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Franny answers franchisee questions

Ask FrannyThis forum was created so that readers and members of Blue MauMau can post questions to Franny about issues of interest to small business and franchise owners. Franny sometimes invites world-class subject matter experts to answer tough questions

If your post is answered by Franny, it will be featured on the front page of this journal under the "Ask Franny" column.

In your post, please do not mention your franchisor's, vendor's or your own firm's name. The intent of this forum is not to give press to a brand name but rather to ask general questions that franchise owners within and outside one's brand might find of interest. (There are press release areas to sell what's great about a brand or other forums to tell tales of franchisee rip off.) Your question may be edited for clarity, brevity and frankly, some entertainment value.

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Significance of Section 31101 Exemption - California Franchise

When we researched a particular franchisor using Caleasi, they filed a Section 31101 Exemption in March of 2009. We did our lay research as we're early in the process and wondered if this serves as any sort of flag - positive, negative, nada. As I understand it, they have fifteen months from that filing to file the standard reports, which they dutifully filed for many years before 2009.

All information we receive from the franchisor is biased toward sales of franchises, which we expect and respect. However, we are biased towards the aspect of getting the best value for our family from whatever franchise we may end up with. (These biases may or may not be mutually exclusive.)

If anyone would like to explain the 31101 exemption in short and simple words, that would be great.

Thank you in advance.

OpenFran's picture

31101 Exemption Explained

Sorry to begin this response with "It depends" but to answer your question regarding a 31101 exemption filing by a franchisor being "positive, negative, or nada" - it really "depends" on who you ask. Also, sorry this wasn't short but hopefully you'll find the explanations simple to follow.

But first, we'd like to commend you on utilizing the free information available online for your preliminary research and initial due diligence prior to investing in a franchise opportunity.  Since you've already utilized the free California based database (CALEASI), you might be interested to know that our Foundation (OpenFran) has indexed thousands of CALEASI and other franchise related public documents (including FDD’s from some exempt franchisors) and made them word searchable and downloadable - for free.

Here is your answer:  A franchisor who files a 31101 exemption in the State of California is claiming to meet a variety of requirements, including:

  •     Minimum net worth of the franchisor or corporate parent;
  •     5+ years of sustained operational experience (minimum number of franchises, etc.)
  •     Agreement to disclose material changes in a timely fashion.

33101 is known as the "Large Franchisor" exemption. It is our understanding that California enacted the 33101 exemption as a way to reduce regulation and associated expenses. A note: According to various state offices where disclosure filings are required (Disclosure States), it actually costs the state more to review and process a disclosure filing than what they charge franchisors in fees.

The "Franchise Investment Law" (FIL), accompanying regulations and NASAA rules were designed to protect potential "unsophisticated" franchise investors while also protecting legitimate franchisors and franchising in general from unscrupulous operators. The logic behind the 33101 exemption is that larger, financially secure and experienced franchisor is more likely to provide a stable investment/business opportunity to citizens  - thus requiring less oversight.

However, some franchising industry pundits claim that the exemption is counterintuitive to the stated purpose of the FIL disclosure rules and other regulations since it allows these "large" private franchisors, which have greater disproportionate financial advantage over individual franchisees/investors, avoid open, public disclosure of their practices, agreement terms, legal proceedings and ongoing financial condition. Hence, it could be suggested that a large, private franchisor has less investment regulation, oversight, and public disclosure requirements than pretty much any investment opportunity in The United States.

Many of those Franchisors who cannot be exempted (Franchisors must meet all the criteria of 31101) believe the exemption is unfair since it places additional financial burdens on them via higher attorney expenses and the filing fee structure (the exemption filing and annual maintenance fees are substantially less than disclosure filing fees in most registration states).  The logic is that bigger franchisors should pay their proportionate share.

Looking at Blue Maumau, you will see that a large number of disputes discussed on the site involve exempt franchisors.  “Franchisee-side” groups, including Independent Franchisee Associations (IndFA's), argue that the bigger, more powerful, and more complex the franchisor, the larger the opportunity for abuse and heavy-handed dealings.

So, “positive or negative” is in the eye of the beholder.

Ultimately, a UFOC/UFDD is a standardized public disclosure document that must be provided to the franchisee before any franchise agreement is signed and these large franchisors do commit to communicating material changes on an ongoing basis. Franchisors also claim that they will send their FDD to anyone who requests it without any strings but there are no rules that require this practice.

