STRATUS Franchise: Are Stratus Master Franchisees Jumping Ship?

131 thoughts on “STRATUS Franchise: Are Stratus Master Franchisees Jumping Ship?”

• STRATUS BUILDING SOLUTIONS: Goldeneye Holdings Franchise Lawsuit

  The lawsuit against Stratus Building Solutions master franchisee Goldeneye Holdings Inc. alleges that the company blatantly scammed Spanish-speaking franchisees by promoting the franchise in Spanish language publications, conducting the sales presentations in Spanish, then coercing them to sign English franchise agreements they could not read.

  After the franchisees had signed and paid for their guaranteed work, the lawsuit alleges that none of them ever received the cleaning accounts they were promised – and paid for.

  I’ve posted excerpts and the full complaint. Comments, as always, are welcome.

• STRATUS BUILDING SOLUTIONS: Should Entrepreneur De-List Stratus From the Franchise 500?

  In checking the Stratus print ads from the Entrepreneur 500 issue, there are three franchisees pictured with testimonials:

  Annie Gonzalez, Atlanta, GA
  Ken Casseri, Western, NY
  Tim Mehringer, St. Louis, MO

  Have Ken & Annie both debranded from Stratus by now?

  What about Tim, who said Stratus is making his financial dreams come true?

• Pingback: STRATUS BUILDING SOLUTIONS: Should Entrepreneur De-List Stratus From the Franchise 500? : Unhappy Franchisee

• I am very concern unit franchisee we are post to sign our name under pro2fs or else. I got this in a email 2 weeks ago late at night What should I do? I have read everything on this page and I agree with the masters in leaveng But what about those unit franchisee who bought in to stratus what is our protection in all of this? Where do we go from here? We need some advice.

• a concern unit franchisee wrote “But what about those unit franchisee who bought in to stratus what is our protection in all of this? Where do we go from here? We need some advice.”

  Wasn’t yesterday the deadline for forcing a lot of the Stratus franchisees to drop their Stratus branding and become Pro2fs? Does anyone know how many did it and how many didn’t? Can Pro2fs really do that? Seems like unit franchisees are really caught in the middle.

  What can unit franchisees do? Can they get protection by calling Fortman Law and getting in the class action lawsuit, or is that different? Is Jon Fortman representing franchisees under the Pro2fs masters?

• It has been an interesting and busy week in the Stratus Family……I would like to call this week: The Empire Strikes Back: Rise of the Puppets!

  Quick update almost daily needed:

  Over Holiday Weekend: After last Friday’s “train wreck” of a phone call, there were acts of intimidation by Pete/DJ and then a desperate DJ began calling around to see if he could find a “fire sale” buyer for Stratus. He called at least two (2) compaines that are currently in the “franchise business”…. Since there is not a “notification clause” in the Master Franchise Agreement, he is attempting to sell the Brand, St. Louis Branch and Promissory Notes without further bloodshed.

  Tuesday: A warm, wonderful, somewhat apologetic email is sent out to all the Masters informing them that they “heard” that many of the Masters problems with the system is the “unfair” Royalty Structure and that effective immediately and maybe for good, the Royalty Structure would be cut in 1/2! Meaining if you had been sending in 5k per month in Royalty Fee’s, beginning in June, you only had to send in 2500.00!

  Wednesday: A GREAT Announcment was made (Just prior to a Master Group of 14’s phone call) that the Advisory Council Bylaws had been written and that they felt they had found the 1st Group of Members (Rise of the Puppets!) but you could nominate anyone for the Council and it would be taken under advisement….

  The Master Group of 14 had their phone call, it was a great overall discussion, everyone got to say what they wanted, hoped for and agreed to formulate a letter to send to Corporate as a Group very soon.

  Thursday: Many phone calls took place as the “Puppets” were uncovered and more information was gathered/given in regards to the following “bombshells”
  a) DJ’s attempts to arrange a Firesale was actually disclosed to me personally on Thursday p.m. by an industry “vet”. I was able to confirm the possible suitor and released that information the following day.
  b) Jan-Pro is very interested in what is going on at Stratus…So much so, they have had at least two executive level meetings to discuss what to do about the “Stratus Issues”. Also, A group of approx. 30 Masters have decided to Stop Selling Unit Franchises for the time being and quite possibly forever.
  c) A second possible suitor for Stratus was revealed, but I have not been able to confirm that as of yet.

