Blenz Coffee General Manager Mark West Runs Second Simultaneously Competing Franchise Look Tea

If allowing their GM Mark West to own his own competing coffee franchise My Cup while attempting to look out for the best interest of Blenz Franchisees wasn’t odd enough, Vancouver’s Blenz Coffee has now allowed him to kickstart a brand new competing tea franchise as well – LOOK Organic Tea

Mark West launches Blenz Competitor LOOK Organic Tea

Mark West launches Blenz Competitor LOOK Organic Tea

On February 10th of this year, the VCSFA published an article about the sudden sale and subsequent splitting of the Blenz Library Square corporate store.  We noted that it was a very interesting business decision to give up such a prime location that was previously used for training new Blenz Franchisees.

More interesting than the actual sale of such a useful corporate asset was the mystery of what would be opening right next door to the store that they had just sold off to a new Franchisee.  Here is a question we asked in our article published nearly five months ago:

Has Blenz protected the current owner of this Library Square location from a potentially competing business opening right next store?  There is not hint of what kind of business will be moving in to the former training space.  What if it turned out to be another coffee shop or tea shop?

Will wonders never cease?

Not only did a tea shop open right next door that competes directly with the Esprit line of Blenz premium teas that Blenz Franchisees are forced by contract law to sell, but the name of the man receiving all franchise inquiries at LOOK Tea is the very same name on the Blenz franchise inquiry page – Mark West. In addition, although the page has recently and mysteriously become un-clickable at the My Cup website, Mark West was also the name on the My Cup Coffee and Tea franchise inquiry page.  Thankfully we saved a screen shot of this. It’s also interesting to note that Mr. West no longer lists the Georgia and Seymour My Cup location which directly competes with three different Blenz locations.   The following are screen shots are from those respective pages:

join-us-LOOK

Want a LOOK Tea Franchis? Call Mark West!

 

Want a Blenz Franchise? Call Mark West!

Want a Blenz Franchise? Call Mark West!

Want a My Cup Franchise? Call Mark West!

Want a My Cup Franchise? Call Mark West!

 

Until the launch of LOOK Organic Tea took place in a retail space that literally shares a physical wall and ‘support’ staff and leadership with a Blenz location (Shawn Pattison of LOOK also works for Blenz the Canadian Coffee Company), the camp was divided as to whether or not Blenz was looking out for the best interests of its Franchisees.

The camp is no longer divided.

 

The Dangers of Buying a Franchise Business (in British Columbia)

The sign on the side of the road reads: “Danger! Beware!”

We receive continual requests for advice from people who are getting close to the point of buying a new business – specifically a franchise business.  The majority of these people are not coming from a business background and are looking for something that their family can operate or a place to invest some extra money that has the potential of generating more money than their conservative investments.  Others still are looking to buy as a way of making a career change – they are sick of their jobs.

Most have already been ‘sold the dream’ in their minds before they even find us.

Danger!  Beware!

Today we would like to publish a kind of summary article with hand picked articles just for you.  If you truly read these articles before you purchase a franchise business, you will be in a better position than anyone we know.  You will be in a very unique and powerful position.

So don’t just skim these articles.  Learn them.  If you can’t understand something, we can help you reach out for help from a professional advisor on each topic.

We truly wish you the best and most prosperous business future

General Education

True Stories that hit close to home

Purchase & Sale

We hope that the hand-picked articles found in this post have helped you tremendously to make the best possible investment.

As always, don’t hesitate to contact us at info@vcsfa.ca.

Yet Another Prestigious Blenz Closes: Pacific Centre on Granville

Blenz Investor Alert: Danger!

Blenz Pacific Centre Shuts its doors

Blenz Pacific Centre Shuts its doors

If you were considering investing in the once powerful and quickly growing Blenz Coffee, and you noticed that they were losing prestigious retail location after prestigious location every few months, you might be wise to do a little extra research.

Blenz loses location to another clothing retailer

Blenz loses location to another clothing retailer

The sudden closure of the Blenz Coffee at Pacific Centre this week is just one of now many in a string of closures over the last 24 months.

You can read all about the different closures here:

Blenz Coffee Bayswater

Blenz Coffee Burrard and Robson

Blenz Coffee St. Paul’s Hospital: It was owned by a Franchisee, then by the Burrard Hotel, then suddenly all signs of Blenz disappeared and they now sell JJ Bean)

Blenz Coffee Cambie @ 17th

Blenz Coffee Hastings @ Howe

But it doesn’t end there.

