Franchise Tank is being promoted on Craig’s List and elsewhere as both a consulting service for launching new franchise programs, and as a franchise opportunity to sell franchise consulting services. Franchise Tank franchisees are promised big commissions as well as an equity stake in a portfolio of client companies. But who is behind Franchise Tank, and why are the red flags a’flying?
(UnhappyFranchisee.Com) Controversial franchisor Chris Daskalakis (ZooglaList, Mr. Oil Saver, Mr. Fire Safety, Nika Business, Clean Fry and others) has teamed with veteran franchise attorney Harold Kestenbaum to launch a concept that seems too good to be true:
A franchise that enables its franchisees to
1) sell franchise consulting services & earn commissions and royalties from companies that franchise,
2) sell franchises and get commissions on the franchises they sell, and
3) receive an equity stake in a portfolio of client companies
It’s called Franchise Tank, an as yet un-federally trademarked name that plays off the popular TV show Shark Tank.
Here’s one of the many ads currently running in multiple markets on Craig’s List:
What if you were instrumental in assisting to start the NEXT BIG BURGER FRANCHISE, and you were also making a monthly royalty from EVERY FRANCHISE STORE they ever build! YOU CAN NOW BE PART OF THIS GREAT OPPORTUNITY, by investing in a FRANCHISE TANK franchise! .
WE’RE “FRANCHISE TANK”, THE NATION’S TOP FRANCHISE INVESTMENT, CONSULTING & BROKER COMPANY. We are seeking an aggressive and dependable individual to grow your area.
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THERE ARE MANY BUSINESSES IN YOUR STATE THAT WOULD LIKE TO KNOW MORE ABOUT FRANCHISING THEIR BUSINESS. We help businesses franchise their companies and assist them to sell their franchises! Often we come in as investors and charge just $20,000 and take 10 percent equity & 1 percent ROYALTY in their business and other times we come in as consultants and charge a flat $40,000 fee to create their Franchise Disclosure Documents (FDD) and make them legal to sell franchises in the usa.
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WE PAY YOU 30 percent of the royalty we collect monthly PLUS 40% COMMISSION FROM EVERY business you bring us that we franchise ($8,000 TO $16,000 based on if they choose Plan A or Plan B, plus ROYALTIES & 10,000 SHARES in our sister business, FDG, which is a portfolio of ALL THE COMPANIES WE FRANCHISE AS EQUITY PARTNERS. So your shares increase in value as we grow!
[Here are two examples from Craig’s List: Franchise Tank franchise ad Florida, Franchise Tank franchise ad Texas]
According to the Franchise Tank FDD, “The total investment necessary to begin operation of a Franchise Tank franchise is $23,635 to $41,450. This includes the franchise fee of $20,000 that must be paid to the franchisor and/or its affiliate, as appropriate.” There is also a minimum $200 monthly royalty franchisees must pay to the franchisor.
Prospective franchisees have the right to know the background of the people they are considering signing a binding, long-term agreement with (The term of the Franchise Tank franchise agreement is 15 years).
The FTC Franchise Rule requires franchisors to provide, in its Franchise Disclosure Document (FDD), the 5-year work history of its management team (Item 2: Business Experience) and, among other things, any recent litigation and/or current injunctive or restrictive orders or decrees imposed on those listed in Item 2 by a governmental agency (Item 3: Litigation).
While we are neither franchise attorneys nor franchise regulators, it seems to us that the Franchise Tank FDD in Item 2 is not in compliance with the FTC disclosure requirements regarding the work history of and current governmental orders imposed on CEO Chris Daskalakis.
The only person disclosed in Item 2 of the Franchise Tank FDD is Chris Daskalakis. Instead of the FTC-mandated work history of 5 years, Franchise Tank lists 10 years of positions with now-defunct companies seemingly unrelated to his franchising activities:
ITEM 2
BUSINESS EXPERIENCE
Chief Executive Officer – Christopher Daskalakis
Mr. Daskalakis has been with our company since our inception. From April 1998 to November 2005, he was Founder of 5 Star Construction & Fire Safety Services located in Old Bridge, New Jersey. From 2006 to 2011 Mr. Daskalakis was the CEO of The Elite Group, LLC located in Maitland, Florida. From 2012 to the present, Mr. Daskalakis was the President of NRPG Enterprises located in Debary, Florida.
