Words of wisdom from a franchisor:
Proforma’s co-CEO Greg Muzzillo said “the filing will improve Norwood’s balance sheet immediately”. Well, no sh** sherlock! Bankruptcy is a great vehicle to screw your creditors! (Greg gets a 2-3% kickback on every item a franchisee buys from Norwood.) Why not screw them all the way just like you do your franchisees, Greg (and your wife too)! After all, you learned from the best – Mr. DeLuca. And your little whipping boy Brian Smith can help you snow the franchisees into believing that all is OK while you rape and pillage their future livelihoods too!
Except that if you are a franchisee and you chose bankruptcy for protection, you lose everything (Section 13, xii in the franchise agreement)! So what’s good for the vendor who is feeding kickbacks to Mr. Muzzillo is death to the franchisee who is giving nearly 25% of its net worth to a fat lazy schmuck who sues his ex-wife to get out of child support when he’s making 38K a month and she is a homemaker! Can you spell D-O-U-B-L-E S-T-A-N-D-A-R-D Greg?
Update: For all of those who don’t know it, Mr. Muzzillo gets it both ways. He takes kickbacks from every vendor that sells to any franchisee in his system. If you’re a franchisee, he’ll twist your arm and make you buy from a “Proforma PLP (preferred limited partner)” because there’s a 2% kickback from the heavy volume PLPs (BIC, Norwood, Vantage, SanMar) and more for low volume PLPs who spend their time schmoozing Greg and Vera and Brian. You would think that franchisees would have more clout since they are losing over 10% in royalty fees as compared to the PLPs. But oh contrare! The franchisees are nothing but marks and only those in the “Million Dollar Club” are given any attention (and very little at that). They are in fact the angriest! You see, if they do 1 million in business at a net profit of 35% (highest average of all franchisees), they would receive $350,000. Yet they end up paying Greg and Vera a whopping sum of $100,000 (28.5% of their net profit for absolutely nothing)! (If one only makes 25% net profit on 1 million, then Greg and Vera would receive 40% of the franchisee’s net profit!)
You see Greg and Vera don’t know an effing thing about selling print, promotions or apparel (that’s how Greg got in the business, but he hasn’t been in the trenches for over 25 years. He was actually an accountant by trade and Vera is an investment banker.) They are in the business to sell more franchises to more unsuspecting marks and they aren’t very good at that! Franchise counts are not measurable as they are simply the word of Greg and Vera. Franchise discontent continues to grow year after year (especially with those who are successful in spite of Greg and Vera). As one makes more and more profits, Greg and Vera get more and more and more for less and less and less. What do they do with all of the marketing monies, you ask? They spend the royalty dollars marketing Proforma to prospective franchisees and mostly for their personal PR to prop up their personal image. If you want marketing services for your specific franchise, that’s extra and you either have to do it yourself out of your own pocket or you can buy those services from Greg and Vera, (but that will be extra).
Bloody
Bloody Franchise 
BF points out in this post that there is definitely a double standard in bankruptcy concerning franchisors and franchisees. Franchisees, of course, under our laws, are merely expendable resources of franchisors who get “special” treatment under bankruptcy laws.
Franchisees don’t have any opportunity to reorganize and negotiate their debt and lose the entire investment in the franchise when they become insolvent and declare bankruptcy. Their personal residences which were posted as collateral or borrowed against in home equity loans are most often lost when there is a liquidation of assets to pay debtors
The franchisor, however, often retains the benefit of the tangible and intangible assets of the insolvent franchisee’s business when they make small offers for the tangible assets of the franchised business to the banks holding the loans, etc.. before the insolvent franchisee actually goes into bankruptcy
However, franchisors, especially since the advent of the “securitization” of Intellectual Property and Intangibles can use insolvency and bankruptcy to stiff creditors because their greatest asset, i.e. the portfolio of signed franchise agreements has been isolated in a “true sale” to a new owner is the securitization process. The securitization of a franchisor’s business allows the franchisor to borrow money at a better rate of interest and premeditates that the franchisor will ALWAYS REORGANIZE and not liquidate when the franchisor becomes insolvent.
The securitization premeditates that the franchisor’s creditors will not be able to touch the cash flow of the franchisee royalties and other receivables, etc… that are paid to the “true owner” under the terms of the securitization contract. All very complicated and expensive to arrange but lucrative product for law firms and CPA’s and banks, etc.. and beneficial for the franchisor who can borrow at a lower interest rate because of his improved credit rating.
The rules and regulation of accounting law and insolvency have been changed since 2000 to accommodate securitization of the IP of franchisors.
Hopefully, there will be studies by the government and private institutions of corporate governance as concerns corporate law, securities law, and bankruptcy law to determine the wisdom of the securitization of the IP of franchisors and its impact on franchisees and those who invest in the commercial paper of the franchisors.
In the meantime, as BF says, LET THE BUYER BEWARE of the contracts from hell and greedy and exploitive franchisors.
i have seen the greatest people work their ass off to build that company and zero gratitude form the owners greg and vera are zeros to the rest of the world they know that the vendors pay their ticket ask them why 60 to 70- franchise owners leave them a year and they try to sucker in more now its free does that tell you anything its a joke
Proforma is a joke they steal money from you
hello, greg muzzillo here. i am not sure why you choose to attack me personally or the organization i have taken 30 years of my life to build.
your attack is anonymous. your words are filled with lies and misrepresentations.
the fact is that our suppliers are encouraged to pay some money into a preferred supplier fund. and that money is used to benefit the suppliers and the franchise owners.
we use that money to pay for credit insurance. all our franchise owners receive free credit insurance from the preferred supplier fund. the franchise owner benefits. and the supplier does, too. because in the proforma system, both the franchise owner and their supplier knows that they will get paid…even if the franchise owner’s customer doesn’t pay them.
this year that fund and the insurance program has paid millions of dollars to the franchise owners and their suppliers. in fact, i know of a few franchise owners that would not have survived without the credit insurance proceeds.
proforma has been recognized by inc. magazine, forbes magazine, the wall street journal, success magazine, blue mau mau and many others for its accomplishments.
i am proud our system and our people. i regret that you have taken to anonymous slander, name calling, lying and misrepresentation about proforma.
i am proud of proforma. i am proud of the result of my 30 years of hard work. that said, i admit that we are not perfect and invite you to directly address with me any legitimate issues you have with proforma.
we are committed to helping the dreams of our franchise owners come true. in the spirit of that commitment i invite you to an open and honest dialog.
dream big!
greg muzzillo
founder & co-ceo
proforam
Gee Greg,
Why in the hell would I single someone out who delivers nothing for his promises, writes one-sided contracts (Fred Deluca taught you this) and hires disreputable officers who execute your usury on the trusting and naive. No reason for alarm there now is there Greg? When people read about you on Bloody, (and they do every day, Greg), they get to see what kind of character is at the helm and if this prevents just one more innocent person from becoming a victim of “modern day franchising” which you Greg are the purveyor of, then well, that works for me!
Sincerely,
Bloody
One more thing Greg, how long did it take Bernie to build his fiefdom? Greg, I know you’re a little more than slow, so let me help you – time and money do not equate to success!
Thank you for helping me decide my future in the promo products biz. No franchise for me