Greg Muzzillo is Pro-Bankruptcy (but only if you’re a vendor giving him kickbacks)

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

Questions for a Franchisor (squirm, sweat and stutter;)

We are lead to believe that franchisors tell the truth and have the franchisees’ best interests in mind.  In hindsight, franchisors lead a completely disparate life from the franchisee.  Boiled down to the most common element, franchisors are using the capital of a franchisee to promote their brand.  Nothing more, nothing less.  Anyone who tells you different is probably selling you a franchise.  Franchisors sell franchises to trusting souls while leaving the trusting souls up to their own devices when it comes to any and every aspect of running a small business in the trenches.

If you were to ask a franchisor the following questions, then  “sleep on them” for a night, then validate them with a minimum of 10 franchisees who are in the system and 10 franchisees who have left the system, you would find that franchisors are less than truthful on nearly every issue.  If you’re a franchisee in the system, it’s too late, but hopefully you’re doing your due diligence and you’re reading this prior to purchasing a hairy ball of nothing for the all-too-hefty total of your entire life savings.

1. How many of your franchisees make it past three years in your system?
2. How many of your franchisees have sued you in court?
3. How many of your franchisees own multiple outlets?
4. How many of your franchisees have left the system, really?
5. What is the success rate of your franchisees? (please include churn, terminations, bankruptcies)
6. Who are your finance partners (please name them all past and present)?
7. How many SBA loans have defaulted within your franchise?
8. What is your definition of  “churn” and how many of your franchisees have you churned in your history?
9. Can I please have a copy of the name and number of every franchisee that has left the system in the history of the franchise?
10. How many franchisees have lost to you in arbitration?
11. How many have beaten you in arbitration?
12. Do you get kickbacks from your vendors, and if so, who are they?
13. What is the turnover rate of your corporate HQ employees?
14. How many corporate employees do you commit to the health and well being of your franchisees?
15. What is the average payroll for your franchise-related employees who serve franchisees?
16. How many franchisees have you willfully terminated in your history?
17. How many franchisees have you settled with requiring the signing of a gag order?
18. Do you publish the statistics on your marketing buys?  Can a franchisee have access to the amount of its money you’ve spent in their territory?
19. How many box seats in professional sports arenas do you own?
20. How many corporate jets do you own?
21. How many company stores do you own? What is the greatest number you have ever owned.  Is this on the rise or the decline?
22. How many foreign outlets do you own and how long have you been pursuing foreign markets?
23. Which outside law firm represents you?
24. How many stores are still in operation having dropped your name and franchise?
25. Have you or any of your management staff ever been convicted of a felony, claimed bankruptcy or lost a civil case in the courts?
26. How many legal cases does your franchise have currently pending and in which venues (arbitration, federal and state)?
27. Do you provide and require the purchase of marketing services from your franchisees?  If so, who is your CMO or VP of Marketing?
28. How many franchises have you owned, do you currently own (if any) and what are they?
29. Have you ever operated an individual franchise in this system and if so, for how long?  Were you profitable?  If so, please explain.
30. Finally, would you let a child or relative of yours own one of your franchises?

Bloody

Midas Finally goes Bankrupt in Australia

Why do they go overseas to sell what they cannot here?  Because there are no franchise laws protecting the little guy!