Death of Fratelli Ravioli Franchise: A Cautionary Tale
My condolences go out to the franchisees and employees of the five Fratelli Ravioli franchise locations that closed in New York, New Jersey and Connecticut last month, ending what seemed to be a promising concept 28 years in the making.
The legacy of the Fratelli Ravioli franchise program is the lesson it leaves behind for prospective franchisees: Look behind the hype, awards and positive press before investing in a franchise. It might not indicate a good franchise company, just one good at hype, getting awards and positive press.
The Brooklyn Chamber of Commerce awarded the founders their 2004 Entrepreneur of the Year Award. Entrepreneur Magazine named Fratelli Ravioli one of their “Hot for 2006″ franchise concepts. Their concept was celebrated with positive media coverage from Crain’s New York Business to the Food Channel. Even now, the Fratelli Ravioli website shows happy franchisees, promises “success and fun all under one roof” and states “‘Our success is your success’”
Also on the Fratelli Ravioli website is a bizarre online wake, complete with funeral dirge.
Last month, all five Fratelli locations closed, five families lost their investments, and the franchisor moved to Arizona to be a “business consultant.” In news articles from the New York Post and The Brooklyn Papers, Fratelli Ravioli Founder Larry Vivola blames the franchise industry for brainwashing him into thinking franchising his business was “safe,” and blames his franchisees for not running the stores well and for skimping on “quality and portions.”
So investigate thoroughly before investing. And before taking the claims of companies at face value, remember that the Entrepreneur website still celebrates Fratelli Ravioli as a hot concept, and the company website still states “Success will be assured… The company builds a strong lasting relationship with it’s [sic] franchisees, employees and the local community” even now, after the chain is six feet under.
COMMENT ON Death of Fratelli Ravioli Franchise: A Cautionary Tale
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14 opinions for Death of Fratelli Ravioli Franchise: A Cautionary Tale
Larry
Dec 8, 2006 at 9:50 am
Hi Sean,
Thanks for the coverage and helping me spread the word that Franchising is very risky. You should also extend your condolences to my family the franchisors. We tried to build the American dream company and got destroyed. I take some of the blame. I blame some of the franchisees. I also blame the franchise industry for hyping the success rates. Franchisors and Franchisee’s must beware both sides are getting wiped out. We are no longer in business and our website stays up with our mission statement unchanged because we gave 110%. Your dreams sometimes don’t go as planned !!! Thank You
Sean
Dec 8, 2006 at 10:44 am
I agree that the industry paints an unreal and simplistic picture of franchise risks for both franchisees and franchisors that is not healthy for the franchise industry and the practice of franchising (as well as those directly affected when a franchise company fails). Over the years I have written and distributed articles on these issues, some of which are posted on http://www.franbest.com and http://www.franchisemarketing.com. Those interested should read “Lies, Damn Lies & Franchise Statistics,” and “The B.Y.O.B. (Be Your Own Boss) Myth.”
Franchisors need to understand that just selling franchises (their first hurdle) will not make them successful. They need not only to pick the right franchisees, but instill the right expectations. They need to provide strong guidance and support, but also strong enforcement of standards to ensure compliance. You mentioned being the “next McDonald’s.” McDonald’s wasn’t successful by accident. Ray Kroc gave a lot of freedom to franchisees when it came to marketing, but he was a dictator when it came to QSC.
New franchisors need to know which parts of their concept are critical to success and to building the brand, and they need to make sure prospective franchisees understand & will comply with those requirements before they award them a franchise. In my experience, it is that clarity and conviction that separates the success stories from the could-have-beens.