Notably missing are ownership positions he’s held in the past 5 years directly related to the sale of franchises and business opportunities.
While we are not sure of the accuracy of some of these exact dates and positions (especially in relation to NRPG, Nika and Clean Fry), corporation filings in Florida and Wyoming indicate that relevant positions Mr. Daskalakis has held in the previous 5 years (but are not disclosed in the Franchise Tank FDD) might include:
Question for Franchise Tank and its attorneys: Why are these positions and companies not disclosed in the Franchise Tank FDD?
Related question: As attorney Harold Kestenbaum’s client list is used in Franchise Tank marketing and Mr. Kestenbaum will play a major role in the production of core work product, shouldn’t he be disclosed in Item 2?
According to the FTC, in Item 3 of the FDD “The franchisor must disclose whether… any person identified in Item 2 is subject to a currently effective injunctive or restrictive order or decree resulting from a pending or concluded action brought by a governmental agency.” The Franchise Tank Item 3 discloses no such actions or litigation:
ITEM 3
LITIGATION
No litigation is required to be disclosed in this Disclosure Document.
We are neither attorneys nor regulators, and we could be wrong, but it seems likely that one or more of these enforcement actions would be a required disclosure item:
In addition, in the Chris Daskalakis’ Assurance of Voluntary Compliance, Daskalakis agrees not to sell any franchise or business opportunity in Florida without first submitting it for review and receiving approval for from the Florida Attorney General. It appears that the Franchise Tank franchise is possibly being promoted in Florida in violation of this agreement.
Questions for Franchise Tank and its attorneys: Aren’t some or all of these orders required Item 3 disclosures? why are they not included in the Franchise Tank FDD?
Has the Florida Attorney General reviewed and approved Franchise Tank franchises for sale in Florida? What about Clean Fry?
Red Flag #3 Advertising Offer of 10,000 Shares in Sister Company “FDG”
Franchise Tank franchise ads on Craig’s List promise:
WE PAY YOU A 40% COMMISSION FROM EVERY SALE ($8,000 TO $16,000 based on if they choose Plan A or Plan B, plus ROYALTIES & 10,000 SHARES in our sister company which is a portfolio of ALL THE COMPANIES WE FRANCHISE AS EQUITY PARTNERS. So your shares increase in value as we grow!
WE ALSO GIVE YOU THE 10,000 SHARES OF FDG ONCE YOU BUY THE FRANCHISE… SO WE ARE BOTH VESTED IN EACH OTHER TO SUCCEED! … This is accomplished through 10,000 shares that we offer you as soon as you buy the franchise… You will own a piece of the portfolio of ALL THE COMPANIES WE FRANCHISE AS EQUITY PARTNERS.
The Franchise Tank website also states:
When you buy a Franchise Tank franchise, we automatically give you 10,000 SHARESOF THE FRANCHISE DEVELOPMENT CLUB (FDC), which is a portfolio of all the companies we franchise as equity partners!
SO YOUR SHARES GROW WHEN ANYONE MAKES A SALE!!! THAT’S YOUR NEST EGG!!! We are the ONLY franchise that actually GIVES YOU SHARES in the portfolio of ALL the companies we franchise as equity partners!
Yet the Franchise Tank FDD has no mention of a “Franchise Development Club” or other “Sister” company:
We have no parent, predecessors, or affiliates at this time.
The Franchise Tank FDD given to a prospective franchisee recently seems to directly contradict the promise of an equity share of the companies they franchise:
You do not receive any equity shares from companies that we franchise as equity partners.
