Foot Solutions - Horror Story
This is just a really bad franchise to buy. Don't make the same mistake we did.
This is a franchise that has a cool concept, cool franchisees, but a flawed business model, and lacks basically everything you would expect in a franchise including - branding, national advertising, marketing tools, and documented repeatable plans for success. And that's just for starters.
The majority of the franchisees bail within 2-3 years after having lost their life savings, their homes, and often their retirements. They end their indentured servitude to a flawed system - angry, disappointed, and broken. Most of the owners are highly educated professionals that have enjoyed much success in all other professional areas until Foot Solutions. But according to the franchisor: franchisees that do not do well, "fight the process", "are a bad match", or "have a negative attitude". Yeh right. Like we all went looking for a place where we could drop $200k and then get to complain and make someone miserable for 2 years. Yes, that was our plan.
85% of Franchisees are not making money. We hang on because the initial investment is much to lose. So we just keep hoping corporate will come through and start acting like a franchisor and things will get better. But in the mean time, loans go unpaid, houses are lost, retirements are spent and well you know the rest. And what does the owner do while 85% of his business "partners" are floundering? He is writing self-serving books, joining industry committees to tell about his success, and oh yes, thinking of ways to raise prices on his franchisees.
And we did our due-diligence. Spoke to franchisees and looked into the smiling lying face of the owner and fell...hook-line-and-sinker.
Don't do it.
Does anyone know of a good legal team, that can help with a class action law suit?
I have had two people call me
I have had two people call me tonight and ask if I was the author of this post. I was not aware of this forum, but I think its a great idea!
I am a former owner of a foot solutions store and here is my story:
I was looking for an opportunity to own a small business and this one sounded perfect, great hours, not too many employees, opportunity to help people and since its a franchise a great process. I was more excited that I have ever been about anything. I was in a great financial place. My house was paid for and my savings was fat enough that I could pay for the franchise and still have enough working capital and personal expenses to last 3 years. Surely a business will bring me something in 3 years right?
The first time I suspected something wasn't good, was when I received my opening inventory from corporate. To tell the truth, I felt raped. Not only did they send me stuff I new I could never sell, but came to find out they sent me obsolete merchandise that they bought at close-out prices and charge me more than wholesale price. That's ok, I didn't complain, but I was devastated. I followed all their Grand Opening proceedures to a tee, and could not earn enough money to pay my bills. Fast forward. When I could not generate enough traffic in my store to support myselft, I asked corporate for help. A rep came to my store and spent 3 hours. He told me my inventory was not good enough and made suggestions on how to improve it - some sure winners were needed. I bought what was suggested inspite of the fact that the stuff he thought was inadequate came from corporate. I did it ($$). When I still could get no traffic I was told to advertise more. Use corporate ads, not those from other franchisees. I did it ($$). When this did not work., I was told to send out direct mail, using coprorates artwork and postcards. I did it ($$). When this did not work, I was told to try commercials. Use the ones corporate puts out. I did it ($$). When this did not work, I was told to increase my marketing efforts. Since foot solutions did not have any marketing materials to present to the medical community I hired someone to make some for me ($$). When this did not work, I received another visit from a rep. This time he spent a whole 4 hours in the store. He told me I needed to fire my saleperson. What this has to do with no traffic, I don't know, but by this time, I couldn't afford him anyway so I fired him.
Its too late to make a long story short, so I will just say, that after two years of spinning and doing what corporate told me to do, all my savings was gone, and my equity line of credit on my mortgage free house was maxed out, and my 401k was gone. I lost my house. Turns out when the housing market crashed, the amount of my equity loan was more than the house was worth. I Now live with my daughter and son-n-law. No cash, no ability to find a job in this economy, no 401k and no business. Some of the fs franchisees tell me corporate put me out of business, and if I had not listened to them I might still be open. I am not so sure. Two of the stores I trained with in different states are also closed. I emailed them tonight and asked them to share their stories. My advice to those looking to buy a franchise is not to pick foot solutions. My advice to the original poster is to get out now. Too many see the potential in this franchise and so hang on hoping things will get better. Don't do what I did and think, "I have to keep going because i have so much invested". Things won't change. It's not the economy (although it rushed things forward). Cut your losses ASAP and try to salvage your home. NEVER EVER use your 401k money in a franchise. It's not worth it.
Never heard of Foot Solutions
"Cut your losses ASAP and try to salvage your home. NEVER EVER use your 401k money in a franchise. It's not worth it."
That si DEFINITELY good advice. Know when to hold and know when to fold or you'll ride a loser all the way into the ground.
What I don't understand is how so many (well how many actually) could buy into this. Folks, "concept" means NOTHING. It's all in the EXECUTION. Any "concept" that proves successful can be reverse engineered and copied. Concept opens the doos but execution KEEPS them open.
How could you people buy into an empty concept? I don't care how educated a professional you are. DON'T buy into a business if you are not experienced in THAT business. Just because it is a franchise doesn't mean it is easy. And how "proven" can this system be? What are same-store comp sales for units that have been opne a year or more (standard measuring criteria) or better yet 3-year sales history. Does this thing even HAVE 3 year sales history????
