1-800-RADIATOR Franchising Fails to Renew Its Franchise Registrations

1-800-RADIATOR FRANCHISING, following the recent establishment of a hotly resisted independent franchisee association, has failed to renew its franchise registrations in the registration states. Its registrations have all lapsed.

The company is on a December 31st accounting year, and will not likely be able to renew based upon its year end financial statements.

Footnotes in its previous financial statements indicate that its parent company, RADIATOR EXPRESS, takes out a fee in the amount of between $ 11 and $ 12 Million a year to compensate itself for providing the support for all franchise operations.

Counsel for the RADIATOR FRANCHISEE ASSOCIATION, INC., questions whether this indicates that the franchise company is being used as a front for the parent company and that it is the parent company that is the real franchisor. If that is the case, the parent company’s certified financial statements may have been improperly excluded from all the franchise disclosure filings made by this franchise organization to date.

Reasons given by the company, per Joe Rippey, its president, having to do with inconvenience are being challenged by the franchisee association’s Counsel and Managing Director, Richard A Solomon.

Radiator Franchise Fails, Mr. Solomon Succeeds

Congratulations, Mr. Solomon, on a job well done.  It appears the Franchisee Association is gaining the upper hand.  One franchisor down, thousands more to go. . .

Awesome job Solomon!!

Love ya Solomon.  Your a good person.

Valid Point

Richard is raising a valid point - it is often very difficult to access timely documents from Caleasi, and I haven't seen a material change document filed in several years.

How can this franchisor attract new and qualified franchisees without proper disclosure documents?

I haven't looked at the financials, so I won't comment - for right now.

Textbook

Perhaps NOW there might be some limp franchisees taking more notice followed by decisive action.  Where there are willing ranchisees there is a way ahead; 'hotly resisted' or not. Sometimes you just need an ahole to lead the charge.

Is an ahole nice?

Sometimes you have to be an ahole to accomplish what is right. 

Ahole is one of those catch all compliments. It can be something

just as nice inside as well as outside of prison.

Sometimes nice people want someone extremely aggressive to deal with a mad dog adversary. Fortunately for me, that is something I do very well - have done that very well all my life - long before I became a lawyer.

1-800-RADIATOR management is reported to have said that

they will file franchise registrations in about a week.

I will be preparing a forensic comparative analysis of it for the Radiator Franchisee Association, which - if justified - will also be provided to the enforcement agencies of the registration states and to the FTC.

If it is sent to enforcement, I will post it here.

I know you cannot respond

but I take that to mean you suspected their might be discrepancies and/or ommissions.  And you suggest that ain't a good idea.  See .. you can be subtle ... as a sledge hammer.

There are incredible "tricks" in the just expired documents. If

they persist in the new documents, I will be making a fight of it.

Then I suspect they now want them gone as well

but the question I might raise is whether they can let them go ....?

That’s funny

Just buy it. Trust everything they tell you. They do get the best price – their prices are so good that even after their 10-18% of sales, you will be way ahead of the competition. They can’t prove it, but trust them. In fact, they are the competition. You will work low work hours and have no risk. This is an excellent opportunity and they have not had any failures.  Radiator Chat

Let me guess - Can you figure out where that BS is coming from?

1-800 has a shill pop up on FranPundit every few days and try to contradict what dozens of their victims post. Remind you of someone you know?

Satire

It is very funny.  I especially like the part about being their own competition!

Translation

Just buy it: .. Don’t investigate or serious due diligence will put you off.

Trust everything they tell you: .. You don’t know them but they will put your interests ahead of theirs on the 8th day of ever week.

They do get the best price – their prices are so good that even after their 10-18% of sales, you will be way ahead of the competition: .. Not only do they get supplier kickbacks as a competitor they know exactly how you need to operate.

They can’t prove it, but trust them: .. They can tell you the real deal or you wouldn’t be interested.

In fact, they are the competition: .. And as a competitor they have your best interests at heart on the 8th day of ever week.

You will work low work hours and have no risk: .. If you are still listening we know we can tell you anything you fool.

This is an excellent opportunity and they have not had any failures: .. They can’t divulge the failure rate or they would never sell a franchise.

Unscrupulous Means?

It seems that the information you refer to is not currently available on franchisepundit.com. I talked with the owner of this site earlier this morning and he was not aware of the problems with his site.

