Expense Reduction Analysts franchise complaints include an extremely high franchise failure rate, and aggressive franchisor bullying tactics to keep failed franchisees from warning away prospective franchisees.
Are you familiar with the Expense Reduction Analysts (ERA) franchise opportunity? Please share an anonymous comment below.
Also Read: ERA EXPENSE REDUCTION ANALYSTS Franchise Fraud Allegations
The Expense Reduction Analysts (ERA) website claims ERA is “one of the world’s largest and most successful consultancies for cost, purchase and supply management…”
“As a franchise partner you have the potential to generate a substantial income for you and your family. You can run your own consulting business with high flexibility and control your work-life balance…”
However, one former Expense Reduction Analysts franchise owner told us a different story.
After losing everything, an anonymous ERA franchisee told us he/she feels used, bullied, financially raped.
The franchisee feels like he/she escaped from a “financial serial killer, yet they are still free to pillage future victims.”
The franchisee claimed that many of his/her fellow franchisees suffered devastating failures, but all were so intimidated by the company’s legal threats and TRA (Termination and Release Agreement) that they are too afraid to even speak to fellow “victims.”
To verify the franchisee’s claim that Expense Reduction Analysts franchisees were failing in droves, we obtained a copy of Expense Reduction Analysts 2013 Franchise Disclosure Document (FDD).
Sure enough, the FDD revealed that 304 Expense Reduction Analysts had been open in the U.S. between 2010 and 2013.
Of those 304, 125 (42%) franchises had been “terminated” or “ceased operation.”
Those numbers imply that nearly half the franchisees who invest in ERA thinking they’ll be getting “high flexibility and control” of their “work-life balance” will end up prematurely being terminated or ceasing operation.
For many, they received financial devastation in lieu of “work-life balance” and control.
Expense Reduction Analysts: “still free to pillage future victims”
One former Expense Reduction Analysts franchise owner believes the system is rigged from the start, stating “they knew from the beginning what they were going to do to me financially.”
He/she claims that Expense Reduction Analysts created a climate of fear and shame in which franchisees are afraid to let on to their fellow franchisees that they are struggling.
The franchisee writes “The ERA franchisee culture is that none of the franchisees wanted to reveal they were struggling. No one wanted to admit that things were not going according to what the Expense Reduction Analysts franchisor said should happen.”
The franchisee states that once they fail, franchisees are forbidden from sharing their negative experiences with future franchisees with a gag order (“Confidentiality and Non-Disparagement”).
So, evidently, the cycle is free to go on and on…
If you are considering an Expense Reduction Analysts franchise, or really any franchise opportunity, consult with an experienced franchise attorney and other qualified advisors.
Also Read:
ERA EXPENSE REDUCTION ANALYSTS Franchise Fraud Allegations
ARE YOU FAMILIAR WITH THE EXPENSE REDUCTION ANALYSTS FRANCHISE OPPORTUNITY OR THE ERA FRANCHISE CONCEPT?
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TAGS: Expense Reduction Analysts, Expense Reduction Analysts franchise, Expense Reduction Analysts franchise complaints, Expense Reduction Analysts complaints, ERA franchise, ERA complaints, ERA Franchise Complaints, Franchise gag orders, franchise churning, Unhappy Franchisee, franchise warning, franchise complaints
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Reading this site, seems to me that success at ERA comes down to 2 things;
1. the quality of the franchiser (in this case above, its the Allison family in the UK and they are clearly ethical and run a great organisation)
2. the capability & attitude of the franchisee
It would be good to hear from other geographies. I am interested in joining the Australian ERA group and am researching it.
Annette,
I am MD for Australia. I have taken up this role after 13 years as a franchisee, so perhaps I'm twice as biased as my UK colleagues. If you would like to contact me I'd be more than happy to answer any questions you have. Of course, we also provide contact details of the entire Australian team and encourage you to call any or all of them.
I hope to hear from you.
Kind regards,
David
I am currently investigating a number of business opportunities and in particular franchises. Most of the franchises I have looked at cost between £30K and £40K, a large investment and one I only wish to make once to build a business that pays me back many times over in the next ten years.
It has been interesting to read this thread as I am booked in for a discovery day at Southampton with ERA UK, where I can look more closely at the opportunity.
Does anyone with experience of ERA have any tips to get the most out of this day to help me in my research of this opportunity?
Ignore the clearly orchestrated replies shown above. Yes, there is a core group of successful franchisees (there has to be for it to survive). But, mark my words, it is unlikely to be you. As an ex-ERA franchisee I can tell you that the situation in the UK is, in my opinion, absolutely no different to that in the US. Perhaps worse.