To some extent I feel for your loss, but to what extent did you fail to ask the right Q's and merely buy a "concept"? Concept is highly overrated. You need a "proven system" with OPERATING HISTORY.
The company is an 11 year old
The company is an 11 year old company. When I bought in, many franchisees reported that they were doing well and only 2 stores had closed out of approximately 200. Average store sales were decent with a reported 20% returned to bottom line, but understand franchisees don't open their books since they are individually privately-held. So there is a system, but as I posted it needs some revision for long-term success. My three points if implemented will help.
IN RESPONSE TO THE "FOOT SOLUTIONS-HORROR STORY"
I realize all to well the state of our economic crisis we are all experiencing. I'm a firm believer when the times get tough the tough get going. Easier said then done when in 2009 alone more than 300k businesses were closed, such as: Starbucks closed 600 stores, Foot Locker 140, Sprint Nextel 125, Pep Boys 33, The Gap 85....and the list goes on an on! So, when you are lashing out to blame corporate for your business that is failing, why don't you ask yourself, did I do my due-diligence as an entrepreneur? I'm an extreme advocate of Foot Solutions as I have opened and taken over numerous F.S. stores. In the stores I have taken over, I was able to make a profit within a very short period of time. Keep in mind, these owners were highly educated, but did not possess the necessary skills of entrepreneurship. Having said that, I'm appalled, angry and saddened at your accusations about our company. Let's see the picture for what it is: F.S. has been upgrading products that make a difference in ones health and wellness for the benefit of the frachisee and consumer, offering continuous education through webinars and seminars, annual and semi-annual meetings to inform and strategize over products, advertising and more. You mentioned the CEO of the company. His leadership has brought on board new products that are exclusive to F.S. which has been beneficial to our customers and us
as owners. Having the foresight to expand corporate HQ three times while putting his own $$$ into the process and labor so we may benefit in $$$. How exhausted he must be after working 12-15 hours at corporate...then to find time to write a book to further educate our consumers...we should be so blessed to have his integrity, passion, dedication and perserverance for the betterment of the company and our consumer. We all want to succeed...if you don't have anything constructive to say in the fight for your success, don't poison those who have the tenacity and ambition to strive and make their store a success. Stop the whining and let's get behind our company. Remember: A kite rises against the wind rather than with it.
Congratulations on your
Congratulations on your success. Who are you and what stores do you own?
To: In response to FS horror story author
I don't know who you are, but that is great that you are having success with Foot Solutions. Your are probably among the 1% in this company. If you are who I think you are, you bought up floundering FS franchises for next to nothing. You couldn't do anything but go up! You buy a franchise for the assistance and the marketing. We're getting neither. Field ops are stretched beyond limits and rarely seen or heard from. Marketing is non-existant. Oh wait - Planet Run, Little People Big World. Money spent for no return. You state "You mentioned the CEO of the company. His leadership has brought on board new products that are exclusive to F.S. which has been beneficial to our customers and us." Yes, for example, one wonderful product that I truly love - Chung Shi. What happened? Here we have this awesome product, we sit on our thumbs and the honeymoon period passed us by. Now everyone has a shape-up shoe and we are thought of as followers. We could have made a lot of money in the beginning with the proper advertising. Oh, and the Reebok Easy Tone. It was supposed to be exclusive to us and it was everywhere, even in the beginning - at around $30 less then our MSRP.
"If you don't have anything constructive to say in the fight for your success, don't poison those who have the tenacity and ambition to strive and make their store a success. Stop the whining and let's get behind our company." I'm glad that you prompted me to quit eating my bon bons and dismissing my cabana boy for the day. Those of us who are dissatisfied aren't poisioning anyone. People do due diligence and this is one avenue. They can assess the situation and make an educated decision. Yes, no tenacity and ambition for me. I'm just losing everything, but hell I don't care. I really didn't want a roof over my head any more. I'm tired of cleaning the place anyway. My field op has told me that I am doing everything according to the process and have no further recommendations. Well I have one - national advertising. But then again, that's beating a dead horse. Until Ray quits micromanaging and let's his so-called experts do their job, or retires, we won't have a FS in the next two years.
I don't know who posted originally but this is my take on this thread: if there weren't SO many dissatisfied franchisees out there this blog would not be threatening to anyone, especially you Mr. Success and a half. Opinion is opinion. I think when the Advisory Council info comes out true rubber meeting the road will happen.
I'll take it further. I CHALLENGE you to put a post on Foot.net that you will buy any franchise that wants out. If you have been as successful as you say, that should be a true win-win situation for you. I am an extreme advocate of FS also - by that I mean the concept. I LOVE what I do and I LOVE helping people but you know what? At the end of yet another negative sales day after busting a** and hearing "how long have you been here? I've never heard of Foot Solutions," it just doesn't make for a warm and fuzzy feeling. I don't make enough in sales to do large $ advertising, nor do I get a volume discount that a large purchaser would get.
Oh, and another aside: I thought it was very ironic that an edition of NSRA from last year had Ray on the cover as a committee member, and it was also an edition that had an article of most, if not all, of the shape up shoes detailed (pros, cons, etc.). Was Chung Shi in this article in any form or fashion? No. Pretty sad commentary that the NSRA writer didn't include anything on it. That speaks volumes in itself.
