Greg Muzzillo – Go Buy a Mirror!

Bloody here,

I invite those who stop by the blog to help Mr. Muzzillo with his most recent post here at Bloody (crying like a little piss ant that he’s been attacked personally) to help him out and explain to him why this blog is here and just what Mr. Muzzillo cannot see with how he runs his (excuse me, YOUR) businesses into the ground …… (note the guy is so effing stupid that he cannot use punctuation or spell his own company correctly – is this a franchise owner you’d want to be in control of your livelihood?)

greg muzzillo

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

Greggy, you might want to go back to school and learn how to spell and type or at least let one of your peons type for you because your default to defense and your imbacile Rah! Rah! statements further prove to all those watching that you haven’t a clue and you don’t own a single mirror!

Bloody

Labor Day in the life of a Zee

Ever ask a zee how they feel about holidays?  Just what goes through the mind of an average person versus the franchisee owner when “holiday” is discussed?  Ever wonder how a zor spends their holiday? In the Americas, the word is “vacation”.  Every paid worker spends their year planning and imagining the relief those two or three weeks truly bring to the family and one’s own inner balance of family vs work vs quality of life.  In Europe, it’s holiday and it’s twice as long as the Americas because most Euro holiday packages are four to six weeks.  The European has come to expect holiday and due to the lack of opportunity, in some respects holiday is one’s privilege.

In the thinking of the blue collar or the white collar or the Euro or anyone else who has never truly owned and run a business, let alone a franchised business, there is no reference or association as to what a holiday brings to a zee.  Their impression is that a small business owner who owns a high-profile franchise operation must already be rich.  They do not know that the life savings and the mountain of debt needed to serve them their 15 second servings of fast food heart attack will never allow me to enjoy another holiday.  The reference of outlay at the onset of such purchase of franchises is referred to “sunk costs”.  Oh how bloody true is that depiction!

Here are just a few interesting problems of the zee during holiday:

• Workers are off, zee gets to stay and keep the doors open (bills don’t do holidays)
• Workers are off, doors have to stay open, otherwise the revenue of the holiday revelers will be lost
• If it’s a day in which stores are closed due to law, I’ll stay and catch up on books and admin as the workers aren’t in
• If it’s a party day where retail is open, I get to stay and help the skeleton shift (who bitch and moan that they have to work)
• Leading up to the holiday, everyone leaves early, meaning I get to stick around to make sure everything is set because I own this mess
• And finally, the schedules are all mine to own and fix and work with due to the fact that no one owns anything but me (the R word means nothing to the hourly worker)

And last but not least, I can visualize and imagine the wonderful times the zor is having attending special events as grand marshall (the honor and respect he purchased with my life savings and ongoing royalty abuses).  After all, his ad fund, his marketing fund, his kickbacks from vendors and his admin, his legal support are all coming from the money I gave, will give him and am generating while working over this glorious holiday!

Bloody

Who Pays for TV and Radio Advertising?

Turn your television on and for a single hour, jot down the commercials you see on any of the major broadcast or cable channels (ABC, NBC, CBS, ESPN, CNN, etc.).  On major channels, there are three main categories of advertisers.  (Check the bottom of this post to find out what those three are.)

Though it cannot be proven, franchising advocates continuously quote that 40 to 50% of all retail is franchised.  (The data is owned by too many people and influenced heavily by pro-franchisor predatory bigots.) When you analyze the data of your one hour’s worth of major network advertising, it will become apparent just what the three verticals are that spend the lion’s share of advertising dollars with Madison Avenue agencies.

But that’s not the question or the purpose of this post.  The question is: Where is the money coming from?  First of all, some history.  McDonald’s ignored all conventional wisdom over three decades ago when they surpassed the 100 million dollar mark in advertising spend in a single year.  Most could not fathom the thought of such.  How did they justify it?  Simple, it wasn’t their money!  It is the money of hard working franchisees who pay exorbitant royalties to franchisors who spend it freely and with reckless abandon.  McDonald’s practices are truthfully depicted in in Fast Food Nation, author Eric Schlosser.  They pioneered the principle of going after your children, the pester power method.  But that again, is not the issue.  The real issue is that many franchises are B2B and not B2C.  Nearly all of the franchises that are offered at low entry fee are B2B.  These predatory franchisors have no intention of doing anything with the hard-earned  money they collect for advertising from your profits.  When asked the question of where that money is spent, or better yet when reading an FDD or UFOC, it is up to the sole discretion of the franchisor whether or not those funds are even earmarked for advertising.  Read an FDD and if you can even find the subject covered, you will see that the money can be used for advertising or any other thing the franchisor chooses.  Many simply use if to fund their playboy lifestyles.

