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

Franchising’s Abuses Began with Henry Ford

I’m a little taken aback as to why everyone is so surprised (including the dealerships of Chrysler and GM) as to the path that the government took and the abominations of approving GM’s bankruptcy.  Politics rule and the guy with the most commodity hooks wins.  When Henry Ford started selling Model Ts to the world, he made every dealership pay for the cars up front.  Wheels for the World by Douglas Brinkley exposes the serious ugly sides of Ford, Sloan and others who set this model in place.  Each dealership was required to scrape up the money and pay Ford up front for the cars before they were ever assembled.  The Dodge brothers actually sold Ford the majority of the parts to assemble Model Ts for the first several years.  When Henry went to manufacturing everything, the Dodges’ built their own brand and were later snatched up by Chrysler.  There was no financing and no credit for either Ford or for the dealerships or for the buyers of the vehicles.  All purchases were cash on the barrel head.  When Henry needed more design money or development money, he found ways to pass this onto the dealerships in creative ways.  What could they do?  They had no recourse due to the fact that Henry was the only one making affordable cars.  When Alfred Sloan saw how gullible the dealerships were, he followed suit and thus you have the predatory and abusive model of the franchisor in its genuine origin (Singer is credited with the original idea of franchising).  His claim to fame was the origination of financing (GMAC) so the common man could afford his overpriced vehicles (Model Ts were $750 at their highest and $275 at their peak, while GMs were usually 2K or higher) and pay even more for them (interest plus principal).  Do you realize that the banking and Wall Street relationships were started then and have resided among these families and elite circles for all these years?  (And Obama isn’t going to upse that apple cart without the risk of losing his $60,000 dates to Broadway and his $300,000 photo-ops over NYC.)

Now that GM has found a way to use a company owned dealership (took it over from a franchisee after they failed – hmmmmm) in Harlem to accelerate its bankruptcy proceedings (NY is known as the swiftest), it allows them to simply thumb their noses at dealerships in the name of saving General Motors.  Can anyone explain why we want to save such a poorly run obese corporation which makes supremely inferior products with the lowest resale value since the Yugo?  And is there any reason we should feel sorry for a company that has gouged the masses for a hundred years?

Franchisees, you haven’t a chance in hell of survival when a franchisor can make every business decision, arbitrarily charge you royalties and put those monies in its pocket without having to answer for them and then use them to defend itself in the courts when you are disadvantaged or claim abuse.  When will you wake up and understand that franchising is just a license to use your money to build their kingdom?  Get the hell out, run your own business, make your own decisions and watch your profits go up.  We need to go back to used cars and Japanese cars that don’t fall apart in two years.

Bloody

SureSlim: “We are not a Cult?”

This a line from the owner of SureSlim.  See the full article here:  Big Losers in SureSlim row head to court

What’s wrong with this picture?

The franchise started in Australia (it is now in receivorship).

They moved to New Zealand and started selling franchises there, now 17 of 21 franchises they sold have failed.

How about a “royalty and marketing fee”  of 29%!!!!  Let’s do the math.  Assuming one’s business is at the top of the food chain and one of high profit, say 50% markup before payroll, overhead and taxes.  You make $50.00 USD.  It costs you $50 to deliver the goods and services (this is way over the top folks!). Now you pay your royalty fee of $29.00 to corporate?  You have yet to pay taxes!  Are the people that bought these pink elephants really that stupid! (I’m not letting the owners off the hook here, but for all the promises in the world, I’m not giving some gypsy who sells snake oil a 29% gross profit for the rest of my days!)  So, even if you’re a genius and you’re making 50 cents on the dollar, that only leaves you with a Net Profit before taxes of 21%!  No accountant in their right mind would ever approve a business model like that!  After suffering through a year of that, I’d make the franchisor put up my family, feed my kids until he let me out of the contract.  If that’s a cult, then so be it!

The governments of the US, Australia, New Zealand, the UK, Canda and others cannot and will not be bothered to keep this from happening!  They don’t want to hear about it, which is why the FTC took over the reins in the 80s during the Reagan administration.  Now it just goes to arbitration.  The rich and the scheming are all in bed together.  They will fleece you, piece you and hang you in the rafters if you are so naive to believe the gypsies and con men who call themselves “franchisors”.  And when their best friends are bankers, mortgage criminals from Fannie Mae & Freddie Mac, would you expect anything less?  Who do you think funds these stupid ventures?  Securitizing  franchising loans is a hot investment area now that real estate is worthless.

A word to those who are entertaining any type of franchise:  Ask two lawyers, an accountant, your wife and anybody else who has a brain at least three times whether buying a franchise is a good thing.  And don’t do it unless you have a 100% majority “YES!”.  In essence, stay the hell away from franchising.  Stop the bleeding.

