Franchise Pick

135 opinions for Cuppy’s Coffee, Elite Manufacturing Franchise Complaint on Rip-off Report

• jd
  Feb 18, 2008 at 7:15 am

  So, where did the money go? This sounds just like what was happening with Java Jo’z/Cuppy’s fiasco from last year. It sounds like management is finding a way around escrowing prospective franchisee’s intial franchise fee. I wonder if this is ‘fair’ in the mind of the AAFD.

• sean
  Feb 18, 2008 at 9:41 am

  I was surprised to see this after all the negative press Cuppy’s Coffee franchise had to fend off with the Java Jo’z & Roy Snowden debacle last year. Especially since the parent company of Elite Manufacturing, Medina Enterprises, is also now marketing the Planet Wings franchise and the San Gelato franchise as well as the Cuppy’s Coffee & More franchise.

  Hopefully, this is an isolated incident.

• jd
  Feb 18, 2008 at 10:26 am

  Assuming that this report is correct, you hope it is an isolated incident, but it still doesn’t explain why they have to spread the payment out over 24 months. As an accountant it makes me think that they are having cash struggles, and they are using this guys money to fund some other portion of their business. We’re not talking millions here.
  On another site, they supposedly offered another prospective franchisee no initial franchise fee and a discount on his building. It sounds like they are getting desperate.
  And since you mentioned the other franchises that they are now franchising through Medina, I would be a little cautious as a prospective franchisee. The press releases talk about rapid expansion, but the part that got me the most was the release that stated Medina would generate $75 million in revenues on San Gelato. To me this sounds more like a company interested in their own revenue rather than the franchisees.
  I still remain skeptical about these companies. Maybe they’ll prove me wrong.

• jd
  Feb 20, 2008 at 3:54 pm

  Sean, it seems as if your posting this has helped Rolando, because today there is an update, saying it was all a misunderstanding. The update has a similar style to the ‘corrections’ last year at this time. At least the guy is getting him money back.

• Daniel Suarez
  Feb 21, 2008 at 7:57 pm

  I have the same is exact issue with Elite and Cuppys. My partner and I put down $39,600 and after not being able to find financing and Cuppys breaking their agreement (by sending out LOIs to several locations without having secured financing as per their Franchise Agreement) AND being in writing that Elite would refund all monies if financing could not be secured it has now been over 3 months since we have placed a written request and many daily calls to have our money refunded without any word or status update on our case from Elite. Each time we call the ONLY person Dany Jones who seems to be able to do anything about refunds is OUT SICK, or ON THE PHONE, or IN A MEETING and he NEVER returns calls or even replies to certified USPS mail!

• jd
  Feb 22, 2008 at 8:27 am

  Daniel,
  It seems to be the only thing they respond to is when someone gets out on the internet and posts these things (look at the Java jo’z/Cuppy’s posts on this and other franchise websites). If you do that then they will contact you because they don’t like the bad press.

  Also, have you signed a franchise agreement?

  I fully anticipate that if you do this, that in a week or two’s time, you will write a full retraction stating that they’ve paid you back. Just look at the retraction on Rip Off Report.

  Good luck getting your money back, assuming that your details are correct (since I am only hearing one side).

• Daniel Suarez
  Feb 22, 2008 at 10:57 am

  Here is an update.

  Mr. Jones telephoned me today after getting wind of this posting.

  So, we are now in contact. This is the first verval communication from Mr. Jone. Mr. Jones had in the past exchanged emails with us and as per Mr. Jones he said we are headed towards a resolution. To be fair we have been able to reach Desiree who would just pass on messages to Mr. Jones.

  Something I did not know and that it was pointed out to me today is that Mr. Jones has a personal illness and therefore fell behind with his work load but, once again, he assured me that we will work towards a prompt resolution.

  As with Rolando ELite promised to pay the $25,000 franchise fee if we singed a Franchise Agreement with Cuppys. This special offer was of limited time and it would expire at the end of September 2007. So we did, who would not sign if you can save $25,000!!!

  So now we once again wait.

• jd
  Feb 22, 2008 at 1:23 pm

  Good Luck Daniel. i had this strange feeling that you’d get a pretty quick response.

  It makes me wonder if these are two isolated cases or if there are more out there.

• sean
  Feb 22, 2008 at 3:34 pm

  jd or someone help me understand this.
  Daniel gave Elite a $39,600 downpayment on a coffee kiosk for a Cuppy’s franchise, refundable if he couldn’t get financing.
  He couldn’t get financing and asked for his $39,600 back.
  For three months they don’t respond to his repeated requests.
  He leaves an angry post here.
  He returns ONE DAY LATER to say: Nevermind! They’re going to waive my $25K franchise fee! Who wouldn’t jump at that?
  What happened to not getting financing?
  He wants to be a franchisee after not getting a response for three months?
  This is like some 1950s science fiction movie where people make scathing, irate comment, then inexplicably return as a pod people two days later, saying gee, what swell bunch o’ fellas they are?
  Soma? Lobotomy?
  I am definitely not picking up any gooey pods left on my front porch, or letting any of them big Star Trek flowers spray their happy spray on me…
  What am I missing here?

• Daniel Suarez
  Feb 22, 2008 at 3:52 pm

  Sean, the saving of the $25K was offered in Sept. when we singed the Franchise Agreement. It was the number one motivator to move so quickly and signing. I never said we are getting our money back. We are still working on that.

  Yes, we put in our refund claim in December 2007. We’ve communicated primarly via email since then untill this posting. Mr. Jones has called me twice today and he has assured me that he is making things move right along and that we will come to an agreement. He is making things happen.

• jd
  Feb 22, 2008 at 3:54 pm

  Sean, my guess is that it’s the possible bad publicity and considering that they have a history with it, they’ll respond quicker, because they then seem like the ‘good’ guys.
  What worries me is that they are having people put a down payment on the store and giving away franchises for ‘free’. My guess is this is a way to avoid having to put the money in escrow, which may be required by some states until their obligations are complete (opening the store). They then have the money in hand.
  Also think about if they know that these franchisees won’t get financing. It gives them a few months of additional capital until they ask for the refund. Then they use some other guys down payment to refund Daniel, and they play that game. Seems shady to me, but I’m by nature pesimistic.

• sean
  Feb 22, 2008 at 5:42 pm

  jd said: What worries me is that they are having people put a down payment on the store and giving away franchises for ‘free’. My guess is this is a way to avoid having to put the money in escrow, which may be required by some states until their obligations are complete (opening the store).
  That’s an interesting possibility. Unfortunately, the pessimistic are usually right lately.
  Daniel: I misinterpreted what you were saying. My apologies. Two things to be aware of: jd is right that the company is very sensitive about bad pr on the web and spent a lot of money last year trying to remedy it in some seemingly heavy handed ways.
  The other thing is that there is this pattern I alluded to where outraged commenters change overnight into board members of the Cuppy’s Fan Club, sometimes making statements they most assuredly didn’t write. Whether through threat, bribe or both, their hope of recouping their dough seems tied to immediately singing the company song for all to hear. The weird thing is that no one ever comes back to confirm they got their money. It’s just silence after that.
  It looked like Cuppy’s made some genuinely positive moves last year, and won an endorsement from the American Association of Franchisees & Dealers. I’m hoping for the best. If posting here helps you get your hard-earned money back, I’m delighted. Just do me a favor - If you get your money back, come let us know. If you don’t, slip me a confidential email and tell me whether it’s a loved one being held in a secluded location, compromising photos or the nondisclosure agreement from hell… I’m just curious as to how they disappear the complainers.

• jd
  Feb 22, 2008 at 7:07 pm

  Sean
  The accounting fraud method that I am talking about is called ‘lapping’. Check it out. My guess is that Elite is using the $37k from one person to cover someone else’s construction. Again, my speculation.

