In our many discussions with franchisees over the years, we have come to appreciate how difficult it is for operators to gain a say in brand leadership. All too often franchisees feel disenfranchised in setting the direction for the concept that has so much to do with their net worth. All this explains the burgeoning success of our QSR/Restaurant Research LLC Brand Satisfaction Survey. It provides a very public platform for operators to voice their opinions. This year 990 franchisees operating 8,462 units weighed in with their opinions. This year’s survey response represents approximately 7.5 percent of all franchised units among the largest 150 chains tracked by Restaurant Research. Quiznos' Reaction to Tragedy: Termination Notices
December 12th, 2006
“It’s unfortunate that this is the way Quiznos has reacted to this tragedy,” that according to Justin Klein, Marks & Klein, attorney for the Toasted Sub Franchisee Association (TSFA). In response to the association’s web posting honoring Bob Baber, a fellow franchisee who committed suicide November 27, Quiznos sent termination notices (pdf file) to all ten TSFA board members, representing approximately 17 units, on Monday. The tribute had included the suicide note, which was directed at the mainstream media, in a plea for an investigation by the government into the franchisor’s business practices.
The notices state that the franchisees’ rights under the Agreement are “terminated, effective 30 days following the receipt of the notices, for engaging in conduct that, in the sole judgment of Quiznos, materially impairs the goodwill associated with the Marks.” According to a letter from Quiznos’ attorney, Fredric Cohen, DLA Piper of Chicago, franchisees are required, among other things, to pay all royalties, fees and other amounts owed Quiznos and its affiliates. They are also advised to cease identifying themselves as Quiznos franchisees, and to stop using all marks, trade secrets, signs, trade names and other material.
In closing Cohen states that if franchisees require further information with respect to curing their companies’ conduct within the 30-day period or ending their franchise operations, they should contact him.
Quiznos response, or lack thereof
In response to franchise owners concerns about the passing of Baber, Quiznos sent out a memo (pdf file) on December 8, stating the company was deeply saddened by Mr. Baber’s death and that it had expressed its condolences to the family and took steps to provide comfort and support to its franchisee community who were directly affected by the situation.
But in a conversation today with Ratti Baber, his widow, she said as of today she had not heard anything from Quiznos headquarters. But she said, “Forget about the condolences. For the company to retaliate against the [franchisee] association for honoring the passing of a fellow franchisee, what is that all about?” What are they hiding?”
In regards to the lawsuit Quiznos filed against the Baber family, she said they had been involved in it for the past 18 months, and that had really taken a toll on them, mentally and physically. She said, “When the case was moved to Colorado that really crushed us.” Now she is weighing all her options to continue on with the legal action.
Mrs. Baber said she was monitoring the discussion on the bluemaumau web site. She wants the franchise community to know that Quiznos’ approach is wrong. She said, “We are supposed to be investing in the system, we are suppose to have equity and partnership. We are not their employees, their hired hands that they can rule by intimidation."
Quiznos did not respond to requests for comments on the passing of Bob Baber or the Notice of Terminations sent to TSFA board members.
Janet Sparks is a freelance reporter who writes about complex issues related to the franchise industry, including the litigation between franchisors and franchisees.She is the former publisher of Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years, and was an independent reporter/columnist for a leading franchise magazine for over 10 years. Sparks is also a Forbes.com contributor to its leadership/franchise section. She can be emailed at jsparks@bluemaumau.org.
Comments
December 12, 2006 - 16:47pm
Rubbing salt in the wound
Speaking as one who disagreed with TSFA's decision to post the note, and with Mr. Maumau's decision to post the note, I am nevertheless stunned by the franchisor reaction.Suicidal ideation is a confluence of several factors. The response of those affected by the tragedy (including family and friends) is understandably affected by their shock. This is why I thought it inappropriate for Mr. Maumau to post the note, and why I was deeply uncomfortable with the TSFAs decision to post the note before a period of reflection and mourning. They could at least have waited till the poor man was cold in the ground before they started the media spin. If the widow felt the same way in a month or two, fine. There would have been plenty of time later for recriminations. No one did the family any good by rushing to capitalize on the tradgedy. The corporation (and their mega-firm legal counsel) could have risen to the occasion rather than rush to rub salt in the wound. Their response only causes unnecessary pain, but also escalates the media damage to the franchisor; ensuring yet a few more days (at least) of press. Sometimes the best advice a lawyer can give his client is to refrain from exercising a legal right.A multibillion-dollar corporation should be more media-savvy and those running the entity should consider that even if the franchisees were acting out of bad faith, the corporation is wise to consider the public response to the corporation's action-- and the effect not just on the corporation, but on others (such as other franchisees). It is one thing to be mean, but it is downright foolish to let your emotion damage your corporate interests, which is what the corporation has done.One of the reasons to hire outside Public Relations and Legal counsel is to put the brakes on impetuous decisions. I can see why the franchisor would be upset by the TSFA post; it put the franchisor in a no-win position and I actually felt that the TSFA was a bit tacky. But to stoke the media flames seems hugely counterproductive for the corporation. Rule One of PR is: don't make the situation worse. Rule Two: Keep your eye on the ball-- here, the long-term interest of the corporation. As a company ultimately dependent on those wives/mothers/daughters who choose to buy (or not buy) your product, consider how your action will make you look to that core demographic. I know this sounds cold, but cold objective judgment is why you pay your PR firm and your lawyer.Just because you can be more petty than your opponent doesn't mean you should--both for reasons of humanity and for pecuniary interest.Sometimes it is by being graceful and compassionate in the face of suffering that we can best achieve our objective. Not to mention look ourself in the mirror each day.--Paul Steinberg, pwsteinberg@msn.com
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December 12, 2006 - 20:15pm
Posting of Note
There are a couple of people who have written here and elsewhere that they thought posting a suicide note on a public website such as Blue MauMau and TSFA was in poor taste.
While normally suicide notes are private and kept that way, most likely in keeping with the decedent’s last wishes, the original story on Bob Baber’s suicide makes it clear that he wanted the reason for his suicide made public. Reading his note should leave no doubt about that.
He made as certain as he could that the note would be found and publicized. He had both the note and a USB drive containing the note on his person when he killed himself. To leave nothing to chance, he in addition left the note for his family to find on a home computer.
Why did he want to have his note made public? You have only to read it or reread it. He wanted Quiznos franchisees to have a voice. He wanted to right a hidden wrong affecting many others.