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 Fool’s Attempt at Due Diligence – Loss of life savings and more

For those of you who read this blog or have stumbled upon it by means of your layman “due diligence”, please read further.  Due Diligence is not for the inexperienced and cannot come from the credence good community (See credence goods).  Due Diligence must not be attempted, it must be undertaken.  And if this does not happen correctly, you might as well end up with the undertaker!  If you purchase due diligence from a credence good provider, you’re an idiot!  That’s what I said, an I-D-I-O-T!  If you buy it from a lawyer who is benefiting from the decision because he sells his services to people in the industry he’s investigating, then you’ve been had.  If you do it yourself with the lack of knowledge, you’ve been had.  If you hire a consultant that has something to gain or operates within the industry, you’re being hoodwinked.  Even if you hire someone or take advice from someone who is not gaining from the relationship and they have not been in the industry, you’re going to lose.

“So Bloody, if I cannot do it myself and I cannot hire one who is in the industry, to whom do I turn?”

Great question, I say.  Great question.  So to whom do you go?  Well, that in and of itself should make you so gunshy that you run in the other direction with great speed.  But if you’re like 99.9% of the majority of blokes who still believes that franchising can provide you with “the freedom of owning your own business without having to do the groundbreaking”, you deserve to lose your life savings and more.  Anyone who sets out to do due diligence and comes to the conclusion that franchising is any safer than opening up one’s own business, did a piss poor job of due diligence.  The statistics are there for everyone to see.  It’s called the Internet!

The golden rule to due diligence is:  When you find something that smells, don’t eat it! It’s not good for you no matter how much sugar you put on it!

Due diligence of a franchise is as important as proving a business plan to a potential investor.  When it comes to a franchise, you are the investor and if you eff up, you’re going to lose it all!  So don’t be so stupid and don’t give the franchisor the benefit of the doubt.  Be an effing Missouri mule and MAKE THEM PROVE EVERY BLOODY THING THEY SAY TO YOU!  IF THEY CANNOT, THEY ARE LYING!  IF THEY TELL YOU YOU WILL MAKE $50,000 A MONTH, MAKE THEM PUT IT IN WRITING!  IF THEY REFUSE, TELL THEM THEY ARE LIARS AND LEAVE!

It only takes one subtle thing to go wrong and you will be completely broke and most likely without for the rest of your life.  The banks don’t care, the lawyers don’t care, the government doesn’t care and damned if I know why I care.  Maybe it’s because I’ve been there and don’t want you to have to go through what I had to in order to find out the ugly side of franchising.

Oh, one more thing; if you find any franchisor that will stand behind the asinine claims they make and put it in writing, send it to me or comment on it.  I have yet to find a single one that will.  Ever hear of a carnival?  There’s a reason they come into town at night, set up their tents and leave in a week!  Franchisors are the direct descendants of gypsies and carnival operators.

Bloody

Getting the Zor’s attention

Visit BlueMauMau and you can read rants and arguments all day.  Sad to say, they are one of the few sites that encourage the criticism as opposed to so many others that spin franchising as an entrepreneurial venture (not!) and somehow are still able to sleep at night selling more and more displaced corporate or vets down the river with their silver tongues.  If you’re a franchisee who’s been destroyed, what else do you have to do?  You can bitch and moan and the lawyers will simply tell you you’re effed up because you signed the freakin’ document, idiot!  

Or maybe you’re a lawyer and you’ve finally come to the realization that you’re the one who is effed because by the time the franchisee figures out he needs help, he’s broke and you have no market!  And if you play both sides of the fence, then you have no say.  Pick a side or get the hell out of the way lawyers!  For you to continue taking even prospective franchisee money in exchange for due diligence on a single company is a travesty!  As I said in a post on BlueMauMau, what happens if the company is not worthy of investing in, do you then charge your prospective franchisee client another $5,000 to vet a second company to come to the same result?  

Maybe you’re a broker who is bottom surfing for that stupid bloke who is vulnerable and gullible and stupid enough to be so tight that he won’t pay a lawyer to do his due diligence for him and he believes you are dealing in “good faith”. Ha!  You’re all missing the boat and for those of you who are too stupid to figure out that there is no traditional recourse for the injustice, poor poor pitiful you!  If you’ve read this far and you’re not one of the three above, then there is still great hope.  The truth hurts like hell, but real people don’t let that stop them.  It doesn’t come without great sacrifice.  Put your passion to work in fighting the system the same way you fight to keep your business in spite of the wickidness of the franchisors we all have come to know so well.  See what Eric Schlosser says in the epilogue of Fast Food Nation:

page 268…When McDonald’s demanded ground beef free of lethal pathogens, the five companies that manufacture its hamburger patties increased their investment in new equipment and microbial testing.  If McDonald’s were to demand higher wages and safer working conditions for meatpacking workers, its suppliers would provide them.  

page 267…The right pressure applied to the fast food industry in the right way could produce change faster than any act of Congress. The United Students Against Sweatshops and other activist groups have brought widespread attenton to the child labor, low wages, and hazardous working conditions in Asian factories that make sneakers for Nike.