So the next time you see David Brandon bragging that he’s giving money back to Main Street, don’t believe it.  He’s spending the money of the franchisees as though it is his.  When you watch a Subway commercial, remember that Fred DeLuca is the slimiest franchisor in the world, fighting more lawsuits than McDonald’s, Dunkin Donuts and Pizza Hut combined.  Fred gladly sells single franchises to unsuspecting immigrants (all they need is a pocket full of cash) when he couldn’t make it until he owned three!!!  When you see a Quiznos (seedy and poorly thought-out million sub giveaway campaign), know that Rick Schaden and his staff of flunkies approved the campaign and then fired the VP of Marketing (who came from telecommunications – how ignorant and cheap is Schaden for even hiring her) as a scapegoat.  (It’s only a matter of time until Quiznos loses the pricing game, thus driving all of their franchisees out of business.  Freddy D. has 6 or 7 times the number of franchisees, thus a war chest of over 400 million dollars a year at his disposal (pun intended).  Ricky hasn’t a chance of winning a price war.

So the next time you watch a Nascar race (if you can stand the fact they never learned to turn right;), count the number of advertisers who sponsor a car and then see how many are franchises.  Then realize that Ricky and Freddy and Davey are all spending 4 to 5 MILLION per car to put their brand on the hood of a race car!  That’s right, the hard-earned money of your relatives or friends or immigrants (who are unaware because they’re probably working 7 days a week just to make ends meet) is being spent so Ricky and Freddy and Davey can sit in the infield or in VIP boxes,  get special privileges at the expense of those who labor just to scrape by.

The three vertical leaders in advertising are auto, beverage and food.  (Yes, they are all franchised; GM not for long – they are soon to be owned by you and your Commander-in-Chief, who by the way, operates just like a franchisor.  He spends your money and you have absolutely not one damn iota of say in any of those decisions!)

Bloody

Franchisee Recourse

Many of you have faith in the system.  This is why you bought into a franchise, are looking at buying into a franchise or sadly, have been burned and turned into ash by a franchisor.  Some have said that those of us who have been burned simply want to rant and throw the whole system out (the baby with the bathwater).  This is true if franchising stays in its current condition.  Franchising could be a great model, but not until there is recourse on behalf of the franchisee.  Today, recourse is non-existent.  As a franchisee, here are your options:

Scenario:  You’ve run into a snag.  No matter the snag (financial, operational, marketing, sales, functional or strategic), you are at a point where you don’t have the resources or the knowledge to go it without some assistance.  The normal course goes something like this:

1. Call the franchisor, who gets back to you a week later and simply says “You’re just not doing what we told you to do, keep trying”.  Or perhaps “You’ll need to buy another franchise to increase your revenue”.  (This isn’t an option because you’re already up to your eyeballs in debt.)
2. You call other franchisees to get support and find out they’re in the same boat and they have no answers. (Bitch and moan sessions break out.)
3. You seek out help from your friendly neighborhood lawyer, all to find out he has no expertise in this area and getting any advice from him is just plain stupid and doesn’t apply. (I pity those of you who trust main street lawyers with your livelihood.)
4. You read your contract and find out just how lopsided it  truly is and you now realize you’ve been effed (or “had” if you aren’t yet mad as hell by now).
5. Now you’re really in a pinch and you start thinking about any other recourse you might have.  Let’s just say you’re not an evil person so sabotage or ambush are not considerations of your recourse.
6. Considering you feel you’re very resourceful, you call your local franchisee association (assuming there is one – which means you’re in the minority).  After six months of feeling these people out, you realize its rife with lukewarm blowhards who have no clue as to how to get anything accomplished, while there are slight glimmers of hope from a few conversations, only to realize that corporate has infiltrated the association and everything submitted is “taken under advisement” never to see the light of day again!
7. Finally, you’ve done all of the nice guy things that can be accomplished, so you pull all the stops and you seek out franchisee-only law firms.  After several confusing discussions, you realize that the lawyers will cost you a fortune in hourly fees considering most will not take a contingency case.  Contingency cases must be a slam dunk and this rarely occurs when the UFOC/FDD is written 99% in favor of the franchisor.  The UFOC/FDD is loaded with intangible statements including “good faith” and “disparaging” types of words which do not and will not do the franchisee any favors with most judges.  The law firm will ask you enough questions to figure out whether the case is egregious enough to be considered a contingency or a class-action or you are stuck with arbitration. (Class action suits only benefit the firm and in almost 100% of all cases, the franchisee will only get a partial portion of their initial sunk costs back, about 5 years after engagement if one wins the suit.  The judge in these cases now holds all the keys to your future.)
8. Let’s just say you read the FDD and you ask your competent lawyer about the clauses of “arbitration”.  You find out that you cannot even go to court because you don’t have a case large enough, or it cannot be monetized and you are therefore subject to arbitration.
9. At this point, you either have to have the reserves to hire the firm on a retainer basis ((you now have to take a second or third or pull all of your life savings together (provided you have any left) to defend what you’ve already sunk into the venture)).  If not, you simply give up and either suck it up and swallow the franchisor’s bullshit or you close up shop and walk away a “loser”.  The franchisor can simply put you into the loser’s category and in court, you haven’t a chance in hell of ever convincing a judge or jury otherwise because he has statistics of successful franchisees and unless you can refute them, his word is way more viable than yours.  After all, he’s a successful franchisor and you’re just a low-life franchisee.
10. Maybe you do have a rather egregious case and the firm takes your case on a contingency basis.  First, they will need a retainer.  If you don’t have $50,000 to throw into a retainer, then you have to fund it with a loan or even worse, you ferret out other franchisees to see if you can rally the troops.   (You know from previous conversations that you’re not alone, but for fear of retribution, most are not as ballsy as you and you will have to do this with great fear and trepidation to avoid this getting back to the franchisor making you vulnerable to having your franchise terminated with/without cause).
11. Once you take action with a firm, regardless of contingency, retainer, class-action or some combination thereof, you now are going to be terminated and marked.  You will have to go out and find another way to make a living in the meantime.  Wasn’t buying into a franchise the alternative to having to go back into the corporate hell hole in the first place?