  Friday: Day of Decision Making, Rise of the Puppets……We have dramatic information on the “Puppets” to Reveal including but not limited to the following:

  Two of the Puppets: “California Boy” and “City of Brotherly Lovers” have been getting payments/kickbacks from Stratus Corp. for every Validation that they have done over the past 4 to 5 Years….Basicallly, they received money for their “good words” about Stratus and verifying the fraudulant statements made by DJ/Pete in their presentations to potential Master Franchisors. These two are indirectly referred to in the suit filed by Goldeneye Investments and have been confirmed by at least three different sources that both of them have been doing this for awhile.

  One of the Puppets: “Rocket Man” or “BBQ King” or “Asphalt Jungle Man” I haven’t decided what his nickname is yet, has been attempting to play both sides…He has been sending out feelers attempting to get himself invited into the “Group of 14” and at the same time, he has been in direct communication with “California Boy” and “City of Brotherly Lovers” and recently sent out an email stating that he would be loyal member of the Advisory Council. This person has two (2) Area Developers that he gets 1/2 of their overall Royalties each month and has additonal financial ties to Stratus Corp. including recently forgiven Notes due to the fiasco formally known as the “Call Center”.

  So in a nutshell, the “Group of thieves” have attempted to “fire sale” their company, the “Puppets” have been identified and have financial dealings and possibly a financial promise with the “Group of thieves” IF the company sells. In fact, there was a rumor that the “Puppets” may become the future owners of the Stratus Brand/Franchising if DJ cannot line up a suitor with cash…..That however is a rumor without validation at this time.

  I believe it was “guest” many posts back that talked about “Medussa”…Guess what, he might be somewhat correct afterall. I am hopeful that this weekend as the “Group of 14” reviews two plans of action that I can title next weeks “Judgement Day: The Beginning of the End” or “The Rehabilitation of Stratus: Real Hope and Change”

  It is in the “Group of 14’s” hands now, the Puppets have no say, DJ and Pete have no say…..Literally the company is going to either be brought down by the Group or Rehabilitated by the Group.

  DJ and Pete are liars, thieves, disgusting human beings that care nothing about anyone else but their own pocketbooks.
  They surrounded themselves with people of like minds including Marvin Ashton, David Farrell, Carmen Garcia, Bob Stapleton and Marissa Lather and the now famous “Puppets”.
  They literally stole millions of dollars by fraudulant means/methods, they ruined families for potentially decades, they committed criminal acts and they don’t give a damn about you, your family, your finances, your angst or grief!

  Is this really who you want to be assoicated with?
  Are these people that you would let in your house and around your children?
  Are these people that your name and their names are directly related?
  Do you want to have more “financial blood” on your hands as you continue to be part of the “Stratus Family”?
  You are just as guilty as the “Puppets” if you don’t chose to remove DJ, Pete, Marissa, David, Marvin, Carmen, Bob and the way they have conducted themselves and ruined countless lives!

• Reasoned Source, thank you so much for your continued updates. Very curious as to what went on this week and now we have some answers.

• Reasoned Source: Thanks for the update.

  I find it interesting that Jan-Pro is taking such an interest in the Stratus situation. Let me ask you a question because I know you’ve been in this business for years. Do you see how the franchise concept utilizing Master Franchisees in the commercial cleaning business can ever be fair to all parties? I see the same flaws in the other systems as I do in Stratus.

  We concentrated on Stratus simply because we had clients who were unfortunate enough to buy franchises in St. Louis. However, I see the same levels of greed in the other systems also. In my view, the business model has evolved into something that depends on the exploitation of Unit Franchisees in order to succeed. As these companies have gotten into a battle to see who can be tops in Entrepreneur’s annual popularity contest, the problems have been magnified.

