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
A Bailiff was reportedly seen ‘dealing with’ the Steamrollers franchised location at 693 West Broadway street at Heather. Steamrollers is also reportedly owned by Blenz the Canadian Coffee Company.
Earlier this week, further reports claimed that the entire staff had suddenly disappeared overnight and been replaced by new staff.
The previous owners were no where to be seen.
Blenz the Canadian Coffee Company has been facing notable challenges, specifically over the last 24 months including multiple lawsuit filings involving previous Franchisees as well as ex head office employees, not to mention multiple closures of prominent locations.
Imagine you had just invested your life savings into a Fresh Slice Pizza Franchise location when you read the headline in your local rag “FreshSlice Pizza owner had affair with employee before she was fired, judge rules”. Chances are you won’t be feeling a lot better than Ray or his family.
Some people might argue that those kind of stories are not important and that they don’t affect the business.
Those people are wrong.
The first question I’d ask is ‘Did Mr. Russell have a prenuptual in place?” If not, the ownership structure of their chain might quickly change.
The second question I’d ask is ‘If this is how Mr. Russell conducts himself in his personal moral life, might he also compromise on business ethics issues – like how he deals with looking out for his Franchisees’ best interests.”
Everything just became very shaky, and a gambling man might make a wager that the FreshSlice stock, if traded on the exchange, just lost a few percentage points.
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.
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.
It’s daily business to hear of smaller Vancouver franchises milking their Franchisees’ profits and doing funny business, but it has been rare if not non-existent to hear negative stories like this one about McDonald’s from a business perspective.
We are often asked, at the VCSFA, “Are there any good franchises out there?” to which we always reply “Yes, there are a few good ones out there and not all hope is lost. The model remains a win-win model, in theory providing there is a leadership who cares.”
But sometimes leadership doesn’t care.
It seems that more often than not, the Franchisor views their Franchisees as slaves in their revenue-stream producing retirement plan. Any noisy ones are quickly silenced by their pricy lawyers and no media seems to exist to expose the wickedness of their ways.
The wide webs of the world have made it possible for the little guy to raise his or her voice.
Obviously things are not well at McDonald’s these days and we hope that the Franchisees will continue to stay noisy about it which will help prevent new stores from opening so fast and force leadership to start caring about the financial well-being of their number one partner – their Franchisees.
“Yes, we’re in the beverage retail business,” he says, “but really what we are is a franchise development company that just so happens to use coffee as a vehicle.” – George Moen, 2010
There is no question that George Moen has been working hard over his lifetime to maintain his self assigned title of “Serial Entrepreneur”. Anyone involved in social media at all, would drop their jaw in awe at the number of followers he has on Twitter (currently 134,000+ at the time of this article). Articles like this one, describing the power of his endurance to achieve success have been published regularly over the years and likely someone is in the middle of publishing one right now. Mentioned in many of these articles are things like:
But there is much more to the George Moen story than meets the eye. There are many things about his ‘success’ that are no described in these articles and online profile that make up an important part of who he is. Questions like:
Stay tuned as we explore these and other interesting connections as they pertain to George Moen, Vancouer’s ‘Serial Entrepreneur”
“What? Me worry?” – This could have been the caption on Gerald Tritt’s recent Instagram upload that portrays him living it up with a smile that would put Alfred E Neumann of Mad Magazine to shame. Mr.Tritt appears not to have a care in the world as he tools about in a loaner Ferrari for the weekend, living the dream as he weekends in Chicago and hangs out with the Boss Man himself, Bruce Springsteen – champagne dreams and caviar fairy tales indeed!
Alas, it is a lifestyle that many Vera’s Burger Shack Franchisees can only aspire to after investing in the Gerald Tritt Franchise system.
