Blenz Coffee: 2016 Litigation List

Blenz Coffee: 2016 Litigation List

Ever wondered who is suing who in the coffee franchise industry in Vancouver, BC, Canada?

For your convenience, we’ve put it all together for you into one convenient PDF file.

CLICK HERE TO OPEN THE 2016 BLENZ COFFEE LITIGATION LIST

As of December, 2016, just click this link for a complete download of all the lawsuits filed in BC related to BLENZ THE CANADIAN COFFEE COMPANY LTD, BLENZ COFFEE LTD, BLENZ COFFEE,

As of December, 2016, there are 49 lawsuits filed.

 

Franchisepro.ca picks up on Important Franchise Legislation article in Reputable Magazine

Franchisepro.ca picks up on Important Franchise Legislation article in Reputable Magazine

Wayne Taylor plaintiff in a lawsuit against Blenz Coffee in Vancouver, was interviewed in a reputable national magazine called Food Service and Hospitality.

Read about it here on Wayne’s Franchisepro.ca

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Read about it here

Blenz Coffee Franchise Poster Child Example of Need for BC Franchise Legislation

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In this most recent Business in Vancouver article on the topic of the need for franchise legislation in BC, Wayne Taylor briefly describes his personal experience dealing with Blenz Coffee (Blenz the Canadian Coffee Company Ltd) and just some of the claims he and two other former Franchisees have against the Vancouver franchise and its directors Sarah Kate Moen, Geoffrey Hair and Brian Noble.

Blenz Coffee and many other local Franchisors have essentially been able to do whatever they like while they hide behind their weighty franchise agreements and the shield of their pricey lawyers.

Until now.

Franchisees around BC have had enough and have figured out that the scales have not only been unbalanced but completely lop-sided in their Franchisor’s favour.

Typically what will occur is the Franchisee will enter into a binding legal agreement with the Franchisor and by the time he or she figures out that their investment is built on sand (or worse) they have no money left to fight the imbalance in court because government has been conveniently avoiding getting involved.

The result? Ruined marriages, unnecessary bankruptcies, lost homes, and serious cases of depression around our beautiful cities.

For some Franchisees there may be time to recover their financial house before retirement but for many others the clock has run out by the time the battle begins.

The government of BC needs to at least make a way for the small guy to have a fighting chance against companies that display sociopath and bully-like, in the same way that they have in other provinces.

It’s time to level the playing field.

 

British Columbia Law Institute (BCLI) Releases Report on a Franchise Act in British Columbia

Members of the VCSFA had an opportunity to meet with Greg Blue of the British Columbia Law Institute (BCLI) approximately one year ago where we had the chance to hear more about the plans for a proposed Franchise Act for BC.  We created this post shortly after this meeting.

At this point, it was in the ‘consultation phase’ where feedback was being gathered by stakeholders in the franchise industry.  To read the original document, you can click this link and download it directly or go to the Franchise Act Project page at the BCLI.

We are pleased to announce that the conclusions from the consultation phase have now been compiled into this document: Report on a Franchise Act for British Columbia which can also be viewed/downloaded from the BCLI project page above.

In the near future, we will write a report with our feedback on the report.

The VCSFA would like to extend our most sincere thanks to Greg Blue and all the others who contributed to this worthwhile project as it has already contributed to the exposure of the oftentimes questionable nature of the Franchise-Franchisor relationship in general, but especially in BC, and will most certainly help any potential buyer (who does their due diligence) avoid some of the common pitfalls prevalent in the industry,

 

 

Blenz Coffee Involved in Growing Number of Lawsuits

We were informed today that at least two lawsuits have been filed in the Supreme Court against Blenz the Canadian Coffee Company LTD so far in 2014 – and it’s only March!

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CLICK TO SEE DETAILS

Following our usual protocol here at the VCSFA of verifying information before sharing, we searched and confirmed the report .  A quick trip to the Court Services Online (an online service for seeing what’s going on in the courts) revealed two separate filings for 2014 already.

An individual, Jacobo (#140041), and a group of three, Taylor, Kormi, and Sahdra (#141773) are listed as Plaintiffs and Blenz Coffee as Defendants.

Also listed as a Defendant in the group case is “Moadebi“.  A quick internet search reveals this individual as a commercial agent.

We have not yet obtained the court documents associated with these listings (available for a $6.00 fee for download).

As always, please continue to share information like this with us so that we can remain the source for coffee shop franchise information in Vancouver.

 

Sue-Go Juice: Did Jugo Juice Juice their Franchisees?

It looks like Jugo Juice is becoming ‘sue-go juice‘.

I had been running my own coffee franchise for nearly two years when I took my first Canada Line trip.  The very first thing I noticed was what seemed like a Jugo Juice at almost every location.  The first thought that came to my mind was ‘Those rascals!’ (of course using much more colour terminology). My only surprise is that there are not more names on the plaintiff list.