  I’ll tell you what I told Stratus’ prior attorney. If your group learns from the mistakes made by Stratus, Jan-Pro and the rest of the clones, you could set up a business model that is sustainable over the long term and you can be out front in the industry. Stratus refused to take us seriously and failed to even discuss possible alternatives to our proposal. The only reason was greed. I still commend you and the others in your group for taking action.

  We have been sitting back watching these developments. However, we are reaching a point where we need to ramp up our lawsuits filed here in Missouri. I still have clients that need to be heard and we are still hopeful that a global resolution can be reached. I think the end is near for his company and if the owners think we will let them walk away with fat payouts they are mistaken.

  Thanks again and keep up the good fight.

• Reasoned Source: Yes, thanks for this and your previous updates. We made several new posts on Stratus this week, but it was eerily quiet on the comment front.

  If anyone would care to confidentially share copies of the “warm, wonderful, somewhat apologetic email is sent out to all the Masters” and the “GREAT Announcment” regarding the royalty reduction, please send it to UnhappyFranchisee[at]gmail.com. Confidentiality assured.

  Commercial cleaning franchising is really at an historical turning point. UnhappyFranchisee.com, with your help, is going to add pressure by calling out the advertising media, brokers and others who make money knowingly promoting this defective model to unsuspecting master and individual franchise prospects.

  To that end, we have called out Entrepreneur magazine to de-list Stratus from its Franchise 500 and cease any advertising for Stratus. Please leave a comment in support here:
  STRATUS BUILDING SOLUTIONS: Should Entrepreneur De-List Stratus From the Franchise 500?
  http://www.unhappyfranchisee.com/stratus-building-solutions-entrepreneur-franchise-500/

  Further, we have put other lead generation and bestowers of superficial awards on notice with our first “Franchise Threat Advisory” which will go out over the newswires next week. This post also contains links to all of our 15 posts on Stratus:
  http://www.unhappyfranchisee.com/franchise-threat-advisory-stratus-building-solutions/

  Our goal is to urge Entrepreneur to revoke its deceptive endorsement of Stratus Building Solutions franchises short term, and urge them to completely ban janitorial franchises from their Franchise 500 and advertising by December, 2012 when their next list is released.

  UnhappyFranchisee.com commends all of you who are pushing for change, who are demanding an end to this corrupt and predatory business model, and are courageous and creative enough to reinvent the branded commercial cleaning industry.

• @ Fortman and all of the “Group of 14″….The answer is YES… A Properly Structured Master Franchise System is possible and can be run effectively and without major issues….Let me lay it out for you now in a minimum of three (3) forms.

  Keeping the Unit Franchise Model: I firmly believe in the Operational Benefits of this model, someone that has a “vested interest” in the performance of an account will ALWAYS outperform an “hourly employee”.

  Re-structure the Buy-ins and make them reasonable and lower for Masters, Area Developers and the Unit Franchises themselves.

  Re-structure the Royalty payments for all, make sure the unit franchises have the option (in writing) to purchase their own insurance without penalty. The Master Royalty Payments to the Franchisor must be based upon either 1.% of Gross Billings or 6% of Gross/Net meaning after Unit Franchises monies have been paid. (what many don’t understand that approx. 80% of all “billings” goes directly to the unit franchisee, 4 to 5 % of all “billings” goes directly to Corp. for a total of at least 85% of gross billings actually leaves the Master Franchisor) This causes a great need for the Master to sell more unit franchises than what they actually need in order to improve cash flow and actually stick some money in their pockets.

  Re-structure the account acceptance fee’s to something that is reasonable for “all parties” the biggest mistake is the 4x or 5x multiplier, that puts too much strain on the unit franchisee financially and actually makes many accounts un-profitable…It isn’t a good situation if it isn’t a “win/win”. 3x should be the maximum with room to go to 2x or lower if needed.

  Form an advisory council on both the Master level and the Unit Franchisee level. Agree to a “Franchisee Bill of Rights” that makes “issues” a direct mediation to the respective advisory councils for review/action, an actual mediator if necessary after that.