In light of the fact that he gave his life to get the message out, should the public media and his widow then ignore his last wishes? It seems to me that that would have been the unkindest cut of all, but each of us must answer that in light of our own conscience — often wrestling with doubts, but to the best of our abilities.
In spite of the many unfavorable stories that have been circulating about Quiznos and its franchisees (for example, this March story in the Tampa Tribune: http://www.gsnh.com/quiznos/TampaTribune06Mar01.pdf), Quiznos has added fuel to the fire of its dubious public image by mass-terminating franchisees on the board of the TSFA. I think many will read about this and think along these lines: “Unbelievable! I thought perhaps Quiznos was being unfairly demonized, but it’s clear they really don’t care about the welfare of their franchisees.”
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December 12, 2006 - 20:42pm
Conditions for Curing
Love to know what the conditions for curing this breach is going to be. Michael Webster PhD LLB Psychology of Compliance and Due Diligence Law www.bizop.ca
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December 12, 2006 - 23:02pm
Bob Posting
In response to some of the postings about Mr. Baber, it is time to set the record straight.
- Mr Baber was my friend, and a friend of the TSFA.
- The posting of Mr. Baber’s note was made after discussions with, and the approval, of his widow.
- In this day and age of 5-minute-media events, it was important to honor Bob’s message by disseminating it to the public, which from his note, is clearly what he wanted.
Ms. Marilee Hayes has captured the reasons for revealing this note completely in her posting. Read it.
Certainly the TSFA had to weigh the negative impact, political correctness, risk of retaliation (which has already occurred) and poor-taste issues against Bob’s wishes, as our friend. In the end, Bob’s wishes won out.
I had dinner with Bob and his wife just a few weeks back in LA. I knew he was distressed over the heavy handedness that was befalling him from corporate. In retrospect, I wished I could have offered him more comfort. But the problems affecting Bob are the unfortunate de-facto standard affecting hundreds if not thousands in this chain. This has been going on for years, and will continue until it is stopped.
So the decisions become…let Bob’s passing go quietly in the night (as Bob’s passing surely would have done), or honor him by acknowledging his sacrifice for all those left behind in the same situation (what was clearly his last wish).
People often banter about whether the lowly ranking E-4, who revealed what was going on in Iraq regarding prisoner torture at the Abu Gharaib Prison, should have done so.
In the value system I grew up in of responsible, moral and ethical behavior and courage…that’s not such a hard decision. There are those fighting for us today in the armed forces that hold the same values.
They believe as I do that there is right, and there is wrong. The same thing applies here.
Sometimes the right decisions are the hardest to make.
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December 13, 2006 - 09:59am
What an absolute debacle
What occured with Mr. Baber is an absolute tragedy. Mr. Baber clearly had personal issues which had nothing to do with Quiznos.
It would also appear Quiznos has its own issues which has nothing to do with Mr. Baber.
When a franchisor goes to war with its franchisees, it goes to war against itself. It is the franchise equivalent of repeatedly punching yourself in the face. Nobody wins except the competition and the attorneys.
Terminating the franchisees isn't the answer.Committing suicide isn't the answer.Going to war isn't the answer.Franchisor command and control tactics is not the answer.Franchisee pot shots and poisonous blogs are not the answer.
Quiznos obviously has an absolutely toxic corportate culture which is impacting the entire organization. There is a total breakdown in trust between the franchisor and franchisees.
NEITHER PARTY IS ACCEPTING RESPONSIBILITY FOR THE BREAKDOWN.
BOTH PARTIES ARE RESPONSIBLE FOR THE BREAKDOWN. NEITHER PARTY IS ACKNOWLEDGING ITS OWN ROLE.
Here is what we can all learn.1. Listen to the franchisees. Hear their concerns. Franchisees are generally reasonable business people. They don't expect to get their way and see all their ideas implemented. They just want to be heard.
2. Franchisees need to listen to the franchisor. Franchisors have their own set of concerns and their own business which needs to be profitable. Franchisees have to gain an understanding of the concerns of the franchisor so they can understand the rationale behind some of their decisions.
3. Stay in problem solving. Franchisees blessed with objectivity should work with franchisors to craft solutions which work for both parties. Franchisees will not skillfully execute strategies they are not enthusiastically behind.
4. When problem-solving fails, bring in skilled facilitators before you bring in attorneys. Sometimes franchisees and franchisors are too close to and have to much emotionally invested in the problems to be objectives.
5. Take responsibility for breakdowns in communication. When their are two parties in a relationship and the relationship fails, both parties contributed to the failure. This is not a bad thing, as breakdowns occur all the time. It is a predictable thing. Identify your role, take responsibility, and try a different course of action.
AVOID LITIGATION WHENEVER POSSIBLE.
LITIGATION OF THIS TYPE OCCURS WHEN BOTH PARTIES STOP LISTENING AND ARE OUT OF IDEAS.Those franchisees being terminated and the franchisor are STILL ultimately committed to the the same thing. They all have alot at stake and want Quizno's to win.Joe Mathews
Franchise Performance GroupCo-author Street Smart Franchising
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January 24, 2007 - 00:39am
REGUARDING PAUL STEINBERG
The following seems to pertain to our illustrious Paul Steinberg. Can someone please confirm?