As discussed in other VCSFA articles, the Franchisor is in a clear position of power and has the advantage of being the creator of some very hand-crafted – and arguably one-sided – legal documents, namely the lease, the sublease (if applicable) and the Franchise Agreement.  The profile of Franchisee that seems to be preferred by Franchisors is typically, from my experience,  someone not steeped in either franchising, or small business.  They are often accountants, teachers, retail managers, and such, but more commonly – again from my experience – immigrants who may not quite have the language skills to battle on their own should such a need arise.  The point here is that not one of Franchisees I have met over the last few years in the food and beverage business – especially in the Vancouver coffee business – came with the expertise required to make such a huge financial and time investment.  As a result, I have seen devastated marriages and families as the money is bled out of their lives.

The worst part is that British Columbia doesn’t have *any* franchise legislation to help abused Franchisees. In their often nearly bankrupt condition – the time when they most need a lawyer’s help – they are left to fend for themselves.  As in this Jugo Juice case, I’m sure that we will see that a mandatory disclosure document may have saved these Franchisees the need to file this lawsuit.

One will often come across quotes from experts in law and business saying things like, “It’s buyer beware” or, “One has to check the legal documents carefully”.  That’s very easy for someone to say who has no experience in business or business law.  To reiterate, most prospective Franchisees are not coming from a position of being savvy in business – and the Franchisors know that.

Every Franchisee I have spoken to has one thing in common – they trusted the name and the brand and their experience.  They trusted that the Franchisor would not knowingly put them (or allow them) into a bad deal.  The trust that potential buyers put in the brand is so strong that I have witnessed sound-minded, intelligent people sign documents that are so bad they would give you cramps.  I know one gentleman whose position is, “Well, they signed it.”  I disagree with this position.  If it were an independent cafe or restaurant and the people who created the documents were on the same playing field in experience, then I would steadfastly agree.  However, the very nature of a Franchise implies ‘trust’ and ‘success’ and they accomplish this image largely because of the sheer number of locations.  I will never forget a quote from my good friend.  He had just explained how he had received accounting and legal advice *not* to purchase his franchise coffee shop.  The outcome of his decision to purchase was the most devastating series of events I have ever witnessed.  After explaining his situation to someone the person asked ‘Well, why in the world did you purchase, then?”  His response?  I’ll never forget it.  It’s engraved in my mind forever:

I thought surely sixty locations couldn’t all be wrong.

They were wrong, though.  They all signed a similarly one-sided document and were reaping the reward of their folly.  Just like me.

Did Jugo Juice sincerely think – with all their experience in the retail beverage business – that these stores would succeed buried deep within the Canada Line?  Who has time, while rushing to a train, to have a nice, blended drink?  And, let’s just say you do have just enough time to grab a drink and get on the train, it says right here in the Translink Etiquette Guide (item #4) that you should ‘refrain from eating and drinking on the train’. So stopping to get one of these drinks will set you up to be a bad guy in the eyes of your co-commuters.  To me, this sounds like a business disaster waiting to happen. Just to make sure it wasn’t my personal experience and bias clouding my judgement, I started surveying my own customers to find out when was the last time they stopped and bought a nice drink at a transit station and if they would do so in the future.  The results of the mini survey were dismal: they all agreed that they would prefer to go a little further *above ground* and buy their speciality beverage.

Here’s what Jugo Juice gained out of the last few years since their 2010 Canada Line Expansion:

  • Incredible brand awareness: countless hundreds of thousands of people walked by (the key is *walked by*) those Jugo Juice logos
  • Increased probability of selling new stores: “Mr. Prospective Buyer, we are a big, well-known brand. You are buying into a big chain with a winning formula.  Look at the proof – we have stores in most Canada Line stations.”
  • Royalty payments: Did Jugo Juice offer ‘royalty relief’ during their time of suffering or was the full contractual amount continually (and probably automatically) taken from their bank accounts?  This will come to light, I’m sure.

What did the Franchisees – who likely invested all of their life-savings in these businesses – get out of the deal?  A court date?

It will be most interesting to follow this lawsuit and perhaps it will pave the way to better Franchisee-Franchisor relations in BC and ultimately the quick establishment of franchise legislation in our beautiful province.

 

 

 

Bell Mobility Gets Sued by Franchisees: A Deeper look into the Franchisee-Franchisor relationship

The Globe and Mail, on July 29th, published this article about how the Bell Mobility division of Bell is getting sued by its independent dealers.

In short, the Franchisees are suing their Franchisor for squashing their profits and looking out only for their own interests at the expense of the front line troops – the Franchisees.

This is another example of the potentially very challenging relationship a company must face if it chooses the franchise business model.  The motives, agendas, and heart of the Franchisor *must* be like a parent shepherding their flock of less experienced sheep towards a mutually profitable enterprise.  Once it is known (or suspected) that the Franchisor’s main goal is to take as much as possible from their flock and give back little, the relationship will be short-lived and it will be just the blink of an eye before court documents are filed.  Should one be surprised?  Divorce rates are well over 50% and there is much more than money to be lost in a divorce.

It must be noted that not all franchises are being sued.  In fact, we have had Franchisees of a few select coffee franchises claim boldly that they are a) making money and b) satisfied with their Franchisor.  So, it is absolutely possible to have a synergistic and win-win relationship with the Franchisor. However, when trust is breached as in the case of Bell, and if swift and serious action is not taken to repair the breach then all roads lead to the courthouse.