  Also, you must allow and encourage the unit franchisee’s to “build their own book of business” with your help…You shouldn’t charge a unit franchisee or punish them if they grow their own business. You don’t do that with a “sub-contractor” why in the hell would you do that with someone that bought into your system?

  So hopefully, that answers the question about “can it be done”….This is the easiest way to please all parties that want to keep it as a “unit franchise” business. If you have happy unit franchisees, you have happy customers, happy sales staffs, happy operations managers and a growing/profitable office.

  With a strong “master advisory council” people described such as the “puppets” in my previous post, would be fined, have their licenses revoked and potentially have their offices taken over by either the “corporate entity and/or advisory council” and settled over time in a lawsuit if needed.

  There are other ways to have a sucessful Master Model, including use of licensing agreements vs. unit franchisees and/or the use of “certified vendors”. The key to all of these is to have an honest, open, profitable relationship with the Corporate Office, Master and most importantly the unit franchisee themselves.

  What we have at Stratus, Jan-Pro, Coverall and others is nothing like what I have described in this posting…The only one’s “winning” is DJ/Pete, Greentree Capital and the owners of Coverall.

  Hope this Helps……

• I don’t want my previous post to be misunderstood…..My previous post is directly related to starting a “new franchise company” and/or “full removal” of Pete/DJ from Stratus along with the “puppets”. Those are simply immoral men/women, have shown that multiple times, multiple ways. They are corrupt to the core and have no intention of “sharing” the opportunity with anyone else but themselves and to a lessor degree with their “inner circle”. They learned from the best cheats and simply decided making well over six figures wasn’t enough anymore, they wanted more and they didn’t care what they had to do to get it, whom they had to hurt to achieve that and who they can screw/take advantage of in order to achieve their personal financial gain.

  With my help, I could turn this entire company around in a matter of days, secure the settlements on multiple fronts, rebuild the infrastructure, offer a full revised plan of action, support mechanism for the Masters and the Unit Franchisees and fulfill any/all books of business within a short period of time…I’m not a miracle worker, but I know people who are, I understand this business very well and I see a GREAT need and opportunity in revolutionizing this model.

  Unfortunately, the “Group of 14” hasn’t quite seen what I have, hasn’t experienced decades in this industry and understand what it is like to already have worked in all sides of this industry from traditional to licensing agreements to unit franchising. YOU must be able to walk between all the divisions in order to understand what your problems are and how to fix them. The “Group of 14” are all good men, they have good hearts, have run their businesses overall well and feel a strange sense of “loyalty” based upon signing a document that was fraudulantly gotten by DJ/Pete.

  I guess I’m unique, I don’t give a damn about DJ/Pete/David/Bob/Marissa/Carmen/Marvin, I only care about them, their families, the unit franchises harmed, the former Masters that were harmed and doing what is right for the good of all. I have no loyalty to a piece of paper obtained by fraudulant means!

• Reasoned Source, what’s the latest? We are preparing to send Notices of Deposition for Pete Frese and Dennis Jarrett. In addition, we are going to subpoena Farrell, Stapleton, Marissa Lather, and Marvin. We’ve waited through this week to monitor any further developments. The Unit Franchisees just can’t wait any longer. I’ll keep you posted.

• @ Fortman, I think that is a reasonable plan of action…I wish I had better news to report, but it is amazing to me the low price associated with certain peoples integrity and morality. Though I will always remain hopeful that a reasonable settlement can be reached for/by all including the harmed Masters, Unit Franchisees and others…It is very slim at this point in time…If you ever need my help, a subpoena is the way to go.

• I wish I could say I was surprised but I’ve been doing this long enough to know that many people are motivated by fear and greed. I once went to a Tony Robbins seminar where one of the speakers was Donald Trump. The Donald’s advice was to screw the other person before they screwed you. In contrast, I’ve been reading Sam Walton’s bography which was an early father’s day gift from my stepson. The man was a billionnaire but never motivated by money. He never expected any of the associates to do anything he wouldn’t do or hadn’t done himself. My point is that when someone is motivated by the need to amass as much money as possible, they cannot do the honorable or right thing. They become more and more self-centered and will stab famiy members in the back if it means getting ahead. It’s a miserable existence. I’ve seen it happen in several clients over the years. Reasoned Source, you have shown me that you are an honorable man who wants to see people treated fairly. Keep positive because we’re in it for the long haul. If you need anything you know how to reach me.

