' sounds like a good thing, if and when you have additional franchisees in nearby markets, however it could also be quite burdensome deepending on how these issues are addressed by the Zor.
Once Again, best of luck to you! Keep us all posted on your journey into franchising.
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
Earnings Claims: A Little Mischief
That is one of the farthest stretches I've heard yet - a franchisor not giving you the selling price of the product because you could possibly extrapolate a store's earnings.
I see that you have received some good advice on (1) how to use items in the UFOC to get earnings and (2) getting a franchise's earnings from a franchisee. That's how I did it - although very poorly.
Here's a suggestion on how to play a mind game with Supercoups for needlessly playing smoke and mirrors with you. Thank them for providing you an earnings claim by connecting you with their franchisees that they recommended. (Pre-picked franchisees will open up their financials with you so you'll know their top and bottom earnings.) Then tell the franchise development manager that you think they are required to back up those earning claims in Item 19 of the UFOC, after all, they led you to the claim.
Let 'em sweat it out.
Frankman
P.S. Don't mind me. I'm just having fun. Wish you the best of success.
Utterances by a franchisee good or bad is the...
Provence of the franchisee. So Bob take your homemade compliance and shove it.
Mischievious earnings
I thought it a bit of a stretch as well - I thought it would have fallen under the heading of the zor having to make all info available so that a potential zee can make an assesment. I seem to remember that there is some wording to that effect in the " official " description of what a UFOC should contain. So I would have though that by having info and deliberately not sharing it they would leave themselves open for litigation anyway, seems silly to me.
I'll keep your suggestion up my sleeve - it may be an interesting card to play at some stage,
Thanks
Martin
With any luck...
Guest,
With any luck, Supercoups won't have an easy answer. Resolving the problem may force them to rethink their earnings claims logic as they struggle to explain.
And as for taking my homemade appliance and shoving it where the sun don't shine, I'm afraid I don't have it. Your wife desperately needed it.
P.S. Oh, you said "compliance", not appliance. Uh, never mind... (I would like that small, shall we say "appliance" back though.)
Earnings Claim...
Is a good idea for a franchisor!
You've instructed a prospect to coerce and illegal earnings claim from the salesperson. If it's not in Item 19 a salesperson or any company representative can't say it. Giving the key components of the P&L so a prospect can "do the math" is a construtive earnings claim.