JUDGMENT - Civil Case # 200604202803
Defendent: STEINBERG, PAUL W
Plaintiff: NORTH SHORE UNIVERSITY HOSPITAL
Filing Type: JUDGMENT/STATE LIEN
Amount Liability: $1,760
JUDGMENT
Date Filed: Nov. 2, 2006
Civil Case # 2006570631
Defendant: STEINBERG, PAUL W
Filing Type: SUITS - INITITAL FILINGS INDEX
Plaintiff: (name withheld)
JUDGMENT
Date Filed: Oct. 19, 2006
FEDERAL TAX LEIN (individual)
Defendant: STEINBERG, PAUL
Plaintiff: IRS
Amount Liability: $29,654
JUDGEMENT
Civil Case # 462926028
Date Filed: Oct 19, 2006
Defendant: STEINBERG, PAUL
Plaintiff: IRS
Filing Type: FEDERAL TAX LIEN
Amount Liability: $29,654
Action Type: FEDERAL LIEN
JUDGMENT
Civil Case # E024175702
Date Filed: Apr 18, 2005
Defendant: STEINBERG, PAUL W
Plaintiff: NY STATE DEP'T OF TAXATION AND FINANCE
Filing Type: JUDGMENT/STATE LIEN
Amount Liability: $30,131
Action Type: NY STATE TAX WARRANT
JUDGMENT
Date Filed: Apr 24, 1995
Defendant: PAUL STEINBERG ENTERP INC
Plaintiff: NYC DEPARTMENT OF FINANCE
Filing Type: JUDGMENT/STATE LIEN
Amount Liability: $2,564
Action Type: NY CITY TAX WARRANT
JUDGEMENT - Civil Case # S1389D09378
August 9, 2001
Defendant: STEINBERG, PAUL
Plaintiff: NJ DEPT. OF ENVIRONMENTAL PROTECTION
JUDGMENT
Civil Case # DC-009342-2000
Date Filed: August 30, 2003
Defendant: PAUL STEINBERG ASSOCINC
Plaintiff: F P R EXPRESS INC
Amount Liability: $8,009
t...and there's more
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December 13, 2006 - 14:53pm
Termination
Wow! Too bad I resigned a few years back from the TSFA Advisory Board. My wife and I could have been set free from bondage had we hung in there and received our termination letter!! Now we'll just have to keep on rolling down the "Rocky" mountain into the abyss of complete financial failure.
My sincere sympathy to the Baber family. As a Quizno's franchisee from almost the beginning when the franchisor seemed to care, I understand how this can happen. We have lost our life savings to-date, have been unable to sell our stores for two years and still have debt remaining. A tasteless combination coming from a chain which still has the best product on the market. Too bad the franchisor is led by a pack of hungry jackals who care nothing for the franchisees they ravage.
Watch out and beware, you prospects. You have been warned. Had I had me to warn myself back then when we bought in to the lie, we would now be relaxing on one of those yachts described to us in detail by the former AD who sold us on the concept!
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December 12, 2006 - 20:15pm
Posting of Note
There are a couple of people who have written here and elsewhere that they thought posting a suicide note on a public website such as Blue MauMau and TSFA was in poor taste.
While normally suicide notes are private and kept that way, most likely in keeping with the decedent’s last wishes, the original story on Bob Baber’s suicide makes it clear that he wanted the reason for his suicide made public. Reading his note should leave no doubt about that.
He made as certain as he could that the note would be found and publicized. He had both the note and a USB drive containing the note on his person when he killed himself. To leave nothing to chance, he in addition left the note for his family to find on a home computer.
Why did he want to have his note made public? You have only to read it or reread it. He wanted Quiznos franchisees to have a voice. He wanted to right a hidden wrong affecting many others.
In light of the fact that he gave his life to get the message out, should the public media and his widow then ignore his last wishes? It seems to me that that would have been the unkindest cut of all, but each of us must answer that in light of our own conscience — often wrestling with doubts, but to the best of our abilities.
In spite of the many unfavorable stories that have been circulating about Quiznos and its franchisees (for example, this March story in the Tampa Tribune: http://www.gsnh.com/quiznos/TampaTribune06Mar01.pdf), Quiznos has added fuel to the fire of its dubious public image by mass-terminating franchisees on the board of the TSFA. I think many will read about this and think along these lines: “Unbelievable! I thought perhaps Quiznos was being unfairly demonized, but it’s clear they really don’t care about the welfare of their franchisees.”
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December 12, 2006 - 23:02pm
Bob Posting
In response to some of the postings about Mr. Baber, it is time to set the record straight.
- Mr Baber was my friend, and a friend of the TSFA.
- The posting of Mr. Baber’s note was made after discussions with, and the approval, of his widow.
- In this day and age of 5-minute-media events, it was important to honor Bob’s message by disseminating it to the public, which from his note, is clearly what he wanted.
Ms. Marilee Hayes has captured the reasons for revealing this note completely in her posting. Read it.
Certainly the TSFA had to weigh the negative impact, political correctness, risk of retaliation (which has already occurred) and poor-taste issues against Bob’s wishes, as our friend. In the end, Bob’s wishes won out.
I had dinner with Bob and his wife just a few weeks back in LA. I knew he was distressed over the heavy handedness that was befalling him from corporate. In retrospect, I wished I could have offered him more comfort. But the problems affecting Bob are the unfortunate de-facto standard affecting hundreds if not thousands in this chain. This has been going on for years, and will continue until it is stopped.
So the decisions become…let Bob’s passing go quietly in the night (as Bob’s passing surely would have done), or honor him by acknowledging his sacrifice for all those left behind in the same situation (what was clearly his last wish).
People often banter about whether the lowly ranking E-4, who revealed what was going on in Iraq regarding prisoner torture at the Abu Gharaib Prison, should have done so.
In the value system I grew up in of responsible, moral and ethical behavior and courage…that’s not such a hard decision. There are those fighting for us today in the armed forces that hold the same values.
They believe as I do that there is right, and there is wrong. The same thing applies here.
Sometimes the right decisions are the hardest to make.
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December 13, 2006 - 09:59am
What an absolute debacle
What occured with Mr. Baber is an absolute tragedy. Mr. Baber clearly had personal issues which had nothing to do with Quiznos.
It would also appear Quiznos has its own issues which has nothing to do with Mr. Baber.
When a franchisor goes to war with its franchisees, it goes to war against itself. It is the franchise equivalent of repeatedly punching yourself in the face. Nobody wins except the competition and the attorneys.
Terminating the franchisees isn't the answer.Committing suicide isn't the answer.Going to war isn't the answer.Franchisor command and control tactics is not the answer.Franchisee pot shots and poisonous blogs are not the answer.
Quiznos obviously has an absolutely toxic corportate culture which is impacting the entire organization. There is a total breakdown in trust between the franchisor and franchisees.
NEITHER PARTY IS ACCEPTING RESPONSIBILITY FOR THE BREAKDOWN.
BOTH PARTIES ARE RESPONSIBLE FOR THE BREAKDOWN. NEITHER PARTY IS ACKNOWLEDGING ITS OWN ROLE.
Here is what we can all learn.1. Listen to the franchisees. Hear their concerns. Franchisees are generally reasonable business people. They don't expect to get their way and see all their ideas implemented. They just want to be heard.
