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Dear Franny (Guests Post Questions Here)

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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CheeseCake Shop

Hi Franny,

Your website is a very informative and useful for me. I am sure whoever want to be involved in franchise system would agree. Thanks for your contribution.

I am interested in buying one CheeseCake shop and doing my research as much as I can. However, it seems that the franchise has a lot of disputes up to about 2012-2013. Since then, everything seems to be settled and quiet. It's like too quiet. I am not sure if there is anything under the water that I should be aware of? Have you heard anything about this brand lately? Any cases or complaints from franchisees? Or anything I should be aware of. I am sorry to break your rule about not to mention the name but my question is really specific about this brand. If it's possible, you can reply me privately, sammm.s@gmail.com. Thanks for your help and understanding.

Regards,
Sam S.

Right at Home brand

Do you know the failure rate for Right at Home ?

Right at Home

No. What is it?

(What does its FDD say it is and how does its reported numbers compare to the strong performance of leaders ComforCare or HomeWatch?)

Firehouse Subs

I love your website and enjoy reading the news. However, I am upset that there are three articles about Firehouse Subs that ring completely untrue. I have been a supplier for over 20 years and also involved in a franchise business with them. I have never experienced anything but professionalism, generosity, support, and loyalty to their franchisee's, suppliers, and employees.
Can you please remove the articles as they are slanderous, and completely untrue. It seems Mr. Roger's has an axe to grind and motivated for reasons I do not understand.

Thank you.

wtwald@aol.com

Franchise vs License

Hello,

I am thinking of buying a restaurant. However, the owners of this particular establishment is offering licenses to operate, not franchisees? What's the difference??

Re: franchise vs license

A franchise is a license but a license isn't necessarily a franchise. There are all kinds of licenses, including franchised licenses. My guess is that the seller is either selling a business opportunity, where he gives you a sort of plan on how to build your business and then you go out and do it. Or, he is selling you a franchise license in which he trains and controls/supports the way you operate your business, but does not want to admit that it is a franchise so that he doesn't have to pay fees to comply with franchise registration and regulation.

Jenny_Buchan's picture

my FDD question

Hi Don

Please don't publish the reason for my question about sourcing FDDs as last time Uri and I surveyed franchisees we got some push back from franchisors. We also (of course) don't want franchisees have a heads up abotutour survey. 

Thanks.

and, I ran into Liz last weekend at a law teaching conference. She looks really well and is, by now, in your country somewhere. 

Best wishes

Jenny

Jenny_Buchan's picture

Free FDDs? Helip!

Hi Don

How's things over your way?

Uri Benoliel (Israel) and i are going to do some research on how franchisees rate the chance of their franchisor failing, and if so, how they think it will impact on them. We want to survey franchisees via their emails and therin lies outrcurrent challenge.  

Are you able to give me any help with sourcing free FDDs? I can access the Minnesota ones easily enough but can't get a reliable link to Wisconsin. The Californian ones don't seem to list current franchisees' email addresses, just their phone numbers - not much use for research f they are on a 'do not call' registry.

I've looked at the links you posted on BMM in 2007 but they don't seem to work for me now. Thanks for any help you can provide. The research should be very revealing.

On another matter, I've just (with 2 friends) signed a book contract to write about all the law that affects franchising in Australia - quite a big project. Our completion date is Sept next year.

Best wishes

Jenny

private-club

is private eclub another boris bugarski entity?

Failure Rate

Do you know what the failure rate is for Mac Tools Franchise?

FRANCHISE I AM LOOKING AT

Hello. Where can one go to find out info on a smaller franchise such as how many franchisees they have, any negative/positive news, avg. costs and earnings. I can easily find info on the LARGE Franchises but very tough to find out info on the smaller ones. I can always find their websites but I am looking for third party info that may not be biased.
Thanks.

