Here is a quick (and carefully worded) recap:Â A number of individuals claim that they paid refundable fees of $20K & $30K to a company (Java Jo’z) contingent upon finding a location.Â They can’t find locations & ask for their money back.Â They are told that the assets of the companyÂ the individualsÂ paid have been sold to another company (Cuppy’s), and their money is gone.Â Sorry.Â The individualsÂ are confused because the new company looks likeÂ the same people sitting in the same desks in the same office as the old company, but now their logoedÂ shirts say “Cuppy’s” instead ofÂ “Java Jo’z.”Â The new, improved company hiresÂ high-powered lawyers to patiently and emphatically explain to these people that the new shirts mean they should go away quietly and leave them alone.
What are the lessons here for prospective franchisees?Â Don’t ever put money down on a franchise, even if refundable?Â Insist on an escrow account?Â What are the lessons would-be franchise buyers can take away from this unfortunate situation?
What are the lessons here for franchisors?Â Can you really transfer assets without the bad will and unresolved complaints coming along?Â Is it cheaper in the long run to make amends and show good faith, or to use legal and PR efforts to silence the debate?Â Has blogging made tactics of the past obsolete?
What positive lessons can we learn from this debacle?
Related Posts:Â Why Java Jo’z problems are Cuppy’s problems