I applaud your success. I too
I applaud your success. I too would like to know what stores you own.
Yes, I know that the economy has hit all small businesses hard. But the original poster of this thread mentioned that a large percentage of foot solution stores were not making a profit long before the economy tanked. That is my understanding as well.
Are you saying "all" the failed/closed stores had highly educated owners, that lacked the "skills of an entrepreneur"? That's pretty ridiculous.
I followed the process. Everything corporate suggested I do, I did. I did not whine or complain as you say. I called other owners trying to find out what was working for them. I took trips to other stores observed, and learned. I did all of this on my own dime. I think it's rather arrogant and obnoxious to assume you know how much of an entrepreneur I am. When you buy a franchise, you buy a process. You tell me what percentage of an entrepreneur you have to be to follow a process, and I will let you know if I meet your criteria. If I wanted to do my own thing, I wouldn't have invested in a franchise.
My point is that I followed the process that exists, worked with representatives of corporate, did everything they suggested, and when things did not get better, not once did someone from corporate try to find out why. Do their ads work in all regions? Is there certain inventory that works better in some areas? Which commercials are a true call to action? Wouldn't you expect someone from corporate to want to know why I failed? You know for future reference and protection of other franchisees.
I think it's great that foot solutions has great innovative and wonderful products, I don't doubt this. And that there is now a huge corporate structure built with as you say "the owners own money" is just wonderful. But none of that helped me get folks in my door. Nothing corporate gave me helped. You can have the biggest and best buildings to train in, the best products known to man, but if no one knows about them then no one benefits.
Look, you seem offended that this "brother or sister" of the franchise had the nerve to vent their frustration on a public forum. I must have missed the part of your post, where you welcomed this brother/sister to tap into your success and mentor him/her. If you want him/her to "get behind the company" as you say then help him/her, BEFORE they lose the business. Have you posted something on the internal foot solution boards offering mentoring and/or help to all those struggling? I used to post on the board, I read that many many stores were struggling. I don't recall ONE time a brother or sister of the franchise that was doing well offering to partner with an owner and help.
It's too late for me, but if you are so very successful and believe so strongly in this franchise than help an owner that needs it even if they don't meet your criteria for "entrepreneurship".
I honestly think and am 90%
I honestly think and am 90% sure that you work at Corporate now and do not currently own a store. You may have turned stores around during better economic times but certainly not now. The major problems with FS are: SRN, a separate supply company owned by the CEO Ray that sells "exclusive" goods at a premium to franchisees, no marketing or branding at the corporate level, misguided minor sponsorships like the Racing team, Blue Planet, Little People, Balance Walking and the new bomb of them all SGK and a real lack of franchise process and system. And a CEO that is either dishonest or disconnected or both. Other than that it is great.
The funny or unfunny thing is the concept has great potential. New management to develop and enforce a system and process, a franchisee owned coop to buy product from and a true branding program would be great starts.
By the way, I am not losing my house or 401K although I could lose about $200K invested. In spite of FS, I make a small profit but work incredibly hard for that profit. And by writing this I do hurt my investment to some degree, but it is in hopes of a turnaround.
A previous post said it
A previous post said it best……this is a “flawed business model, and lacks basically everything you would expect in a franchise including - branding, national advertising, marketing tools, and documented repeatable plans for success.” When this franchise was purchased over seven years ago, we knew that it was a great concept. We also knew that the “blueprint” for success was a work in progress. The lack of a repeatable plan for success is the fundamental reason that Foot Solutions does not operate as a franchise. Instead we are a collection of independent stores and the only thing we share in common is our name. And as an independent store, there is not enough profit to pay 5% royalty and $500 dollar month advertising fee. I would suggest we are at a competitive disadvantage
I know from first hand experience that we lost at least 15-20k in opening inventory. This was inventory purchased by the “experts” at Corporate Foot Solutions. These were mostly shoes that were being discontinued by various vendors.
Our current advertising by Corporate is almost comical. We are currently being asked to promote “Pink Walking Poles” for the Susan G. Komen Foundation. This product does not belong in a specialty shoe store - it makes absolutely no sense. We are to sell 20,000 “pink walking poles” during the promotion period to satisfy a guaranteed donation of $100,000. Out of the 6 stores in my local market……..one just closed and no other store has sold any “pink walking poles”. I am confident that the majority of Foot Solutions stores do not sell this product because it is an extremely poor fit with our product line. We are only promoting this product because of the CEO, Ray Margiano. We are also asked to promote and sell a book called “Balanced Walking” written by none other than our CEO, Ray Magiano. On the store level there is absolutely zero interest in these products. In the future, there will be a newspaper article with a picture of Mr. Margiano handing a check to a representative of the Susan G. Komen for the Cure in the amount of $100,000 dollars. It will be a huge boost to Mr. Margiano ego…………a $100,000 dollar gift, picture in the paper and a nice article. Friends will call and congratulate Mr. Margiano for his generosity. Oh, let’s not forget that the $100,000 contribution is an advertising expense and is being paid through our monthly advertising fee.