Conclusion:  There is no viable recourse for franchisees.  Even with a settlement (see the previous post about a Quiznos franchise awarded in favor of the franchisee over a 4 year period), you are subject to appeal.  And trust me, the franchisor has more time and money (your money I might add) and will pursue any and every possible remedy (with your money I remind you) to keep you from exposing them.  See the post below placed on Bluemaumau.com by the owner of a franchise when I called him on the carpet for being a dishonest franchisor:

hello all….bloody franchise is a nameless, shameless liar and malcontent. he/she seems to be hell-bent on trying to destroy the institution of franchising with malicious and false attacks on franchisors and their people at his blog and with persistent emails to people in organizations he wants to attack.

he/she attacks real people with real words but all the time refuses to expose hie/her real identity. my caution to you is to be very wary of any communications you have with him/her. his/her ONLY agenda is to destroy all who are part of the franchise family of franchisors and service providers.

hello bloody….we will find you. we will find out who you really are. and because of your malice, libesl and other counts we will seek all remedies the courts allow. you are a coward to hide behind an alias and attack real people. we will find you. and we will crush you. you are a coward. you are a liar. you are a loser. and if you have anything left to lose…you will lost it, too. that’s a promise.

So franchisees, there are no conventional recourse options.  Legal is in it for the money.  Franchisee-only lawyers are in it for the money – they have to be!  If they play both sides of the fence, they cannot be trusted!  The courts don’t have a clue and with the changes in franchising, the laws of the court have been replaced with franchisor-friendly arbitration firms who schmooze the franchisors to get the cases.  You have no options there either.

“So what are my options?” asks the franchisee.

“Aside from criminal, civil or libel actions against the franchisor, going to the press or organizing other victims of your franchise brand to bring grass-roots marches on the front steps of the franchisor, there are none!”  – Bloody

A Day in the Life of Becoming a Franchisor

Now for the perfect job, the franchisor:

1. Hijack a concept that sells (regardless of profit), create an alternative product with not a creative bone in your body or differentiator (other than price) to separate yourself from the leader.  Good models are Subway/Quiznos, Dunkin Donuts/Tim Hortons, Gold’s/Curves, Taco Bell/Taco Johns, McDonald’s/Burger King, Red Lobster/Long John Silvers, Dominos/Papa Johns, Midas/Meineke, Kinkos/UPS Store, Carvel/Baskin Robbins.
   
2. Find a big franchisor law firm that writes bullet-proof UFOCs/FDDs.  “Put in two CYA clauses for every claim your broker will make.”
   
3. Get a referral from your law firm for that less-than-respectable banker that can build a contract based on UCC and not common law.
4. Sell the concept to unsuspecting franchisees who are naive and in a place of vulnerability (immigrants mostly, displaced corporate America , mom and pop hopefuls) to finance your venture (mostly because anyone with a brain won’t touch such a business plan).
   