• @Fortman, that you for your kind words…I wish you very well in your efforts…I still have some hope that common sense will rein supreme in this endeavor for all parties….Unfortunately, when money is envolved, embarassment is envolved, shame is envolved (believe it or not, by the wrong people) it makes good people do very stupid things. Here I am looking for a fight without any real “skin” in the game, those with legitimate gripes, who should be very embarassed for having their names associated with these people are trying very hard how not to get into the fight.

  I’ve learned more about certain individuals in this fight than I care too, I’ve learned about how very smart, very honest and yes too proud, business men/women have been taken advantage of by these men and they are willing to continue to be taken advantage of in the stupid hopes of turning these men around.

  I’ve learned more about the following words than I care too:

  Fraudulant Inducement
  Mail Fraud
  Wire Fraud
  Securities Fraud
  Disparagement Agreement just to name a few…….

  I’ve learned that it is amazing to me that people are willing to sell their “souls” and allow themselves and therefore their families be tied to such people and therefore such companies for a mear 50% reduction that you can still pay the original thieves so you can be taken advantage of and assist them willingly to take advantage of others.

  I’ve learned that until enough good men and women bind themselves together and clean up this mess, that additional good men and women are going to become party to this nonsense.

  I’ve learned that companies/groups such as:

  St. Louis Book of Lists
  USA Today
  Franchise Times
  INC
  Entrepeneur
  USCA

  Have such a low threshold by which they varify documents from companies and supposed “third parties” that they actually become part of the problem as the “awards”, “lists”, “articles” all become fodder to “suck in” more victims. I don’t know, I would think more than just one crafty, “junk yard dog” attorney should be able to draw a line of liabilty from one end of the chain to the other:

  Harmed Unit Franchisee
  Harmed Master
  to:
  Stratus Franchising, LLC
  Dennis, Pete and other Management of Stratus Franchising, LLC
  Previous/Current Validators (Masters) that verified what was said and/or documents given to potential/future Masters.
  to:
  Name the organization/company/award

  Seems reasonable to me, maybe I’m looking at too simplistic, but when I hear/read such as others on this post that they felt they did at least some of their homework and they go to various sites of the above listed organizations/companies and see Stratus’ name and/or the principal owners name, they get a sense of validity and a general calmness comes over their decision making process.

  Make no mistake, if these people are allowed to survive in the business world, much more harm than good will be gotten. These men are the same today, as they were yesterday…In other words, the same way they are acting at Stratus, is the same way they acted at Jani-King, Jan-Pro and Coverall respectfully. Old dogs do not learn new tricks!

• Reasoned Source:

  You are right. A major problem is that respected publications give the illusion of legitimacy to these bad investments and predatory franchisors.

  I am calling for Entrepreneur – the worst offender – to de-list Stratus and discontinue featuring master/unit janitorial franchises from next year’s list. Please add a comment in support here:

  http://www.unhappyfranchisee.com/stratus-building-solutions-entrepreneur-franchise-500/

  Check out the comment by Zurab about how the Entrepreneur rankings embolden the sellers of these franchises even after the sale. Here’s an excerpt:

  “When I spoke to John Coleman (one of the master Franchisor in Philadelphia Startus Building Solution) and asked him to return my money back or I would take him to the court, he laughed at my face and this is his exact words: ”Please, who’s going to believe you? we are ranked as number #1 cleaning franchise by entrepreneur nationwide. ”

  If this site can do anything abouot it, they will not be ranked #1 anything by the next ranking.