In September 2014, the original Port Moody Franchisee managed to escape The System after having his store on the market for over a year. That particular Franchisee purchased a brand new location on Newport Drive and opened in or about September 2012 at a cost rumoured to be in the range of $375,000.00 to $400,000.00. Initially, the location recorded robust sales as it consistently ranked among the top of Vera’s locations in monthly sales and $2,000 daily sales were often recorded. However, the good times were not to last as the Port Moody location began a descent down the sales rankings by location. By June 2013 a scant nine months after opening, the Franchisee had had enough and listed the location for $379,000.00, but, like the Broadway location, the Franchisee could not find any takers. The location remained on the market as sales continued to decline pushing it ever downward on the Vera’s sales rankings by location. In September 2014, the news broke that the location had sold but at a price far far below the Franchisee’s investment. Reports suggested the location, less than two years old, had sold for a price between $215,000 – $200,000.00 representing a loss in excess of $150,000.00 to the Franchisee who had bought into the Vera’s Burger Shack brand.
It was the second location within three months that had sold at a loss in excess of $100,000.00 to its selling Franchisee. Unfortunately, it appears that unlike Gerald Tritt, neither the Port Moody nor the Broadway Franchisees will be driving Ferraris anytime soon.
It was the best of times for Gerald Tritt and Noah Cantor, co-founders of the Vera’s Burger Shack franchise, as the summer of 2011, saw Vera’s Burger Shack ink a deal to expand the Vera’s franchise to the United States Pacific Northwest. Vera’s was flushed with a run of several years growth and had grown from a seasonal concession stand in West Vancouver to a flourishing franchise with sixteen locations. However, it wasn’t to last – without an underlying business model that went beyond depending upon the personalities of individual Franchisees and a cartoon logo – it could not last.
A clue to the coming debacle for many of the Vera’s franchisees can be found in Gerald’s choice of individuals to expand the Vera’s brand in the USA. The purchaser, Paul Brown, a promoter, who promoted such sport luminaries as Tonya Harding, figure skater turned boxer, appeared, at least according to Vera’s own press release, to have no experience in operating a single restaurant, let alone operating/managing several restaurants within a cohesive franchise system. On the face of it, Gerald and Noah seemed to want someone to promote the brand as oppose to having someone with strong restaurant experience to screen and assist prospective franchisees in opening Vera’s franchises in the Portland area.
Up to the time of the signing of the U.S. expansion deal, Vera’ s Head Office had often emphasized style over substance when managing the growth of the Vera’s franchise system. A failure to establish a head office training system for new Franchisees, a comprehensive training manual, regular inspections, and even one method of cooking the burgers had led to an absence of standardized behaviour across the Vera’s franchise system. All the while, Gerald Tritt was fond of telling Franchisees he had spent over a $100,000.00 on branding the Vera’s name.
By the spring of 2013, Gerald Tritt had found himself rid of his most troublesome Franchisee who had made the painful business decision to lose six figures as oppose to continue being a participant in a franchise system that was failing to maintain standardized behaviour amongst its Franchisees. However, it was clear that franchise’s troubles were just beginning.
By August 2013, eight of the thirteen franchises were listed for sale (and this was excluding the two that were sold at the beginning of the year) – a stunning indictment of the Vera’s franchise system for the stampede of Franchisees wanting out was nearly as crowded as the last train rolling out of Paris in June 1940 before the Nazi advance.
It is now over a year since the Franchisee stampede began and with the exception of North Vancouver and Broadway (which sold at a loss of at least six figures to its franchisee – see A Poor Broadway Performance), the remaining six Franchisees continue to list their stores for sale – albeit some at substantially reduced listing prices. It was rumoured that others were listed for sale but these cannot be substantiated at the time of this article. The U.S. expansion plans remain exactly just that – plans.
To date, Vera’s is limited to being a Lower Mainland franchise with half of the franchisees wanting to sell and with its head office having no immediate plans to open locations elsewhere in Canada or the USA. As Gerald Tritt’s plans for a thousand store empire slowly fade to oblivion, the Vera’s nightmare lives on for its Franchisees.
In late March 2013, Gerald drew a sigh of relief as the soon to be ex-Franchisee walked out of Vera’s flagship location in Kitsilano with lease assignment in hand. As sales figures across a number of franchised locations had sagged, the Franchisee had proven quarrelsome and unwilling to follow the Gerald Tritt Franchise System to a tee. Even worse, the Franchisee had shown Gerald up in email discourse that took place in full view of all the Franchisees when the Franchisee pointed out that absence of inspections and adequate training from head office had led to a lack of standardized behaviour throughout the franchise system. Gerald’s response to this rebellious insolence was to change the email settings so that a Franchisee could only reply to Gerald and not to the Franchisees at large.
