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Cuppy's Coffee: Some Words from AAFD Raises More Questions

 Sean Kelly, publisher of franchise blog FranchisePick.Com and occasional troublemaker, responds to Bob Purvin’s response (Some Words From AAFD On Cuppy’s Coffee and Elite Manufacturing) to the FranchisePick.Com list of alleged franchisee complaints about Cuppy’s Coffee & affiliate Elite Manufacturing (Cuppy’s Coffee Franchise Allegations Are Disturbingly Familiar).

Bob writes: I am delighted that Sean Kelly has now got religion…

I don’t know that I’ve found religion, Bob, but I have found another complaint: Another Cuppy’s Coffee Franchise Allegation on Rip-Off Report.

cuppyslogoBob writes [emphasis mine]: …let me offer a few facts and observations about the AAFD handling of the 5-6 complaints about Cuppy’s Coffee and Elite Manufacturing… Elite Manufacturing readily confirmed that it made refund promises to applicants who were unable to secure financing for a Cuppy’s franchise. It is the AAFD’s understanding that these 5-6 prospective franchisees…

Calculators being in short supply (darn mortgage crisis!), I dusted off my abacus and, between the other post and this one, counted 12* so far. Since most people are not even aware of blogs, it would be fair to assume there are many more out there. The Medina Enterprises website says Cuppy’s Coffee has sold 290 franchises. Perhaps AAFD’s investigation could include getting a list of depositors from Cuppy’s Coffee or Elite Manufacturing. Only they know the true number.

1) Ralcalee; Long Beach, California Source: Rip-Off Report
2) Charles Hunter Source: Complaints Board
3) Rolando BUENA PARK, California Source: Rip-off Report, FranchisePick.Com
4) Jls E STROUDSBURG, Pennsylvania Source: Rip-Off Report
5) Daniel Suarez FranchisePick.Com
6) Steve Tierre Verde, Florida Source: Rip-Off Report
7) KD Source:
8) maria Source:
9) MJ Source:
10) Chip Geneva, Illinois Source: Rip-Off Report
11) Robert Source: FranchisePick.Com
12) Philip, Cottonwood, California Source: Rip-Off Report

Bob writes: AAFD Accredited Contract status is not a guarantee of performance, or success, or a good business model, but it is an assurance of accountability.

Obviously it is not that, either. It’s an assurance solely that the contract wins the AAFD Franchise Agreement Beauty Contest. It’s not an assurance that a franchisor will abide by it, or even provide it to prospects as required by law. It’s not an assurance that a franchisor won’t allow an affiliate to sidestep disclosure laws by accepting monies than “paying the franchise fee” at a later date. It’s not an assurance of fairness whatsoever. If the award is simply a franchise agreement beauty contest, but is widely touted, both by the company and the AAFD, as proof of fair franchising, isn’t that, in essence, franchise fraud?

Bob writes: Elite Manufacturing readily confirmed that it made refund promises to applicants who were unable to secure financing for a Cuppy’s franchise.

I assume that Elite Manufacturing is disclosed as franchise sales agents or brokers for Cuppy’s Coffee?

Bob writes: I read today on one of the posts that an alleged victim claimed he had been promised that his deposit would be escrowed by Elite Manufacturing (Cuppy’s affiliate). Not one of the complaints registered with the AAFD made that contention, and none of the documents shared with us have documented such a claim. This is important information to know, and I invite anyone with evidence, if such exists, of this to contact the AAFD.

Several people mention escrow in their postings, including Rolando on Rip-off Report, saying that he was told “that there VP of operation made a mistake by not putting the down payment in an escrow, so they [can’t] return the down payment in full. He is blaming there Vice President of operations” Look at Rolando’s almost comical retraction where he says his cell phone wasn’t working and Cuppy’s Coffee is now a great company. Reminiscent of the Java Jo’z retractions (including Ben Scoble’s classic “My Mea Culpa”) where folks suddenly threw down their tar and feathers and burst lively renditions of the company song. It’s interesting that you designate this issue “important” but aren’t concerned with potential signs of gag orders, coercion, withheld franchise fees, broken disclosure laws, fraudulent representations on loan applications… What does Webster call it? Confirmation bias?