2. Franchisees need to listen to the franchisor. Franchisors have their own set of concerns and their own business which needs to be profitable. Franchisees have to gain an understanding of the concerns of the franchisor so they can understand the rationale behind some of their decisions.
3. Stay in problem solving. Franchisees blessed with objectivity should work with franchisors to craft solutions which work for both parties. Franchisees will not skillfully execute strategies they are not enthusiastically behind.
4. When problem-solving fails, bring in skilled facilitators before you bring in attorneys. Sometimes franchisees and franchisors are too close to and have to much emotionally invested in the problems to be objectives.
5. Take responsibility for breakdowns in communication. When their are two parties in a relationship and the relationship fails, both parties contributed to the failure. This is not a bad thing, as breakdowns occur all the time. It is a predictable thing. Identify your role, take responsibility, and try a different course of action.
AVOID LITIGATION WHENEVER POSSIBLE.
LITIGATION OF THIS TYPE OCCURS WHEN BOTH PARTIES STOP LISTENING AND ARE OUT OF IDEAS.Those franchisees being terminated and the franchisor are STILL ultimately committed to the the same thing. They all have alot at stake and want Quizno's to win.Joe Mathews
Franchise Performance GroupCo-author Street Smart Franchising
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December 12, 2006 - 16:57pm
Equally Stunned!
"I am nevertheless stunned by the franchisor reaction." - Steinberg
I am equally stunned at such heavy-handedness. It seems so counter-productive for the franchiser, and a PR nightmare.
Frankman
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December 12, 2006 - 21:50pm
Watch out!
You may be sued next. As a franchise owner I'm shocked and appalled at the reaction by corporate to this. In many ways I wish my agreement would be severed.. I'd rather make it on my own.
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December 13, 2006 - 01:34am
Here I blow again….
I find it considerably more repulsive that anyone would compare the unfortunate but misguided actions of Mr. Baber with the sacrifices made by those who have served in or are serving in our armed forces. There is a significant difference between placing ones life on the line to defend the rights of all Americans, and taking ones life over a failed business venture and/or a poor business decision.
Blue Maumau is an open forum with its focus being ‘Franchise News, to Prosper and Amuse’. If and when a disgruntled franchisee commits suicide in the restroom of another franchisee of the same system, with a note in his pocket outlining an opinion of all that is wrong with the franchisor that is news. I support the right of Blue Maumau to report the news and to provide an open forum for the discussion of that news.
Toasted Subs is an association of franchise owners who believe in and supports the Quiznos concept, its products and most importantly, the brand. Whose goal is to protect, preserve and promote the Quiznos brand and help raise Average Unit Store Volumes (AUV's)… I support TSFA’s decision to dedicate a page on its website for the purpose of, as their website states, Honoring the passing of a Fellow Franchisee. I do not believe that publishing the note which Mr. Baber carried in his pocket to be congruent to the above stated TSFA goals.
Quiznos has a fiduciary responsibility to all franchisees to protect the brand. The actions of Toasted Subs in trying to make Mr. Baber a Martyr is not good for the brand, and it seems as though Quiznos will contend that those actions were in violation of its franchise agreement. The actions of Quiznos may be considered cold, callused or ill timed by some, I’m sure that there are others who will find comfort in the fast, swift and firm action taken by corporate. Sometimes the right decissions are the hardest to make.
Being that Quiznos is up for sale, and there are so many unhappy franchisees spending so much time and money complaining and suing the franchisor, would it not make more sense for TSFA to simply buy Quiznos? Is it possible that is the plan, but only after propagating as much negative publicity as possible to drive down the price? Hmmmmm
Believe & Succeed,FranSynergySynergizing Franchising 1 Franchisee at a time!www.fransynergy.com
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December 13, 2006 - 11:00am
Quiznos Film
Many of you know who I am. I started producing a documentary on Quiznos well over 1.5 years ago.
Considering the constant attacks I was getting from Q Spies on www.QuiznosSucks.com (gee, don't we all miss that?) a group of us decided it was best for me to stay under the radar and catch Q by surprise when the film is done.
Bob and I were in constant communication about this and he was playing a major role in the production of the film. His name and his story will live on. No doubt about that. Q did not shut him up. They contributed to a lot of pain in his life. Anyone who knows anything about the psychological reasons behind suicide know that suicide is not a selfish act at all. Bob was not thinking of his family or his friends or even himself. He was thinking about the pain he was in. Just like when you burn your finger on a stove and you quickly do something to stop the burning --- people who commit suicide simply need to find a way to stop the pain. That is not my analysis; that is how it has been described countless times in countless books by people who are a lot smarter than me and who know what they are talking about. Bob was in pain and Quiznos did not care.
Quiznos can not stop this film. They can not shut me up. They will not hold me back.
Attack me all you want here, but we are getting close to exposing all the nightmares Quiznos has brought upon people.
Bob was one of the most intelligent and kind people I had ever met. I am so utterly upset by this, but I am charging on, as he would want me to. His presence in the project is now stronger than ever.
I will disappear now and go back under the radar. But the film will be done very soon, and it will be dedicated to Bob because he was (still is) a big part of it and he deserves to be immortalized.
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December 13, 2006 - 11:24am
Joe Mathews
Joe I understand where you are coming from. Your suggestions would work for the majority of companies. What you and others are over-looking is one simple fact. There is no forum for communication with corporate Quiznos. Up until a year ago, we used to have quarterly meetings where questions and answers were exchanged. Now we have webinars where you log on to the internet and are presented information one way. How do you negotiate, communicate, or voice your concerns where there is no avenue to do so? The answer is that you can't. Hence the TSFA was formed. Likewise the lawsuit riddled UFOC is another example of people's frustrations. Do you think we are a bunch of sue-happy owners? When Quiznos own corporate field people visit the restaurants, they are just as much in shock and disbelief as we are. They used to believe in what Quiznos was trying to do and back the corporation. Not any more. They actually believe in many issues that we are facing.As a side note, Quiznos does have a "hand-picked" franchise advisory council. These guys and gals will tell you the same thing. Quiznos doesn't listen.I think an outside mediator would be the start of the getting this company back on track but that would never be an option.I would give Quiznos corporate staff one bit of advice... "A desk is a dangerous place from which to watch the world."