If you really love the idea of working in a specialty shoe store, it would be best to operate as an independent. After all we are already operating as independent stores…..so why pay royalties and advertising fees and get nothing in return. Oh, I forgot we all signed a franchise agreement. Does anyone feel like an indentured servant?
To better days ahead.
What a BAD Experience
When you buy into this franchise make sure you buy a Jar of Vaseline. You'll need it from the screwing you get from the Foot Solutions Corporate owner!
Then let the rest of corp. take their place in line of screwing you. They are all "Yes sir" and can't think or speak for themselves.
Need of Lawyers
These lawyers practice across the United States:
I"m in the same situation as all of you. Same story different franchise and the problem is franchisors are not held accountable for what they sell. Our responsibility is to ask the other franchisees; however, we are not purchasing from other franchisees, but from the franchisor. They have zero accountability right now. This industry really needs reform. I'm sure there are some really good Models out there, but right now I have not heard of any.
Also, watch on CNBC a program called Behind the Counter: Franchising. It airs on 12/22 at 8pm. Search for it. I don't see how anyone is making money really. I guess they just don't want to work for someone else. Eventually, you have to get a return on your investment and the question is when or if ever.
The link above I"ve heard is the best lawyers. They have fought some huge businesses and have won regardless of whether you signed the franchise agreement.
Sometimes I feel like we are
Sometimes I feel like we are banging our heads against a wall.
Store owners for the last 5 months have been loudly declaring:
- The Rocker Bottom Shoe craze is over
- We need corporate to help us drive more traffic into the stores
- We are broke
- With a new POP campaign advertising guess what...Rocker Bottom Shoes
- POP to hang in the store offering customers $25 off with each $100 purchase. They advertise a $25 cash card, that they do not provide. So store owners that are broke can now offer a discount to the customer WE brought into the store with our dollars, and pay additional dollars to buy cash cards. We lower our profit margin, but OMG we get a poster from coporate.
- A new National Advertising Fee has been charged to all franchisee without a detailed dollar amount, detailed schedule on how this will help the stores. We are paying more money each month so he can take e-commerce off the site. Nevermind it was our National Advertising dollars from the last 2 years that launched the ecommerce site we didn't want.
And then a corporate person asks us "How can we improve Communication?" What a crock. YOU CAN LISTEN!!! We want YOU to drive traffic into our stores while NOT impacting the little profit we have.
Ok so maybe lawsuits are not the answer to our problems. Who can afford a class action suit other than the lawyers who get it all. But we need to band together and do something. What? Do we all stop paying royalties for 3 months? That would put him down permanently I suspect. Stop ordering from Shu-Re-Nu so they can go away for good? We have tried talking, pleading, sniping, complaining, and an Advisory Council, and yet nothing major has changed. We need a new game plan or we are all going down...
I feel your pain "I want out." I closed my FS store last Saturday. Never broke even, never took a salary, and was told I did everything I was supposed to do - except do large scale marketing which I couldn't afford. I'm in the Atlanta area and probably saw my field ops less than any of you. Bobby lives one road over from my store and I only saw him before he applied for the job. That speaks volumes in itself. Plus now that he is out ill even little else is getting done. I quit paying my royalties two months ago because I decided that I had paid enough for the little amount of marketing and support I received. Closing was very, very difficult for me emotionally. My husband and I put everything into this store. It was a labor of love and a great concept. We have had to file for bankruptcy which is very difficult being close to retirement age. We're going to have to work much longer to try and recoup some savings. Sigh. Too bad we had a franchisor that refused to let people who knew what they were doing do it. I do not believe that FS will be around in the year 2012. The last Infonet forum shows that there are 289 stores, but there are only 221 in actuality. I considered forming a class action suit but those I spoke with stated that several know Ray is in financial trouble so what would we gain. Apparently the lawsuit that he narrowly won scared the bejeezes out of him.
Let's hope that with these posts others will not fall into the same trap we fell in.
Foot Solutions Horror Stories
As one of the orginal FS owners Let me say that I fell lucky to last as long as I did. In my 9 plus years in business I could have made more money working at McDonalds. My lease expires this year and I will not renew. The problem with this franchise is the business model can never work. After 10 years in business, not one attempt has been made to copy this business model. It just doesn't work!
Yet another Guest said: "Let me say that I fell lucky to last as long as I did. In my 9 plus years in business I could have made more money working at McDonalds."
That's lucky? I'd say you would have been better off quitting a long time ago.
Are You Lucky?
If you are deciding to close your store, walk away, and have not lost your home, marriage, dignity, savings, retirement and are not filing bankruptcy than indeed you are lucky.
Most of the ones I know have lost all of the above and more behind this sorry ass concept.
FOOT SOLUTIONS STORES CLOSING AT A RATE OF OVER 1 PER WEEK
FOOT SOLUTIONS STORES ARE CLOSING AT A RATE OF OVER ONE A WEEK THIS YEAR. MANY MORE TO CLOSE. STORES THAT AREN'T CLOSING ARE WALKING AWAY FROM A $200,000 INVESTMENT. YES IT IS THIS BAD. DO YOUR RESEARCH BEFORE BUYING BY CALLING ANY FOOT SOLUTIONS OWNER AT RANDOM AND GET THE REAL STORY.
