Franchise Pick

AAFD: Franchising Watchdog… or Lapdog? Part 1

by sean on March 17th, 2008

(FranchisePick.Com)

Is the American Association of Franchisees & Dealers (AAFD) the franchisee’s watchdog or the questionable franchisor’s lapdog?

Will the next edition of AAFD Founder Bob Purvin’s The Franchise Fraud be subtitled A How-To Guide?

Is one-time franchisee advocate Bob Purvin being held against his will in a tiny modular coffee kiosk, being coffee-boarded by some brutal barista until he writes emails like the one you’re about to read?

These were the questions that went through my mind after reading this correspondence left in the comment section of a recent blog post on the Cuppy’s “We’re not Java Jo’z” Coffee & More franchise opportunity.

After reading disturbing allegations about Cuppy’s Coffee and its affiliate Elite “We’re not Emerald Coast” Manufacturing, a prospective franchisee emailed the AAFD to inquire before she wire-transferred in her $39,500 “refundable” deposit.

Hi AAFD,
I am currently researching Cuppy’s to potentially purchase a franchise. As you know, they earned AAFD accreditation last year with the highest score ever achieved. There are now allegations showing up on blogs that Cuppy’s is indeed not playing by the rules with potential franchisees (see example link below). Considering I’m early in the process with Cuppy’s, the negative press they are still receiving is weighing heavily on my decision.
Can you please comment if you have received any communication from people with similar concerns? Has AAFD been aware of the allegations? If so, what is AAFD doing about it?
Your help is greatly appreciated. I’ll look forward to your reply!

Sunday, March 16, she says received this reply:

Thank you for your inquiry regarding your prospective investment Cuppy’s Coffee. We have recently received several similar complaints registered with us regarding Cuppy’s Coffee or an affiliated company, Elite Manufacturing, that handles build outs for Cuppy’s franchised units. Each of these complaints has involved demands for refunds when the prospective franchisee failed to be approved for franchising.

Our investigation has revealed that financing for Cuppy’s franchises has been affected by the national mortgage crisis. Recently, prospects who have been routinely approved have been declined for financing because lending sources have dried up. Cuppy’s has been unable fulfill cash refunds on a cash basis, and has been negotiating repayment terms. All of the complaints we have received have involved franchisees who declined to accept monthly payments for these refunds.

We have not received any complaints from Cuppy’s franchisees who are in business.

Last year Cuppy’s applied to receive AAFD Accredited Contract status from the AAFD. Cuppy’s dramatically amended their franchise agreement to earn AAFD Accreditation. This is not an award that a company earns for good deeds; it is an accreditation that the AAFD provides to companies whose franchise agreements conform to the AAFD’s Fair Franchising Standards.

If you signed the franchise agreement that was approved by the AAFD, you legal rights are far superior to those of almost any franchise agreement in the world today. I would assume your legal counsel has advised you of this fact. FYI, the complaints we have received has to do with an agreement signed with Elite Manufacturing, which is not the franchise agreement, and is a document that we have no knowledge of.

I would be happy to visit with your legal counsel to see if I can be of assistance.

Best regards,

Bob Purvin
AAFD The Center for Total Quality Franchising!

From the AAFD website:

Fair Franchising Seal Recipients

The Fair Franchising Seal is a powerful marketing tool rewarding fair franchising practices. The AAFD honors Seal recipients in the marketplace and thereby encourages negotiated franchised relationships and ethical franchising practices. Only franchisors that earn the Fair Franchising Seal are eligible to market their franchise opportunities through the AAFD, and through AAFD sponsored trade shows. The AAFD Fair Franchising Seal sets a new standard for franchise selection.

VIVA FAIR FRANCHISING!

Sean Kelly

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