Sorry for your loss, Larry.
jarry
Dec 15, 2006 at 7:58 pm
i was an original sucker to go into business with these slugs they are slugs and common thugs they stole my money for all those years and then decided i wasnt good enough for them and they never delivered my goods anymore forcing me to shut down my store.. they would force expensive products on us that they made a lot of profit on and we didnt … there products always had to be used if u wanted to add something special that sold well nearby in ur nhood they would cry and we had to take it off the shelves… they would always change from the original plan we had and starting charging us royalties for our money making them famous we opened up five stores and he had a few more and 9 years later they all close in 1999 and then a few years later started to sell franchises like he had an incredible spotless record.. he had already failed all the stores from the 90’s what a crook sean contact me for more info…
[Editor’s Note:] As it is FranchisePick.Com’s policy not to delete comments, Jarry asked us to add this to his original comment:
This was written in the heat of the moment. The passion of business is intense and sometimes we can’t see the other party’s points. At this time, I would like to retract my statement and I am glad to say the hatchet is buried with my ex- business partners. We had more great times than bad and an education that you couldn’t buy. It has made us better businessman and better people. - Jarry
Franchise Graveyard: Fratelli Ravioli at FRANWORST
Dec 17, 2006 at 10:30 am
[…] Cause of death not entirely clear. In news articles from the New York Post and The Brooklyn Papers, and in comments on Franchise Pick, Fratelli Ravioli Founder Larry Vivola blamed the franchise industry for brainwashing him into thinking franchising his business was “safe,” and blaming his franchisees for not running the stores well and for skimping on “quality and portions.” […]
larry
Dec 17, 2006 at 7:30 pm
Nothing to be ashamed about. I had great successes but bigger failures. That’s business. I will always look forward and learn from the past. That’s the beauty of being a human being. Everyone should always remember there is always 3 sides to every story.
Problems are the price we pay for progress.
sean
Dec 18, 2006 at 7:15 am
I appreciate the comments from both sides. It’s my opinion that a lot of problems arise, and are perpetuated, in franchising because everyone is eager to tout the success stories and few are willing to discuss the failures. An entrepreneur’s education can be excruciatingly expensive, taking much more than a financial toll. The greatest tragedy is to pay the price, yet not learn from the education, and not become wiser and better for it.
Dawn
Dec 20, 2006 at 2:44 pm
It is always sad to hear of failure BUT sadder still is not even trying. All failures are lessons and they build charactor. I am learning that being a franchisor is a very scary and risky business. People management is not a fun task. I may be mad but I am sticking it out even when I hear stories like this because without sharing my orrigional idea and passion with others, I would be limited in my ability to learn, grow and help people. Besides I would rather fail than always be wondering, what if? Sean said it best, it is not selling franchises that makes your business a success. It is finding the right people to operate them long term. It also comes down to being humble and open as a franchisor to letting those same poeple, the ones closest to the pulse of the cutomer, in on the creative action. Allowing ideas and suggestions to flow freely and implementing changes when issues or challenges present themselves. Ego and greed are the two biggest corrupters of any relationship. You can not please everyone. My feeling is that a franchisee needs to be made very aware up front that it is only by thier personal efforts and thier ability to follow the system, and be a team player that their franchise may succeed. A franchisor also needs to be aware that it is by listening and accomidate change that their franchise system may continue to succeed. We can do far more as a unified team so when times get tough, that is the best time to try and stick together and come up with creative solutions.
Keep on keeping on.
sean
Dec 20, 2006 at 4:27 pm
Beautifully put, Dawn. Being a franchisor is a very difficult task. And I agree with Larry that many in the industry do not fully emphasize the challenges franchisors will encounter, and their obligations to be strong leaders to their franchisees. I have seen some fail because they were too restrictive and did not treat franchisees with respect or fairness, and I have seen others fail because they were too nice, too lax in enforcing standards and protecting the brand. There must be a balance between the two. McDonalds’ Ray Kroc provides a great example of someone who was a fanatic, a tyrant even, about Quality, Service & Cleanliness, but very openminded when it came to marketing and new product development. “McDonald’s: Behind the Arches” by John Love should be required reading for every would-be franchisor.