Bob says: If the Cuppy’s agreement hadn’t been negotiated by the AAFD to qualify for AAFD Accredited Contract Status, the promise of a refund would not have existed!

I’m sure all the franchisees who trusted the company with their life savings because of the AAFD’s praise and award recognizes the AAFD’s contribution to their well-being.

Bob writes: The AAFD has not received one complaint from a Cuppy’s franchisee in business

We haven’t received one comment in defense of the company from a Cuppy’s franchisee either.
It appears that there are 5X as many Cuppy’s franchisees that aren’t in business than those that are. Medina’s website says Cuppy’s Coffee has sold 290 franchises. A recent news story said they’ve “opened” around 60. My abacus tells me that’s nearly a 5:1 ratio. And, dare I say, a potential 230 downpayments?

cuppyslogo.jpgBob writes: …some have demanded the AAFD to behead Cuppy’s

Personally, I think that’s a bit extreme. I wasn’t even aware that was an AAFD service. Plus, looking at the Cuppy’s Coffee logo, I think someone already has.

Bob (AKA Clarence) writes: I suggest that some of our critics go rent the movie, “It’s a Wonderful Life” and advance to the scene in which George Bailey responded to a run on the Bedford Savings and Loan. George couldn’t return all the depositors money in just one day…

I don’t recall that Bedford Savings & Loan being a for-profit franchise company (I do seem to recall a prospect saying he was told that every time a deposit is wire-transferred, an angel gets his wings.) In his profile on GoBig Network, Robert “Morg” Morgan states:

We Own and operate businesses that generate in excess of $30,000,000.00 plus in annual sales. 1. A NATIONAL FRANCHISE - Cuppys Coffee & More - 50+ stores open and additional 70 under construction. 2. A NATIONAL COMMERCIAL CONSTRUCTION MANAGEMENT COMPANY - Elite Manufacturing & Construction Management - 3. INTERNATIONAL ECOMMERCE SITE - Generates more than $1,000,000 in annual sales and is set to begin doubling every 120 days.

Maybe George (AKAMorg) should loan Elite some of the $30M to give people their own money back - in full, and not over 20 months.

Bob writes: I have been puzzled by some responses, or concerns raised, about the AAFD.

That’s clear. I have a world of respect for you, Bob. I think you’re a good man in a bad spot. IMHO you’ve got blinders on in this situation, and it’s threatening the credibility of the organization you’ve worked hard to build. Split hairs about contract accreditation, etc. but the bottom line is that the AAFD claims to be a relentless champion of fairness in franchising. If the AAFD is credible, the alarm bells should be clanging loudly and the AAFD fairness fighters should be swinging into action. AAFD should be taking the lead in this, asking the hard questions, not deflecting them. If Cuppy’s Coffee is 100% innocent, then suspend the award until an independent AAFD committee comes back with credible proof that exonerate your member and award recipient. But if you appear to be discounting serious allegations, blaming the victims, and ignoring facts, the AAFD will have all the credibility of the Entrepreneur Hot New Franchises list.

As an aside, doesn’t it strike you as a little ironic that a marketing guy with a blog and a tropical fish have to place these allegations at the AAFD’s feet on a silver platter? Isn’t that the “accreditor’s” job?

Bob writes: All that is needed is the long ago assumed groundswell of franchisee malcontent to surface and support a strong trade association to truly arm itself as the voice of franchisees.

Here’s a point we agree upon. The groundswell is evident on Blue MauMau, FranchisePick.Com, and several other sites. It’s time for the strong trade association to show itself. Any ideas?

* I did not include the Java Jo’z-era depositers who are still reporting not having been paid.


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