The question that is in my mind is this--did the zor have something to do with this? The forum on www.franchise-chat.com had my entire story documented from before I was a franchisee to after. And because that site was well listed in search engines when searching for information on the franchisor, it was the most popular source of truth about this zor. Then one day, it disappeared forever. Will the information on franchisepundit.com suffer the same fate? And if so, who is behind this? Once could be a fluke, but twice indicates some sort of intent to me.

franchisepundit back up, and

franchisepundit back up, and 800 radiator blogs non existent. How coincidental....

Based upon reports from the Radiator Franchisee Association

Membership, the next Association Bulletin is likely to be about wire fraud and how to deal with it, including something I almost never suggest - involving the FBI.

The arrogance of this franchisor's agenda regarding the withdrawal of funds from the bank accounts of franchisees and refusing to credit back when more money is taken out than the franchisor could ever be entitled to take leaves no room for doubt what needs to be done.

This is the kind of stuff the RICO statute was enacted for.

The litany of aggressive and arbitrary predations, when coupled with the attrition rate of franchisees and the financial condition of so many of those who are still standing fit perfectly into the end stage pattern of the dying franchisor.

Their claim to be about to renew their franchise registrations is eagerly awaited. Will the parent company keep using the subsidiary as the "front" frachisor to conceal its own financials from disclosure, even though the footnotes to the financial statement clearly show who the real franchisor is? And if they did put the parent's financials into the FDD, how could they get a CPA firm to certify it as a going concern?

This would be a good soap box TV series with some sex and drugs thrown into the mix.

Talk to my manager

There have been a number of cases reported here and the most amazing one was where an ex-franchisee, 10 months departed, was notified by his bank manager [friend] that the franchisor [Midas Australia - 2007] had attempted to withdraw $26,000 from his account the night before.

Possession being 11/10s of the Law in Australia when it comes to under-funded ex or current franchisees; it is one hell of a problem getting the money back when quite possibly the money that was taken might have given you some chance against a cashed up franchisor.  Typically its a write off with worse to come from a franchisor that would do such a thing.

The banks don't really give a damn unless you can push but even then if their was an ability signed by the franchisee for  the franchisor to take money from the franchisees account at any time at best you will struggle where the bank will suggest you get a lawyer. Here if you report it as a crime then you best be heading for the Australian Federal Police because the rest of them will simply call 'business-to-business problem' - get a lawyer.

At one stage I went to my bank to cancell a direct debit facility to my franchisor but the manager refused unless the franchisor agreed in writing.  I agreed he had my signature and that I would simply arrange for the funds in the account to be transferred to another account at another bank. Suddenly it was cancelled.

I cannot condemn the AFP for not having a shot.  I haven't heard of a complaint being taken to them.

I don't do nude ....

A continuing pattern of unlawful withdrawals of money from

other people's accounts, especially when it is done under a guise of some seemingly proper business arrangement, evidences intent to take more than what is owed. This conduct can fall under the Federal Wire Fraud Act, which is one of the predicate crimes of the Racketeer Influenced and Corrupt Organizations Act (RICO).

The courts and enforcement agencies look for continuous chains of similar unlawful conduct, forming a pattern of criminal behavior that is likely to continue if not challenged.

What you describe is typical of franchisors who build into their systems an automatic drafting from accounts payment systems. Especially when they are approaching collapse because their business model is unsuccessful (to put it mildly), the overwithdrawing and refusal to correct overdrafts becomes one of the symptoms that analysts look for.

Essentially, it is not a complicated issue. When a company adopts practrices that are improper as part of their financial management protocols, the signal it projects to investors, suppliers and franchisees is one of desperation.

In many instances, especially when the franchisor is not paying its bills, or when it is paying on such late schedules when compared to normal credit terms, the question that is obvious is "Where the hell is all the money you owe?"

If the debt is for inventory purchases and the money to pay the bills has disappeared (as revealed by a certified financial statement of the debtor company) the conclusion is obvious.

Fitting

one of the predicate crimes of the Racketeer Influenced and Corrupt Organizations Act.

Australia has a lot to learn when it comes to distinguishing a criminal act from maximizing profit. At least in franchising.

The RADIATOR FRANCHISEE ASSOCIATION, INC. may get the opportunity to change the way in which many US franchisors approach maximizing profit and tactical leveraging in this way.

FDD and Rico Statute

These claims seem to be somewhat outrageous. I am curious what you think about the new FDD. Also, what did the FBI have to say about the wire fraud?

Did they renew their

Did they renew their franchise licenses?