Phoenix Franchise Brands, Greg Longe Running “a Pyramid Scheme” Claims Longtime Franchisee

Tamara Bean, a successful & respected franchise owner of 17 years, claims she can no longer remain silent as franchisor Greg Longe & Phoenix Franchise Brands use her royalties and her success story to exploit individuals & families with a franchise “pyramid scheme.”  by Sean Kelly

(UnhappyFranchisee.com)  Tamara Bean, who is a member of the Independent Association of Fetch Pet Care Franchisees,  and dozens of other Fetch! Pet Care franchise owners, accepted the FTC’s invitation to submit public comments on franchise regulations and franchisor business practices.

Tamara’s “comment,” consisted of a summary, a detailed account of alleged predatory practices by CEO Greg Longe, Phoenix Franchise Brands and others, and 6 supporting documents.

As part of our ongoing investigation, we are posting the FTC-submitted comments and hosting a discussion on Fetch! Pet Care and other Phoenix Franchise Brands here:

FETCH! Pet Care Franchise Complaints (Index)

Tamara Bean’s detailed statement is included in its entirety below.

“Phoenix Franchise Brands is running what appears to be an illegal pyramid scheme.“

To Whom It May Concern,

Thank you for the opportunity to submit my statement.

My name is Tamara, and I am a legacy franchise owner with Fetch! Pet Care, part of Phoenix Franchise Brands. I have been with Fetch! for over 17 years, and I’m writing to expose the illegal and deceptive practices being carried out by Greg and Maria Longe, owners of Phoenix Franchise Brands, and their leadership team, including Heather Bir (VP of Operations) and Carolyn Alonzo (Director of Operations).

Opening Statement
What I’m sharing today is just a tiny glimpse of the extensive fraud happening under Phoenix Franchise Brands. I am highlighting what I believe are the most egregious aspects of their scheme. Fetch!, along with three other Phoenix Brands franchises, submitted fraud complaints through the FTC website a few weeks ago. We’ve also attended two FTC consumer calls. On the advice of our attorney, Bryan Dillon, who already submitted a complaint, we are reporting Phoenix Franchise Brands to the State of Michigan Attorney General’s office for running what appears to be an illegal pyramid scheme. We desperately need the help of authorities to stop Greg and Maria Longe, along with their team, from continuing this scheme that is destroying people’s lives.

Please read this recent article in the Franchise Times addressing many of the issues we are reporting.

Misleading Revenue and Profit Claims in Violation of FTC Rules
This is a public YouTube video of Greg Longo from 2020 where he claims that the top 20% of franchisees in the Fetch! Pet Care systems were generating $900,000 in revenue, which was and still is a blatantly false claim and can be confirmed every one of their FDDs.

Additionally, numerous franchisees in our system were sent flyers and documents before purchasing, including one from 2021 sent directly by a Fetch! employee, claiming that the top 20% of franchisees were making $948,000 in gross revenues, which does not match what is listed in item 19 in the FDD. Another document that Fetch! provided to a broker falsely states that the net profit margin for a Fetch! franchise is 30%, a financial performance representation not listed in item 19 of the FDD. All three claims are blatantly false and violate FTC franchise rules.

Pyramid Scheme Operation
Phoenix Franchise Brands is running what appears to be an illegal pyramid scheme. They lure in new franchisees with revenue figures from legacy owners like myself, who are under favorable contracts. However, they hide that fact from prospective franchisees. The fees under the Longes contracts include a 7% royalty and a mandatory 15% call center fee, totaling 22% of weekly gross revenue. Additionally, the Longes implemented their so-called “fully passive managed- services model” last year, which requires an additional 5% of gross monthly revenue. In contrast, legacy owners like myself only pay 5%-8% of monthly gross revenue.