5. Then watch the money come in.  Schedule your 12 weeks of vacation per year, buy your VIP box at your favorite stadium and start shopping for yachts.  It’s only a matter of time until you have the cash flow to live like a king.
   
6. With some of that initial franchisee deal money, hire some bloke who can’t otherwise make it in the real world to be your marketing officer (sort of like Quiznos hired Steinfort, some young 30 something who’s only experience was in telecommunications!).
   
7. Introduce them to the other brilliant creative minds on Madison Ave. and the party will now begin!  All you have to do is attend dog-and-pony shows, make a decision and whatever you choose is paid for by the franchisee!
8. If you need more ad money, simply raise the rates on your ad royalties and make it retroactive to every FDD/UFOC (that confirms it’s coming out of the franchisee pockets of course). No one can object because if they do, you can pull their franchise!
   
9. Cut an ironclad kickback agreement with your vendors and dictate to each franchisee that they have to buy from that vendor.  If they refuse, threaten to pull their franchise and thus their livelihood.
   
10. Hire average salespeople (yes men) who will do exactly as you instruct them in coloring the truth just enough to the franchisees to get them to sign.  Those from the mortgage industry, timeshare sales, car sales and any other large ticket, one time products make great fits.  They’re used to instilling the confidence necessary to maket the sales and because it’s only one-time, they don’t have to worry about repeat sales.  Salespeople with integrity and honesty are considered bad prospects.
    
11. Spend all your time building your marketing programs to sell more franchises, letting the other stuff work itself out.  You don’t need rockstars for this, average blokes from the local community do just fine.  If you hire too much IQ, you suffer someone questioning your motives and the long term.  Remember, your job is to sell franchises, not worry about how they do as a business.  If they fail, you have the opportunity to sell another in the same region.  And because you the majority of your money on the initial sale, their success or failure is absolutely of no concern to you.

Stop by tomorrow to learn how to build your internal staff to accommodate your new high roller lifestyle.  We’ll teach you just what type of people can help you build your kingdom with the life savings of the naive who are seeking to survive.

Bloody

Blood is in the Water – Here Come the Franchisors!

CHUM [chuhm] – noun

1. Decent upright and trusting citizens having been layed-off or downsized by corporate America   (in their effort to appease Wall Street, the rich, the elite, Political pundits & Capitol Hill) finding themselves in the overpopulated labor pool.  In possession of 401k savings, retirement and severance packages.
2. Veterans who have served our country who have returned and now find themselves in the job market but without the skill sets on their resume that corporate America chooses to accept.
   Synonym = franchisee

“CHUM-MING” [chuhmng] – verb

1. The art of writing a UFOC (Uniform Franchise Offering Circular) – pre 7/2008 now referred to as an FDD (Franchise Disclosure Document) in an effort to make an otherwise worthless business saleable to chum.
2. The art of luring chum into an indentured & subservient relationship with promises of ownership, independence and autonomy using terms such as [own your own business without the risk], [take less risk], [be your own boss], [work within a proven framework]. Commonly practiced by opportunists to create inflated revenues, building itself a low cost labor network to generate marketing dollars resulting in greater revenues. Only works within the framework of a franchise brand which was at one time overseen by the FTC (never a factor for franchisees) and has absolutely no regulation or oversight today.
3. Benefits include:
   1. Limited administration at headquarters – franchisees are treated like second-class citizens by corporate people who have never been in the business – mostly low level b-rated admin people or relatives of the chummers
      
   2. Huge cash flow as franchisees must give chummers royalty, advertising monies, vendor kickbacks (and anything else the chummer dreams up),  whether the chum prospers or not
   3. Living the life by simply buying more air time on national and local networks and sending the bill to the chum.
   4. corporate boxes at sporting events, playing golf on the PGA with pros, sponsoring NASCAR teams (all at the expense of those stupid franchisees we call ‘chum’).  Synonym – “franchising”
      

Origin: Singer Sewing Machine Company – 1800’s

Firms who paved the way to this model of abuse:  McDonald’s, Dunkin’ Donuts, Subway, Pepsico, Coca-Cola, Ford, Chevrolet, Chrysler, Cendant – now Realogy (Century21, Coldwell Banker, Sotheby’s Real Estate, ERA, Better Homes & Gardens Realty), Wyndham, AAMCO, Blockbuster, Yum! Brands (KFC, Taco Bell, Pizza Hut, Long John Silvers, A&W) – and the list goes on and on and on.

And you thought those guys were just marketing genius’?  I think they attended Bernie Madoff’s alma mater.  Or perhaps Mr. Stanford’s school of investment?