  Oh, and I’m curious to hear what the AAFD’s stance would be on Cuppy’s ignoring two prospectives franchisees request for refunds if they were promised back in their agreement until they made an internet post.

  Daniel, my personal opinion here, but be glad you didn’t get involved with this company.

• sean
  Feb 22, 2008 at 7:45 pm

  Make that three:

  http://www.ripoffreport.com/reports/0/283/RipOff0283583.htm

  An excerpt: My wife wanted to invest in a franchise, so she looked on the web and found Cuppy’s Coffee and More. She filled out the online application and soon Cuppy’s reps were calling her….My wife was very excited and gave a deposit of $36,000.00. Cuppy’s sent us the Franchise Offering Circular and Franchise Agreement. We also filled out paperwork for third party financing (Cuppy’s was to refer us to different finance companies). My wife was not able to secure a business loan. Cuppy’s was not able to get us a loan either. Cuppy’s has held our deposit for over a year now. I believe they knew my wife was not qualified for a loan and still said she was pre-qualified. After reviewing the Franchise Offering Circular I noticed that the $16,000.00 franchise fee was not refundable…. Cuppy’s never put the rest of the money in an escrow account. Elite Manufacturing is refunding $20,000.00 to us but in monthly installments because of what Cuppy’s did. That was very dirty on Cuppy’s part… CUPPY’S should be ASHAMED of their tactics. Ralcalee Long Beach, California

• jd
  Feb 22, 2008 at 8:02 pm

  It doesn’t seem to be an isolated case. Wonder how many times they will let this happen with San Gelato and Planet Wings?

• sean
  Feb 25, 2008 at 8:57 am

  Here’s another recent rip-off report on the same issue. See the original post here:
  http://www.ripoffreport.com/reports/0/285/RipOff0285086.htm

  Cuppy’s Coffee And More/Elite Manufacturing/Java Jo’z/Emerald Coast Manufacturing/Medina Management These companies are all of the same people, dedicated to stealing your money Fort Walton Beach Florida

  Submitted: 11/15/2007 4:00:32 PM
  Reported By Mike Titusville, Florida

  My involvement with this company dates back to December of 2005. Due to the lengthy site selection and approval process I believe I have more insight due to length of time than most victims.
  First of all, Cuppy’s claims to have nothing to do with Java Jo’z or Emerald Coast Manufacturing. In fact, I became a Java jo’z licensee based on the selling point that the company intended to become a franchise after achieving the goal of 250 liscensees. I would then be grandfathered in meaning I would never pay franchise fees. Furthermore when I sold the business in the future, the future owner would also be grandfathered in. Thus, assuming the franchise took off, I would get a better return on my investment. When I visited the headquarters, I met with George Speed Ames and Richard ‘Morg’ Morgan. I was told that they came on board because Mr. Snowden (the convicted felon) needed their expertise to make the company grow.
  These gentlemen were commited to making Java Jo’z succesful. When they franschised, they supposedly changed their name to avoid trademark violations when opening stores at new locations. It seems that due to Mr. Snowdens federal tax violations there may have been other, less starightforward motives.
  Some of the attempts by this business entity to rebutt internet information/complaints have indicated that Mr. Morgan, Speed, Ben Doyle, and Mr. Hibbing, Danny Jones (the good ool’ boy group) had nothing to do with Snowden’s illegal activities when in fact they have all been there all along.
  Changing the company name, the medina management formation, the insinuation that Elite manufacturing bought only the physical assets of Emerald coast are all very clever attempts to continue doing exactly what Snowden was doing, while ensuring that they would never have to refund a deposit.
  When you sign a franchise agreement with this entity, you must buy the building or one of their approved configurations. Bt the way, they are also on their third builder (also all of the same people over and again). This could be a way to stall delivery (this was the case in my experience).
  These guys are good at what they do………theft and deception. I believe that sooner or later they will pay for their actions as do all thieves and parasites.
  As an aside I have requested a refund of my deposit. I was told by Cuppy’s to contact Elite, which told me to contact Emerald Coast. All of these businesses are comprised of the same people, albeit with different title from company to company, in the same building at the same address.

• Steve
  Feb 26, 2008 at 9:21 am

  I too have fallen under the Elite/Cuppy’s spell. They have had my money since August 2007 and I hired a lawyer in October to get my $37,900 back. Elite (or Cuppy’s-not sure since it is the same lawyer) is offering 20 monthly installments for the $22,900 and as far as the $15,000 they do not feel it should be returned to me. I signed 8/15/07 and notified them 10/1/07 that due to the financing that I wanted to terminate the agreement and get my money back. I am still waiting. Now I have interest fees for the money I borrowed through an equity loan for the down payment as well as lawyer’s fees.

  I don’t understand how corporations can do this.

• employed
  Feb 26, 2008 at 9:35 pm

  you guys are getting smarter

• jd
  Feb 27, 2008 at 7:27 am

  Huh, I wonder if they’ll allow for monthly installments going forward for people signing franchise agreements. I doubt it.

  Seriously, if they are promising refunds back if someone can’t get financing, why aren’t these funds going into an escrow account?

  I wonder what the AAFD’s stance is on all of this?

• sean
  Feb 27, 2008 at 9:38 am

  Rolando was told their “VP of operation made a mistake by not putting the down payment in an escrow, so they [can’t] return the down payment in full…”
  Daniel said: Each time we call the ONLY person Dany Jones who seems to be able to do anything about refunds is OUT SICK, or ON THE PHONE, or IN A MEETING and he NEVER returns calls or even replies to certified USPS mail!
  Steve on ROR said: I have requested a refund of my deposit. I was told by Cuppy’s to contact Elite, which told me to contact Emerald Coast. All of these businesses are comprised of the same people, albeit with different title from company to company, in the same building at the same address.
  Steve here said: Elite (or Cuppy’s-not sure since it is the same lawyer) is offering 20 monthly installments for the $22,900 and as far as the $15,000 they do not feel it should be returned to me.
  Sounds like a trickbag that would make Houdini proud, featuring such classics as Sorry, wrong company!, Oops, that shoulda gone in escrow!, and We’ll get that right over to you… over the next two years!
  jd said: I wonder what the AAFD’s stance is on all of this?
  I hope the AAFD will look into it. The AAFD has nothing to be ashamed of, since (from what I understand) their award/accreditation was based on the Cuppy’s Franchise Agreement & Offering Circular. If Cuppy’s is circumventing the provisions and the spirit of the terms of the disclosure documents, they are violating the good faith that prompted the award. I would hope that Bob Purvin and the AAFD would follow up to make sure they weren’t duped.
  Giving an award based on what a franchisor says it will do in the future seemed to me to be a bad idea at the time. But Bob Purvin has always seemed like an honorable guy, and they have credible people involved like Michael Webster, who chairs the AAFD Franchisor Accreditation Subcommittee. I’d hope they’re monitoring the situation, if even for their own credibility.

• jd
  Feb 27, 2008 at 10:36 am

  Here seems to be a common theme: I signed the franchise agreement and I can’t get financing.

  So, is Cuppy’s just giving franchises away to anyone, even if they might not have the capital to fund the franchise. Or are banks not loaning to them, because they don’t think Cuppy’s is a good investment model for the franchisees.

• jd
  Feb 27, 2008 at 10:45 am

  There are two more on rip-off report (one of them seems to be the same Steve that commented above). The other is from someone in PA. So, that’s five now.

  I thought that they had turned the corner.

• Steve
  Feb 27, 2008 at 10:52 am

  After reading through all the blogs from folks like myself, I logged claims with the Florida Attorney General’s Office and BBB. Had I checked with them first before engaging in any business with these two companies, I would have known that complaints were made against these organizations already and not entered into any relationship with them. Hopefully with their help as well as my lawyer, resolution will be made. I urge all the others that have been “taken” to seek legal assistance. I don’t know about them but I am tired of being taken advantage of and hope that no one else falls into this trap.