Dawn Mucci
Dec 20, 2006 at 7:02 pm
Well let’s just keep on reading and learning more because that is after all what life, learning and growing is all about. Despite what franchising models and books may say about being successful. I am admitting that I am opinionated about success. McDonalds is not a God. Yes they make millions, but at what cost? What is to be said about success? $$$$$$$$$ is the root of all evil if it is made selling things that will in the end hurt the buyer. We are all far too fat, over fed, deceived, and miss-lead. It is in my opinion the result of mass fast food and money making marketing schemes. Especially directed at our children. Even when we adults smarten up, they will and always find and continue to find a way and go after our kids. SHAME. Sorry to be so blunt but I don’t eat or buy into this shit and I would not feed or market anything in bad taste to my kids no matter how cheep or accessible it may be. No matter what you sell or how great you market it. You still have to have some ethics and in the end a decent and honest product. Check my spelling. It sucks just as bad as the fast food industries marketing campaigns to our children.
sean
Dec 21, 2006 at 7:27 am
McDonald’s is worth understanding not because of the food it serves, its marketing or how much money it makes. Ray Kroc was very successful at the difficult task of simultaneously maintaining strict operational standards without killing individual initiative and participation. He also established vendor relationships that strengthened the entire system. Food aside - McDonald’s was successful because of the way Kroc empowered franchisees, vendors and home office employees.
Contrast that with the approach of Quiznos, whose reaction to franchisee input tends to be lawsuits and termination notices. Follow some of the links from my post in the BUYER BEWARE category (http://franchisepick.com/?p=102). When a distraught franchisee committed suicide last month, and their franchisee association posted a tribute to him that included his farewell letter on its website, Quiznos did not waste time thinking of ways to relieve the pressure on its franchisees. Quiznos Corporation’s reaction was to immediately terminate the franchise agreements of all ten association board members, and to demand they close and pay future royalties on their 17 stores.
Unfortunately, ethical concerns in franchising extend even beyond selling junk food.
matt
Apr 8, 2008 at 9:07 am
just came across your website. Jarry had it rite the first time they were liar’s and crooks.
sean
Apr 8, 2008 at 9:29 am
matt:
Why do you say that? Larry claims that if the franchisees had followed the system, they would have been successful. He also claims that he was a victim of the franchise industry which hyped success rates. You disagree?
Matt
Apr 12, 2008 at 2:03 pm
sean:
I am partners with my brother we were former franshisee’s of Fratelli Ravioli. Please note that three store locations still exist under new names once changes were made to make it a viable business. The business plan was flawed in many different ways. My brother and i sat down with them Larry and Christian numerous times and they did not want to make the necessary adjustments to make the franchise work. Believe me the franchise system was a joke and if i listen to them i would have been bankrupt like to other franchisees . My new website is lombardifoods.com take a look. If you would like more in-deph reasons for the failure of Fratelli Ravioli feel free to contact me at my business. How they could let two franchisor’s go bankrupt and blame it on effort is amazing.
sean
Apr 12, 2008 at 5:17 pm
Matt:
Thanks for contributing to FranchisePick.Com. The purpose of the site is really to figure out, on an ongoing basis, how to create successful businesses… what franchisors should do to create win-win-win relationships between their staff, franchisees and vendors, how prospective franchisees can identify the functional vs. dysfunctional systems, viable vs. flawed concepts, and how - when things go wrong - both sides can part amiably without destroying one another (hopefully).
Your story seems to represent a fascinating opportunity to look at the factors that made the difference between success and failure in a business. I visited your website. Looks like an impressive concept - which Fratelli’s Ravioli originally appeared to be from the outside looking in. To their credit, the Fratelli’s Ravioli owners were talented promoters - winning numerous awards and getting a lot of press. Yet there were obviously major flaws behind the great story. This is the classic match & powderkeg scenario in franchising.
So what were the necessary adjustments, specifically, that you and your brother made that were the difference between success and bankruptcy? What was the turning point in the relationship when the franchisees lost faith in the FR? If they had done certain things differently, would Fratelli’s Ravioli be a successful franchise chain today? What were those things?
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