The Franchise Tank franchise agreement has a standard “merger/integration clause” which states that if it’s not spelled out in the franchise agreement, you’re not getting it… even if promised in an ad:
Only the terms of the Franchise Agreement are binding (subject to state law). Any other promises may not be enforceable
Question for Franchise Tank and its attorneys: Why are promises being made in Franchise Tank advertising of 10,000 shares of a “sister company” called Franchise Development Club (FPG), yet no mention of the offer or sister company in either the Franchise Tank FDD or Franchise Agreement (FA)?
Red Flag #4 Questions About Experience/Competence/Honesty of the Franchisor
There seems to be a disconnect between the claims being made about the experience of Franchise Tank in its franchise advertising and what appears in its franchise disclosure document.
Franchise Tank franchise ads state:
WE ARE “FRANCHISE TANK”, THE NATION’S TOP FRANCHISE INVESTMENT, CONSULTING & BROKER COMPANY…
The Franchise Tank website states:
Our franchise attorney is a veteran in the franchise industry with over 25 years of experience writing Franchise Disclosure Documents for a variety of businesses in different industries. Our partners come from the construction industry and franchise industry and are franchisors of their own national franchise as well as general contractors and architects.
Yet the Franchise Tank franchise disclosure document makes no mention of any franchise development experience by its principals. It states:
FRANCHISE TANK, INC (“we”, “us” or “our”) is a Wyoming incorporated company that was formed on July 1, 2015…
We do not own or operate a Business of the type being franchised.
We do not offer franchises in any other line of business except for our affiliate franchise, Clean Fry…
We have no parent, predecessors, or affiliates at this time…
How could Franchise Tank be considered a the nation’s “top franchise investment, consulting, & broker company” when it claims that it has no prior experience in franchise investing, development or brokerage?
How can Franchise Tank claim to be experts in putting together franchise programs at all when their own legal documents and advertising claims seems to be problematic (to put it mildly)?
Is Franchise Tank’s claim true that it is “a unique firm made up of franchise attorneys, architects, general contractors, brokers and franchisors all under one roof.”
Does Franchise Tank really have 34 independent sales reps (first names and cities are listed on the site)? If so, why do they have the same phone number but no extensions or voice mail numbers?
Despite the Red Flags, we are keeping an open mind about the Franchise Tank franchise opportunity and suggest our readers do to.
We are sending these questions to Chris Daskalakis and Franchise Tank franchise attorney Harold Kestenbaum with an invitation to provide corrections, clarifications, rebuttals and/or updates… which we will publish.
ALSO READ:
CHRIS DASKALAKIS Franchise Violations & Complaints
Chris Daskalakis Name Change to Chris Matthews: Should it be Approved?
CLEAN FRY Franchise Warning: Another Chris Daskalakis Venture
TAKEDOWN DEMAND: Chris Daskalakis, Nika Franchise,
Mr. Fire Safety CHRIS DASKALAKIS Denies the Failed Zooglalist was a Franchise
MR. OIL SAVER Was Killed by Distributors: Daskalakis Lawsuit
CHRIS DASKALAKIS Franchise Press Release: Nikabusiness.com
CHRIS DASKALAKIS Franchise Complaints: ZooglaList.com
ARE YOU FAMILIAR WITH CHRIS DASKALAKIS? SHOULD HE BE ALLOWED TO CHANGE HIS NAME TO CHRIS MATTHEWS? SHARE A COMMENT BELOW. Contact UnhappyFranchisee.com
TAGS: Chris Daskalakis, Christos Daskalakis, Franchise Tank, franchise consultants, franchise your business scam, Franchise Tank FDD, Harold Kestenbaum, Clean Fry franchise, Nika franchise, Nika Restaurant Services, Nika Business, Mr. Oil Saver, Mr. Fire Safety, Mr. Fire Safety franchise, Pauline Daskalakis, unhappy franchisee
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Surprise, surprise, Sean...the Franchise Tank "About" Page discloses no names!
That's right; unless you have ESP, you won't know who owns this mess until you call or email. Credibility at its finest.
Thanks for exposing this one. I give it a year.
The Franchise King®