• sean
  Feb 27, 2008 at 12:24 pm

  DISCLAIMER: the following idea is completely unrelated to Cuppy’s, Elite Manufacturing, Emerald Coast, Java Jo’z, it’s officers or affiliates; any resemblance to actual businesses, living or dead, is entirely coincidental.
  Years ago, while at the IFE convention in Vegas, I stared in amazement at a bustling casino where thousands per day kept depositing money hour after hour. It is the ultimate business: like a owning a deposit-only bank.
  But I just had an idea for a better business - one without gov’t interference or any of those nasty occasional pay-outs.
  Imagine people give you, say, $37,900.
  You can use the money, interest-free for 14 months til they’ve lawyered up.
  You then pocket $15K for admin expenses, pain & suffering caused by holding unearned income, etc.
  They then give you an interest-free loan of the remaining $22,900 to (possibly) pay back over the next two years.
  In essence, a business where people pay you $15,000 to play with their $22,900 for three years.
  I think I’ve finally found it: A business with more upside than owning a casino!
  I wonder if anyone’s tried that…?
  I wonder if it would work…?

• jd
  Feb 27, 2008 at 12:51 pm

  It’s very interesting where they get that $15k number from, since none of their concepts have a $15k fee.

  Steve, I know that you say you’re working with your attorney, but if he doesn’t have experience working with franchising, it may be wise to talk to a franchise attorney, as they might be able to point out some useful information that a regular attorney may not, with regards to franchise laws. Also, do searches on the internet and this website for Java Jo’z/Cuppy’s. You’ll find a lot of similarities with what happened to you, except Cuppy’s/Elite ‘bought the assets’ of Java Jo’z/Emerald Manufacturing.

  Sean, sounds like a great business deal. Wonder if it’s legal?

• sean
  Feb 27, 2008 at 1:12 pm

  jd said: Sean, sounds like a great business deal. Wonder if it’s legal?
  Some people just don’t understand the entrepreneurial spirit.
  Next, you’ll be asking if it’s ethical!

• jd
  Feb 27, 2008 at 1:29 pm

  come on sean, it’s only un-ethical if you get caught. that’s how pyramid schemes fall. they work great at first, until you can’t get people to put more money in to pay the first ones.

  Steve, please keep us informed of how things are going. They’ve been known to silence what’s happened in the past.

  feeling guilty about all of the negative things being said about Cuppy’s so you decided to put up the PA store opening?

• sean
  Feb 27, 2008 at 3:42 pm

  come on sean, it’s only un-ethical if you get caught.
  And if you’re far enough away when it implodes, you can still claim it as a success story.
  …feeling guilty about all of the negative things being said about Cuppy’s so you decided to put up the PA store opening?
  Nah… Not guilty. Cuppy’s has got enough experts touting the franchise opportunity. But I do think the franchisees can use all the help they can get.
  Steve: I second jd’s advice and request for updates. You can also email in confidence to info[at]ideafarm.net.
  Also check out:
  http://www.bluemaumau.org/cuppys_coffee_john_dozier_what_franchise_times_wont_tell_you
  http://www.bluemaumau.org/cuppys_i_see_it
  Franchise Times Recounts Cuppy’s Coffee’s “Blog Attacks,” Scoble Incident
  http://www.franchisepick.com/franchise-times-recounts-cuppys-coffees-blog-attacks-scoble-incident/
  An old one with some interesting comments:
  http://franchisormarketing.com/?p=170

• jd
  Feb 27, 2008 at 7:12 pm

  sean, I agree the franchisees are going to need all of the sales that they can get. After following the Coffee Beanery story, there is plenty of evidence that their ‘cafe’ were a failed business concept. Cuppy’s reminds me of them.

  Steve, did you sign a franchise agreement with Cuppy’s? Was the $37k check made out to Elite? If so, how would they have lost revenues, since all they would be doing is building your store? I commend you on going to the AG and the BBB. I would also contact the AAFD (aafd.org), since Cuppy’s franchise agreement is supposed to be the fairest of any they’ve ever reviewed. If that’s the case, it seems like they’ve found loopholes.

• Robyn & Corey
  Feb 27, 2008 at 11:07 pm

  I have been trying to get my deposit back since they were Java Joz. They actually told us Morg came up with the name for Cuppy’s and was very excited about having us become a part of Cuppy’s. Yeah whatever, just want my money back. I am sure they have earned more than enough intrest with our $30K. I have hired lawyer, filed complaints more times than I care to mention, still nothing. I am running our of ideas. Help???

• Steve
  Feb 28, 2008 at 5:06 am

  JD, I have filed with the AD and the BBB. I did sign a franchise agreement with Cuppy’s however the check was made out to Elite for the deposit of the build out. The purchase order clearly states it was all contingent to financing. Did I note that the finance department from Cuppy’s instructed me to state I was keeping my full time job in order to pay back the loan even though they demanded as well as knew that I would be leaving my job to open the franchise? Obviously they have denied that. I don’t understand how there would be any loss of revenues when I sent them the check on 8-16-07 and requested the refund on 10/1/07. Elite did absolutely nothing for me and had no expense during that time. It is my obsession at this point to get this rectified in any way I can. My issue is with Elite not Cuppy’s except for the fact that Elite is the exclusive build out company for Cuppy’s which does, in my mind, tarnish their name. Wish me luck!

• Steve
  Feb 28, 2008 at 7:10 am

  Read below from the Fair Franchise standards from the AAFD regarding franchise fees. I wonder if the AAFD is aware of what is happening with our money. The franchise fees are to be placed in escrow and the franchisor can not fully earn the fee until the business is opened:

  STANDARD 6.1 INITIAL FRANCHISE FEE

  An initial franchise fee should be structured to compensate a franchisor for providing services necessary to the opening of the

  franchisee’s business and to have a stake in the success of a franchisee and encourage a franchisee to follow the franchise

  system.

  Commentary: Proposed by subcommittee (not adopted): An initial franchise fee is not fully earned by a franchisor until a franchisee

  is opened for business. A portion of the initial franchise fee should be escrowed with a third party. When a franchisee opens for

  business, a franchisor is paid the balance of the initial franchise fee. If a franchisee never opens for business, the escrowed portion of

  the initial franchise fee should be returned to the franchisee.

  The initial franchise fee should be sufficient to cover a franchisor’s expenses associated with the sale of a franchise and a period of

  time thereafter until franchisee is paying full service fees.

• jd
  Feb 28, 2008 at 7:14 am

  Steve

  Thanks for the info. As I’m sure you are aware, but Cuppy’s/Elite are more or less the same company, with the same physical address. They are owned/operated by more or less the same people. When Roy Snowden was indicted by the IRS (now serving 4 years in jail)he sold Java Jo’z and Emerald Manufacturing to Medina Mgmt and those companies are now called Cuppy’s and Elite Manufacturing.

• jd
  Feb 28, 2008 at 7:26 am

  Steve,
  That AAFD quote wasn’t adopted in their rules. it was talked about, but not adopted. In California, Cuppy’s was required to put franchise fees in escrow. My guess is they are getting around it by saying that you are paying Elite and Elite will pay your franchise fee. It’s their way of being able to spend the money earlier without escrow restrictions.

  I’m going to send my e-mail address to Sean, and if you want to contact me, you are more than welcome to. I’m not an attorney, but I was a controller for a franchisor, so i do understand some of these things.

• Steve
  Feb 28, 2008 at 1:16 pm

  To Robyn and Corey, I am glad to hear that you have hired a lawyer too. File claims with the Attny General’s office and BBB.

• KD
  Feb 29, 2008 at 1:49 pm

  we are being offered the same deal by Elite, they will pay the fee of $25,000, but have to sign today. Do we do it? It doesn’t sound like it.

