Waves Coffee: 2016 Litigation List

Waves 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 WAVES COFFEE LITIGATION LIST

As of December, 2016, just click this link for a complete download of all the lawsuits filed in BC related to WAVES COFFEE, WAVES COFFEE INC,

As of December, 2016, there are 7 lawsuits filed.

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.

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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.

 

 

How a Few Law Suits Can Really Cripple a Franchise

Global TV aired a very, very damning broadcast about Zerona Canada today.  If you have been reading our articles at the VCSFA, you would not have been surprised at the kind of behaviour.

The summary of the lessons that one should take away from this unfortunate story are as follows:

  • Even a great product (or service) cannot make a business fly on its own
  • Franchisors make lots of claims that should be checked and then checked again
  • This pain would have continued and never been exposed if these courageous owners didn’t fight the dominant power – and yes, a franchisee is in a position of weakness before they sign up for the deal.
  • Support (or lack thereof) is *absolutely rampant* in franchising.  Amongst most cases we’ve seen you can only be sure you are getting one thing – the name.  Everything above that is [sadly] a bonus
  • Franchisors: you can only burn so many bridges before the skeletons of your past close in from all sides and you have no where to run but to the judge for mercy

As always, we are here to help franchisees of coffee shops – and beyond.  Don’t hesitate to reach out to us here at the VCSFA

Former Coffee Franchisee Speaks about His Coffee Shop Franchise Experience

For anyone considering owning a coffee shop franchise in Vancouver, you might do well to read this recent article called,  “Keep it Clean and Don’t Burn Bridges – It’s a Small World After All” written by an ex-franchisee of a big Vancouver coffee shop brand.  The comments below the article are starting to appear as well.

As usual, don’t hesitate to write to the VCSFA to make sure you are making the best investment decision for you and your family.

 

 

Franchise Legal Advice Featuring Blair Rebane of Borden Ladner Gervais

This article published by the Canadian Franchise Association is an absolute must-read for anyone considering the purchase of a franchise.  What is not mentioned in this article is the fact that franchise law differs from province to province.  In British Columbia, for example, you need an especially higher level of legal advice and protection when dealing with Franchisors because there does not yet exist any form of franchise legislation.

One of Mr. Rebane’s wisest pieces of advice from the article is as follows:

“It’s key to get someone experienced in franchising because they not only tell you what the agreements mean, but what is standard and what is not,” says Rebane. “As someone who has drafted and read hundreds of agreements, I can quickly spot atypical clauses and point them out.” He notes that finding a lawyer with years of experience will also save money. “Someone experienced can get through the documents quickly because they know what they’re looking for without having to research it.”

One of our members gave his account of why this advice is so important:

When I bought my brand-name Vancouver coffee franchise, I was naive and assumed that all I needed was a lawyer who understood business.  How wrong was I!  Franchising is a completely different beast.  I chose a very expensive law firm, and I’m sure that my expensive lawyer was experienced in some form of business – he said he was but I didn’t check any credentials -but it wasn’t Franchising.  As a result, I ended up in a really bad deal with clauses that only came to life after I ran the day-to-day business and saw the business practices of the Franchisor.  Perhaps my endless headaches could have been avoided…

 

For more information on this and other related topics, be sure to search our site and the variety of different categories.

 

Franchisee-Franchisor Conflict Resolution

In 2011 the Canadian Franchise Association (CFA) published this very informative article about conflict resolution between Franchisees and Franchisors.

This article speaks in detail about the steps that could/should be followed to resolve issues within a Franchise business model.  Their recommendations can be summarized as follows:

  1. Set up a face-to-face meeting with Franchisor
  2. Bring your issues to the Franchisee Advisory Council (FAC)
  3. Try mediation (voluntary and non-binding)
  4. Try arbitration (binding and both parties agree not to go to court)
  5. Go to court

The CFA has a very optimistic tone in this article and we are glad that Franchisors around Canada have been able to work in this reasonable way.  However, we have received numerous reports from the Vancouver area that some Franchisors have operated in such a manner that the idea of ‘reasonableness’ is far from reach.  One Franchisee from a coffee Franchise in Vancouver has reported to us that their Franchisor has established an FAC that not only doesn’t actively do any meaningful work, but they were also not given the authority to change the unknown agendas of the Directors.  Therefore, options #1 and #2 in the suggestion list above are not possible.

If the Franchisor has demonstrated that they are not willing to work openly and transparently with their Franchisors, it is very difficult to imagine initiating the voluntary and non-binding suggestion of mediation in #3 above.  For these Franchisees, it seems that either settling their matter out of court (arbitration) or suing the Franchisor for damages are their only remaining options – options #4 and #5 respectively.

Whatever the case happens to be for your Franchise business, we at the VCSFA agree with these reasonable steps outlined in this CFA article as a procedural means whenever possible.