It can be argued that these exemptions increase opacity and decrease unfettered access to timely information to interested parties. Those looking to research an investment without having to pay to attend “Discovery Days” or purchase an FDD will naturally have a harder time locating information and conducting due diligence for one of these large franchise opportunities versus a franchisor who is required to publicly file and disclose their FDD. The same goes for an existing franchisee who wishes to proactively educate themselves on the latest dealings and financial condition of their franchisor.

We hope this information helps!



The Open Franchise Foundation is a 501(c)(3) organization formed to promote the unfettered access to franchising related documents, such as the UFOC and FDD. It is entirely funded by the generous support of our founding benefactors and franchising community members. Together we advocate franchise openness and equal access to information.

The foundation’s website,, revolutionizes the way you search for franchising related information.

OpenFran provides free access to every franchising related document archived by CALEASI since 2002, along with 1000s of other franchising related documents (UFOCs, FDDs, filings, exhibits, orders, etc.).

These documents, formerly viewable only as simple images, have had every word fully indexed and made searchable via OpenFran’s PowerSearch feature. This allows you to instantly find what you need. Every archived document is also easily downloadable in the convenient PDF standard. OpenFran provides the PowerSearch functionality and document download features to everyone completely free of charge.



tortious interference

Will tortious interference be applicable in a law suit against my partner for controlling all the incoming prospective clients although this is not how we have done business together for the last 13 years. We have always shared all business with the acknowledgement that we can visit each client together if we so desire. She has unilaterally changed this and hired a person to accompany her in my place. I recieve whatever portion of the business she sends my way. I founded the business. The person she hired has no stake in the business and is actually a non-entity in the business. She has bullied the web designer to keep her number as the contact and I cannot seem to effect any change. We have know each other for 40 years and have worked together for 13.


Looking for a loan. I have an Annuity to put up as collateral

Delightful Bouquets

Mr Blue Mau Mau,

Would you please format Delightful bouquet their very own blog catagory. They are posting their product under Candy Bouquet's blog.

Thank you for the considertion,
A Candy Bouquet blogger


Who is this new franchise association called IAFD and what do they represent?

michael webster's picture


The IAFD website is at, where you can read about who is on the strategic committee.  Later on this week, on the convention page, you will see all the systems attending the convention.

But we don't represent any franchisee associations in the legal sense of representation, we have members who join because of the economic value we provide to them and their members.

North American Customs Broker

Good evening,

My name is Julio Caceres, I'm a Licensed U.S. Customs House Broker. I work for a global company experts on "supply chain" business. Recently I began a little research on the internet to see if their is any "Customs Brokerage" franchise to start my own firm. After namy search it seems to be 1 franchise out of "Franchise Gator" called "NORTH AMERICAN CUSTOMS BROKERS" (from Charlotte, NC). While looking for more information about this franchise I ran into "Blue MauMau" website & took the liberty to call the telephone # provided & had the pleasure to speak with Mr. Don Sniegowski. We chat for awhile but as well as me, he has no information about this company. The only information about I found (see below) is on "Franchise Gator" website, but I haven't been successful to get direct contact to this company.

I have vast experience in the import/export industry, today is called "supply chain management". I want to know as per information below, If someone has heard of this company, are they legitimate? Do they have any negative history (below states they have being established for 13 years)? It has a pretty good deal of 60 days money back guarantee... therefore, I need some feedback from any franchise expert or any one that has contact this company before so I can interview them myself.

NACB Import Export Business Opportunity Information:

Become a Licensed Import/Export Agency…and more!

North American Custom Brokers (NACB) provides a business opportunity where any individual or family, with no prior business experience, can set up and establish a profitable home or office based International merchandise brokerage. Importing and Exporting is becoming one of the hottest industries and everyone is trying to get in the game.

The problems most people face when starting is:
•Learning how to Import & Export
•What documents and procedures to follow
•Buying Inventory to distribute $$$
•Finding International Customers to buy the goods
For a one-time fee of $6,999.00 U.S. Dollars NACB will provide you with all the above to start and operate your International Merchandise Brokerage.

60 Day Money Back Guarantee (*Inquire for details)

Our Mission Statement

NACB was designed to establish and maintain a strong business relationship with independent custom brokers doing business worldwide. Through our company, individuals with no prior experience can engage in any domestic or international transaction without carrying inventory or any financial obligations. NACB Custom Brokers benefit from our years of experience, International contacts, and hundreds of suppliers established throughout the world. NACB and its custom brokers mutually profit through every transaction.

