MAKE & TAKE GOURMET: 3 Franchisee Groups Reportedly Suing
Unhappy Franchisee has learned that three franchisee groups have joined together to sue franchisor Make & Take Gourmet. The groups include franchisees Shawn & Lisa Tyszka, of Syracuse, NY, owners of the now-closed Camillus, NY Make & Take Gourmet franchise; Eugene & Cheryl Grenga of Liverpool, NY, owners of the now-closed Baldwinsville, NY Make & Take Gourmet franchise; and Brian & Lisa Clark of Clifton Park, NY, owners of the now-closed Clifton Park, NY Make & Take Gourmet franchise.
According to the complaint, “The Tyszka Group, Grenga Group and Clark Group seek damages, punitive damages and rescission of certain licensing, franchise and related agreements, and for attorneys’ fees and costs, related to defendant Make & Take’s sales of franchises in violation of New York General Business Law 683 and 687, and common law fraud pursuant to the laws of the State of New York.”
Allegations common to the three groups include:
Illegal earnings claims. Franchise companies are prohibited from providing sales or profitability information, or projections of potential sales or profitability, except in a specific, designated format within franchise disclosure documents. The three franchisee groups allege that prior to entering into their agreements, Make & Take Gourmet provided them with oral and written earnings claims as to the levels of revenue and profit that they could expect their franchises to yield.
Sale of unregistered franchises. In order to sell franchises in the state of New York, franchisors must be registered with the New York State Department of Law, Office of the Attorney General. The three franchise groups allege that Make & Take Gourmet sold them unregistered franchises, in violation of New York state law.
Violation of franchise disclosure laws. Franchisors must comply with rules and regulations regarding pre-sale disclosure of certain information furnished in a designated format called a Uniform Franchise Offering Circular (UFOC) which contains required information about the franchisor company, management, rights and obligations of both parties and the specifics of the franchise agreement between the parties. The three franchisee groups allege that they were never furnished with a UFOC prior to purchasing the Make & Take Gourmet franchise.
Also named in the lawsuit is Bond, Shoeneck, & King, PLLC, of Syracuse, NY, Make & Take Gourmet’s law firm.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
This has to be a joke.
These people opened meal prep franchises without doing their homework, then whined when it fell flat.
In the case of the Clifton Park franchise, there were THREE meal prep businesses in one small town alone. What did they think would happen?Overnight success? It’s common sense, people!
They gambled and lost. Welcome to the world of small business in today’s economy.
They gambled and lost. Welcome to the world of small business in today’s economy.
Bill:
I agree that people should have known this was a risky, unproven concept. However…
This franchisor appears to have been selling unregistered franchises in violation of franchise laws.
This franchisor was reportedly making illegal earnings claims and providing bogus numbers.
This franchisor was simultaneously marketing advertising services to independent MAKS… potential competitors of their own franchisees.
Gambling is one thing, but the dealer’s still not allowed to cheat the players.
Would complain about losing in what you learned was a rigged game?
It is ALWAYS the cheaters fault, period.
With all due respect to Bill Ferret, it’s not the problem or responsibility of the local store to know there was fraud perpetrated. To suggest so, would be to say that all commerce in the US can legally be fraud as it’s always the buyers fault.
Having said that, it’s also true that the whole problem could have been avoided by if the perspective franchise had simply spent the lousy $500 for a quick [and I do mean quick!] review by a Financial Analyst.
As a matter of fact, I did a review on one!
My friends’s wife frequented the one in Manchester, NH and liked it. I live nearby and drive by the store all the time, so I stopped in. The first thing I noticed was a large multi-thousand dollar sign outside, and tens of thousands of dollars of store fit up inside. I also observed retail prices that were not enticing. I also suspected low margins, and witnessed low sales in the store.
I went back to my computer checked into the franchise fees and set up costs, which were astronomical. Well over a quarter million.
This entire exercise, including the visit in the store and the visit on the web took under an hour. And yes, that includes drive time!
I called my friend’s wife and said “enjoy them while you can, they’ll be gone in 6 months”
It was a very simple calculation, at least for me.
A. Ultra-high star up costs (documented on company web site)
B. Low sales
C. Low margins
D. Doubtful stream of repeat customers because of pricing
E. No observed value added from the mother ship. It was nothing more than a nice kitchen that was open to the public
And yes, that store was closed within 6 moths.
I never talked to the owners, but I can easily speculate that crushing operating costs and wierd franchise agreements lurked.
Again, this all could have been avoided, but for somebody not spending the $500 to have it looked at independantly.
What a shame.