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December 13, 2006 - 14:09pm
Response to Joe Mathews
Hog wash. The problem is that the Franchise Law in most states is not sufficient to protect the Franchisee. Most if not all Franchise agreements are adhesive. The Franchisor gives lip service to "advisory committee's" and has them in the FA agreements because some states require them. There is no real power to the Franchisee Advisory Committee's (FAC's.) They are purely window dressing. As long as the IFA is run by the Franchisors and the majority of the Franchising Magazines (the biggest of which starts with an "E" are deriving their money from Franchisor advertising and base their ratings onthe financial status of the Franchisor and not the Franchisee or a combination of the two, there will never "good" due diligence. The Franchisor hides behind the Franchise Law and in most cases has an excellent "dog and pony show" all set up for the prospective franchisee. It is kind of like voting for a political candidate, most of the time they are all bad, it is just which is "less" bad.
There is no level playing field as the Franchise Law exists and until there is then there is a place for litigation. Check in to the lobbyist that are on the payroll for the Franchisor and the high powered lawyers like DLA Piper and such.
Cathy Gordon
Mail Boxes Etc Franchisee
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December 13, 2006 - 01:34am
Here I blow again….
I find it considerably more repulsive that anyone would compare the unfortunate but misguided actions of Mr. Baber with the sacrifices made by those who have served in or are serving in our armed forces. There is a significant difference between placing ones life on the line to defend the rights of all Americans, and taking ones life over a failed business venture and/or a poor business decision.
Blue Maumau is an open forum with its focus being ‘Franchise News, to Prosper and Amuse’. If and when a disgruntled franchisee commits suicide in the restroom of another franchisee of the same system, with a note in his pocket outlining an opinion of all that is wrong with the franchisor that is news. I support the right of Blue Maumau to report the news and to provide an open forum for the discussion of that news.
Toasted Subs is an association of franchise owners who believe in and supports the Quiznos concept, its products and most importantly, the brand. Whose goal is to protect, preserve and promote the Quiznos brand and help raise Average Unit Store Volumes (AUV's)… I support TSFA’s decision to dedicate a page on its website for the purpose of, as their website states, Honoring the passing of a Fellow Franchisee. I do not believe that publishing the note which Mr. Baber carried in his pocket to be congruent to the above stated TSFA goals.
Quiznos has a fiduciary responsibility to all franchisees to protect the brand. The actions of Toasted Subs in trying to make Mr. Baber a Martyr is not good for the brand, and it seems as though Quiznos will contend that those actions were in violation of its franchise agreement. The actions of Quiznos may be considered cold, callused or ill timed by some, I’m sure that there are others who will find comfort in the fast, swift and firm action taken by corporate. Sometimes the right decissions are the hardest to make.
Being that Quiznos is up for sale, and there are so many unhappy franchisees spending so much time and money complaining and suing the franchisor, would it not make more sense for TSFA to simply buy Quiznos? Is it possible that is the plan, but only after propagating as much negative publicity as possible to drive down the price? Hmmmmm
Believe & Succeed,FranSynergySynergizing Franchising 1 Franchisee at a time!www.fransynergy.com
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December 13, 2006 - 16:55pm
Fransynergy...Do you have a clue???
Fransynergy...
Do you ever read a newspaper? Do you watch the news? Do you have any idea what you are talking about???
Quiznos is not for sale...Quiznos is sold. JP Morgan purchased 49% of Quiznos Corporate earlier this year for $585,000,000 (25% of the original asking price for 49% of the company...it appears the Schadens over estimated the value of the Q empire!)....JP Morgan has an agreement in place to purchase the remaining 51% at a date to be determined based on Q Corporate meeting an outline of defined goals. The company is sold...not for sale.
Your thought process of the TSFA purposely driving down the value to assist in buying the company is ridiculous. You consider yourself someone "in the know" when it comes to franchising, but you obviously don't spend as much time reading as you do posting.
Here is a tip...check a couple of facts, read up on a subject...THEN post your opinion. It is a great place to start and it will keep people from assuming your an idiot!!! I'll remind you of something my mom used to tell me, "Better to have people think your an idiot, then to open your mouth and prove it". You last post just proved your an idiot!
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December 13, 2006 - 18:07pm
Clueless
Guest:
You’re right, I miss spoke, the dangers of posting at midnight. Quiznos was put up for sale last year with a projected selling price of 2 to 2.7 billion dollars. In an interesting turn of events, those interested in acquiring it backed out leaving as you point out JP MORGAN to effectively become a minority partner by acquiring a piece of the ‘Sub Roll’ in March of this year. If your facts are correct, 585 million for 49% that would be about ½ not ¼ but, who really cares?
The real question is would you prefer JP Morgan to own it all? If so, I’m sure this type of dialogue is not facilitating that acquisition. And if the remaining 51% could be acquired for around 608 million that wouldn’t be a bad deal when divided up by a few thousand operators. And although I may be an idiot, something my DAD taught me was that everything is for sale. At this point JP Morgan may very well be willing to sale both their interest and their agreement to purchase, at a loss.
I think Mr. Mathews, Frankman and I have all said the same thing. No franchisor is perfect, and perhaps Quiznos has made more mistakes than some. No franchisor grows to the size of Quiznos without some litigation, or without a few failed franchisees along the way. Quiznos offers a very good product, and has very good brand recognition, and you have a choice….as my mom taught me….you can be part of the problem…or you can be part of the solution. You can continue to blame Quiznos or you can say I’m going to find a way to make this work in spite of the situation.
You can’t simply keep saying Quiznos took my money before giving me a UFOC, that’s simply not the way a sophisticated franchisor like Quiznos does business. If they did, and you can prove it quit wasting your life, sue them for the violation recover your money and move on. The same can be said for many of the other ridiculous, claims which have been made. Even if it’s all true, you’re not helping your case. Instead you’re coming across as a disgruntled franchisee who was simply unwilling or unable to do what it takes to make it work.
I don’t want to sit here and continue this banter back and forth, quite frankly I don’t have time, and as you’ve pointed out I need to spend some extra time reading the paper and watching the news. BUT if you’re interested in dropping the blame game, and WORKING your way out of the situation, then I’ll GLADLY provide you with some tools, assistance, and resources which will allow you to do so. But First….YOU MUST DECIDE THAT YOU WANT TO!!!