If you do fall for it make sure you ask them EXACTLY how many lemmings, sorry franchisees, join and exactly how many leave and over what period. Be specific AND GET IT IN WRITING (you might need it later in court). Ask for the average lower quartile earnings of the entire network and, again, GET IT IN WRITING. Be very cautious - it is almost impossible to get information out of the literally dozens and dozens of failed ERA franchisees since they are all tied to a legally binding gagging order when they eventually buy their way out. Many of them having sunk their entire life savings or entered into crushing loans.
In my view it can only be a matter of time before this operation get a slot on prime time TV (I'm thinking BBC1 WATCHDOG here).
Meanwhile, if you are hell-bent on donating your hard-earned cash to the Allison wealth fund then my advice is to just write them a cheque for £50K+ and get on with your life.
Expense reduction business is distinctly different from food preparation, carpet cleaning, automotive oil changing or some of the other businesses ideally suited for a franchise business model. Operational cost reduction or expense reduction is an expertise that requires academic knowledge and many years of functional experience in industrial procurement or purchasing, engineering or cost accounting fields. As a principal business owner, one must be able to prove to a manufacturing company or small business that he or she has the knowledge & practical expertise to reduce costs & expenses in business operational areas that the company or business cannot do on its own. And, then you have to deliver tangible results time and again before you earn the trust & respect of businesses that would hire you to do the expense or cost reduction for them. You must prove that you are indeed better than the company's own experts or else why would they retain you to do what their own experts are supposed to do. I know something about this because I have been doing it for a while and still learning from some of the best professionals at my current company.
Unlike a hamburger or ice cream stand, or carpet cleaning franchise, you cannot hire some semi-skilled people and train them in couple of weeks to do an excellent job of whatever your franchise is offering in the form of product or service. You must be a knowledgeable & experienced professional of exceptional skills in purchasing, cost accounting, business negotiations and such before you can hang your shingle and offer cost / expense reduction services. No franchiser is going to give you a magic wand or abracadabra mantra to start doing the expense reduction.
My heart goes out for people who have lost their life savings or floated hefty loans, hoping to make it good in expense reduction business. My colleagues have decades of functional experience and millions of dollars of cost savings to prove that they are experts in the field. Yet, we have to work hard on prospecting, selling to project management and delivering the results. It’s not an easy business folks but if you have what it takes then the rewards are fair & substantial. I hope it would help some of the folks who are thinking about getting an expense reduction or cost reduction franchise.
Gary Loveless and others – please, please don’t invest in ERA UK !!
The current franchisees who have posted above some very supportive comments about ERA UK are (with a couple of exceptions) examples of the “core” franchisees who have been with ERA UK for 9-10yrs or more, and are part of the Allisons’ very loyal “inner circle”. They are very successful people, and they cannot help but be aware of the phenomenal turnover of new recruits, but what can they do but try to preserve their own livelihood by defending the brand? Think of all the clients they would lose if the truth were to be made public, when this is a business based almost entirely on client trust and consultant integrity.
I was a franchisee for about 3 years in a strikingly similar business (let’s call it FRB* UK), which was owned and run by some strikingly similar people (let’s call them the Pugwash family, notably Captain Pugwash and his son, Master Mate).
If you are hardworking, a very experienced purchasing/sales professional and “get lucky” with a couple of lucrative clients early on to cash-flow the hefty monthly fees until you get your business on it’s feet, you may succeed in a business like FRB. As Joe Rushmore rightly points out, there are a lot of excellent reasons why people can fail at the cost-reduction business, and in my experience of FRB most of those who failed did not do so because of a lack of hard work or intelligence, but because they ran out of money to cashflow the business. This is great for Master Mate, who is only too happy when you are at your lowest ebb to take your hefty 6-months notice fees, legally gag you, and get on with his real business, stalking the next victims at £40K apiece. For the Pugwashes it’s a win-win! For you, like many before and after you, it will be consequent poverty, marriage problems, and clinical depression.
Bear in mind when doing your due diligence that current franchisees can NOT speak their minds in the same way that they will once you have “signed up” and won their trust. By then, of course, it is much too late.
There have been upwards of 170 FRB UK consultants at any one time over the last 5 years. There are currently about 120 consultants, at least 25 of whom have joined FRB in the past 2 years (another cool £1M in the coffers). FRB still recruit around 12-18 a year. Ask yourself – year after year, where do all these new recruits go? Does Captain Pugwash sail them away in his yacht singing “Kipper me Capstans”?
*FRB UK is simply a very lucrative *Franchisee Recycling Business* with a cost reduction consultancy “shopfront”, made to seem respectable through "BFA endorsement".