What’s more, new franchisees are required to pay an additional marketing fee that is now listed in the most recent Franchise Disclosure Document (FDD) at $3,800 per month, another egregious cost legacy owners are not subjected to. They frequently charge undisclosed junk fees, the mos recent being an SEO fee of $489. The FDD and franchise agreement require Fetch! to provide and pay for the website from the Brand Development Fund. Yet, they are still charging this extra fee and penalizing those franchisees who refuse to pay it by not listing their service areas on their websites. Despite being fully aware that this fee structure offers virtually no possibility of profit, the Longes continue to add more charges each year, and they have continued to increase their total buy-in price, which is now $120,000 for a business with no physical assets. Since 2020, nearly 90% of new Fetch! franchisees have failed or are failing under this fee structure.

Deceptive Practices and Violations of Franchise Law
Phoenix continues to violate the FTC Franchise Rule by hiding material facts and misleading prospective franchisees. One of the accounting firm representatives from a firm Phoenix requires all managed services owners to use recently admitted to two different franchisees that he is uncomfortable with what he is seeing within Phoenix Franchise Brands because he cannot foresee any of the owners achieving profitability under their terms. Furthermore, Phoenix has used deceptive accounting practices by directing the accounting firm to recategorize fees on franchisee P&Ls. For example, the additional undisclosed junk fee they require the franchisees to pay the accounting firm is now being listed under “office supplies,” and the call center fee (SMC) is falsely listed under “marketing expenses,” disguising the fact that it is being paid directly to Phoenix.

Manipulation of Failed Locations and Coercive Legal Releases
Phoenix quickly takes back locations when they know the franchisee is out of money instead of trying to help them succeed. This behavior further points to running a pyramid scheme. As franchises fail, the Longes take back the location for little or no compensation to the original owner. They promise to resell the location and give part of the profits to the original owner within two years. Still, in every instance I am aware of, they have either changed the location’s name or delayed reopening it until after the two-year period expires, ensuring no compensation is ever paid to the former owner. In other cases, failed locations are transferred to a select group of legacy franchisees or close allies of the Longes at minimal or no cost, perpetuating a system where those at the top benefit while unsuspecting owners are financially ruined. The Longes have also been giving failed locations to newer franchisees who are unaware of what is happening, with no paperwork or formal agreements, claiming they want to “help them out.”

When questioned, Phoenix consistently responds, “the previous owner just wasn’t the right fit.” These new owners are then forced to take on the fees and employees of that location without understanding the full implications. They also require the failed owners to sign legal releases that
remove legal recourse while reserving the right to sue the franchisee. Meanwhile, hundreds of thousands of dollars have been drained from innocent franchisees, only for the cycle to begin again with new victims.

Impact on Legacy Owners
As a legacy owner, I operate under a more favorable fee structure, but Phoenix’s actions have severely devalued my business. No buyer would want to purchase a franchise under their egregious terms, meaning Phoenix has stolen the value of a business I have invested 17 years of my life building.

Furthermore, my monthly royalties are being used to perpetuate this fraudulent scheme, and I refuse to stand by while others are financially ruined using my money.

Call for Regulatory Change
The franchise industry is in desperate need of a regulation overhaul. The current system allows franchisors like Phoenix Franchise Brands to steal unsuspecting owners’ hard-earned money, retirement accounts, and life savings with little oversight or accountability. Many are now in severe debt they may never get out of, or they were forced into bankruptcy. While the recent rules prohibiting undisclosed junk fees and retaliation are a positive step, more must be done to prevent franchisors from running fraudulent schemes, misleading prospective franchisees, and exploiting innocent consumers.

Recommendations for Regulatory Action
The current level of regulation in the franchise industry is insufficient to protect franchisees from exploitation. I urge the FTC to consider the following regulatory changes to address these systemic issues:

• Extension or Elimination of the One-Year Fraud Limitation
The current one-year limitation for franchisees to sue for fraud is grossly inadequate.

Many franchisees only realize they are being defrauded after years of running their business once the long-term effects of inflated fees and misrepresented financial viability take hold. The FTC must extend, or ideally eliminate, the one-year statute of limitations for franchisees to pursue fraud claims. This change is critical to ensuring justice for those who have been exploited.