Another very interesting point to be taken from this article is that the CFA has a kind of Ombudsman program.  Although we cannot speak for this program it is certainly something we are going to look further into, and we hope that the public will also give us their feedback if they have used this program.  Here is a direct quote from the article:

If agreement still cannot be reached, there are options. The Canadian Franchise Association (CFA) has an Ombudsman program, a free program available to all franchisees and franchisors in Canada. The Ombudsman will listen to one or both sides and try to facilitate communication. All discussions are completely confidential and done informally by phone. Contact the CFA Ombudsman at 866-443-8255.

 

 

Do Customers Like Coffee Shop Franchises?

A small article in the Huffington Post BC slipped by many readers. It is most significant to us at the VCSFA not because of what is on the list, because instead what is not on the list.

Before reading the article, it is important to preface that the author Jesse Ferraras used the term ‘franchise’ towards Artigianos where was not a Franchisee/Franchisor business model but instead a corporate structure.  Be it known that Caffe Artigiano does not sell individual franchises as is therefore not on the VCSFA list.

Why this article struck us as notable was that we could not find one – no, not a single solitary name – coffee shop franchise. Don’t believe us, do your own comparison.

The VCSFA Comprehensive List of Vancouver Coffee Shop Franchises

The Huffington Post article of ‘The Best Coffee in Vancouver’ list

Not a single coffee shop franchise wowed the people enough to make it into this list which begs the two obvious questions:

What makes a coffee shop desirable?

Why aren’t coffee shop franchises desirable?

In defense of all those who were not included in this list, we at the VCSFA do not consider Yelp to be a reliable form of research data.  We have had many discussions with cafe and restaurant owners who have had very positive reviews end up ‘filtered’ at the bottom of their page, not contributing towards positively to their star count.  Further, we know of some horrific cafes that have been reviewed accordingly and those awful 1-star ratings still sit there filtered today, not lowering their star count to where it should be.  Finally, we believe that every food and beverage business needs a ‘jubilee’ every 1 or 2 years where all their entire ratings and history are magically erased and reset to zero and the business gets a chance to right the wrongs of the past, starting again with a clean slate.  Can you name one food/beverage business where the same bad (or good) staff are still working there two years later?  Or, is it not possible that a new owner has taken over and has improved upon or killed the previous owner’s work? For this reason, we acknowledge that the data source is not a reliable enough to be considered conclusive.

With that preface, Yelp is good for one thing: collecting the ‘extremes’.  So, if a review does make it through the Yelp filters, it is likely that the person who wrote it is pretty fired up in the positive or the negative.  It is even more unlikely that someone will blog a positive review so all the kudos to the shops that got some.

With all that preamble behind us, here is the important stuff that we have pulled out of this work:

What seems to make people like these shops:

  • quality food
  • unique atmosphere
  • niche java (ie. serving South American style, Clover machines, freshly roasted, organic/fair trade, etc)
  • niche skill (ie. latte art)

One reason why a Franchise coffee shop may not have made it on the list is because people, by the nature of the way they view a multi-location chain, don’t consider it special.  They may get a good drink but because it’s part of a big chain they might not consider that experience unique enough to blog.

The VCSFA is well aware that the food programs at most if not all coffee shop franchises is abysmal.  In many cases the owner of the store is forced to order over-priced product from a vendor that has no idea what the customers in his neighbourhood are demanding and/or has no authority or ability to provide a solution.  In one case, a group of franchisees from a major Vancouver chain reported to us that their sandwiches were made in Vancouver and then shipped for sale to their store in the Okanagan!  We could understand this model for a low-priced, high-volume chain, but we were shocked that this was occurring in a chain claiming to be trying to carve out a piece of the high-quality market.  Needless to say that as soon as the customers found out, sales slumped.

Coffee shop franchises should be on alert and take much heed to this casual list.  Franchisees of the chains that were not included on this list (which is every last one of them) should start immediately asking their Franchisors what went wrong.

 

 

New Service – Free Contract Review

Thinking about buying a coffee shop franchise but you don’t want to spend money on a fully qualified lawyer?

Already bought one and don’t understand what you signed?

Why not schedule a time to meet with a VCSFA Coffee Shop Franchise Volunteer Consultant, get some free advice from an experienced Franchisee who understands the contract well?  After reviewing your contract they will be able to point out areas of concern so that you can make the best choice for you and your family.

Although our volunteers are not lawyers, they have themselves worked with a variety of lawyers on a variety of topics related to these contracts and are well aware of how these oftentimes confusing contract clauses can significantly affect your future.

Not in Vancouver but still need our help?  Don’t let distance prevent you from reaching out to us.  We’ll find a creative way to help you because we are passionate about what we do.

Although this is a free service run by volunteers, we do hope that you will find a huge value and, after receiving your advice consider making a contribution to the VCSFA so that we can continue our work bettering the lives of coffee shop franchisees.