Believe & Succeed,FranSynergySynergizing Franchising 1 Franchisee at a time!www.fransynergy.com
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December 13, 2006 - 18:46pm
Of Clues, Character, and Quizno's
Sometimes one may not have all the facts, or may interpret accurate facts incorrectly.This does not make one an idiot, nor does acting in accord with social convention even where the facts would warrant a more blunt approach. I can see why offering condolences to those at corporate would be seen as socially polite, and I can see why franchisees would be deeply offended by this. As to the facts as noted in the other post:Since Quiznos is privately held, facts are difficult to come by and difficult to verify.That being said, my understanding is that the royalty stream was previously securitized, and that hitherto little-known transaction might indicate a particular view of the long-term prospects for their company taken by the Schadens; it certainly would affect corporate valuation.As to the "big corporation": Jack Welch was once asked by some MBA students how he reconciled GE's actions with Welch's religious faith. Welch responded that it was an absurd question asked by someone who had never worked at a large corporation. He went on to explain that GE was no more than the thousands of people who worked there, and that it was the actions of those human beings (for better or worse) that resulted in the corporation taking a particular action."Quiznos" did not take an action, Welch would tell us. Rather, it was an individual or group of individuals (likely the Schadens) who took an action and a particular individual (lawyer) who felt that it did not conflict with that individuals own values to assist the Schadens.I would hope that none of those involved in this decision would take the "it was the big corporation" or the "it was my job" defense. To do so is corrosive of the soul: sometimes one faces hard choices, but always let us realize that it is a choice we have made.Money comes and money goes, but character remains.In the end, each one of us is alone with our conscience and our Maker. We affect the lives of others for better or worse, and the sum of those actions is our legacy.Perhaps those persons involved in this franchise system will consider the how they want to be remembered, and view their options going forward with a fresh perspective.--Paul Steinberg, pwsteinberg@msn.com
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December 13, 2006 - 18:07pm
Clueless
Guest:
You’re right, I miss spoke, the dangers of posting at midnight. Quiznos was put up for sale last year with a projected selling price of 2 to 2.7 billion dollars. In an interesting turn of events, those interested in acquiring it backed out leaving as you point out JP MORGAN to effectively become a minority partner by acquiring a piece of the ‘Sub Roll’ in March of this year. If your facts are correct, 585 million for 49% that would be about ½ not ¼ but, who really cares?
The real question is would you prefer JP Morgan to own it all? If so, I’m sure this type of dialogue is not facilitating that acquisition. And if the remaining 51% could be acquired for around 608 million that wouldn’t be a bad deal when divided up by a few thousand operators. And although I may be an idiot, something my DAD taught me was that everything is for sale. At this point JP Morgan may very well be willing to sale both their interest and their agreement to purchase, at a loss.
I think Mr. Mathews, Frankman and I have all said the same thing. No franchisor is perfect, and perhaps Quiznos has made more mistakes than some. No franchisor grows to the size of Quiznos without some litigation, or without a few failed franchisees along the way. Quiznos offers a very good product, and has very good brand recognition, and you have a choice….as my mom taught me….you can be part of the problem…or you can be part of the solution. You can continue to blame Quiznos or you can say I’m going to find a way to make this work in spite of the situation.
You can’t simply keep saying Quiznos took my money before giving me a UFOC, that’s simply not the way a sophisticated franchisor like Quiznos does business. If they did, and you can prove it quit wasting your life, sue them for the violation recover your money and move on. The same can be said for many of the other ridiculous, claims which have been made. Even if it’s all true, you’re not helping your case. Instead you’re coming across as a disgruntled franchisee who was simply unwilling or unable to do what it takes to make it work.
I don’t want to sit here and continue this banter back and forth, quite frankly I don’t have time, and as you’ve pointed out I need to spend some extra time reading the paper and watching the news. BUT if you’re interested in dropping the blame game, and WORKING your way out of the situation, then I’ll GLADLY provide you with some tools, assistance, and resources which will allow you to do so. But First….YOU MUST DECIDE THAT YOU WANT TO!!!
Believe & Succeed,FranSynergySynergizing Franchising 1 Franchisee at a time!www.fransynergy.com
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December 13, 2006 - 19:09pm
QSR Rates Quiznos Last In Franchise survey
What Franchisees Think
QSR Magazine | Issue 90 | June 2006 | By Phil Mangieri and Wally Butkus
"Quiznos’s operators rated their chain dead last for brand strength, reinforcing public complaints about a largely unresponsive franchisor."
You know it all franchise consultants need to do a lot more reasearch. You guys are gradually getting up to speed but still have a long way to go. Do you actually think we are a small group of dissatisfied franchisees? It is company wide. The following is a real survey conducted by an independent company. It is their quote above about a "largely unresponsive franchisor."
Your operators have something to say about your brand’s strength.
In our many discussions with franchisees over the years, we have come to appreciate how difficult it is for operators to gain a say in brand leadership. All too often franchisees feel disenfranchised in setting the direction for the concept that has so much to do with their net worth. All this explains the burgeoning success of our QSR/Restaurant Research LLC Brand Satisfaction Survey. It provides a very public platform for operators to voice their opinions. This year 990 franchisees operating 8,462 units weighed in with their opinions. This year’s survey response represents approximately 7.5 percent of all franchised units among the largest 150 chains tracked by Restaurant Research. We included in our final analysis only the aggregated responses of those systems in which at least 5 percent of the franchised system units were represented, leaving us with 13 leading concepts. Responses are weighted on a one-vote-per-franchisee basis, and averages are considered informational rather than statistically significant. Notably, this year we added a new feature to the survey; we are reporting the average of the nine individual brand component ratings to reflect the overall concept rating.
Aggregated Category Ratings
| 2005 | 2006 | Y/Y | |
| Average Overall Score | 2.55 | 2.41 | +5.5 percent |
| Franchisee Support | 2.67 | 2.45 | +8.2 percent |
| Sales Growth Prospects | 2.53 | 2.33 | +7.9 percent |
| Advertising | 2.68 | 2.47 | +7.8 percent |
| Profitability | 2.84 | 2.65 | +6.7 percent |
| Franchisor Management | 2.67 | 2.51 | +6.0 percent |
| Product/Promotions | 2.42 | 2.32 | +4.1 percent |
| Menu | 2.30 | 2.21 | +3.9 percent |
| Physical Condition | 2.43 | 2.35 | +3.3 percent |
| Operations | 2.43 | 2.37 | +2.5 percent |
Aggregated average results for all respondents spanning all concepts showed increased confidence across the board. Franchisee support represents the biggest change for the better. Apparently franchisors are becoming more responsive to the operator community. Operators are also very confident about sales prospects and that advertising will drive sales. In the end, this portends well for unit-level profits. Operations bring up the rear but at least post an increase.
