Subscribe
Previous Post
(FranchisePick.com) According to stories on CBS Channel 6 WOWT, and on Hotel Online, Mike and Cheryl Smyth, former owners of the Moose Creek Grill, claim they and others were contacted by a New York-based company that (according to Mike & Cheryl) would put together a franchise program and have them selling Moose Creek Grill franchises in no time… for $2500.
A few months later, the Smyths expected to be inundated with checks from franchisees, but instead received only “a folder full of papers” and ”a dent in [Mike's] pride, humiliation.”
Here’s an excerpt from the CBS report:
“He dangled a carrot out there and said listen, here’s what we can do, we can sell x amount of franchises for this amount of money,” says Mike, who sent the consultant $2,500.
The business developer promised Mike that by now he would have three franchises in other states. “Once he got his money he got harder and harder to get a hold of.”
* * * * *
“You have the dream, send all the money, then your money’s gone, then what do you do?” says Cheryl.
After Six On Your Side started investigating, the business consultant called the Smyths and promised a refund, but they’re skeptical a check will ever come.
“Kind of builds the hope and dreams of franchising a system in a restaurant, it didn’t work out that way so hopefully other people won’t make the same mistake a number of us have.”
By phone from Florida, [The consultant] … promises to refund money to the Smyths and to another Nebraska restaurant owner with the same complaint.
Frankly, the Smyths got off pretty lucky with only losing $2500. They could have saved that money had they been willing to do the slightest bit of investigation or applied a shotglass full of common sense.
A web search of the consulting company and the consultant’s name turned up no website, publications, 
association or directory listing, or other indication he was an industry participant, much less an expert.
A search of the consultant’s phone number indicated a possible broker status with a scattering of unstable, unsuccessful or abandoned franchise concepts.
With a couple of phone calls or web searches, the Smyths would have learned that franchising is a complex process that typically requires an investment of $65,000 – $165,000 and a minimum of 4-6 months to develop.
Franchising is not a get-rich-quick option for franchisee or franchisor. Being a franchisor takes dedication and long-term commitment to you concept and your franchisees. Judging by the fact that they no longer even own Moose Creek Grill, the Smyth’s dedication was certainly not long-term.
In the end, the CONsultant did Mike and Cheryl Smyth a huge favor. If he had brought them three signed franchise deals, in addition to their $2500 franchise program and zero understanding of franchising, the Smyth’s would have truly learned a lesson in financial loss.
WHAT DO YOU THINK? SHARE YOUR OPINION; LEAVE A COMMENT.
Submit editorial inquiries, press releases, wire transfers and bequests to FranchisePick.Com World HQ via: info[at]ideafarm.net.
Check out these franchise websites:
TopNewFranchises.Com: America’s Next Top… Franchise
FranBest.Com: The Best in Franchising
Franchise & Marketing Newsletters: Affordable. Stylish. Free.
__________________________________________
FREE WHITEPAPER: What’s the best way for companies to respond to online criticism and attacks? A Harvard report with multiple recent case studies compiled and is available for free download.
I have been biten by the Alan Feifer con man bug. I have my own business, and I was one of the suckers that paid the $1250 and the rest would be out of the first franchise. I to found where the phone calls that I was receiving were few and far between. I would call his Florida number and it would be weeks before he would call me back. I just recently received a call from Mr. F and like today, he told me that business is bad and with the economy and all. It is either one story or another, he is either in the hospital with some kind of problems, or on vacation or some lame excuse. I have asked for my money back, but he avoids answering the question. I don’t know what to do. Am I going to see my $1250 back??
After receiving the letter from Alan Feifer saying my candy store had been visited and would make a good franchise, I spoke with Mr. Feifer, and he said one of his representatives had been in the store. I spoke with him several times and asked if he couldn’t take the $2500.00 when the first franchise was sold. He said they would have to have $1250.00 now and the rest would be added to their fee after the first franchise was sold. I received all the papers (very professional looking), and talked with him several times. The time between my calls and his returning them seemed to take longer and longer. He then told me he had had a serious medical problem and would be back to his office two days later. I tried and tried to contact him and then found that both the New York and Ramsey, N.J. phones had been disconnected. That was in 2007. I’ve even checked the Social Security Death Index to see if he had died. After reading these forums, I guess I was lucky to only have lost $1,250.00!
I am so disappointed, as he seemed to be a very nice, professional person, and a caring human being, as I was going through a very difficult time due to the loss of a son, half way through our negotiations.
1660 days ago
[...] Yesterday, I posted a story (He Put the Con in Franchise CONsultant) about a couple who thought they could franchise their business for $2500 and, within three months, [...]
1660 days ago
[...] Yesterday, I posted a story (He Put the Con in Franchise CONsultant) about a couple who thought they could franchise their business for $2500 and, within three months, [...]
i got one of those letters a couple years ago from Robert Ames Development someone named Alan Feifer said he had visited my restaurant and thought it was perfect for franchising. I was tempted, then figured it was a form letter and tossed it out. for someone in trouble like many restaurtant owners, this can seem like someone giving them a chance to get out of debt quick.
Nice post, Sean.
$2500 for franchise development work?
It seems that whenever $$ is involved, the shady ones appear.
Joel Libava
The Franchise King Blog
1661 days ago
[...] Share This [...]