I'm so glad someone at last has had the courage to stand up to this parcel of rogues. I too am a 'failed' Expense Reduction Analysts (ERA) franchisee and I can confirm that the comments from S. Camcon and B. Ware above mirror exactly my own experiences with this company.
The vast majority of ERA franchises fail. As Scamcon points out, yes there are successes, but I agree that these are a carefully groomed and nurtured core group which gives the franchisor a ready source of 'happy franchisees'. Not a single one of the franchisees that joined the company in my entry tranche survived more than 2-3 years. Until the point of being stripped of all their cash most struggling franchisees are in denial. They want it to work and they don't like to admit, even to themselves, that they have been conned. The unscrupulous franchisor is able to exploit this natural human fear of failure and the resulting tendency to be in denial. (BTW the ERA monthly franchise fee is payable even where no business is generated and it goes up substantially over a three year period).
The people who joined ERA at or around the same time as myself ranged from company directors, engineers, single mums, business-owners, NHS professionals, middle management, and so on. All were professional, intelligent people looking for a business in which to invest their redundancy money, their savings, pensions and, in some cases, their (re-mortgaged) homes. Over the first 6-12 months most of us believed we could make the business work if we just worked harder and held on a bit longer. Reality starts to bite around the 18-month mark. We started asking the questions we should have got the answers to (in writing) before we parted with our hard-earned cash. Questions like:-
How many franchisees have failed in ERA and lost all their investment?
Who are the top earners and what do they actually earn?
Who are the bottom earners and how much are they losing month-on-month?
How much cost-reduction experience/training is needed to effectively run this business?
Of course we asked these questions at the Discovery Days! And we were told plausible lies by the ERA management who were so deviously convincing we didn’t think we needed to get it in writing. Lies such as:-
"Only 2 franchisees have left in the last 5 years, 1 retired, and 1 was ill."
"At least 10 people earn over £100K"
"1 guy only earns 35-40k - but he only works 2 days a week"
"Our 3-week training is all you need as we have such a great system in place."
(the last untruth is especially contemptible:- the great ERA "system" turned out to nothing more than an antiquated Lotus email/CRM programme and a handful of bug-prone Excel Spreadsheets).
The owners of Expense Reduction Analysts UK, however, are not nearly so naive and trusting as their victims. They made us sign a contract in which we unwittingly agreed that, should we at any time in the future decide to terminate our franchise agreement, we would be required to sign their unseen 'Deed of Termination'. It later transpires that this Termination Deed is more than just the Restrictive Covenant-type of document we were led to believe. In fact it is a Non-Disclosure Contract, the legal enforceability of which will make for an interesting court hearing.
Here is a taste of its contents:
6.2 The Franchisee and the Individual agree not to sue, commence, voluntarily aid in any way, prosecute or cause to be commenced or prosecuted against the Franchisor and/or its officers, directors, employees and agents any action, suit or other proceeding concerning the Released Claims, in this jurisdiction or any other.
7.1 The Franchisee and the Individual each undertake to the Franchisor that they shall keep strictly confidential and shall not disclose to any person the existence, subject-matter and contents of this Deed, nor the subject-matter and details of the negotiations between the parties leading up to the entering into this Deed and the fact that such negotiations took place.
7.2 In the event that the Franchisee and/or the Individual receives any queries relating to the Franchisee’s Business or is asked to provide information as to the reasons for the termination of the Franchise Agreement the Franchisee’s and/or the Individual’s response shall be limited to a statement that the termination was mutual and that all parties were entirely satisfied with the performance of their respective obligations under the Franchise Agreement.
Does any of that seem 'reasonable' to you?
To assist potential franchisees in their quest for the truth, here are a few cold truths about ERA UK and its franchisee churn:-
Over the 13 month period March 2011 - Apr 2012:-
17 new franchisees started. 31 franchisees left, of which:-
8 had done 3 years or more
3 had done 2-3 years
15 had done 1-2 years (another 2 had handed in their notice)
5 had done 1 year or less
A significant proportion (5 or 6) of the head-office staff also left in this period.
The current and previous ERA UK franchisees who have posted their supportive comments above (in a laughably orchestrated sequence) about ERA UK are (with a couple of exceptions) some of the loyal “inner circle” band of franchisees mentioned by both Scamcon and B.Ware.
Having joined at a time before the market was saturated with 'cost-reduction analysts' these exceptions were able to cherry-pick lucrative clients which bank-rolled the hefty monthly fees until they got their business going. Nowadays the rich pickings have long-gone and ERA franchisees are rigorously restricted as to the number of 'suspects' they are allowed to court (a massive operating restriction that is not revealed to franchisees until after they have signed up and parted with their cash).
The above views are my own as an ex ERA franchisee. If you read this and still decide to go down this route don't say your weren't warned.