This is serious business, rest assured.

Sometimes Franchisors lose touch with their roots.  They don’t spend enough time in the field getting to know the customers and Franchisees personally.  They don’t know that everything is falling to pieces when a simple, transparent and humble chat would have revealed all. Perhaps the Franchisor would have to consider some compensation for past errors.  Perhaps all it would take would be a grave apology letter or speech from the Directors.  Unfortunately, the impression that many Franchisees get from their ‘shepherd’, as they suffer significant financial hardship, is that they are nothing more than mechanical cogwheels in their money-making machine, held in place by nasty and sometimes abusive contracts.

The Canadian – specifically the British Columbia – franchise world will, in the near future, see the collapse end of bad Franchise ’empires’ as associations like the VCSFA are able to help prepare potential buyers for their investment. We hope that Franchisors who are serious about maintaining a positive brand and all the goodwill their created in the eyes of their customers, will hear the voices of their front-line soldiers and take strong action.

 

 

 

Sears Faces Class Action by Hometown Franchisees

In the following article covered by News 680 is the announcement that Sears is now facing class action by its Hometown Franchisees.  The Franchisees are going to go after Sears for failing them in the following ways:

  1. For competing against them in their territories
  2. For lowering local advertising budgets
  3. For dictating conditions
  4. For eroding Franchisees’ profits by corporate decisions that are not in the Franchisees’ favour

The following quote from the article summarizes the Franchisees’ situation:

“We are tired of disappointing our customers because we lack the resources to serve them properly,” – Jim Kay

The VCSFA has heard countless stories of situations where Franchisees – specifically coffee shop franchisees – have been unable to provide the right product at the right price, or, been unable to provide a consistent brand experience to meet the customers’s expectations that the customer is expecting before he or she enters their place of business.

It is paramount that the prospective buyer of an existing or new franchise investigate the ‘atmosphere of support’ experienced by existing franchisees.  A lot of Franchisees could have protected themselves against complete financial ruin, family hardship, or worse – had they only probed the managers or Franchisees of existing stores.  This is *completely free* and most Franchisees, given enough time and in the atmosphere of trust, will divulge all their good and bad feelings they have about the Franchisor which is one of the most valuable pieces of investment information you can obtain.

No matter what kind of franchise you plan to purchase, do your homework before you purchase. Multiple locations is not always an indication of a successful franchise.

As always, don’t hesitate to contact the VCSFA should you have any questions.

 

What do Burger’s and Coffee Have in Common?

The answer to the title of this article is, “They are poster-boys for the franchise business for better or for worse.”

A CBC story about Marufa Ahmed and her husband Mohammed Hashen, caught the eye of a VCSFA reader who forwarded the article to us. Marufa and Mohammed purchased a Lick’s burger franchise (they operate in Ontario), gave up 18 months of their lives, day in and day out, only to have the store taken from them.  Here in Vancouver, the VCSFA has received reports of ex-coffee Franchisees who spent well over half a million dollars (CND$) on their investment and over 60 months of their lives only to lose it in an even worse way than this couple.

What the reader needs to understand is that Franchising is not your ‘own’ business.  In fact, if one were to take a few steps back he or she would realize it is perhaps the furthest thing possible from having ‘your own business’, other than the fact it requires a capital investment and the financial business model is similar.  The time when the Franchisee sooner or later comes to realize this, is when they encounter the triangular relationship between the Landlord, the Franchisor, and the Franchisee.

The ‘relationship’ is held together by hand-crafted and very clever legal documents.  In some reputable franchises, the Franchisor actually works side-by-side with the Franchisee to establish the best possible rent rates.  They are transparent and they work diligently to make sure their front line soldiers (the Franchisees) are comfortable with the decisions. Conversely, in other franchises,  the Franchisor will sign lease documents with the Landlord with ‘unknown motives’ and will keep the Franchisee completely in the dark throughout the experience.

We have a current member who asked his Franchisor for lease details over 36 months ago (he was trying to sell) and the Franchisor refused to provide the information he needed claiming ‘we don’t know what the future holds’.  Then, when the very last legal deadline to begin lease negotiations with the Landlord was upon them, they slowly started the process, but still keeping the Franchisee completely in the dark throughout.  The Franchisee today still has no idea what will happen to his store in the fall because nothing has been provided him on paper and there are less than three months remaining in his lease term.  This is definitely not ‘owning your own business’.

We have just become aware of another location where the Franchisor may have paid above market rents in comparison to other similar businesses in the area, and the Franchisee will now be paying for that decision each month.

Before purchasing a Franchise, it is extremely important that you investigate – in great depth – this relationship between the Franchisor, Franchisee and Landlord.  If something seems fishy, or there is any lack of transparency, run and do not look back.  On the contrary, if you find that all the books are open and all the relationships where you stand to lose or gain are open, then you may have found a good Franchisor.

As always, do not hesitate to contact the VCSFA if you have any questions.  We are always happy to help.