A Family Owned Business

NACB is a 13 year old family business started in South Carolina. Now with the main facility in Charlotte, NC its expansion has carried to 31 Independent Brokerages operating in the United States, Canada, Mexico and Puerto Rico. The goal is to stay "family" orientated and keep the "hands on" approach still alive. The Owner &President of the company still works full time in the warehouse and support facility.

Our Business Opportunity

For $6,999.00 U.S. Dollars NACB provides its independent brokerages with all the necessary materials to learn the fascinating Import/Export Industry. NACB prepares you with one-on-one training and "hands on" assistance to learn the entire industry and obtain your own CUSTOMS BROKER LICENSE.

But that's just scratching the surface.

NACB also provides name brand, first quality goods to distribute through your brokerage and you never have to buy any inventory. We drop ship the goods for you and collect the charges. You will not need a credit card terminal or billing software. Your commissions are paid directly from NACB. NACB does not deal in Surplus, Liquidation, Close-Out, Used, Irregular or Refurbished products.

NACB provides unlimited International Customer Leads and the products they are currently seeking to buy. All the contact information and best time to reach each customer is supplied by our Research Department.

Hands on computer and software support to understand which programs work best and how to use them. We will help you make business cards, letterhead, design databases and spreadsheets to assist your brokerage. This is one-on-one training.

Finally, we provide you with 5 designated support personal to help you every step of the way. "Think about it" That's 5 full-time employees working for your brokerage.
•Human Resources Representative
•Computer Technician
•Research Assistant
•Transactions Assistant
•Training and Support Specialist
You receive everything to operate your brokerage for a one-time fee of $6,999.00.

Snap Fitness - Laws, Codes and Regulations

Dear Franny,

How can Snap Fitness be allowed to market, sell and open franchisees in states that are perfectly clear in their laws and regulations about requiring staff on duty at all open times, CPR/AED certified employee must be on duty at all open times and an employee operator is required to be on duty when tanning is being used?

Don't franchisors have a moral and legal responsibility, duty and obligation to insure their franchisees are within the laws and regulations of that location before they can actually sell a franchise there?

Are the states this inept in the enforcement of their own policies?

Help me out here, who is in the wrong? The state regulators or the franchisor? Certainly the franchisees should not be liable for this if it was misrepresented when they purchased their franchise.

What say you?

Delightful Bouquet

Has anyone heard heard of this company and had any dealings with them? Inquired about their product and they emailed this to me. What do you think?

Thanks for your interest in Delightful Bouquet™!

Our system will be launched in early February 2010. This e-mail is being
sent to you to keep you informed on how our system will work and our main
competitive advantages.

We know that anyone can work with candy bouquets without being part of a
franchise system, and here we will present you with a business opportunity
that will show you that if you really wish to enter this market, it is
better to join a group rather than working alone by yourself.

We are developing and investing in a system where briefly we will have
hundreds of concessions across the United States and beyond. This will
allow us to invest even more in marketing so that concessionaires can sell
more and more as well as enabling us to purchase customized materials in
great quantity while reducing the cost of each bouquet.

In our system you will have at least 3 sources of revenue:

1. Delightful Bouquet™ Sales: The candy bouquets will be presented to the
public through billboards in major American cities that have visitors from
across the country, advertisements in high-circulation newspapers in
strategic dates, daily advertisement on Facebook (which is one of the most
visited websites in the planet with more than 300 million users), online
display ads on other websites, flyer distribution and e-mail blasts.

2. Delightful Bouquet™ Designs: You will be able to design new candy
bouquets and, after your design is approved by our team, your bouquet will
be added to our portfolio. We will build an inventory with the necessary
materials to build your bouquet and it will be available for sale through
all of our concessions. You will be receiving royalties from each sale of
your Delightful Bouquet™ designs.

3. Selling other products: Knowing that our system will have great
marketing and that all of the visitors from your city will be directed
automatically to your virtual store, you will be able to sell related
products by establishing strategic partnerships with flower, gift, and
fruit arrangement shops, among others.

You do not need to purchase the concession for your city, it will be given
to you. You will only have to pay a small flat monthly fee for the system
maintenance (which is being developed with cutting-edge technology) as well
as marketing campaigns that will generate sales for you.