Gerald’s response to this rebellious insolence was to change the email settings so that a Franchisee could only reply to Gerald and not to the Franchisees at large.
In any event, the Franchisee was gone and with him out of the way only better days could lay ahead for the Vera’s franchise system – or so Gerald had assumed. His optimism proved to be short lived.
In the fall of 2012, while warring with the aforementioned troublesome Franchisee he had approved the sale of the Broadway location to the youngest Franchisee ever. The Broadway location had had a troubled history in that in recent years it had not been that profitable. Of course, profitability from the Franchisees perspective is quite different from that of the Franchisor. While a store Franchisee (location owner) can be barely paying the bills or even losing money hand over fist, the Franchisor will always take their cut off the top of every transaction that goes through the till. From Gerald’s perspective, franchise fees generated by this location read ‘just fine’ on the profitability meter. In any event, the location had changed hands repeatedly over the past five years.
Notwithstanding new ownership, the Broadway location lagged at the bottom of the Vera’s locations’ monthly sales rankings being in front of only the Aberdeen Mall location. As ‘victory has a thousand fathers and defeat is but an orphan’ as quoted by John F. Kennedy, Vera’s head office and the Franchisee began to blame each other for the location’s poor performance. The details of the relationship between Gerald and the outgoing Franchisee remain murky but without doubt it was fractured. The Franchisee blamed Gerald for a lack of training while Gerald blamed the Franchisee for being unable to operate the location in a professional manner – a typical Franchisor-Franchisee dialogue where systems are found wanting and Franchisee’s bank accounts drained.
By the fall of 2013, the negative reviews online were stunning in their criticism of the Broadway location’s operations with some of the reviewers going so far as to accuse the Franchisee of tax fraud because of its “cash only” policy. Inexplicably, Vera’s Head Office failed to take steps to revoke the franchise and allowed Vera fans’ to part with their hard earned cash to pay for what appeared to be a substandard product and experience. The negative reviews continued to pile up online yet Vera’s Head Office appeared, at least on the surface, to do little to intervene to protect the brand. Other Franchisees began to express concern that brand integrity was being compromised yet Vera’s Head Office failed to revoke the location although, based on online reviews as a starting point, sufficient grounds may have existed for such action.
While it is uncertain when Vera’s Head Office began to sour on the Franchisee, it is clear that a scant 3-4 months after buying the Broadway location, the Franchisee had seen enough of the Vera’s franchise model and listed the franchise for sale for $275,000.00. Over the next twelve months the listing price inched downwards to the low $200s, as there were no takers. As 2013 turned to 2014 and the online reviews went from the sublime to the ridiculous, the Franchisee finally had a taker to assume control of the troubled location. Some reports suggest the sale price as low as $40,000.00 meaning the Vera’s Brand was worth little more than restaurant equipment at this location. Other reports say the sale price came in between $100,000 to $120,000.00 meaning the Vera’s Brand was worth equal to the equipment and leasehold improvements leaving little value to goodwill. At this location, instead of becoming a smash hit, the Vera’s Burgershack brand became a Broadway flop.
At this location, instead of becoming a smash hit, the Vera’s Burgershack brand became a Broadway flop.
It was the spring of 2011 and many of the Vera’s Burgershack locations had recorded their best ever calendar year sales in 2010. Flushed with success, directors Gerald and Noah must have been experiencing a supreme sense of confidence when Aberdeen Mall’s property management company approached them to open a Vera’s Burger Shack in the Mall’s food court to replace the recently vacated White Spot Triple O’s location.
Undeterred by the fact that Triple O’s had failed and clearly imbued with the confidence associated with his self appointed title of ‘franchising genius’, Gerald entered into a lease and quickly developed a concept that he was convinced would work in a predominantly Asian food court. Gerald’s ultimate goal was to open the store with the resources of Vera’s Head office behind him and then flip the store to a Franchisee for a price of $399,000.00 thereby pocketing a hefty profit – a common business play in the franchising world.