Another red flag that started waving a few months ago that should have raised a few eyebrows was the sudden and quiet sell off of what was previously their pride and joy: the Library Square Corporate Training Centre where they hosted public events and tried out innovative drink ideas.  Within a flash it had been halved in size and sold off to a fresh new ‘franchise partner’.

Another even more devastating blow to the brand are the growing number of lawsuits against the former Vancouver coffee powerhouse including one filed by a small group of franchisees and another by a previous head office employee.

Will Blenz Coffee be able to pull out of the obvious tailspin?  Will Mark West, be able to save the day?

Stay tuned for more news on Blenz Coffee and other coffee related news.

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,

 

 

Why Quiznos is Going Bankrupt and What You Can Learn From It

Franchising is set on a pedestal in the minds of business minded people and customers alike as a dream model – a goal to reach as it were.  For some people, to franchise your business means you are validated by the business world.  To open hundreds of stores means you are awesome.  To open thousands?  Now you’re a rock star, baby.  But wait!  While your business groupies marvelled at your copying-and-pasting skills, your lovely, innocent, country bumpkin girlfriend who was always there for you got neglected on the way to your stardom.  That’s quite sad.

Some people believe that franchises are started by directors with abusive and even predatory business goals but most believe they start out innocently but are then corrupted by the sudden infusion of cash in their banks created by their army of burger flipping, latte steaming, foot-long wrapping worker bees.

You choose what you believe.

The Franchisees of Quiznos in the USA may now have to figure out how to walk on their own two feet while proceedings for the funeral of their corporate franchise mother ship get underway.  Will their Landlords extend expiring lease renewals now that their never-failing rent guarantor has failed?  Will the owners be able to sell their stores and recuperate the hundreds of thousands they spent to buy the business name and systems?  Will this bankruptcy ultimately mean the doom of Quiznos in Canada?  What buyer would purchase a franchise that may no longer be a franchise?  How much goodwill value is left in the brand?

This article in the Business in Vancouver publication summarizes the situation at Quiznos best as ‘…struggling with high debt, angry Franchisees, and increasing competition.”  Many of the angry Franchisees apparently sued the head office for failing to support them and for overcharging them for supplies.  Quiznos settled out of court for $95 million.  And just a few years later – good bye, sugar pie.

But it makes sense.  When a lawsuit is filed against a Franchisor, its roots didn’t magically grow like Jack’s beanstalk, especially if the lawsuit involves more than one Franchisee as it did in this case.  The Franchisees had to have been angry enough to fight against their own ‘fear of the Franchisor’ and start meeting privately to come up with a plan – a sort of revolution.  Money was taken from them unfairly so they went to get it back.  They paid for support that they didn’t get so they went for a court imposed refund – and they got it.  It would be interesting to ask the Franchisees who chose not to fight how they feel about their decision now.

One of the most interesting quotes from the BIV article on the topic is the following:

All except seven of its nearly 2,100 restaurants are independently owned and operated by franchisees and will not be affected by the bankruptcy, the company said in a statement.

How they will not be affected by the bankruptcy is nothing short of a very large mystery.  To remove a stigma of this size from a brand is a formidable task – regardless of where the bankruptcy is filed.  Think about Jack in the Box.  Stigmas are sticky.

So what can we learn from the woes that are sweeping over Quiznos?  Here are a few points to consider:

  • If Quiznos was focused on helping the Franchisees make money instead of finding ways to take it from them, none of this would have happened.  They would have had Ambassadors of the Brand instead of Assassins of the Brand.  Win + win = win  (Note: this formula still works in 2014)
  • If there are a bunch of Franchisees going after the Franchisor, you should probably be concerned.  Deeply concerned.
  •  ‘Too big to fall’ Franchises don’t exist (although McDonald’s might admittedly be trickier to topple).  The bigger they are the harder they fall – eventually.

Second Cup Gets Serious Hires Former Starbucks Marketing Person Alix Box

February 3rd, 2014 it was announced that Alix Box, a former marketing person for Starbucks (and Holt Renfrew) was brought on to Second Cup as CEO.   If you are in the coffee business in Canada, this announcement would force you to take notice, but if you are in the coffee *franchise* business business, this announcement should have you somewhat concerned.

In Vancouver, Second Cup used to enjoy a fairly strong presence around town – at least to the extent that when you said the name most people knew what it was and where you could find one.  Over the years, they were slowly ground out of the business as more aggressive local franchise chains overshadowed them and the demand for higher quality drove customers to more boutique options. Many can still remember when Second Cup was ‘the place to meet’ in Richmond Centre until a few years ago when even that location evaporated into thin air.  Now there are just three locations in Vancouver – two of which I had no idea about.

But that may soon change.

