iSold It eBay Drop-Off Franchise Declared “New and Unproven”
(FranchisePick.com) As you may have read here (see links), the iSold It eBay drop-off store franchise chain was touted until recently as the hottest new franchise opportunity of the decade.
Earlier this year, a letter from iSold It CEO Ken Sully to his franchisees revealed that many stores had failed, and there were widespread problems with both the chain and with the concept itself. Sully initially suspended the sale of new franchises in order to, as he said, focus full attention on supporting the franchisees struggling for their survival. Shortly thereafter, ISold It quietly resumed selling franchises despite no indication that the problems had been solved… or even addressed.
Recently, Don Sniegowski of BlueMauMau.Org contacted Ken Sully, to request an interview. According to Sniegowski, Sully initially agreed to the interview, but backed out when he received the interview questions in advance.
In his post published earlier tonight (iSold It Declares Franchise Concept Unproven), Sniegowski points out that the new redlined version of the iSold It UFOC indicates that the California Department of Corporations seems to have required iSold It to inform prospective franchise owners that the franchise system is new and unproven, and that franchisees may never be profitable… ever:
…a new, “redlined” version of iSold It’s California Uniform Franchise Offering Circular (UFOC) has appeared. Among its first words are:
“The iSold It franchise system is still new and unproven. We are concerned about financial losses incurred by many early franchisees. The system is subject to ongoing change as we work to lower overhead, increase revenue and generally improve the profitability of our stores. We cannot and do not guarantee that your store will be profitable, either under the present system or under the system as it evolves.” - (page 2 of iSold It’s redline UFOC, May 25, 2007)
Regarding “redlined” UFOCs, Mark Leyes, Director of Communications for California’s Department of Corporations, explains: “For the state of California, a redlined UFOC is a revised Uniform Franchise Offering Circular that the state requires because of pertinent material changes that affect the required disclosure of a franchise system. Words that are added are indicated with a line under them. Words that no longer apply are crossed out with a line.”
Don is understandably disappointed that he did not get his questions answered. Perhaps he just needs to try again with a new set of questions. Perhaps you can help.
WHAT INTERVIEW QUESTIONS WOULD YOU ASK MR. SULLY REGARDING THE iSOLD IT FRANCHISE OPPORTUNITY?
View the BLOGLIOGRAPHY OF EBAY DROP-OFF FRANCHISE POSTS
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POSTED IN: ISOLD IT
13 opinions for iSold It eBay Drop-Off Franchise Declared “New and Unproven”
Don Sniegowski
Jul 28, 2007 at 4:38 am
Great article! To help everyone get started in adding their own questions to iSold It, here is the list of questions that were submitted to iSold It.
Don Sniegowski
Reporter, Editor and Janitor
http://www.bluemaumau.org
Jeff Jeffery
Jul 28, 2007 at 5:04 am
iSold It is obviously trying to cover their butts from lawsuits that they must be expecting. You can hear the argument by its legal counsel now -
Don’t blame us. We warned you that our franchise was unproven in the UFOC. We also told you in our financials how we were losing $$ like the mighty Niagara. You were able to find out on the Net that we were facing significant litigation, were experiencing reorganizaton and contemplating liquidation. And yet you still bought this piece of cr*p. Don’t look at us for being foolish.
sean
Jul 28, 2007 at 5:42 am
Don:
I think Jeff Jeffrey makes a good point about how this wording could be used, though it was my guess that this was language the CA franchise examiners required they put in.
Is that your understanding?
Don Sniegowski
Jul 28, 2007 at 11:02 am
Sean,
I spoke with California’s Department of Corporations and did not get a sense that they required the franchisor to put in such wordings. It is one of the reasons I called the attorney for iSold It who filed the reports to ask why the firm had redlined that the concept was “unproven”. She declined to comment, citing client-attorney privilege.
Don
Hugh Walter
Jul 28, 2007 at 5:57 pm
As a dumb English guy from across the pond - I’m assuming UFOC is = Universal Franchise Dumbly Dar!? can someone educate me please!
Thanks
hhcv
Jul 29, 2007 at 5:35 am
@Hugh Walter
A simple Google search reveals that a UFOC is a “Uniform Franchise Offering Circular.” Details which should be included in such a documents are outlined at the following site:
http://www.allbusiness.com/buying-selling-businesses/franchising-uniform/2200-1.html
As an Australian, I too get thrown by these US-centric terms. Thankfully, the power of the modern search engine answers many of these questions.
sean
Jul 29, 2007 at 10:20 am
Hugh:
Don’t call yourself dumb! And remember, there are no stupid questions! We Americans have infinite patience for our friends in 3rd world countries, and will do whatever’s necessary to do our part in helping Brits, Aussies and even Canadians along.
BlueMauMau has a good explanation of UFOCs (”Uniform Franchise Offering Circulars”) posted here and Franchise Agreements here
Here’s a .pdf of the redlined iSold It UFOC
Hugh Walter
Jul 29, 2007 at 6:31 pm
Dur!……..Why didn’t I think of that, spend all week boring my mates with my ‘Born-again’ Thechnobabble and how everything is on google, then don’t look myself - very dumb!! It WAS late! and it’s been an odd week….
Thanks all!!
Sean - I’m afraid I’ve laid one of my eggs on “Is snappy auctions…” Don’t hate me - I need help!!!
Hugh Walter
Jul 29, 2007 at 6:36 pm
I’ve got the idea, so If you start a legal challenge on the strength of misrepresentation in a UFOC, do you have a chance, or do they file for chapter 11 and run off to Mexico?
sean
Jul 30, 2007 at 6:13 am
You let my characterization of England as a 3rd world country go without returning fire? You did have a rough week.
They’ll run off to Mexico, all right, to a villa in Puerto Vallarta. They will enforce mandatory arbitration clauses, or will require you to sue in their home jurisdiction, jerk you around, stall, run up your legal bills while they finance their war chest with the ongoing revenues from, you guessed it, their franchisees.
Why flee when you can keep collecting franchise fees? iSold It is back selling. They just opened a new franchise in Hesperia, CA.
Hugh Walter
Jul 30, 2007 at 11:28 am
We are a third world country, we can barely support our troops in Iraq/Afghanistan, have had to buy dodgy ammunition (which proved faulty) and armoured vehicles ‘off the shelf’ because we didn’t have enough of the right stuff when needed, haven’t had a train run on time in twenty years, run out of water every summer (despite being one of the wettest countries on earth), except this summer when we all got flooded! where the ‘third richest nation on earth’s’ money goes is anybody’s guess. Into the pockets of the ruling class, and frittered away as tax breaks to Equity investors is my opinion!!
Some of these investment moguls are paying less tax than their cleaners - and that’s official! So insult away, those of us with a brain have long since ceased to have much pride in this grubby little principality! But don’t you dare beat us at football!…..that’s the Germans job!!! (sorry - soccer!).
iSold It eBay Drop-Off Franchise Declared “New and Unproven” at PIGASYS
Aug 1, 2007 at 12:12 pm
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sean
Mar 27, 2008 at 8:22 am
After 3 years, Brian and Gail Eischeid are throwing in the towel. A story in USA Today had drawn them in:
iSold It eBay Dropoff Franchise to Close in Savannah
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