Oh dear! Looks like 'come in Captain Pugwash, your time is up!' Anyone else care to add their ERA UK experiences? Come on guys and gals, its time to put a stop to their game before even more people lose their life savings. I estimate that between 120 and 200 folks (that's at least £4.8M) over the years have contributed to the ERA UK retirement fund. Let's at least try to prevent further victims.
If you are reading this then it's a fair bet that you are planning to invest around £40 - £50k + fees + operating expenses + living expenses in a business that has a pretty good chance of success, right? And you believe that franchises have an 80% success rate, because that’s what the banks and the British Franchise Association (which is funded by the franchisors, not the franchisees) keep on telling us, right?
WRONG!
If you look under the stones you will find that franchises actually fail just as much as (and possibly more than) other start-up businesses. Franchise failure statistics are hidden and distorted because the actual franchised business continues on, regardless of the churn-rate of the poor bankrupted franchise casualties. Be aware that when you sign up for your ERA UK franchise, you won’t be able to call your new company anything with “ERA” or "Expense Reduction Analysts" in the name, as that would make it too easy to look up all the “dissolved” franchisees on the Companies House website. You are even forbidden to operate your own ERA-branded website to generate business (yes, in this day and age).
And don't put your trust in the banks (as if!) just because they are falling over themselves to give you a business loan. UK banks are not required to keep or publish the figures on failed franchises – why should they care anyway; you’ve still got to pay your bank loan back (although you could just file for bankruptcy or hand them the keys to your house....)
I apologise for my apparent flippancy, but you’ll just have to believe me when I say it has taken a very long time for me and my many ex-ERA colleagues to recover, both financially and emotionally, from our "ERA era". So for what it’s worth, here is my advice:
If you are seriously thinking of investing in ERA, or indeed in any franchise business, step right back from the franchise model and take a long hard look at what you are actually paying for BEFORE you part with your money. Don't kid yourself. With the notable exception of some of the bigger (and more expensive) franchise names, such as MacDonalds or Subway, you are not likely to be buying into any real brand equity. So decide if you really need a "Franchise System", Franchise "Support" or a Franchise "Brand". With most franchises all you are guaranteed to get is a pile of 'join our easy road-to-riches" bull****" and a lot, lot poorer. And if you do go ahead, get the answers to all your questions in writing and signed. Nothing more. nothing less.
POSTSCRIPT
Since leaving ERA I have set up and am running my own rewarding and growing business and there is plenty of help out there for start-ups that won’t cost you anything like £50K! Get down to your local FSB meeting and ask around.
Don't get sucked in...
I have been alerted to this blog and wish to add my own experiences as a franchisee with Expense Reduction Analysts in the UK and to caution any prospective ERA franchisees from believing everything they are told by a couple of very convincing salesmen.
Sure, old man Allison, together with his junior clone and his crony franchisees will tell you that Expense Reduction Analysts is a great investment. It sure has been for them. Sales (of franchises) at £40K each + perpetual monthly fees are just great.
And of course no-one 'fails' at ERA. This is due to the fact that they are officially barred from failing - or at least admitting to failure - under the terms of their 'legally-binding' Termination Deed when they are finally milked of all their savings and can't afford the mandatory monthly fees.
The continuous merry-go-round of franchisee failures at ERA UK allows the money generating scam to continue without interruption. ERA maintains that it limits the total number of UK franchises to around 125. Since it has been up at this number for many years is it not somewhat strange that they continue selling franchises hand-over-fist?
The reality is that literally hundreds of franchisees over the years have been mercilessly mangled through this cash-stripping machine before being forced to leave the organisation when their funds eventually run out and they cease to be of value to the controlling group. When they do it's as if they never existed and it all happens without ceremony. All traces of that franchisee are instantly removed from what the company passes off as a 'CRM' system and they are backspaced into oblivion.
Why do so many ERA UK franchises fail?
It's mainly due to lack of business potential, a lack of proper support and lack of a real proprietary system. The market is saturated, the ERA approach is antiquated and new franchisees cannot compete with longer-established incumbents.
I am an ex-ERA franchisee and quickly found that my £40,000 initial investment plus £'000s of mandatory monthly royalty fees had bought me absolutely nothing apart from restrictions, bullying, bureaucracy and internal politics. I didn't receive so much as one single head-office referral in the whole time I was with this outfit and I discovered (but only after joining), that HQ 'marketing support' was an additional monthly fee!!
If you truly believe that an Expense Reduction Analysts franchise "is the a professional, ethical and profitable route to becoming your own boss" then go right ahead. Right now they are "looking for 12 people to join the ERA family. Could it be you?"
If it is, I'll look out for you in the dole queue in a couple of years...