If there is ever a place in the world a chain can test their coffee skills, Vancouver is it.  Perhaps Second Cup will put the gloves back on in Vancouver in an attempt to redeem the territory on which other Vancouver coffee franchises have taken from them.  If Second Cup can provide a win-win business model for their Franchisees (while avoiding the Supreme Court), provide a very high quality offering for their customers, launch branding that distinguishes them and replaces their fairly generic flavour, and re-launch with a bang – they have a fighting chance.  Vancouverites, if they like your brand, will give their loyalty.

 

How does your Franchise Grade (dot com)?

Anyone considering the purchase of any Franchise location or system needs to be fully aware of the best thing that happened to a Franchise buyer.  Conversely it is probably the worst thing that has ever happened to bad Franchisors…

Franchise Grade is amazing and it’s no joke.  Jeff Lefner and his team blends quality raw data from actual Franchisees with technology to spit out a report card that should make any Franchise organization stand up and take notice if not quake in their boots with fear.  If I were the Franchisor, I’d want to make sure I was getting a good grade before this hits critical mass.  On the flip side, well run Franchises who earnestly care about the profitability and general well-being of their Franchisees stand to sell many locations through this website – and they don’t even have to pay for the marketing!  Those Franchisors who have been using fear tactics, writing scummy deals with tricky contracts and who like skimming all the profits for themselves are in for a very rude awakening as Franchise Grade gains awareness.

These reports are not cheap by any means, but most Franchisees would agree that, if they had the chance, they would have cut a cheque for $10,000 to have learned these details before they purchased.

From our understanding of the system, current Franchisees are given about 90 questions to answer anonymously key and revealing questions about their Franchisor.  The results of that data is then handed off to an actual team of professional statisticians who verify everything and make sure its as solid as possible.  From there, when the reports are ordered, the data is pumped into a nice report and handed off to the prospective buyer at which point the Franchisor will either weep or rejoice.

We will continue to review FranchiseGrade.com but for now, we give them an A+ and strongly recommend every potential Franchise buyer purchase these reports whenever available.  If the reports are *not* available we strongly recommend you ask the Franchisor to make sure their Franchisees have submitted their anonymous report before you buy.  This one report could save you literally hundreds of thousands and in some cases – millions.

 

Blenz Ranked as Lawsuit of the Week by Business in Vancouver (BIV)

Blenz Ranked as Lawsuit of the Week by Business in Vancouver (BIV)

Well respected and well read local business publication Business in Vancouver not only picked up on the court filing made by three former Blenz Franchisees against its former Franchisor, but ranked it as their ‘Lawsuit of the Week’ – and rightfully so.  Blenz has enjoyed for many years a natural windfall of sales produced by loyal customers who feel warm and fuzzy about the ‘local Canadian brand’. No doubt the very presence of this filing surprised the author.

Although the BIV article covers fairly well the claims of hindered store sales and lease renewal problems common to the three plaintiffs, a $6.00 download of the very large filing reveals that it didn’t even touch upon one of the most devastating claims against the Franchisor – Kormi’s doomed, mandatory, and very expensive renovation and surrounding events.  This part of the claim alone covers pages and pages and, if these claims are proven in a court of law and picked up by local media (ie. Steele on your Side), they will certainly have the potential to evaporate a good percentage of the ‘warm & fuzzy’ mentioned above.

767_seymour_from_front_left

It is also noteworthy that there was no mention of the first court filing of 2014 against Blenz by Elizabeth Jacobo.  Reports from those who have read this filing indicate that it is on par or even more potentially devastating to the Vancouver brand than the claims found within the Taylor, Sahdra, Kormi suit.

Read our March 14th report of the growing number of lawsuits Blenz is facing in 2014.

Check back regularly for updates on this and other similar stories.

 

 

Quiznos Files for Bankruptcy

Most people reading this CBC article about Quiznos filing for bankruptcy will probably be thinking ‘where am I going to get my upscale sub?”  Franchisees, however, are probably asking “What will happen to the franchisees in this case?”

And what a great question that is.  There are lots of stakeholders in a franchise system, including, but not limited to:

  • the Franchisee
  • the vendors
  • the customers (better spend your gift card money asap!)
  • the landlord (who are you going to go after for late rent?)

One would hope that they have already formed an association that could immediately meet and start taking measures to protect their investments.  One would hope that the Franchisees are not relying on their head office to provide accurate, timely, or beneficial information at this point.  One would hope that they have their legal team lined up and ready to start work.

It will be most interesting to follow the results this event will have on the Franchisees and we hope that some of them will be able to write to us with their insight.

As always, send your comments and stories to info@vcsfa.ca.  We are here to help.