Have we lost that many stores just this year? How do you know? I hate that this is hidden information. Why can't they just post the information somewhere?
Who has closed. You can post locations here?
This information was posted on the Foot Solutions infonet. It details numbers, but not locations. I am noting my comments with an *
Foot Solutions Store Openings/Closing Reports
2000: 1 store opened/0 closed
2001: 27 stores opened/0 closed
2002: 26 stores opened/3 closed
Failure rate: 5.56%, Industry standard 2 yrs - 23%
2003: 43 stores opened/1 closed
Failure rate: 4.12%
2004: 45 stores opened/1 closed
Failure rate: 3.52%
2005: 40 stores opened/0 closed
Failure rate: 2.75%, Industry standard 5 yrs - 50%
2006: 42 stores opened/1 closed
Failure rate: 2.68%
2007: 28 stores opened/8 closed
Failure rate: 5.56%
2008: 31 stores opened/26 closed
Failure rate: 14.13%
2009: 11 stores opened 11/30 closed
Failure rate: 23.81%
2010: 11 stores opened/16 closed
Failure rate: 28.20%, Industry Standard 10 yrs. - 90%
2011: Numbers have not been divulged. Since the beginning of the year, approximately 15 stores have closed with more to come by mid-year, majority of openings have been foreign based,
Main Reasons for Closures
• Economic downturn – through 2010
• Not the right business for the operator
The single largest factor in closings to date is directly related to the economic downturn, 2008 - 2011. The biggest factors are the downturn’s length of time and the number of locations that signed leases in strong economic times when space was not available and at an all time premium. For most stores their lease was locked in and as sales dropped and centers had vacancies, it was high overheads that had the most impact, especially in high cost areas like California and other major cities.
* Industry standard is actually (based on my research) for ALL small businesses. This 90% failure rate groups mom & pop, franchise, family-owned, etc. A true number would reflect only franchise businesses as comparison.
* Economic downturn had something to do with it
* Death/Illness/Divorce - this is a VERY minor part of the failure rate.
* Foot Solutions assists in the finding of an appropriate location based on demographics, etc. This is part of your franchise fee at purchase. This statement is telling on their lack of knowing what they are doing if they are stating this. They have to approve your location and your lease.
* Underfinanced is a funny statement. Most owners had money when they began. Foot Solutions asks you how much liquid you have and what you may need. In their prospectus they state that you will (based on their experience) break even within 3-6 months of opening. This is not happening across the board, or hardly at all. So, you will be underfinanced because you are losing liquid at a vapid rate.
* Not the right business for the person. Again, FS sits with you and discusses goals, expectations, etc. At least two franchises were sold to people who could barely speak English and communicate with their customers. Not that they weren't smart people, they just had this handicap. FS gladly took their money knowing their limitations. In fact, there was a lawsuit against FS for selling a franchise to a Florida store to individuals who were very handicapped in this. FS barely got away with this suit.
* The last paragraph has some credence. However, most of the stores could not pay their rents because their business was so lacking in sales due to lack of branding on FS part. FS is well known for blaming their franchisees for all failures.
The concept is a great concept; however, until the current leadership is removed things will continue status quo.
Just checked the current franchisee directory. According to the above report, at the end of 2010 there were 219 operating stores. Today's count is 206. So, since December 2010 13 stores have closed. Wow.
All you have to do is go to
All you have to do is go to the directory page and see who is left. You have to remove some from it though because M2M isn't a franchise, neither is the test person in Georgia, and others who haven't opened or oved forward.
So How Many areLeft?
So how many stores are still open?
We are thinking of closing. We keep thinking things will turn around. But each month we stay open, we lose money and make an even bigger climb into debt. Has anyone had any success with breaking a lease?
Will things ever get better?
why would they?
iwantout asks: "Will things ever get better?"
Can you identify any reasons why they would? If you keep doing the same thing, odds are you will keep getting the same result. Why throw even more good money after bad? I don't understand why Zees (in a variety of industries and "concepts") keep banging thheir heads on the wall. So what if you owe money or lost money, IF THE STORE IS A LOSER THEN NEXT MONTH YOU WILL OWE MORE AND HAVE LOST MORE.
Put on your running shoes..
of running shoes and get the hell out of there. If these people are so smart why are they staying on a sinking ship? DUH! Cut your losses before you are completely BROKE. Contact an attorney who can help you protect what you have left and shut er down. Also, don't be a fool and borrow against your primary residence. I can't believe people actually buy this garbage. A shoe shop? Really? HA!
Get better? More stores
Get better? More stores close than open each year, the first NEW store that has opened in the past 3 years is placed in the same area where a previous one failed, phone calls and emails to corporate go unanswered and now they want balance sheets from all franchisees to determine the financial health of the system! Really? Like our monthly sales reports don't tell the story?
Well the Balance Sheets will surely tell them what we can cut. Assuming it's all our fault that things are bad, perhaps they will suggest, I cut my costs by turning off the lights, letting employees go, switch phone carriers or stop paying myself.
Oh wait... I haven't paid myself in two years!
so going for three?
iwantout says "Oh wait... I haven't paid myself in two years!"