• sean
  Feb 29, 2008 at 4:50 pm

  KD
  Two Questions:
  1) Why would the deal have to be today? Why would Monday be different? Or next Friday?
  2) I’m sure they would agree to using a third-party escrow service so that, in the event something happens, you will get your money returned, as agreed. Ask them.
  Please keep us posted.

• jd
  Feb 29, 2008 at 8:14 pm

  KD

  I hope for your sake you didn’t send the money. Anyone that is looking to buy a franchise (no matter what company) should take their time and be sure that they are ready for it. If in the long run it costs you an extra few thousand dollars, it’s better than being forced into sending the money.
  To me it sounds like a desperate move to get your money. The question you should be asking yourself is ‘why?’. In my experience working for a zor, there were only a couple of times where this tactic was used, but the potential zees were given two-three months notice of the pending initial franchise fee, not a one day deal.
  Take Sean’s advice and ask to use an escrow service. If they say ‘no’, walk away, because if they really cared, they would agree to it.

• Steve
  Mar 1, 2008 at 7:00 am

  KD
  Hopefully you have not wired them the money yet. Ask them to amend the purchase order to clearly state that if for any reason prior to opening the franchise that your entire deposit would be wired back to your account immediately without penalty. I think your questions will be answered with their response.

• KD
  Mar 1, 2008 at 8:56 am

  Actually, I asked them to write in the “fully refundable deposit” clause in the contract contingent upon our obtaining the location that we desire. They are reluctant to do so and are finding other ways to make me happy to avoid giving a refund. (Felt like adding this clause would start our relationship out on a “negative note”). I have not received a UFOC and by law, that should have been provided upon approval of our application. I definitely have my guard up. I have not sent money because I am suspicious of anyone who gives me a bank account to deposit a large sum of money into with no written guarantee!

• jd
  Mar 1, 2008 at 9:38 am

  kd

  A couple of red flags here: What’s their loss if you ask for a follow refundable deposit if you don’t buy their system.

  What were they asking you to sign? Was it a franchise agreement? If so, that’s really against the regulations, because they are required to give you a UFOC 10 business days prior to your signing a franchise agreement.

  Also, for anyone else reading this, NEVER sign a franchise agreement without having an attorney/accountant look over the UFOC and franchise agreement. They can usually find little things based on their experience.

  One question for you KD, have they used their AAFD seal as a selling point in their discussions with you?

  And my last piece of advice, don’t sign or send any money in until you are comfortable. Remember, this is your money and don’t be pressured into losing it.

• sean
  Mar 1, 2008 at 9:50 am

  KD:
  A written guarantee is worthless unless a company is willing to honor the contract. All the early Java Jo’z had written guarantees and did not get their deposits returned when requested. See the comments above of others who have written guarantees, yet have not seen a dime returned and are having to hire attorneys just to get a 20 month payout on a reduced amount.
  Talk to an experienced franchise attorney now. It will be the best investment you ever make.
  It’s important for you to know that a franchisor cannot accept money from you until at least ten days after you’ve received the disclosure documents. Have they told you this? Have they asked for a deposit before you’ve been given the UFOC? Are they claiming that your payment is going to Elite - and not the franchisor? If you have discussed the Cuppy’s franchise with them and your understanding is that you are putting money toward a Cuppy’s franchise (no matter who the check’s made out to), then this MAY be a thinly veiled way to sidestep pre-sale franchise disclosure laws and a violation of the FTC franchise rule.
  But I’m a marketing guy - and no replacement for an experienced franchise attorney (which is what you need. Fast).
  Please state what you’ve been asked to pay, what the terms of that agreement are, whether you have been offered a franchise as part of your deal, and what information you’ve been given about projected sales volumes or what you might make, etc. I’ll ask some real attorneys to comment on your situation.
  Also, hire an experienced franchise attorney and have any agreement reviewed thoroughly prior to signing or paying anything.
  Act in haste, repent in leisure. And poverty.

• KD
  Mar 1, 2008 at 10:15 am

  I’m being asked to sign a Purchase Order that states the selling price,equipment/build out specs and their agreement to pay the franchise fee. Then, we must deposit the downpayment for them to proceed with negotiations on the lease and location that we desire.

• KD
  Mar 1, 2008 at 10:27 am

  JD, yes. They have mentioned their AAFD award, but it is plastered all over their site as well. Yes, we have been told this deposit goes to Elite for the purchase order/build out/white box. I am confused yb other franchisees are are thrilled to be on board and love the company and support. Two I have called under Cuppy’s referral, one, I called upon on my own-although Cuppy’s knew about it. I think I will follow up on a few more on my own?

• sean
  Mar 1, 2008 at 10:41 am

  KD: In my humble opinion, it is a red flag that you are far enough along in the process that they have given you franchisee referrals to call, yet you haven’t been provided with the required disclosure documents. A required exhibit in the UFOC is a list of current and past franchisees - including those who have closed. They may have a different perspective than those you were referred to. It also includes current or recent litigation, past bankruptcies of execs, etc. Not to mention the terms of the agreement that you are getting more and more invested in.
  It seems like you are being asked to get more and more invested in a venture but - for some reason - you haven’t been given the terms.
  Seems to me to be like being invited into a high stakes card game, but having to place your bet before you’ve been told the rules OR seen your cards.

• jd
  Mar 1, 2008 at 1:41 pm

  KD,

  I agree with Sean, before signing anything, hire a franchise attorney now. There are some franchise attorneys that post on here and other franchise websites like http://www.bluemaumau.org that now the background of Cuppy’s/Java Jo’z. IF they can’t help you out, maybe they can refer you to someone in your area. AAFD.org also has a list of franchisee attorneys that you could take a look at. It probably won’t be cheap, but if it were me, I’d rather spend a couple thousand dollars on the front end than lose my life savings in five years (if you aren’t successful).

  Also, are you in a state like IL, CA or one of the registration states? If so, call up their franchise office and see if there have been complaints about the system, and ask them questions. They’ll probably tell you if Cuppy’s is abiding by the law.

  If you have any questions, that you’d like to ask me via e-mail, e-mail Sean and he can give you my e-mail.

• jd
  Mar 1, 2008 at 8:41 pm

  KD & Steve

  I’m just curious. Are you aware that Cuppy’s, Elite and Specialty Co-op (who I’m sure you’d be required to buy your coffee from) are all run by the same people? KD, since you hadn’t seen a UFOC, I’m not sure if you were aware of this or not. Therefore, if they aren’t making enough money from royalties, they can arbitrarily raise your prices on goods. It’s not a good situation to get into as a franchisee. That low royalty percentage that’s in the franchise agreement, could easily be raised just by increasing your coffee costs.

• KD
  Mar 4, 2008 at 4:49 pm

  Interestingly enough, I had responded to the last purchase order/agreement (sent via email) with my terms, a “refundable deposit” clause and wanting my attorney to look it over before sending the deposit. I also added that I would like a copy of the UFOC before we move forward with a cash investment. That was three days ago…typically, I hear from them 2-3 times a day…nothing so far…

• jd
  Mar 4, 2008 at 5:47 pm

  KD

  Thanks for the update. Makes you wonder if they don’t want to deal with you now that you’ve lawyer’d up and are getting some advice before going forward.

  In the long run, it’s probably a smart move for you. I’ve read about another coffee franchise and it seemed like their franchisees weren’t fairing so well, and it seems to run the same type of business as Cuppy’s. Had you run any numbers to determine how much in sales you would have to do to breakeven? That’s another thing to consider. Also, just so you know, if they were giving you any numbers as to what your store ‘could’ do, that could be an illegal earnings claim.

  Please keep us updated on your progress.

  Steve, anything new on your side?

• Daniel
  Mar 5, 2008 at 2:49 pm

  If you are in the same situation discribed in these posting please let me know by sending me a private and confidential email.

  Do not sign a release prepared for you by Elite. You will be giving up your freedom of speach!