Being our company's concessionaire, you will have your own Delightful
Bouquet™ virtual store, with total exclusivity in your city, payment
processing system (which forwards payments directly to your bank account).

You will have personalized material that makes all of the difference
regarding visuals and which would not be viable for one person to do alone
like ribbons, boxes, cards, stickers, etc. All of this material can be
acquired by concessionaires at cost.

We are so certain in the functionality of our system and the profitability
of this business that we will not be imposing a minimum contract term, and
this way you will be able to begin your work without burdening yourself
with liabilities.
Beyond this, you will be able to count on weekly meetings, trainings and
exclusive strategic tips.

The candy bouquets will be built by you from kits that will contain the
necessary materials thus saving you time and energy.

If you have any questions, please do not hesitate to contact us. We hope
you will join Delightful Bouquet™, the best business opportunity in the
United States.


e-Business4us, Inc. d/b/a Delightful Bouquet™
Telephone: (407) 370-3366
Facsimile: (407) 370-3306
7041 Grand National Drive
Suite 230
Orlando, FL 32819-8991

Growing fast

Delightful Bouquet has had more than 250 registrations for new concessionaires in the last 7 days.

Delightful Bouquet™


How are you?

I have also pre-registered and gotten their e-mail. It appears to be a good business opportunity. The system appears to make viable what already exists. I am also anxiously awaiting the launch.


they are already working and

they are already working and they are very good, I recommend reading the entire contents of the website. These guys promise to be successful and I think they will.

KFC removes Crispy Chicken in Austin Texas

Austin Texas KFC locations removed Extra crispy Chicken from their menu the week of January 25, 2010.
Responding to numerous complaints location managers stated that 11 menu items were removed including a core bone in chicken product Extra Crispy . According to local managers the change was made to provide customers a simplier menu allowing KFC to serve hotter and fresher foods.

ripped off by quiznos

how do i get in on suing quiznos,i made a three hundred thousand dollar investment and had to close 8 months later due to no profits numbers being falsely posted to make quiznos owners think there was a possibility to make profit but there is absolutely no chance of it.

You start by calling Richard Solomon

who will tell you how to handle this. Hiring the right lawyer now is extremely important.

I lost my life savings and then compounded the problem by hiring the wrong lawyer. Save yourself the downward spiral.

He'll start by letting you know exactly what you signed and why you probably are up shit's creek without a paddle.

Taco Del Mar

Lots of buzz about these guys on the forum here. Taco Del Mar declared bankruptcy.

Competition from franchisor

Both franchise agreements ("FA")require the ZEE to agree that the customer list and information developed by the ZEE becomes the property or the ZOR. Both FA's also allow the ZOR to compete directly with the ZEE, under a different name if in protected territory, and under the same name if outside the protected territory, even if the territories overlap. Seems to me that the ZOR's ability to use your customer list to compete directly against you is a recipe for disaster from the ZEE's perspective. The ZEE just put up an inital investment of ~$200K + their personal gurantee ("PG") on the real estate lease + their PG on the equipment lease + their PG on their obligations under the FA and the ZOR is legally permitted to drive them out of business under the FA. Has anyone figured out how to work around this situation?

The work around

The best work around is to never sign the agreement in the first place.

Franchise consultant?

Any recommendations on who to use as a franchise consultant? Or who NOT to use?


I am looking into buying Batteries Plus.Do you know what is the average sales for the stores.Or any use full information about the company's sales numbers or how much can I make with a 300k investment.

Granville_Bean's picture

clueless newbie

Or any use full information about the company's sales numbers or how much can I make with a 300k investment...

Poor guy doesn't have a clue.  Hey buddy, you can make maybe a coupla billion with a 300k investment in lottery tickets, as long as they all win.

The Bibby Group

Can anyone give me the pros & cons of working with The Bibby Group? Everything I read about franchising gives them glowing reviews. We are about to contract with them for a feasibility study. Has anyone out there (beyond those listed on their website) used them and was it a good investment? We would appreciate any feedback.

Should i opt out/in of this CAS?

How could Quiznos only return $475 for $20000 franchise fee that they had collected.
What should i do with this Class action settlement? This is like a slap on the victims' faces again.

Granville_Bean's picture


How could Quiznos only return $475 for $20000 franchise fee that they had collected.