Burgerim

Hello Franny. I would like to know if you have heard of the franchise called Burgerim and if you have any information on them.
A recent opportunity came up for me to get into the franchise and I would like to know what people are saying about them.
Please and thank you.
Kayvan
You can reach me at kayvan.hayati@gmail.com

Background Screening

In today's world it means more to know your employees or volunteers beyond a resume or a smile. Many graduate students are attaching to their resumes their background screening information to push them ahead of other applicants who dont.

With I9 Forms being a federal requirement, sex abuse screens, social security checks, fingerprint impressions, terrorist watch lists to name a few issues in our social world, franchisees should screen their employees.

These screens only costs a few dollars and helps your brand or local franchise build competence and loyal confidence.

This note is to build a knowledge level beyond franchise core business solutions.

For example does anyone reading this know how criminal records are processed and where they originate?

The Book: The Glee-Fee-Me-Free-See-We Stage

Where can i purchase this book?

Updated content

Everytime I read this Blue MauMau - I notice that the majority of the articles are from 2011 and earlier. Is this a credible site or just a place for you to post advertising and make money off the advertising?

Interlake chemicals sure step

FranNY I'm so confused about this franchise I'm about to pull the trigger and getc the franchise
So is it legit franchise to purchase or not.

California Resident

Dear Franny,

I am a California resident and am interested in purchasing a franchise in the State of Arizona. Do you know if there are any franchise rules that would prevent me from purchasing in Arizona because I reside in California?

Thanks so much!
MF Limon
bashful243@aol.com

Franchise Fee Refund

In December of 2015 a franchise fee of $30K was paid to Sweet & Sassy Franchise.
However, it's been 7 months later and we are still unable to secure financing with good credit due to lack of alternative income. Our franchise agreement states "The Initial Franchise Fee is used to defray our costs related to providing you with the pre-opening training and opening training and assistance. The Initial Franchise Fee is uniform for all franchisees and is deemed fully earned and non-refundable upon payment". We unfortunately wont receive any of the terms in which the fee is used to cover.
We feel litigation is necessary as the Franchisor won't acknowledge our emails and previously stated it's nonrefundable. Can she give us a "Trump University" experience without recourse ?

Harrassment Policy for Employees

Do you have a sample copy of a harassment policy for employees to sign? Or can you tell me where to get one?
Thank you

KLA childcare

I am looking for information on KLA preschools/childcare franchise. They are a fairly new company, started in Miami, FL.

Question about advertisements

Dear Franny,

I feel confused about the advertisement fees required in FDD. Will we know how the contribution is used? And is it true our contribution will only be used for promotion in local markets? Does every franchisee contributes the same rate?

Thank you for answering the question!

Franchisor Seems to Have Given Up

Dear Franny,
Our franchise is over 10 years old. We have under 100 franchisees in the system, however just a few years ago, we had over 200. The founder blames the lack of growth on some franchisees who, historically, badmouth the franchise for lack of execution, common system/products, marketing and growth.

I'm specifically, I'm concerned about growth. The founder is in his 70's and at the tail end of his business career and enjoys exploring other ventures. Since 2010, the franchise has closed more stores than opened and we continue to lose more stores every year. Other than "throwing our name in the hat" with business brokers, there is no plan for growth or resources committed to growing the brand. Our investment as franchisees depreciates every year with each store closing.

Many franchisees left the system and have gone off on their own as there is nothing proprietary or unique about this business.

There's an old saying in business, "once you stop growing, you're dead". Any recommendations for us or other franchises in similar situations?

Signed,
No Growth, No Glory

Ownership of franchisor

Should I be concerned? The ownership of a franchise I am looking at was sanctioned bt SEC?
http://www.wsj.com/articles/sec-official-puts-broker-dealer-issue-back-on-private-equitys-radar-1465342234

Don't know if it impacts franchisee support or relations?

Franchisor selling product resale in franchises territory

Does it hurt the franchise when the franchisor deices to sell products at retail outlets other then inside the franchisees shop, example Dunkin Donut selling their coffee, Panera Bread, selling loafs of bread at grocery store. And I just heard the star buck is going to start sell the tea in already made.

