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.