Vera’s Aberdeen opened in the summer of 2011 to great fanfare and high expectations for Vera’s directors, its franchisees, and its fans. However, from the beginning there were grumblings from the Vera’s fan club that the quality of the food was lacking as compared to other locations. Even more disconcerting to Vera’s head office, the daily sales figures were low and when the monthly sales rankings were published to the Franchisees, Vera’s Aberdeen finished dead last among the seventeen locations. Initially, it was downplayed with the excuse that ‘it was going to take time for the Gerald Tritt system to win over the Asian crowd in Aberdeen mall’ and that, ‘like Rome, a profitable and marketable Vera’s Burger Shack location would not be built in a day’. However, as the months wore on and became fiscal quarters, the sales figures at Aberdeen Mall lagged behind every other Vera’s location.
Franchisees began to question why the Gerald Tritt system was failing so badly in Aberdeen Mall. A quick glance at the physical layout of the location gave a clue that Vera’s Head Office had totally failed to take into account or simply disregarded that 90 per cent of Aberdeen Mall’s clientele is Asian. For example, the menu board was in English only thereby failing to communicate in the first language of the vast majority of Aberdeen Mall’s Asian shoppers. Further, Head Office failed to hire a Mandarin speaking manager to reach out to the Asian clientele to get to know the names of each customer or to tell them stories as burgers were being prepared. Amazingly, it seemed that most of the staff were unable to speak mandarin/Cantonese as well. The hallmarks of the Gerald Tritt system were seemingly abandoned in Vera’s Head office efforts to make this Vera’s location ready for a quick sale to a potential Franchisee.
In the fall of 2011, Vera’s Burger Shack Aberdeen Mall was listed for a price of $399,000.00 but the hope for a sale before Christmas 2011 quickly faded. It was clear that the failure of Gerald Tritt system to bring the sales above the 17th spot out of 17 locations was going to result in a sale price far lower than $399,000. As the months wore on through 2012, a number of Vera’s Burger Shack locations were experiencing sales figures far lower than the record year of 2010. Gerald Tritt responded to the grumblings of Franchisees by telling them they were not reaching out to their clientele and it was their fault the sales were dropping. All the while, Franchisees noticed that either Gerald did not even believe and/or follow his own rhetoric based upon his management of the Vera’s Aberdeen Mall location and its bottom-of-the-barrel performance in the sales rankings, or worse, his system wasn’t working.
Vera’s Aberdeen Mall location remained on the market with the listing price dropping from $399,000 to $369,000 and ever downward in Nortel stock-like fashion. For the next two and a half years, the price continued to sink with various incentives added in to make the location more attractive such as no Franchise fees for the first twelve months. There were no takers. By the late spring of 2014, it was being marketed for the price of $50,000.00 as a location that could be redeveloped into another concept. In other words, the Vera’s brand in Richmond was worth the value of used restaurant equipment in a mall food court.
Then one gloomy day in early July 2014, a visitor arriving at the top of the escalator at the Aberdeen Mall food court was greeted by an abandoned food stall with the cartoon face of Vera smiling over the dark and empty counter that was the only remaining legacy of the Gerald Tritt system in Aberdeen Mall.
As for the Franchisees who had watched this debacle unfold before their eyes, they were kept in the dark as much as that the darkness of that food court counter. Gerald, who made it a practice, to inform his Franchisees of a four hour closure of the flagship Kitsilano location due to construction, could not bring himself to tell his Franchisees of the passing of the Aberdeen Mall location. Even more incredibly, he did not even bother to tell his loyal Vera’s fans of its closure notwithstanding Vera’s Burger Shack presence on the web, Facebook and Twitter thereby leaving Vera’s fans to discover for themselves the closing of the Aberdeen Mall location. The question that arose from his omission was whether Gerald’s ego prevented him from announcing the failure of the Aberdeen Mall location or whether he knew deep down that no one in Richmond even cared.