  Rolando, (or anyone else in his situation) you have a release signed but if you contact me all communications will be confidential.

• KD
  Mar 6, 2008 at 9:15 am

  Ok, JD…who’s the other franchise? I also received a call yesterday from my Cuppy’s sales rep and will have to call them back today. I’ll let you know…

• jd
  Mar 6, 2008 at 10:32 am

  KD

  The other franchise is Coffee Beanery. It seems as if almost all of their ‘cafes’ shut down within 3-4 years of opening.

  Just so you know, Cuppy’s is aware of these websites and that’s why some of these people ‘retract’ previous statements, and that’s probably why you got a phone call from them yesterday.

  Another quick question for you. What’s drawn you to Cuppy’s?

• KD
  Mar 6, 2008 at 4:03 pm

  jd-I liked Cuppy’s because it had some flexibility in decor and menu items. I also liked the name which seemed catchy for families, not just the business professional. The product is good and the franchisees I spoke with seemed like good people. I’m sorry I keep finding negative press on them, I was really excited about it. It makes me wary to call on other coffee businesses, that’s for sure. I’m at the “Now What?” stage.

• jd
  Mar 6, 2008 at 9:04 pm

  KD-

  Have you done any financial projections? If not, I think you are falling into the trap that a lot of Quizno’s owners ran in to. They love the product, but now that they own a store they are struggling to get to a breakeven number (that’s why they are continually getting sued) and wish they had never invested.

  Coming across this negative press is better now than later, because now you can ask them difficult questions before you ever sign. You’re the one putting the money up, you’ve gotta understand that there is a possibility that you’ll lose your entire investment, because a good amount of people do in any business venture they start.

  If you are still interested in them, get the UFOC, go over it with a franchise attorney, do some financial projections with an accountant, and call a lot of the franchisees (not just the ones they recommend calling).

  Again, if you have any questions that you’d like to ask me, but not over an open forum, Sean has my e-mail address.

• Robyn
  Mar 6, 2008 at 10:44 pm

  KD
  My name is Robyn, I gave Java Joz’s (now Cuppy’s) $30k in 2005, I am still trying to get it back. The same people are still working in the same office located in the same town. You will not get your money back (YOU WILL NOT GET YOUR MONEY BACK) full refund was stated in my contract also..its not worth the paper it is written on. Their is a lady (Sue V.) in my home town who has opend a JJ, she was about 6 months ahead of us in the process. Her building is a piece of crap she has had problem after problem with it and the equipment, of course she can’t reach anyone at the office. She has been open for a year (give or take a few months) and as of Feb 1st she has been closed. The sign on her building says for repairs but I see no repairs taking place. She has lost MUCH more than $30k it is running in the tripple digits and beyond. What more can we tell you, this company WILL take your money. In a way I am blessed I am only fighting for $30k it could have been worse (although $30 is bad) Please stay away from this company. I am only one voice but trust me there are many more people out there who have lost their money also. How many peoples postings do you need to read to believe us…Keep your money invest it, start your own business you don’t need some crooks to kill your dreams.
  Hope this helps you make up your mind..Please email me I will call you if you don’t believe me and tell you anything you want to know. I am very passionate about exposing this company for what they are.

• Daniel
  Mar 7, 2008 at 5:21 am

  Here is something I came up with to help me in my financial projections…

  http://cdanielsuarez.com/docs.aspx

  Hope it helps.

• jd
  Mar 7, 2008 at 7:19 am

  Daniel

  Thanks for the spreadsheet. If I still had the one that was used at the franchise I was with, i’d share it, but I don’t. It calculated the breakeven point, which is another way to look at it. Based on the variables that you had in your spreadsheet, you’d have to do approx. $340k/year to breakeven (which includes a salary for yourself)

  KD-As i was driving to work this morning, I was remembering your post about the flexibility of Cuppy’s. If you go forward, be sure you get those verbal statements/agreements in writing with the franchise agreement, because you never know when they might change their minds. There are parts to the franchise agreement that you can negotiate.

• Daniel
  Mar 7, 2008 at 3:15 pm

  Great talking to you today Robin.

• Robyn
  Mar 7, 2008 at 8:39 pm

  Yes it was nice to hear from you. Hope I can help with putting a stop to this company. I will have the info for you soon.

  Robyn

• maria
  Mar 8, 2008 at 3:29 pm

  I’m in a similar situation as the others who are trying to get their deposits back from Elite. The only difference - I never signed a franchise agreement. It’s been 5 weeks since I informed Desiree at Elite that I would not be signing the franchise agreement and wanted my deposit back. What do you know - I haven’t heard back from anyone. I was never treated with anything less than the utmost respect from the people from Cuppy’s; it’s Elite that has the problem. You would think that the mother company, Medina, wouldn’t allow one company to bring down all the others. I’m hoping to hear what the AAFD has to say about Cuppy’s and Elite - I’ve sent them all this information.

• jd
  Mar 9, 2008 at 10:29 am

  maria,

  Cuppy’s and Elite are both under Medina. If Medina lets Elite treat prospective franchisees this way, what makes you think that Cuppy’s won’t do the same thing when problems arise. They are both being led by the same management at Medina.

• MJ
  Mar 9, 2008 at 11:14 am

  I am considering a Cuppy’s franchise, and have had a positive experience so far. However, all of the negative press is weighing heavily on my decision to move forward. Here is my story so far:
  Within a few days of being pre-approved for my app., I received the UFOC and Franchise Agreement. My first concern is that the List of Franchisees and Financial Statements are for 2006. I’ve been told that 2007 statements won’t be ready for another couple of weeks. I will be advising my Sales Rep that I won’t make a decision until I see the 2007 statements.
  I’ve spoken with a few existing franchisees and some that are in the process of opening….all of which seem genuinely satisfied with Cuppy’s overall. They didn’t say it was perfect, and pointed out a couple of minor issues with their experience.
  I haven’t gotten a straight answer on the number of corporate owned stores although I’ve been told there have been no failures. However, I know of one corporate store that I visited where I was never given the ’story’ about why the franchisee bailed. My sales rep has told me he will find out. One Cuppy’s employee told me there are a couple of others that are reverting to corporate stores, but nothing specific about how many, where and why.
  I then made plans to visit HQ recently. Prior to my visit, my sales rep advised me that I needed to speak with Elite which leads me to red flag #2. I was provided a SOW and Purchase Order for the configuration I’m interested in. I was advised that my deal (including a ‘free’ upgrade package) was contingent on my willingness to purchase a franchise with Cuppy’s and to be a referral for Elite. I told the Elite rep that if I move forward, and Elite exceeds my expectations, then I would be happy to be a referral. I was then told to bring a check during my visit for a down payment toward my buildout. I told the Elite rep that I am still investigating Cuppy’s, and have not made that commitment yet. And, I advised her that I had just received my UFOC that morning, and the ten day requirement had not passed. My Cuppy’s sales rep followed up with me apologizing for Elite’s fast-track tactic. I made it crystal clear to everyone that I was in no way ready to make a financial commitment yet.
  During my visit to HQ, I was generally impressed by the talent of the employees, the infrastructure in place, and their willingness to provide answers to some tough questions. I was advised about several initiatives that are underway to improve business for the franchisees (ex: they are picking a new menu board vendor to allow franchisees to update pricing on the fly). Being a relatively new franchisor, I left my visit feeling good that Cuppy’s was on the up-and-up.
  During my visit with Finance, I struck up a conversation about wanting a tool to assist me in figuring out whether or not this would be a profitable endeavor. The Finance rep informed me that he did have a proprietary tool available, but it is only made available to potential franchisees if Mr. Hibbing blesses the request. He did show me the tool at a high level, which demonstrated to me that it was the tool I was looking for. In my mind, I don’t know how any franchisee can move forward without it!
  So, all of the negative blogs about Cuppy’s seem to stem from people who did not follow through with their initial commitment. And, these blogs never seem to include experiences from satisfied franchisees??? While I still have many reservations about this young franchisor, and its ability to remain afloat in the short-term, I do feel I was treated well by all of the people I met with at HQ which included everyone at the top to worker-bees who run the day to day operation.
  Thoughts on my situation?