So why do you keep doing it? Going for three? Trying for a martyr's award? One year okay, it could take that long to figure out what's wrong. But why do Franchisees repeatedly stick with losers for multiple years? Your time is the most valuable thing you have, why waste it losing even more money year after year.
What have you tried so far? There are a LOT of ways to work with a lease. What have you tried? Is there any potential demand for that space from some other type of business? And if the LL goes to the max with taking a hard line, well there is always BK (and I don't mean Burger King).
So are you saying that the store pays its lease but not you? You remarked elsewhere that you go deeper into debt every month. Are you really better off staying and sinking deeper every month, or would you be better off closing, getting a job, and paying down your debts with income from the job you'd get now that you're not working your shoe store?
We had a local situation with a Quiznos, where the struggling Franchisee was pushing for a rent reduction. LL wouldn't budge, the store closed, and has been vacant for a couple of years now. I doubt the LL was able to collect jack; can't get blood from a stone and all that.
We have tried to lower our
We have tried to lower our rent and when that did not work, we tried to negotiate out of our lease. The LL was not receptive to either. The center has lost many small businesses and sits at about 40% occupied. (Which negatively impacted our business for sure). The other spaces in the center (some in better locations than ours), have sat empty for up to 18 months. The LL is not budging, and he as already gone after three prior tenants after they left.
The store is paying for itself. It is not paying for me. When I say "going further into debt" every month": I mean that after the store has taken care of itself, I still need to survive personally. Debt. The amount that I am going into debt each month is far less than the current lease. I do not want to do a BK, because I have equity in my home. If I walk away from the business I will still need to pay for my personal expenses while I look for a job, but will still need to pay for the lease too. More Debt.
"The store is paying for itself. It is not paying for me."
IWO says the above. Seems like he sees it as "either the LL lets me out, or I have to stay here for no money." We'll need some numbers to figure out if those are really the only two alternatives. Three things to consider: his contract rent, the market rent, and how much could he make employed on the outside.
There COULD be several alternatives here. For example if his contract rent is $4,000/mo. the market rent is $2,500/mo. ,and he could clear $3,500/mo. if employed (is he one of those highly educated professionals who supposedly bought into being shoe shop owners?), he would be $2,000/mo. ahead subletting at a loss and making up the difference from his job.
I was wondering...
The Original Guest article said: : Most of the owners are highly educated professionals that have enjoyed much success in all other professional areas until Foot Solutions."
So why did these superior people want to quit their profession and RUN A SHOE STORE???
"Turn Around" ?
We are thinking of considering a Foot Solutions Store. A store we called was not making it and some seem to be thriving. We heard that the the new advertising combined with the "up swing in recession" is making a turn around. I want to know with all of the people with bad feet why is this franchise not expanding?? Are truly 80% of stores not making it??
I would reconsider if it were
I would reconsider if it were me.
I am not sure which stores you heard were "thriving". Yes, there are a few where the owners are actually taking home money at the end of the month. But those stores are few and far between. When you purchase a franchise, you are supposed to be purchasing a "system" which works. If only about 2% of franchisees are making it, economy or not, why would you want to buy into that system?
Yes, there are a number of people with sore feet, that need our care. But when your franchise does not do any National or Local advertising for you, it's tough to let people know you exist. The problem, I think is that in order to succeed you abosloutely need new customers EVERY month, not just repeat. We actually do help people get out of foot pain. And that's the good news. The problem, is that once they are feeling better they often start shopping on-line or slowly introducing bad footwear again. The shoes that help with foot pain, are expensive. there aren't alot of people that purchase each month, most make this type of purchase twice a year. Can you survive, with each customer showing up once or twice a year? Not without a steady influx of new customers.
Getting new customers would certainly be easier if the franchise sold the brand on a National basis.
That's my opinion.
I've been reading this blog ... and the disgruntled and dissatisfied reports from franchisees and ex-franchisees isn't new or unique to Foot Solutions.
I remember investing in a company called Soup Exchange ... a soup and salad restaurant. They had the same problem as all distributed retail locations have ... not enough density in a metro area to make advertising in the local newspaper or TV feasible. People aren't going to travel 10-20 miles to visit a soup/salad restaurant, regardless of how good the chocolate chip cookies are fresh out of the oven. A lesson well learned.
FS has a similar problem and I'm not sure what the answer is. Without knowing what Corporate is teaching and suggesting you do, are you keeping a database with every customer's purchases, specifics and email address? Are you sending out a newsletter monthly to your database?
More importantly, what products could you carry that are truly consumable and unique, encouraging customers to return to your store for re-supply? Just curious.
Also, what profit margins were anticipated on the products you do carry and are you required to carry all FS products?
Looking forward to hearing comments.
90+are not making it. In that
90+are not making it. In that 10% that are, they are barely making a living. Certainly not commensurate with the risk they are taking. There is no system, no model, none of the things you look for in a franchise.......a formula or recipe, national advertising, and brand recognition. The web has taken over the shoe biz, and third party reimbursement from Medicare has become so cumbersome it os not worth it. Stay away from this lime you would stay away from a glass of poison.