Answer: They could do it very easily.  Do you think you have a way to do better?  Then don't take the settlement, and sue them individually.  Sounds like maybe you have this confused with a REFUND.  Obviously, they are NOT refunding the $20k franchise fee, they are paying the $475 to settle any possible claim.  So do ya want yer $475 or not?


Please read this article/press release carefully. These excerpts will be used from it for calculating SNAP SPIN.
"with about 250 members paying roughly $35 a month." "2008 revenue: $31,716,000" "The company has roughly 1,000 clubs open in 48 states, Canada, Mexico and India."

Snap Actual 2008 Revenue - $31,716,000, Roughly 1,000 Clubs, Annual Revenue per Club = $31,716

Snap SPIN Revenue - Typical club has 250 members paying roughly $35 month, $35 x 12 = $420 annual dues per member, $420 annual dues x 250 members = $105,000, Annual Revenue per Club - $105,000

SPIN FITNESS DIFFERENCE: $105,000 - $31,716 = $73,284

Just for fun, lets say there were only 500 clubs with the same stated 2008 revenue instead of 1,000. The Annual Revenue per Club would be $63,432. SPIN FITNESS DIFFERENCE $105,000 - $63,432 = $41,568


Granville_Bean's picture

Zee vs. Zor?

Are those figures for the Zor or the Zees?  What's the royalty rate on a Snap?  How much does the Zor make in royalties and how much from franchise fees?

Bankrupt franchisors

Dear Franny:

I am conducting research on franchisors going bankrupt, and was wondering whether you or anyone else on this forum know of a single source listing the franchise systems (franchisors) going bankrupt, say since 2000?

Any leads would be greatly appreciated!


Hello, can someone contact me in regards to starting a franchise or teaming up to start a franchise. I own an investment & construction company; but the food industry is profitable. For example, Jimbo's Hamburger in NY is not a franchise but they have alot of locations. I am a born citizen & minority. I have experience working in the fast food industry. I would like an opportunity to start my own franchise. Please E-mail me an application to get me started. Thank You

Snap Fitness - The No Spin Zone

Dear Franny and Gentle Ones,

What is the percentage of Snap Fitness clubs making money? (Making money = At the end of each month having a dollar more revenue than expenses.) Closest answer given by a reader or Franny staffer wins a Snap Fitness t-shirt!

After being involved with Snap Fitness for a few months, I feel very comfortable sharing information with potential franchisees about the company. I have experience in the fitness industry previous to Snap Fitness.

1. Owners and management are required to sign legally binding and extensive non-disclosure agreements which restrict them from speaking openly about Snap Fitness corporate. This could have a detrimental effect on potential franchisees attempting to perform proper due diligence and acquiring honest and accurate information in regards to the ability of realizing a satisfactory return on investment.

2. Even if there were no profitable Snap Fitness franchises, it is still possible Snap Fitness corporate could continue to benefit financially, increase market share and continue to successfully recruit new franchisees.

3. There was always a constant flow of internal e-mails from Snap Fitness owners soliciting to sell their club and/or franchise license(s) for substantial discounts.

4. The emphasis, expertise and resources of the company are heavily invested in franchising and expanding both nationally and internationally. There were lots of discussion about new programs, technology, campaigns and support but only a small percentage of this was actually delivered effectively.

5. I advise you to research the Snap Fitness clubs throughout the country and you will see there are several that do not provide staff or have very limited hours for employees at the club. Minimal staffing is more prevalent as you investigate clubs closer to corporate headquarters. Remember this if you decide to pursue a franchise.

6. I do not believe their business model is sustainable. The reason for the expedited interest in developing international franchises is certainly motivated by the reality of the lack of success of so many of the individual franchisees here in the USA.

7. Snap Fitness franchise/business model enjoys the same benefits as MLM companies (multi level marketing). The people at the top (corporate) are financially successful while the little guy at the bottom is struggling but still subsidizing those at the top. The Snap Fitness corporate franchising business model is not set up to "share the pain" with their franchisees.

Recommendation: If you enjoy long hours, stress, cleaning, employee turnover, volunteer work and subsidizing your company every month, you will definitely enjoy Snap Fitness.

(Barbara, Keep pounding away! A lot of these people have thick skulls! You are providing a necessary service to the innocent and naive who think the fitness industry is a "piece of cake" or "a great investment". Keep up the great work!)