Average Overall Brand Strength Rating
Sonic took the top spot in this year’s survey, up from a third-place tie last year. Here is a chain that performs well across the board and receives kudos from operators for an inclusive environment that treats franchisees as part of the family. McDonald’s is new to the survey this year, with a sufficiently strong enough showing to take a close second place—a tribute to the chain’s phenomenal turnaround that is now two–and–a–half years strong. We note that McDonald’s response rate was an astonishing 22 percent of total franchise units, reflecting the wide breadth of positive sentiment among operators. At the other end of the spectrum, Quiznos’s operators rated their chain dead last for brand strength, reinforcing public complaints about a largely unresponsive franchisor.
Pick up the June 2006 copy of QSR to find out how franchisees rated your brand on:
- Sales Growth Prospects
- Profitability Prospects
- Menu
- Product/Promotional Line-up
- Advertising Effectiveness
- Operational Effectiveness
- Franchisor Management Ability
- Physical Condition
- Franchisee Support Programs
In the end, overall responses suggest operators’ perception of brand strength might have much to do with their relational feelings towards their franchisor. A strong, familiar bond between franchisees and franchisors might drive more than just favorable perceptions of brand strength. It might actually increase brand strength.
Methodology
Restaurant Research LLC joined with QSR in 2005 in an effort to provide a useful tool to assess brand value by asking franchisee operators to rate their own restaurant concepts around nine key brand components—sales and profit prospects, menu, promotional line-up, advertising, operations, system condition, concept management, and franchisee support—on a 1-best to 5-worst scale.
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December 13, 2006 - 20:00pm
For Paul, Frankman and Fransynergy...
A couple of quick points from a former Quiznos corporate employee...
1. Have you noticed that they always post as guests..it is because Quiznos Corp will send out a default notice/Termination letter if they are found to have "created ill will" by the sole judgement of Quiznos Corporate. They have no voice! If they speak out, they are threatened, berated, and sued. This is not an overstatement. They are then forced to sign an additional agreement promising not to speak out again in any format (this includes meetings or even with other local owners).
2. Paul and Fransynergy, you both seem to spend quite a bit of time defending Quiznos Corporate, but seem to be basing you responses on limited information at best. For example, Quiznos has each store base their food cost on top line sales (before discounts), not bottom line cash in. As far as I know, they are the only major chain that takes that approach, and this leads to reporting the typical stores food costs 4-8 points below what it actually is!
3. Q knows there is are major issues with their FO's, and they need to take steps to address these issues or JP Morgan will not be purchasing the remaiming 51% of the business...by the way, the other posting was correct...2.4 billion for 100% of the company was the initial asking price as stated in the WSJ, and JP Morgan purchased half of the company for 25% of the asking price. As a side note, 8 venture capital firms expressed interest and all 8 backed away from the table within 30 days after a short review of the organization. That is how JP Morgan got such a great deal.
4. As a former Quiznos Corporate employee I saw a lot of awful things. For 4 years I was proud of our growth, product, and brand. The past 2 years I had a hard time living with myself because of the corporate executive team, the level of pure greed, and the direction the company was going in. They repeatedly sold territories to more than one FO, they collected millions in rebates and never shared those rebates with the FO's (until recently), they lied in the sales process, inflated food and paper costs, and overall behaved in a frighteningly one-sided manner.
I am happy to be out of the organization, I can even sleep at night & look myself in the mirror once again! All of us former Quiznos Corporate employees were repeatedly told of the evils of the TSFA, but looking at it these days, they might be just the kick in the ass that Quiznos needs! (and secretly we are all watching closely as this house of cards tumbles)
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December 14, 2006 - 00:02am
Using A Pseudonym Has More Perks Than Being A Guest
"former Quiznos corporate employee...always post as guests.. because Quiznos Corp will send out a default notice/Termination letter if they are found to have "created ill will" - Guest
At Blue MauMau, we believe in anonymity. Many of our franchisee members prefer to use pseudonyms. And they like to use non-corporate email addresses to keep their anonymity. (Somehow McD1201@mcdonalds.com is a dead give-away.) One or two members have even been known to post a model's photo or an avatar rather than their own in their user account.
Here's why guests should register. Guests cannot edit their posts, while members can. Registering (all free) allows you to keep a blog page. It also allows our community to develop stronger ties with you, since as a "guest", you are clumped together with all other "guests" so we don't get to know you individually.
Blue MauMau considers all registration information confidential. Registration information and lists will NEVER EVER be given out or sold. NEVER.
- You can register by clicking here (you need a working email address though)
Of course, if you are still uncomfortable with this, then just share with us as a "guest".
Mr. Blue MauMau
Editor
P.S. As you can imagine, it is considered bad manners in the community to ask a member publicly what franchise system they are associated with. If they want you to know, they will tell you.