• sean
  Mar 9, 2008 at 12:20 pm

  MJ:
  Where are you looking to open? Are there many coffee places in your area?
  Did you ask if your refundable deposit could go into escrow using a 3rd party excrow service of your choosing?

• MJ
  Mar 9, 2008 at 12:34 pm

  I’d prefer to keep my location confidential, but there is definitely opportunity for this franchise because there are few coffee houses in the area including Starbucks. I’ve done plenty of homework on this aspect.
  This blog has put the escrow question on my radar, so thanks everyone! It’s on the top of my list for Cuppy’s this week….will keep you posted.

• Daniel
  Mar 9, 2008 at 12:37 pm

  MJ: I agree with you. They are very helpfull, friendly and kind at Cuppys.

  My issue with the entire process was their push/rush to take my money when, I feel, by them taking the Qualifying Application to see if we where in-deed able to follow thru (financially and/or otherwise) with the business and a so call expert in the field took a look at that application and mis-judged or said let’s through it against the wall and see if it sticks (I know this because I work in getting folks loans so I know that sometimes this is done because you just never know sometimes) BUT, that said, when I take someones deposit and I am not able to get an approval I give the deposit back IN FULL and not interest free payments.

  The coffee business in the right location will work! In this my area I know of 4 places that do nothing but drive-thru coffee. I am greatly desapointed not to be able to puruse the business at this time. SO, if you have it in WRITTING that a FULL REFUND is due then follow thru.

• jd
  Mar 9, 2008 at 12:45 pm

  MJ

  Thanks for your input. I think a lot of the people on here are mad because they were promised a refund, but then it’s like pulling teeth getting that refund. The Zor I worked at, people did put down a deposit that was refundable if they couldn’t work things out with location/financing, and when the refund was requested, we refunded the entire amount within a week (usually the check was sent on the day requested).

  It seems like you are going about the process correctly. I would definitely ask for the franchisees that left the system and give those people a call. Since their year-end is 12/31, they should have a new UFOC available at the end of March. The fact that they wanted to use you as a referral before the work was even done should have you questioning what you are hearing from others.

  I do have a couple questions that maybe you could get the answer for. In their UFOC filed with CA, they said that they had 107 franchise agreements signed not open as of 12/31/06, but their audited financials said 37. Big difference.
  Also, they state that they have a company of 100 employees, but their unaudited statements for the nine months ended 9/30/07 showed less than $100k of salaries.

  Thanks

• maria
  Mar 9, 2008 at 9:33 pm

  MJ

  Just like you I had nothing but a great experience working with the people at Cuppy’s. My rep answered all my questions and gave me a ton of information about the coffee business - that I was able to confirm through the internet. I called him at home, on his cell, on the weekend. He was always more than helpful. I have had a franchise attorney through the entire process and she went back and forth with Cuppy’s to get me the best possible franchise agreement. Cuppy’s isn’t my problem. My problem lies with Elite and getting my deposit back.

  When I let Cuppy’s and Elite know that I would not be moving forward with the franchise because of economic reasons (I live in Michigan and the economy stinks here), Desiree at Elite e-mailed me and told me to provide supporting documents for my decision. Huh? So I found some information on umemployment and the housing market and told her that her request was ridiculous. As far as I’m concerned, my situation is a no-brainer. No franchise agreement equals no obligation to either company whatsoever.

  I never signed a franchise agreement because of a strange set of circumstances and the timing of the release of the new agreement. My attorney sent Cuppy’s a proposal for some changes when I decided to stop the whole process.

  Get a franchise attorney - someone who really knows what they’re doing. It’s going to take them time to work out the bugs in the franchise agreement, but they’ll work hard for you. Pick your attorney’s brain, ask for their advice and their gut feeling. My attorney was relieved when I told her I wasn’t going through with the franchise - her concern was with the state of the economy in Michigan, she doesn’t have any problems with Cuppys.

  Get a franchise attorney!!!!

• jd
  Mar 10, 2008 at 6:17 am

  A little perspective here from someone that used to work for a zor.

  The salesmen will do anything for the sale, and they’ll tell you how great everything is. Once the sale is complete, you’ll never hear from them again. The people you should be talking to are the franchisees and to find out if the operations people will answer your phone calls on the weekend, at night, etc.

  Maria, if they told you that the deposit is refundable, they should’ve paid you back by now. If you aren’t getting an answer from Desiree, move up the ladder to the next highest person, until you get an answer. It sounds like you’ve done the process right with an attorney involved throughout, and Elite just doesn’t understand the word ‘refundable’ that they put in their contract.

  Oh, and I read that one of the stores in California is closing, so you might want to find out the reasons for that closure.

• MJ
  Mar 10, 2008 at 8:17 am

  Everyone, thanks for sharing your info., thoughts and advice! I will keep you posted on my progress. But….what is a zor??
  JD–the document I received shows 100 signed but not open, and Exhibit D gives contact info for all 100 (not sure if this is part of the audited financials you referred to)

• jd
  Mar 10, 2008 at 8:40 am

  mj

  Sorry, ‘zor’ is an abbreviation for franchisor that is used on other forums. ‘zee’ is used for franchisees.

  The UFOC filed with CA, showed 107 stores not opened, so it sounds like there might be different versions floating around (which in my opinion isn’t a good thing). Not to mention, they forgot to include that schedule in their submittal to CA, until CA requested it. If you look at the financial statements Note 5, it states that they had sold 37 as of the end of the year.

  Also, they say they have a company owned store. If that’s the case, why isn’t it included in the financial statements? Wouldn’t that give you some insight as to how their company store is operating?

  jd

• MJ
  Mar 11, 2008 at 5:05 am

  JD,
  Thanks for the zor/zee definition. Agreed different versions are not a good thing. Once I get the financials for ‘07, they should enlighten me on the current state of things including an update on the corporate owned stores. We’ll see.

• Chip
  Mar 12, 2008 at 7:32 am

  I have the same complaint from a different location. I also entered into an agreement with Elite Manufacturing. the date I was told the money needed to be in to pay the franchise fee was June 1. 2008. The amount Elite was requesting was 20,000 and 15,000 would go to Cuppys as a franchise fee. My building contract also had the financing agreement stating” If financing for the project can not be found all monies will be refunded. I could not get financed. Elite has not returned any of my 20,000. Cuppys states they never received the franchise money. Mr Danny Jones of Elite customer service department last question was ” what would you like” my response, ” my money returned. Mr jones stated, “NEVER GONNA HAPPEN’ Ladies and gentlemen this business is not honest

• Fred Smith
  Mar 13, 2008 at 5:06 am

  I have been considering Cuppy’s and have looked on this blog and others and I guess I have a question for those people who didn’t get financed and now want their money back. What made you think that you could get financed? I know my financial condition. I know my credit score and what my assets and liabilities are. If I didn’t think that I could get financed I wouldn’t be pursuing this investment and I wouldn’t let them run my credit report, because each time someone runs credit, it can actually hurt your credit score. What I haven’t heard is any operating franchisees complaining about the business. I only hear complaints from people who got turned down.

  Thoughts?

• Daniel
  Mar 13, 2008 at 6:06 am

  Fred, I know where I stand when it comes to my finances as well. Cuppy did not run the credit. What they asked for is a financial pictures of yourself along with your credit score in their Qualifying Application. This application is ment for Cuppy’s so called experts to take a look at you and see if you would/could in deed secure a small business loan.

