Soup Nazi Under Fire in Franchising (No Success for YOU!)
(FranchisePick.Com) Tough week for inappropriate and offensive references in franchising.
First, Beaner’s Coffee announced their name change to Biggsby’s Coffee. (Seems that somebody, somewhere claims “Beaners” is a derogatory term for Mexicans. How were they to know? They’re from Michigan!)
Now, America’s favorite Nazi since Colonel Klink is having trouble franchising his soup kitchen concept.
According to an Associated Press article, Al Yeganeh, the soupmaker who inspired the Soup Nazi character on “Seinfeld,” closed his original Manhattan shop in 2004 to focus on franchising Original SoupMan stores across the country. They launched around 40 stores in its first two years and started selling its frozen soups to grocery stores.
According to the AP writer David B. Caruso, the franchise blitzkrieg started to go bad almost immediately:
But disgruntled franchisees say many of the new shops didn’t make it through their first year: At least eight have closed for good. Two more have shut their doors for now, although the company said it has deals in the works to reopen them.
Other franchisees told The Associated Press they want out of their contracts because of poor profits or bad relationships with the company. Several have sent the company letters threatening to sue.
Kevin Long, whose Original SoupMan franchise in Scranton, Pa., lasted just one winter, accused the company of misrepresenting how much it would cost to open and run the business.
He and other franchisees said the company also had early problems with its bowl and cup sizes, which were larger than expected and inadvertently gave patrons more soup than they paid for, and never lived up to promises to provide a product line that would sell during the summers, when demand for hot soups is low.
“They are just trying to get as many stores open as possible, and they aren’t supporting them whatsoever,” Long said.
Prices of $7 to $11 per 12-ounce bowl also made it tough to attract repeat customers, he added.
At least three stores have closed, at least temporarily, in New York City. Shops also have shut in Myrtle Beach, S.C., Harrisburg, Pa., Boulder, Colo., Colorado Springs, Colo., and Ottawa, Canada.
Franchisees in locations including Stratton Mountain, Vt., and Ridgewood, N.J., have asked to be released from their contracts so they may try staying open as a different type of business.
Original SoupMan spokesman John Rarrick chalked up the store failures to the normal “growing pains” associated with any new restaurant franchise.
“This is very common,” Rarrick said.
Cold Stone Creamery: More Bad Ideas in a Bowl
There’s hope on the horizon! According to Rarrick, Original Soupman has “struck a deal with Cold Stone Creamery that will create hybrid stores that will sell soup and ice cream.”
Yes, the same company that is going to put a franchised Cereality Cereal Cafe on every corner is interested in creating the ultimate bad idea in a bowl concept yet: The Soup & Ice Cream Hybrid Cafe. Cold Stone Soup & Cereal, perhaps?
No One Likes a Reluctant Nazi
Maybe one of the problems is the reluctant Nazi approach. As the article states,
Original SoupMan opened its first stores in 2005, simultaneously capitalizing on and distancing itself from the “Seinfeld” episode that made Yeganeh famous…
Yeganeh, though, chafed at the Nazi nickname, which he felt insulting, and has discouraged his franchise owners from mentioning “Seinfeld” or saying “No soup for you!” on the job.
If you’re going to capitalize on the luck of being internationally famous as a cartoon-like character on a comedy show, doesn’t it make sense to milk it to the last drop?
I guess if he was about making sense, he wouldn’t be the soup Nazi in the first place.
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Photo: Promo poster for Soup Bros. Photo Credit: Dan Says (http://www.flickr.com/photos/dansays/) Licensed by Creative Commons. Used by Permission.
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5 opinions for Soup Nazi Under Fire in Franchising (No Success for YOU!)
Soup Nazi Under Fire in Franchising (No Success for YOU!) at PIGASYS
Sep 19, 2007 at 4:42 pm
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No Soup Four Me
Oct 3, 2007 at 2:27 pm
What a disaster! The irony is that some of the Franchisees were convinced to buy into the company because Soupman was Co-Branding with a high end low fat ice cream. After deceiving the operators, taking their lifesavings, Soupman dropped the ice cream co-branding and led the Franchisees down the the drain. The company is a disaster and its management is to blame. Operators have lost their life savings, homes and filed for bankruptcy as a result of Soupman’s mismanagement.
Shame on You Soupman!
Got Swindled and Lost Big
Oct 6, 2007 at 10:31 am
1. The issues with the franchisor are much deeper than it appears.
1. The company is undercapitalized. An investment bank retained to raise capital for the franchisor had discontinued its efforts after having received commitments for approximately 25% of the targeted capital. This was a result of the poor operating results of the company and its underlying franchisees.
2. The company has been seeking an acquiror of its operations. Throughout this effort the issues and challenges brought to the attention of the company by its franchisees have been quietly addressed but none of the problems have been resolved.
3. The misrepresentations made by the franchisor to induce franchisees to acquire territories and open up an Original Soupman outlet are many: (a) understatement of food costs; (b) co-branding with Cremalita ice cream to balance overall sales in warm months was abandoned soon after first 12 stores opened for business; (c) mandated use of cups and bowls that are 25% larger than purported serving portions, resulting in giving away 25% more product than consumer was paying for and at the same time causing an increase in purchases of product from the company to replenish inventory.
Cold Stone Creamery Co-Brands With Soup Nazi
Oct 9, 2007 at 12:24 pm
[...] Soup Nazi Under Fire in Franchising (No Success for YOU!) [...]
Cold Stone Creamery Co-Brands With Soup Nazi at PIGASYS
Oct 9, 2007 at 12:47 pm
[...] Soup Nazi Under Fire in Franchising (No Success for YOU!) [...]
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