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December 14, 2006 - 14:35pm
Objectivity / Quiznos / Maryland / FTC
Having written a scathing 200 page law review article on bad franchisors and subsequently having been quoted in the Newark Star-Ledger as saying that even by my experience Quizno's is in a league of its own, I hardly think of myself as a defender of Quiznos.Indeed, in an interview with WWOR-TV, I said that certain of Quizno's practices relating to the 12-month termination raised a colorable claim of criminal conduct. (That part was chopped from the aired report, but is essentially what Jerry Marks is alleging and he was also interviewed for the piece).Preaching to the choir is emotionally satisfying but won't change anything. If you wish to influence the legislators who can change things, you need to consider the tactics of your adversaries in the franchise industry and consider focusing your arguments on truly egregious conduct (which may not be the same as the most legally significant conduct) which cuts through the franchise industry lobbying blather.Discussion of the JPMorgan deal etc, is juicy "inside baseball" stuff of no relevance to post-contractual franchisor overreaching-- either within the Quizno's system or the wider franchise industry. Much of what you say about secret "rebates" (aka "kickbacks") and the lies of franchisor salesmen and "one-sided" behavior is commonly accepted practice within the franchise industry. That doesn't make it any less reprehensible, but if you are going to change anything it is best to start with an understanding of the conceptual and practical factors which affect the political and legal climate in which the franchise industry operates.As one who supported the Coble-Conyers legislation and wrote letters to my Congressman and to the FTC (which is posted on their website if you bothered to do a bit of research of your own) as well as made donations to the AFA (also noted on AFA's website) and co-authored a major article arguing for relationship legislation (also something you would have known if you did a simple Google search), I would suggest that you might have done a bit of research yourself before you chose to work for a franchisor. You might also view my posts on www.franchisepundit.com discussion board, where I have been accused of being too critical of Quizno's.By the way, did you do anything during the SBFA debates? Did you do anything about the fundamentally flawed business model of your franchisor-employer? Did you do anything about the forfeiture and resale of territories by your franchisor-employer? Have you gone to the regulators with any actionable evidence of your franchisor-employer's behavior? Or did you just sit quietly and collect your paycheck? Come on, you knew about this for a long time--it was all over the media. And yet you worked there for 6 years earning blood money. You are in no position to judge me, Frankman, or FranSynergy. All of the practices which Quiznos followed during your tenure with the company are ones which you would have known about if you bothered doing a bit of legwork before you took a job there. Actually, many of those concerns were raised by Harold Brown back in 1969: read Senator Hart's forward to Brown's book Franchising: Trap for the trusting.Franchising is here to stay. Whether the industry is forced to adopt fair franchising is a function of how persuasive an argument the advocates of fair franchising make to their legislators. Ditto regulators: Dale Cantone is a decent guy but he separates his personal beliefs from his professional duties; he will respond to a legal argument but he's not going to take action (nor should he) just because he thinks a franchisor is morally reprehensible. Look, for example, at the Sona MedSpa case (again, it is posted on the Internet) and see how he achieved the objective with a narrowly-crafted ruling: this is the thought process that you need to adopt if you are to get regulators to hear you out.On the federal level, you need to understand why the FTC takes a narrow view of Franchise Rule enforcement and won't exercise its Section 5 power. Now, I happen to disagree with the FTC but at least I understand why their position has won over the Congress and the courts. And any attempt to move the FTC, Congress, or the judiciary on this position must take the prevailing jurisprudence and economics seriously and provide a reasoned argument for modification. That may not be the fireworks you seem to want, but it just might work.That won't be done if the perception is that those advocates are malcontents seeking to tear the house down. Many familiar with the SBFA and GAO fights would say that shrillness was counterproductive for franchisees in the '90s and indeed you might want to consider why the IFA had vast swaths of forest cut down to reprint the PriceWaterhouse "report"-- franchisees should be embracing this report but they have let the opponents of fair franchising wave this report about up on Capitol Hill as an argument for preserving the ability of bad franchisors to abuse franchisees.--Paul Steinberg, pwsteinberg@msn.com
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December 14, 2006 - 19:48pm
FTC, Section 5 and Franchise Rule
"On the federal level, you need to understand why the FTC takes a narrow view of Franchise Rule enforcement and won't exercise its Section 5 power. Now, I happen to disagree with the FTC but at least I understand why their position has won over the Congress and the courts."Paul, I have always thought that the primary reason why the FTC doesn't enforce the Franchise Rule was because there was no systemic analysis of the false statements made in the UFOC. Until recently, most of these UFOC were not available, unless purchased.I am quite hopeful that an industry will develop analyzing the UFOC, monetizing that analysis, and reporting systemic deceptions to the FTC for their action.The Franchise Rule will soon no longer be used to close Biz Ops so it should have some other useful life, especially if there is not going to be a private action associated with the Franchise Rule.Michael Webster PhD LLB Psychology of Compliance and Due Diligence Law www.bizop.ca
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December 14, 2006 - 20:36pm
FTC enforcement / Merger & Integration Clause / False statements
Mike: The GAO reports (available online last I checked) indicated that absent a failure to give a UFOC or matters related to a stated earnings claim within the UFOC (Item 19), the FTC does not pursue franchisors. There are reasons for this, which corrolate to the FTC's position with Section 5 enforcement.As to false statements: the major franchisors rarely make false statements within the UFOC.What happens is that the franchisor's sales agent frequently makes oral representations prior to the franchisee signing an agreement which contains a merger & integration clause, and that franchise agreement omits (or even expressly contradicts) the verbal representation.That's why you can't believe anything except what is in the FINAL written agreement. That sounds a bit cynical and harsh, but if you follow that rule, there are a lot fewer problems.This is one of those practices which to a non-lawyer appear scuzzy, but the courts generally permit this behavior in non-consumer contracts. The reasons for that acquiescence are another matter, but there really are some valid economic and legal reasons.Remember that as a matter of law, you can say most anything and cover yourself with a merger & integration clause. This is not just in franchising, but with most non-consumer contracts in the United States. Some foreign countries, particularly civil law, take a different view.--Paul Steinberg, pwsteinberg@msn.com
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December 14, 2006 - 22:15pm
Integration Clauses
1. In Illinois, the practice of making an oral representation inconsistent with the franchise contract is a deceptive act, per their franchising regulations.2. In the new proposed Biz Op Rule, the FTC has proposed that a number of well known tricks, usually covered by an integration clause, would be per se deceptive.3. Integration clauses make sense for lots of contracts, but not adhesion contracts.4. The problem most franchisees face is the lack of evidence that the pre-disclosure conduct is systemically condoned by the franchisor, who knows that the integration clause is going to negate any pre-disclosure reps. (I go to a lot of franchise/biz op shows for humour.)5. My major role in providing due diligence to franchisees is to show that what they believed that they were buying is fact not in the contract. Some times it even works.Michael Webster PhD LLB Psychology of Compliance and Due Diligence Law www.bizop.ca
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quiznos
i have worked for quiznos for 4 years now. and I'm tired of hearing my boss how quiznos messed up his whole life. he now has to dig into his own pocket, cause quizno depends on the coupons to bring in there costumers.. I'm mean if you have to pay 1500$ to buy your food and you cant even get it delivered to you without paying an extra 200$ a week to get it..there good subs but if you got to lie to ur franchize owners just to get them to open up new stores.they tell you that you will make all this money but they forget to monition (you got to pay royalties) let say you make 12000$ in amonth they take 11000$ and you get the rest to buy your food, paper, labor... then you will have problems.. like the guy who shot himself...take it from me you DO NOT WANT TO OPEN YOUR OWN STORE unless you would like to pay out of pocket