Are you getting it yet people?  No franchisor can abuse those who refuse to be abused when they show up in force and refuse in a position of unity and solidarity.  To continue trying to fight these things in the courts, class action lawsuits, contract negotiations or arbitration allows all the wrongdoers to hide in the shadows and continue their acts of evil against all franchisees.  If franchisees were to stop listening to those who point them at the court system or lawyers or other conventional stupidity, and start finding ways to expose the franchisors for what they are – con artists – and expose this to the press and the media with validity, there is traction!

Wake up America.  We didn’t earn our freedom trying to argue in the British courts, we took it by force and cunning.  Nothing short of this type of action will ever bring justice to a system that is corrupt, insolent, insulated and sheltered by politicians, lobbyists and government officials.   Reason doesn’t work for those who love their money.  The threat or the act of taking their money is the only option left in getting their attention!  

 

Bloody

Franchising is HOT!

Thanks to Sean Kelly (naivete does have its upsides) for letting us know about people like Ms Church:

“Attorney Linda Church, formerly of The Scott Kern Law Office in Connecticut, has joined fledgling franchisor The Spy Place Franchising, LLC, as General Counsel.

Sean questions whether a franchisor who has only one location actually needs an attorney? 

Bloody’s response:  Come on Sean. You’re not fooling anyone here. Everyone knows that an attorney with her knowledge of one-sided franchisor-friendly UFOCs/FDDs and contracts is essential for a successful franchise today! It just proves that Ray Huck (aka Hukster) of the Spy Place is yet another predatory opportunist who knows he must build everything and anything into those contracts to screw the franchisees. The fact that Church was in dispute resolution gives Huck all the insider experience needed to eff over the franchisees.

The only people a franchisor needs today on staff is a dishonest, slick and smooth sales force, an in-house lawyer with all of the franchisor tricks in her bag (working with DeLuca gives here more litigation experience than the top 5 franchisors combined) and a gullible broker (a guy like Sean) to promote their snake oil.  Add a PR person to tell the world how successful franchising and especially the franchisor has been and is (they could also hire you for this Sean) and voila – you’re a franchisor.  Sit back and collect the royalties, the franchise fees, spend the franchisees money on advertising (and get to go to Nascar and PGA events) and when the franchisee gets pissed off, they have to go to detention (otherwise known as arbitration).  This too is controlled by vendors who cater to the franchisor.  And when you learn that the franchisor is the master and you are the slave, you can come out, broke!  

In these times in this economy, there’s so much blood in the water you could walk on water just by stepping on the heads of the blokes who are out of work and just waiting to give you franchise hawkers their life savings so you can party on “their” retirement. After all, America is the land of fropportunity!

Be careful prospective franchisees!  Franchising ain’t never been good and it’s more perilous today than ever before!  Don’t believe those lawyers who tell you to do your due diligence before buying a franchise.  They are after your money too!  Ever hear that seeking advice should be from those who are not in line to benefit?  A recent paper published by a German PhD by the name of Georg Spranger used a great animal analogy to desribe franchise organizations.  I’ll go one step further and declare that the Tuna are the franchisors and the dolphin are the brokers:  

Out in the world’s oceans, tunas and dolphins initially compete for food. As they hunt for smaller fish, tunas encircle their targets and then attack right towards the center. Breaks in the circle though regularly allow many prey to escape. Because of their ability to communicate, dolphins on the other hand are more efficient hunters, though smaller group sizes permit to attack only smaller swarms of fish. Stunningly now, tunas and dolphins frequently join each other for hunting, thereby combining their individual strengths and alleviating initially existent weaknesses. While the mass of tunas does the ground work, the fewer dolphins coordinate the armada and close the breaks in the circle.

Anyone giving advice on the products/services they sell cannot be trusted.  Why is it that prospective franchisees trust some of the most disreputable people in the world with their livelihoods (Lawyers, franchisors, franchise brokers)?  Probably why  Harold Brown entitled his book “Franchising; Trap for the Trusting”  back in 1970.   “Wake up people!  The world doesn’t work on statistics and due diligence when it’s among thieves!  If you are one franchisee and you don’t make it, you will become a statistic under the column “Poor House”.  YOU’RE RUINED – DID THE STATISTICS DO YOU ANY GOOD?  Go find a franchisee that’s lost their life savings, their home, their health and perhaps their spouse and family, and discover that due diligence has to start with the failures, not the gypsy selling the service! And take the advice of failed franchisees who have lost everything:  RUN FOR THE EXITS!  FRANCHISING IS ON FIRE AND YOU’RE THE FUEL!

Sincerely,

Bloody