Status of Univ. Bill of Rights

Is there a current status at the fed level for a univ Bill of Rights. I see very little of the last 4 years.

Updated franchise failure rate chart

Is there a recent failure rate chart? I am a franchise broker and I'd like to furnish this information to my clients.

Jenny_Buchan's picture

Franchisee or employee?

Is anyone able to provide me with a list of the US states that have legislated (or have a bill in progress) that a franchisee is purely and simply a contract counterparty of its franchisor and is NOT an employee?

I am going to wade right in at the deep end and look at the consequences of this for franchisor and franchisee bankruptcy. 

Thanks for any thoughts. Jenny

franchise changed owners and things went south

My franchise was picked up by a franchise company, after being developed by an educator. Over a decade later, she wanted the franchise to herself, and bought it back. That was 3 months ago. Before, we were not being held to a minimum monthly fee, but now, they want us to begin paying a minimum monthly of $900. Before, they asked for just a marketing free of 7% and franchise fee of 3%. So, 10% of our earnings was the royalty to the company. So, this month, I made only $500. I provide services at schools, and I was invalid for four months, so no business. I just got an email from the owner saying I owed another $870. Needless to say I was upset. I emailed back that I needed to dump the business if this was their new approach. Then, the lady who developed the business called me and was very sympathetic, but insistent that we need to pay extra money now, because the business costs them so much to run. How is that my fault?

So, here is the pickle. I cannot afford this. I have limited buiness income as it is, and she is saying this will give me incentive. I work the business a lot, and it is just not working because I started on a shoestring. I spent all my reitrement savings and put myself into debt to tune of $60K to start this up. I had my car repossessed because the franchise does not make as much as they claimed it would make, in the first place, and I banked on earning more, using credit cards to support my household. It never paid off, and now I believe I will have to file bankruptcy. The new owner sent pictures of her daughter's bat mizvah in NY City in this gala suite - I'm sure it cost o ver $50,000. She literally had to ask me what bankruptcy meant. She has no understanding, period, of what it is like to struggle. So, here I am, no income and they want $900 a month. If I don't earn $900 in royalties (the 10% previously mentioned) I have to pay $900 anyway.

Do I have any recourse at this juncture? I signed a piece of paper which asked me if there were things promised, and I sent them a detailed email stating I was promised to earn more, in the first year -- which is true- and that I have gone broke because I have not earned that much. I have worked this program just like they say to, but the income is very sporadic and does not pay off until you have multiple locations and multiple staff hired. I have not been able to build the program out without operating capital.

Can I just quit? What can I do?

Verifying truth from posters

Dear Franny: Does anyone check the accuracy of the posts I see on your website? If the franchisors described there are as awful as they would appear to be, I do not see why anyone would ever purchase one of their franchises. It appears that the posters either have no idea of the subject matter or are merely disgruntled franchisees. Every franchisee is NOT destined to be either rich or great in their chosen business. From SBA information, many franchisors have many successful franchisees. There is no practical way to determine numbers, but I see many local franchisees operating for many years. That would not happen if they were losing money. Help me understand why only unhappy franchisees post information on your site. Do you filter the good comments? Thanks for an answer.
Puzzled in Atlanta.

franchisor lowering prices raises top line lowers bottom line

what can be done when a franchisor mandates lower priced deals that cause franchisees to lose $ but raises topline higher profit for franchisor?

government agency

what government agency oversees franchisors? thanks!

Re: government agency

For most states that require registration, it is their attorney general's office. For example, Maryland's Attorney General's office handles securities and franchise fraud. In Illinois, Michigan, and Connecticut franchises are too.

DOOH Market

Can you comment on the DOOH market and where you see franchise opportunities for this growing industry?

More current data

Are there any plans for this web site to update its delinquency statistics?
Thanks.

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About Franny

Franny's picture

Public Profile

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.