  I work in looking at loan applications and by now I know from looking over the application if anything stands out. I share these concerns with my clients. Then they decide whether to proceed or not since, as you said, each time a credit report is pulled by a company it will affect the over all score.

  That said, securing a loan was always my number one concern and brought up the point many of times and each time I was re-assured by Cuppy’s that all was going smooth and on scheduled.

  But again, the point of the matter is that it is clearly stated in black and white that a refund is due if financing is not secured.
  ————————————

  On a side note. Who here ever had a house built for them? (BTW: this is on topic)

• MJ
  Mar 13, 2008 at 6:51 am

  Along Fred’s line of thinking, I am also wondering why anyone would give a deposit to Elite without signing a FA with Cuppy’s/Java Jo’z let alone without reviewing the UFOC?? Once I get my updated list of current franchisees, I will be contacting many of them to understand their perspective on all of this. They are the best gauge to determine if Cuppy’s will be successful.

• jd
  Mar 13, 2008 at 7:46 am

  While I woudn’t advise any one to pay money before signing a franchise agreement, I would also expect the company I’m dealing with to follow their own policies. If the PO says it’s refundable, it’s refundable, and in my eyes not over a 24 month time period. To me this is screaming that the company has no cash!!!

  MJ, you seem to be going about things correctly. I know you are waiting for the new UFOC. When you get it, could you please let me know if the financial statements are consolidated? When you have multiple companies under one management, you never know if they are hiding expenses between companies that are not in the publics’ eyes. In my opinion, to understand the strength of this company you are considering, you should see a Cuppy’s, Elite, and Medina financial statement.

• Robert
  Mar 13, 2008 at 10:08 am

  I am also having problems with Cuppy’s / Elite similar to Chip, Daniel, and Steve. My financing for a Cuppy’s franchise was denied almost a year ago and my legal representative has only recently gotten Cuppy’s / Elite agree to refund the deposit I initially made. Cuppy’s / Elite now insists on repaying the monies owed me over 31 months which is unreasonable and unacceptable.
  Unfortunately I am beginning to believe that this issue will not be resolved in a just manner, and within a reasonable time period, without the assistance of further legal action. The growing number of complaints for this particular issue is disturbing, especially if it is a reflection of Cuppy’s / Elite’s current financial situation. If you are facing the same difficulties with Cuppy’s / Elite as I am, and you would like to examine the possibility of working together to retain appropriate and effective legal counsel, please contact my current legal representative:

  [Contact info to be verified]

  I have no wish to bring shame to Cuppy’s / Elite; there are many hard working and honest individuals within these companies. I also have no desire to impede the businesses of any of the franchisees currently operating Cuppy’s stores. Many of these franchisees have had Cuppy’s help to realize their dreams and I understand that by bringing our complaints to light we are making business potentially more difficult for them. This is regretful and should be avoided if at all possible. I only want this matter of repayment, per Cuppy’s / Elite’s contract, to be resolved as quickly, quietly, and fairly as possible.

  Robert

• Daniel
  Mar 14, 2008 at 6:57 am

  Robert, I agree. I can be reached at eliasdan [at] ptd [dot] net

• jd
  Mar 14, 2008 at 7:29 am

  Chip,

  I just read your complaint on Rip-Off Report and it looks like you are in the state of Illinois. If that is the case, the attorney general’s office in IL has a franchise bureau. You can look up their information on the attorney general’s website. They may be able to help you out. Even if they can’t they may put a stop to this practice being used by Cuppy’s/Elite.

  jd

• sean
  Mar 14, 2008 at 8:24 am

  Looks like Cuppy’s has brought their PR in-house… no longer uses Rhonda Sanderson. The new PR person seems to be getting a lot of positive coverage of new developments and store openings. One would think that the hefty fees being collected up front would be enough to fuel the growth of the company (companies) but I’m sure there are some hefty salaries being supported for a 60 unit chain (of which some may be kiosks, or counters).

  Check out and comment on the new post:
  http://www.franchisepick.com/aafd-award-caffeinates-growth-of-cuppys-coffee-franchise

• Bls
  Mar 14, 2008 at 8:47 am

  I’ve seen Cuppy’s stores in Arlington, TX and
  Clean Creek, AZ on the Cuppy’s store locator map. Now, after a few months, those stores have disappeared. Did they close? What is going on with this company?

• Fred Smith
  Mar 14, 2008 at 9:02 am

  As I see it, all of the complaints are coming from people who gave a deposit to Elite, couldn’t get financed, asked for their money back and can’t get it. In my case, I’m not worried about the financing. I still haven’t heard about any problems from people who did have financing and who opened a Cuppy’s and had problems. I feel bad for you folks that can’t get your deposits back, but in my case, I want to hear from franchisees.

• Steve
  Mar 14, 2008 at 9:14 am

  Fred, if you tak the time to read through these blogs, the whole issue is that the documents state refund in the event financing is not obtained, plain and simple. There are no payment schedules defined on the purchase order which “implies” complete refund-Not overtime if not ever. I personally could care less about the franchises from Cuppy’s-that’s not the issue. It is Cuppy’s who has partnered with Elite-which by association includes Cuppy’s in this less than ethical scam.

• Fred Smith
  Mar 14, 2008 at 10:41 am

  Steve, I’m sorry I meant no disrespect to you or any of the other folks on this board. I’m just simply in a different situation in evaluating this opportunity and am looking for different type of feedback.

• sean
  Mar 14, 2008 at 12:55 pm

  Fred Smith said: I want to hear from franchisees.
  I’d like to, also. If you read back further (see the category in the right sidebar called Java Jo’z/Cuppy’s) you’ll see a couple of posts about the cone of silence that often descends on these discussions. Nondisclosure & confidentiality agreements may keep any negative comments by franchisees from appearing, but wouldn’t affect positive comments defending the co. If there are current, happy franchisees reading this, please share your positive experiences.
  Unfortunately, Fred, I only see positive comments coming from a slew of creepy fake Cuppy’s blogs. Why does a company have to do this:
  http://makeminecuppys.wordpress.com/
  http://cuppyscorner.wordpress.com/
  http://cuppysconundrum.wordpress.com/
  http://fannabanan.wordpress.com/
  http://gamernut.wordpress.com/
  http://mustangdriver.wordpress.com/
  http://pschumacher.wordpress.com/
  One of the comments above refers to a contractual obligation to provide a positive testimonial as being part of the deal. That may explain the big list of testimonials from owners - but with only their first name and last initial. Why no last name? Seems odd.
  http://cuppys.com/testimonials.php

• jd
  Mar 14, 2008 at 1:36 pm

  gotta give them credit for being pro-active. they registered the domain cuppysucks.com as well.

• MJ
  Mar 16, 2008 at 7:23 am

  Here is the response to my inquiry to the AAFD:

  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!
  [Ed. note: contact info withheld]

• sean
  Mar 16, 2008 at 8:35 am

  MJ:
  When did you receive this?

• MJ
  Mar 16, 2008 at 11:24 am

  I received it today…Sunday, 3/16/08

• sean
  Mar 16, 2008 at 2:03 pm

  MJ:
  Would you mind posting the message that you sent to the AAFD (that Bob was responding to)?

• MJ
  Mar 17, 2008 at 6:18 am

  Sean,
  No prob….here is the email I sent to AAFD that generated the response I received yesterday:

  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!

• Disturbing Allegations About Cuppy’s Coffee Franchise All Too Familiar
  Mar 17, 2008 at 12:23 pm

  […] 2/8/2008  Rolando BUENA PARK, California  Source: Rip-off Report,  FranchisePick.Com […]

• michael webster
  Mar 17, 2008 at 6:52 pm

  I was one of the three attorneys that reviewed the Cuppy’s Contract for the AAFD.

  I believe that this situation may call for a review of the Standard’s Committee’s procedures for granting a franchisor accredited status.

  Please contact me directly, if you want to start a dialogue with AAFD about this matter.