Franchise State Registration

On the Caleasi - it has this document for Candy Bouquet -
Internet Advertisement Exemption Notice which reads,

Uniform Resource Locator:

The franchisor and anyone acting with the franchisor's knowledge, agrees to comply with the California Franchise investment Law and Rules there under, when posting any Internet advertisement on a website.

The next part includes contact information for CBI.

The internet advertisement is not directed to any person in the State of California by or on behalf of the franchisor or anyone acting with the franchisor's knowledge.

What does this mean? Thank you!

Did you get an answer?

I am no attorney, but I do run a franchise system.  They are not registered to sell franchises in California, and they are warning you that if you see this website in California or wish to operate in California, you should not construe this website as an offer by them to sell you a franchise in California.

Hope that helps!

Janet Holman

Janet is incorrect

CBI may or may not be currently registered to offer franchises in California. The disclaimer is for Internet Advertising Exemption.



I'm looking for franchisees for my company. Could you help me by advertising or posting a short article about our medical franchise?

Thanks in advance.

Daniela Szczygiel
Pro-Bionica Europe


I would like to know how inflatable playgrounds franchises compare to other franchises. There is none on the SBA's Default List.
I have a lender that is concerned about this industry, but I don't think they should be, but I have no official proof.
Can you assist in providing factual information on these franchises compared to others, especially Monkey Joes and Jumpzone?

Thank you

Jimmy John's

Would love to know anything about Jimmy John's.  Profitability?  Happiness of franchisee's?  Working with corporate?  Thanks in advance.

Coffee News vs. Tidbits and FunFacts

Dear Franny,

I am considering a Coffee News franchise (  Coffee News has this statement on their website under "Coffee News is Popular":

3) It's virtually competitor-proof! Naturally, when any new idea in
advertising is introduced and has the overnight success of Coffee News
there will be copycat publications. However, due to trade marking and
copyright laws, Coffee News offers a higher level of protection to
franchisees. Those that have tried so far have been ordered by the
court to "cease and desist" and pay average damages to Coffee News of
over $85,000. per settlement. All others not in litigation, have gone
out of business on their own as of this printing.

Do you know if there is proof to support their statement?  Do you know of other mini-papers that have gone out of
business because either Coffee House is that much better or they were ordered to?  What about Tidbits and FunFacts?  Will they too eventually go out of business?

Thanks for any input you can provide me.

Coffee News

I was wondering the same thing about Coffee News' claim to be the only ones to have the right to this type of advertising newspaper. Has anyone got any further info about their claim to have court orders to "cease and desist" and pay damages or put others out of business? How can they lay claim to owning the concept? Info anyone?


Question... What happens to the SBA Loans CIT has in its default loan porfolio (i.e. non-performing assets) if it goes bankrupt?  I'm a former franchisee.

Granville_Bean's picture

meet the new owner

Typically somebody buys all of the assets (loans owed to it) in a package for pennies on the dollar.

In bankruptcy, it is the bankrupt (that is, CIT in this case) who might get some of their debts discharged.  NOT people who owe money TO the bankrupt.

Transferring lease to Zor? Any way to avoid it?

I am 3 years into a 10 year franchise agreement with a sandwich type franchise.  I'm actually making decent money and paid off the place in a little over 2 years.  The thing is, I'm just tired and bored with following somebody else's orders and regs and would like to change the place over to a burger joint.  I love the location and want to keep it - I found it and it wasn't a cheap buildout.  Looking through the UFOC, it says that in the event of a termination, the zor could come in and remove anything that made the place look like one of their franchises.  Fair enough.  It then goes on to say that I would be required to sign the lease over to them.  Is this standard and is it legal?  The lease is between me and my landlord; is it even legal to sign a lease over to somebody else?  I have a pretty good relationship with my landlord - what if they refused to agree to a transfer of the lease and insisted that I keep the lease?  Any advice on how to get out of my franchise so I can keep my location?

Granville_Bean's picture

3 years into 10

You signed a contract.  What if was the other way around, you got a good business going and in Year 3 the Zor came to you and said "Hey you are doing okay, but we are kind of bored with you, we want to put someone else in here".  Would you just walk away?  Odds are this is gonna cost you.  You are the one who signed up for 10 years.