View of an Ex-Foot Solutions franchisee
Many of the time frame and location references in my comment will be obscure because I want to not reveal to FS Corp who I am. If this sounds childish or paranoid, believe me, the behavior I experienced by FS Corp when I closed was definitely on the level of a jr high experience. Let me clarify that. I experienced this behavior from the FS Corp professionals and executives. The people that worked behind these puffed up Al Bundy's were on the whole helpful and thoughtful.
This is a view from someone who was once a franchisee and is now out. The reality is, no matter how much we, as certified pedorthists, want to believe we are special. No matter the stellar customer service we gave/give. We are still viewed by the public and clients as a glorified shoe store. Better than a Pay Less/Famous Footwear. But when it comes right down to it - we are a high priced version of those chains - without the national exposure. Unique lines of product are the big deal at FS. Doesn't make a difference if no one knows about them because it is all your precious advertising dollars that builds the local demand. One of the intangible benefits you hear from FS owners is the "Blue Haired Lady" reward. After making this little old woman feel better and able to walk in comfort you sometime get an appreciative hug/tear or a card thanking you for a job well done. While much appreciated at that moment, how many of those same customers can be later seen wearing the same old crappy footwear because your stuff costs too much or they bought it on-line at Zappos.com
Being a certified pedorthist is a delusional certification or status. It's like declaring yourself the Grand Marshall of Under Roos because you once bought a package of them for your nephew. No one knows about it or cares about it. No matter how grand you make it sound, if you will NEVER get the respect that you deserve by practicing what you know. If you love the profession be an orthotist practitioner.
I ran my FS store for many years. It has been a sufficiently long time since I closed the doors of that failed attempt at achieving my financial dream. This wasn't my first new business. I founded a successful consulting firm prior to getting involved with FS. So I felt I was experienced and realistic in my expectations. I saw this new business as a means to diversify and build something connected with the aging baby boomers and diabetic pandemic. I can confirm many of the comments I have read on this forum about lack of business plan, poor advertising and support. Yes, that is all true - and more.
Without dragging this out, let me summarize.
1. I finally had to file for personal bankruptcy due to having had to personally guarantee many of the vendor agreements. I also had considerable biz credit card debt and lines of credit. I would say to those that have FS franchises but are afraid the step off into the black abyss of bankruptcy, don't be. Would you rather be under the pressure and emotional grind that being in a failed business brings? You can be noble, close your store and work out a payment program. That's fine. If I was 30 - 35 years old and had my professional career ahead of me maybe that would have been a choice. I had to leave this personal and financial disaster behind and move on. Now I must scramble just to get some semblance of personal finances together to retire someday. Just don't let this hold you back. Please. Many of the assumptions and fears I had about bankruptcy were wrong and foolish. I remember I cried when i came to this point. It was embarrassing, shameful and humiliating. It was the only solution. I am glad I moved forward. The worst thing would have been staying stuck because of those self imposed feelings.
2. Since being out of the shoe biz now for a sufficient time my perspective has changed. (I still look at what shoes people are wearing when out in public!) I know now that running that business into a financial hole was my doing. I could have or should have stopped sooner. I don't have bitterness towards the FS CEO. I ultimately made the decisions to borrow the money that I couldn't pay back. What made me do it? If I could only run the right ad... If I could only bring in the right line of merchandise... If I could only get the right person on staff...
Sounds like an addiction doesn't it? It was an epiphany one day when I had an outsider objectively look at my financials and tell me I was crazy. I faced my silly "addiction" (and my ego) and finally woke up. It truly felt like someone close had died. I had devoted my accumulated wealth and my personal relationships to this franchise. It is going to be a tough one to get over but I am working on it.
3. The process took about a year. Before closing I spent much time looking for new work. What I found was disheartening. Since I had put my heart and time trying to make this retail business work, enough time had passed for me to become pigeon-holed into being a "retailer". I could not escape. HR people want current skills and only think the past ten years of work experience is valid. My IT consulting skills had lost their edge. Today's horrible hiring conditions gives little if any possibility of explaining yourself. I have had some work but most have been survival jobs until something better comes along. I always find a way.
That's my story. I hope it helps. I was disavowed and "erased" when I left FS otherwise I would encourage communication with me. I am always one to help.
I wish you the best. I
I wish you the best. I worked for a Foot Solutions franchisor for over eight years and I have been out of the franchise for almost a year. I still keep in touch with my former employer (owner of Foot Solutions) and he is also getting ready to "close shop" and move on in life. My former owner lost his/her initial investment.........but he/she is "thrilled" to be getting out of this franchise and beginning anew.
On a more personal note, you should be "bitter" towards FS Corporate and especially Ray Margiano. I have watched many successful folks (prior to opening a Foot Solutions franchise) lose everything. Yes, as an owner you ultimately accepted the risk of opening a business. Than again, Foot Solutions Corporate never offered anything of value to the franchisee...........they sold a false bill of goods. Its a shame, but the owners got nothing for their monthly royalty and advertizing fee. Absolutely nothing. In my regional area, there are (2) very successful independent specialty shoe stores that offer similar service to a Foot Solutions. The problem was never the concept, it was all the things that everyone has posted.............and the person who is responsible for many of the problems or complaints is, Mr. Ray Margiano. Many former owners of a Foot Solutions franchise would consider Mr. Margiano to be a vile, snake...........and, I would agree with that assessment.