  Note, while I can give you general advice, I am a Canadian Attorney and cannot represent you in any legal action you may want to take.

• jd
  Mar 17, 2008 at 7:43 pm

  To all of the people looking for your deposits back:

  Please take up Michael’s offer on this and start a dialouge with him. He’s probably one of the fairest posters on all of the different franchise websites, and is always willing to answer questions that people may have.

  I’ve made a post on bluemaumau.org criticizing the AAFD’s response on this situation, and how the Medina Mgmt companies need to be held accountable in the AAFD’s eyes, since they use their ‘fair’ franchising as a selling point. I hope that you’ll go on their and share your experiences as well.

• Disturbing Allegations About Cuppy’s Coffee Franchise Are All Too Familiar | Coffee Franchise Guide
  Mar 18, 2008 at 11:43 am

  […] 2/8/2008  Rolando BUENA PARK, California  Source: Rip-off Report,  FranchisePick.Com […]

• Another Cuppy’s Coffee Franchise Allegation on Rip-Off Report
  Mar 19, 2008 at 10:12 pm

  […] February 16th, 2008  Cuppy’s Coffee, Elite Manufacturing Franchise Complaint on Rip-off Report […]

• Cuppy’s Coffee: Some Words from AAFD Raises More Questions
  Mar 20, 2008 at 9:42 am

  […] Charles Hunter Source: Complaints Board 3) Rolando BUENA PARK, California Source: Rip-off Report, FranchisePick.Com 4) Jls E STROUDSBURG, Pennsylvania Source: Rip-Off Report 5) Daniel Suarez […]

• Cuppy’s Coffee: Some Words from AAFD Raises More Questions | Coffee Franchise Guide
  Mar 20, 2008 at 10:42 am

  […] Charles Hunter Source: Complaints Board 3) Rolando BUENA PARK, California Source: Rip-off Report, FranchisePick.Com 4) Jls E STROUDSBURG, Pennsylvania Source: Rip-Off Report 5) Daniel Suarez […]

• sean
  Mar 20, 2008 at 8:03 pm

  Cuppy’s Coffee franchisees and refund-seekers: email me in confidence at info[at]ideafarm.net.

• MJ
  Mar 24, 2008 at 11:58 am

  Well, it’s been two weeks since I submitted my ‘tough’ questions to my sales rep at Cuppy’s, and I have not received a response despite a couple of follow ups to him…..which tells me that either my questions cannot be answered, or they don’t want to provide the answers. They did not provide financials for FY’07, did not provide any explanation about these non-refunded deposits, and did not provide financials for Medina or Elite….all of which I asked for.
  I am no longer looking at Cuppy’s, and I can’t thank participants in blogs like this enough to help shed light on unscrupulous business people like these. I went from my Sales rep contacting me regularly to a complete halt once I told him I wouldn’t be giving any deposit until my research was complete. My heart goes out to you folks who are trying to get your hard earned money back. Best of luck to you all!

• jd
  Mar 24, 2008 at 1:44 pm

  MJ

  I’m glad that you asked the tough questions, because that should be done with any franchise system, not just Cuppy’s. The least they could’ve done is come up with some answer. There are a lot of unanswered questions out there that maybe one day people will get the answer to.

  good luck with your future endeavors.

  jd

• Criston Menz
  Apr 2, 2008 at 10:26 am

  JD, you emailed me the other day and I was quite nasty getting back with you. My sincere apologies. As you can see from your original blogs there are many of us that have been taken in by this company. Let me clear the air though. Many of us did do our research, including myself on a company that claimed to be new coming out from the ashes of a company that had failed. The people were inviting and you were immediately made to feel “welcomed” to the Cuppy’s “family” asking for pictures and such for their community board. The initial franchise was only offered to those that could sell themselves. For instance, we had to write a bio about ourselves, work history and why we felt we could make great owners. We also had to submit a 5 page application of financials with an average net worth of over 150k. Many of the people I have spoken with are educated and did the research on the company. There was nothing to find and Morgan and Elite had all the “right” answers to all of our questions. We were told that they had a offer through Elite that Elite would pay the 15k franchise fee and make the monthly royalty payments for a year if signed by end of Oct 06. There was no way we could get our monies in order by that time. We continued to start the process and secured the PO with Elite in mid Nov. We were told they would still honor the initial offer as we had started the process in Oct. (They received our monies Dec 1, 2006)
  Now the part that chaps me the most is that Cuppy’s said that after looking at our initial paperwork we were fine for their “in-house” financing program that worked with the SBA. They knew that I was getting my initial monies from an equity line of credit. Once we ran all my credit again, my net worth had gone up, but my credit worthiness suddenly went down and thus I was told that we could qualify for a smaller model if we sent more money. (I had already paid 20% down for the build out to Elite $35,900) I did not want a smaller store, I wanted the financing and the cafe we agreed upon. Thus, they sent me out to a third party who said I qualified with him. Upon giving Cuppy’s this info, they quickly stated that the guy they set me up with was a mistake and he had been telling several people he could finance and then did not come through. This was my last straw. After the initial contact with Elite, I never spoke to them again once they got our monies. I dealt solely with Cuppy’s. When I told my rep that I was not going to proceed any longe she said I had to write to Elite to ask for my return on deposit. That was in March 07 and thus, I am still waiting for any money to change back into my hands. They did not respond to my demand letters from attorney’s and did not respond to any of my letters with the FL state agencies. What they did finally respond to was me blogging…imagine public notification that there are issues. I am on my soap box at this time and will not step down for a bit…we will see where this goes. Please feel free to email me back.

• sean
  Apr 2, 2008 at 11:38 am

  Did any of you ever hear of Supreme Building Technologies?
  This is a “vendor” of Elite Mfgr in Angola, Indiana?
  Check out:
  http://www.ai.org/newsroom.htm?detailContent=146_12814.htm&backEnabled=true
  They have the same address in Angola, IN as Elite.
  I’m confused

• Daniel
  Apr 2, 2008 at 1:38 pm

  Here’s an idea: Contact the Angola, IN officials and share with them this site.

  I wonder what would happen to Elite after that news coverage? Or, their governement grant/funding.

  Criston: I am working with a firm in FL and putting together a class action in order to have a lawsuit make more economic sense for us. I am working on organizing the participants. I hope you and the others that have yet to reach me will joing. You can confidentially reach me at eliasdan at ptd dot net

• Daniel
  Apr 2, 2008 at 1:39 pm

  City of Angola: http://www.angolain.org/ContactUs.htm

• Daniel
  Apr 2, 2008 at 1:59 pm

  My email to is short and to the point:
  mayorsoffice@angolain.org; MFrazier@iedc.in.gov; police@angolain.org; clerktreasurer@angolain.org; planning@angolain.org; buildingdept@angolain.org; info@angolachamber.org; patti@angolachamber.org; marg@angolachamber.org; drew.adams@atg.in.gov; laverne.alexander@atg.in.gov; julie.alexander@atg.in.gov; faredin.ameti@atg.in.gov; dawn.anastasia@atg.in.gov; robert.anderson@atg.in.gov; susan.armstrong@atg.in.gov

  ——————–
  One of the companies in your home town recently visited by Dick Hickman and Julie Cole and which received “state employee funding” is taking peoples money across the US!
  ——————–

  If I am lying please correct me and I will send them a corrected email. Because to my knowledge and understanding that is what is being done here; right or wrong?

  Criston has a very clear and detailed overview of what happened to him and it was like reading what happened to me…

• Daniel
  Apr 2, 2008 at 6:16 pm

  I’m sure the media might want to ask a few questions: http://www.insideindianabusiness.com/newsitem.asp?ID=26537

• Daniel
  Apr 2, 2008 at 6:21 pm

  It looks like Supreme Building Technologies is doing well for themselves. “The company recently signed a $54 million contract to provide