You could talk to your Zee and tell them you'd like to terminate.  Maybe they'll offer you a buyout you can live with, as long as you agree not to replace it with a similar "concept".

follow up

What if I wanted to sell the business to somebody who was only interested in the location and the equipment, not in continuing on as a franchisee?  Would I be able to get out this way?  I figure I could sell it to a close friend or family member and then continue with the change-over to the burgers.  I realize that a contract was signed, but I feel like I've been successful despite the franchise, not because of them.  They didn't do squat to locate the location which is the most important part - I did all the legwork and negotiated the lease.  They don't really help me in any way except lightening my bank account.  I don't feel they've done enough to earn my loyalty so I'm not going to be loyal to them assuming I can escape the contract.  Thanks for the advice.

Granville_Bean's picture

what's not to understand?

You seem to be talking about "feelings", you don't "feel" they've done enough.  (Are you a woman?  Or maybe a gay guy?  LOL of course.)  So basiclly, in hindsight you don't like the deal you ended up with.  Now, in what way (if any) is the deal you ended up with, different from the deal you signed up for?

Did the Zor fail to do something that was required of them by contract, and was it a serious enough breach to potentially void the contract?  Or did they merely do what was required (like let you use their brand name and recipes) and nothing more?  Were they required to find a location for you?  If not, how can you hold that against them?

This is a matter of CONTRACT.   What, other than your feeling that you'd like to, causes you to believe you can get out of it?  And now youa re proposing a bad-faith straw man related party purchaser come in to make the transaction look like something it isn't, so that you can silently remain in control behind the scenes. 

See everyone, bad faith schemes are not jsut among the bad  Zors!

Guest, you have convinced yourself, rationalized, that you somehow deserve to ditch the Zor due to whatever.  But if it's not in the contract, you're likely SOL.  Maybe your franchise is indeed a poor value for the Zee, but there's that little matter of being only 3 into a 10 year contract....

Joe Caruso's picture

Contracts mean something

You made a commitment and now you don't like it. Your plan to circumvent your obligation is unwise. You need a franchise attorney to give you actual legal advice before you do great harm to yourself.

Barbara Jorgensen's picture

Yes contracts mean something

To be honest and ethical a FDD should have in bold print, "A Franchise Agreement is a contractual relationship.  Anything said outside of the FDD is not binding. "  Words that the common layman can understand.  If more people understood this they would not listen to the bs and pay attention to the agreement.   

Joe Caruso's picture

It is unlikely you can

It is unlikely you can unilaterally terminate, de-indentify and reopen as a new independent concept without significant consequences if at all.  In order to fully explore breaking away and going independent you should seek the advice of an experienced franchise attorney and have both your franchise agreement and lease reviewed with your objective in mind.

Furthermore most franchisors would not enjoy seeing one of their branded locations put to an alternate use and lose their royalty revenue that was agreed to by the parties to the agreement.

Finally, I don't personally know Mr. Solomon but from reading his posts and website he would be worth at a minimum an initial consult. 


selling of franchise

When a traditional franchisee sells his business to someone else, does the franchisor get a fee for this such as an additional franchise fee like was paid by the original franchisee?  I ask this for the PMD franchisees?  Could you please post this answer to that ongoing thread?  PMD is asking franchisees that sell their existing business to pay PMD $50,000. for this when it was already paid once by the original franchisee. 


Also, do you have another site that deals in license agreements?  We are originally under the PMD license agreement and would like to have someone's advise about our current license agreement.



Granville_Bean's picture

fee from new franchisee

1) What does your contract say?

2) You paid a fee to be a Zee.  Now someone else wants to be the Zee.  They don't have to pay too?

3) Is this a franchise fee which would be the new Zee's responsibility, or is it some kind of "let me out" or approval fee that you the existing Zee has to pay? 

It is a fee that pmd wants

It is a fee that pmd wants from the original franchisee after selling the existing franscise to the second owner.  The money pmd would want is the first $50,000 from the sale of the business to the second franchisee.  After they got the first $50,000. the rest of the money would belong to the orignal franchisee.  Is this customary to keep paying franchise fees when another person buys the same business? 

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Franny is a columnist for Blue MauMau who answers questions about running and owning a franchised business establishment. Those who have questions can post them under the Ask Franny forum. Readers may comment on the questions there. If the post is answered by Franny, it will be featured on the frontpage of Blue MauMau under the "Ask Franny" column. Franny sometimes invites Subject Matter Experts to answer. Please do not mention your franchisor, vendor or your own firm's name in your question.