I wish you the best.
I am owner of a Foot
I am owner of a Foot Solutions franchise and I am also looking forward to "getting out", I am in a better financial situation than most owners - I make a small profit each year. But I will never recover my initial investment.
The folks at Corporate Foot Solutions are after every last "penny" from the franchisee. It does not matter that the majority of owners have not paid themselves, are not profitable and have taken on enormous debt trying to keep the doors open. The franchise agreement say that Corporate can collect royalties and an advertizing fee each month. Corporate knows the franchise is failing and the only source of revenue is the franchisees. So they are squeezing every last cent before the franchisee closes their store. I would agree with the statement above, Mr Ray Margiano is a blood sucking maggot or a vile snake. Take your pick.
Very insightful posts
Folks, I just went through all the postings. They all are very helpful. We were considering buying an existing FS franchisee. But thank you so much to all those who had the courage to post their experience and feedback on this forum - we are definitely going to reconsider our plans. Thanks once again.
If you're making a business
If you're making a business decision based on unsubstantiated comments on a public forum you should keep your day job.
Keep their day jobs
Just about every Hurt Zee on this forum should have kept their day job. Unless your day job is already in the industry in which you are considering owning a franchise, you should be VERY hesitant about STARTING in that industry as an Owner (and sinking your family's life's savings into it).
Yeah yeah right, 2 weeks' training and "follow the proven system". What jobs did you have before deciding to buy a franchise, and in those jobs was 2 weeks really enough to learn how to run the business? Did your bosses have more than 2 weeks' training to get to their positions?
Many franchise systems appear to exist mainly to get franchise fees and royalties, NOT to make sure their franchisees succeed. Thinking "all" you need to do is "follow the pr*ven system" isn't enough to succeed..
I've been reading your posts
I've been reading your posts on franchises ranging from shoes to subs. While you are quick to comment, you offer no "solution." Do you really find satisfaction in picking on franchisees down on their luck? Why not run for political office where your useless, clever comments are more in line with your peers.
I have stated a solution MANY times
People need to stop sinking their life's savings into businesses they know nothing about, in industries that they have not even worked in for even a year or six months. To rely pretty much exclusively on business advice from an ADVERSE PARTY who gets your money if they can get you to sign on the dotted line is madness.
Two weeks' training can only teach you some procedures, NOT an industry. What did you do before you bought a franchise? Is a 2-week employee in that line of business experienced enough to run the company? If you think that all you need to do to be successful is to follow a company manual, you should stay an employee.
The SOLUTION is for people to not sink their life savings and personal guarantees into cr^p they know nothing about. A franchise's value is having a brand name that brings in business. You "rent" that brand when you become a franchisee. You STILL have to make your own calculations as to if this is worthwhile to do. Not rely on oral or "off to the side" representations when you are signing a paper agreeing that you did not rely upon them.
No one has said that "all" they have to do is follow the proven system. However, if you are buying into a franchise you expect viable options and advise. You also expect national advertising, etc. for your fees. If so many are so disgruntled, there is a serious problem here. I got into this franchise because I wanted to help people and thought this would be a great way to do it. And, I didn't just get a two week training. I took every opportunity to take hands-on classes and worked in a clinical setting with an orthopedist, among other things. I would still be doing this business if I hadn't run out of funds and felt that some solid answers from corporate were coming. This is a solid concept, the follow through is what is lacking.
Seriously, you'd still be throwing good money after bad?
This Guest says: "I would still be doing this business if I hadn't run out of funds"
Sorry, but that's a major mistake. Though we hear that scenario all the time: people who stick with losing franchised businesses and ride them all the way into the ground, not stopping until they've lost everything. What do you really expect will change? If corporate didn't adequately support you in the 1st or 2nd year, what grounds (beyond wishful thinking) are there to expect them to change in upcoming years?
If the business is a structural loser, CUT YOUR LOSSES. Better to lose $100k or $200k than $300k or $400k. If you want to "help people", take courses and then vounteer at a clinic. Or be a $9/hr. employee of someone else. If you are going to START A BUSINESS, just "helping people" isn't enough NOR IS IT THE POINT. Your business needs to MAKE MONEY or it's not a business, it's a charity. And for a franchised business, the primary beneficiary of that charity isn't the customer, it's Corporate! It doesn't matter how much you care about helping people, and how much you've learned about foot care, if your business doesn't make money!
Oh, and there is simply NO WAY that a small scattered system with only a few stores nationwide could have effective national advertising. Too expensive and too diluted, even if the F'sees had audit privileges on the advertising fund there just wouldn't be enough money. If a brand were to grow concentrically, regionally (it might even have 2 or 3 growth bases) then it might be able to have effective regional advertising. It would be very hard for a small bricks & mortar system to have effective national advertising, so to rely on that happening is like waiting for pigs to fly.
Follow Through Lacking
You sound like you did everything right except follow through....that is your responsibility as a business owner...you liked helping people and you got good training...just needed more customers...the FS model is built on a referral basis and most successful stores say 70% of their new customers are referrals. This only happens if you or your staff do the referral networking and follow up to make it happen. Just one new
customer a day in the FS model is $50k a year in sales. Why are you blaming someone else for what you did not do......