• Prevent Franchisors from Using Contracts and FDD Clauses to Escape Liability
Franchisors often include clauses in their contracts and Franchise Disclosure Documents (FDDs) that release them from liability for illegal actions or deceptive public statements.
These clauses allow franchisors to lie, deceive, and avoid accountability, effectively hiding behind their contracts. The FTC must change this law to ensure franchisors cannot use these clauses to escape legal consequences, ensuring that any deceptive or illegal practices are fully punishable.

• Mandatory Full Disclosure of ALL Fees and Contract Terms
Franchisors should be required to disclose every possible fee that could be charged during the life of the franchise agreement, and any future fee increases should be strictly regulated.

• Enhanced Protection Against Retaliation
While recent rules against retaliation are a positive step, enforcement mechanisms must be strengthened. There needs to be a more robust system for franchisees to report retaliation without fear of losing their business or being silenced.

• Increased FTC Oversight of Franchise Sales and Renewals
The FTC should implement stricter oversight over how franchises are sold, including mandatory financial viability assessments for new franchisees, especially when the franchisor has a history of high franchisee failure rates. Renewal terms should also be scrutinized to ensure franchisees are not coerced into signing even more restrictive and financially devastating contracts.

• Criminal Liability for Franchisors Engaging in Fraud
Franchisors who knowingly commit fraud and exploit franchisees should be held criminally liable for their actions. The damage they cause is not just financial—it is life- altering. Franchisees invest their life savings and retirement accounts or take out huge loans for these businesses, only to have everything taken from them through deceit.

Franchisors engaging in such conduct should face severe legal consequences, including prison sentences, like a criminal who commits robbery. This would create a considerable deterrent for franchisors considering the same tactics. The FTC must ensure that franchisees who are defrauded have not only civil recourse but also that those responsible for this kind of systemic financial theft face criminal prosecution.

In conclusion, the lack of adequate regulation in the franchise industry has allowed franchisors like Phoenix Franchise Brands to operate unchecked, destroying the lives of innocent, hardworking entrepreneurs. We need stronger protections, more transparency, and meaningful enforcement of the FTC rules already in place. Phoenix Franchise Brands’ practices have stolen not only the financial futures of its franchisees but also their ability to pursue the dream of business ownership.

I urge the FTC to take decisive action to protect franchisees from further exploitation and ensure that franchisors are held accountable for their unethical and illegal practices.

Thank you for your time and consideration.

Sincerely,
Tamara Bean
Fetch! Pet Care Franchisee in Seattle

About Fetch! Pet Care & Phoenix Franchise Brands:

 Livonia, MI-based Phoenix Franchise Brands was founded & is headed by Greg Longe & Maria Longe (aka Maria Shinabarger). 

One or both of the Longes were previously associated with British Swim School, Martinizing International, Rooster’s Men’s Grooming Center, Zoup! (rebranded Z!Eats), & Collision on Wheels International (defunct).

Franchise Brands:  Fetch! Pet Care, Spray Foam Genie, Door Renew, Furry Land mobile pet grooming, MedSpa810 & Steel Coated Floors.

Private Equity:  Cybeck Capital Fund, LLC (“CCF”), a private equity fund managed by Cybeck Capital Partners, LLC of Dayton, Ohio, acquired a portion of the issued and outstanding common stock of Fetch! Pet Care, Inc. and retains a minority ownership interest in Fetch! Pet Care, Inc.

Litigation:  Phoenix Franchise Brands is being sued by call center provider EagleOne Insights, LLC.

Franchise Registrations appear to be expired in multiple states (CA, MN, & IN).  Most recent FDD expired September, 2024

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Are you familiar with Greg Longe, Maria Longe, Phoenix Franchise Brands, or Cybeck Capital Fund?

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Tags:  Fetch! Pet Care franchise complaints, Fetch! Pet Care franchise, Fetch franchise, Phoenix Franchise Brands, franchise complaints, Greg Longe, Maria Longe, Maria Shinabarger, pet franchises, Rhino7, Cybeck Capital Fund, LLC (“CCF”), Cybeck Capital Partners, LLC, dog franchise, Furry Land franchise, Spray Foam Genie franchise, Door Renew franchise, MedSpa810 franchise, Steel Coated Floors, Federal Trade Commission, FTC