• I fully intend on throwing my support toward the effort. I’ve just been busy on our suit against Contours Express, another company that defrauded its franchisees but still managed to get pretty high on Entrepreneur’s list. Several of my clients relied heavily on the company’s ranking as part of their due diligence. Not only did the franchisees rely on it, but the private equity firm that purchased controlling interest in the franchisor used it as a research tool when looking for investment opportunities. That private equity firm was founded by Bob Pittman and Mayo Stuntz, billionaires who were the top two executives at AOL when it merged with Time Warner. They also started MTV. Seasoned businessman to say the least. Entrepreneur knows the importance placed on the list by franchisors and franchisees. Their revenue jumps substantially for that issue. They should do the right thing and de-list any company that is shown to have defrauded its franchisees.

• Couple of minor developments and/or rumors:

  1) The nominations for the “toothless” advisory council came out today, what a surprise the the “validators of false information” both “city of brotherly lovers” and “california boy” were on the list. Also, the recently encouraged/deal cut to stay/problems listed on Fox News and in Fortmans Lawsuit and another law firm in Kansas City where this particular person owns one of four locations that is looking for “class action” was also nominated. Final people on the list were offices that have little to no knowledge of what is going on. I Wonder who will make the final cut!

  2) I wanted to just give another example as to the “mindset” of the two owners of Stratus…..One was recently on a phone call, where he was on purpose placed on speaker phone so more than just the caller could listen in…..After being berated not only for the way that Stratus has poorly handled this entire situation, where the “poodles” were indirectly now in charge of marketing/branding/PR control, where they had made several mistakes including not negotiating a proper settlement with the Pro2FS people in order to “keep them in the family”, he was informed that the caller had contacted his attorney and turned over all documents including a copy of lawsuits filed against Stratus by Goldeneye, the lawsuit against Goldeneye by 51 plantiffs and the copies of both lawsuits filed by Fortman against Simpatico and Stratus Franchising, LLC respectfully, the callers attorney started using terms like “Fraudulant Inducement, Wire Fraud, Securities Fraud and the great possibility that one/both of the owners of Stratus could face real jail time”! Pete’s response was “Fraud is difficult to prove”! Now that is a ringing endorsement if I’ve ever heard one! Don’t deny the Fraud, simply state that it is difficult to prove! Is it any wonder that these guys couldn’t handle a crisis as insignificant as a Clogged Toilet, without getting into DEEP SHIT!

  Thought that would be amusing to the “crowd”! By the way, I have it on more than one source, that the “Poodles” are monitoring this site every day for information…..Hell, I don’t make anywhere near $500.00/hr and I’m smart enough to do that…….

• Only because I have nothing better to do this p.m., I figured I would give our viewers including the “poodles” something more of interest….I was told today by at least two other sources, that even though Stratus Franchising, LLC is demanding that any/all, past/current about to be past Masters that are leaving the system, must NEVER contact one another, say anything bad/derogatory about Stratus Franchising, LLC or any current Master, they have decided that the one’s that have left or are in the process of leaving (over 14 cities as we speak) are described by them and their three/four primary “lap dogs” as the following:

  a) Disgruntled
  b) Failures to Perform under Model Guidelines
  c) Were performing so poorly, that if they hadn’t left, they were probably going to be “purged” from the system anyway!!!!!

  REALLY! So, in the commercial cleaning industry as a Whole, the top 10% of all companies only reach $1,000,000.00 per year in Sales or higher…..Let’s see, out of the 14 cities that I personally know that have left/in the process of leaving Stratus, I know of the following :

  1) Over 400k per month = 5 million/year in sales
  2) Over 250k per month = 3 million/year in sales
  4) over 85k per month = 1 million/year in sales
  3) over 50k per month = 600,000/year in sales

  So, 7 out of 14 cities are above the top 10% of all commercial cleaning companies in the country. 3 out of 14 are well above average….Yet, per Stratus and their “lap dogs” all these men/women are failures and were about to be “purged” anyway…….

  So, you might ask yourself, since that was a lie/basis for your reasoning, what possibly else could it be? Read the entire posts here, don’t believe what you read here, well do some basic research simply google “stratus bulding solutions lawsuits” and you will see plenty of proof……..

• Reasoned Source: I was just driving by Stratus HQ on my way home when your comment popped up on my phone. Must be a sign. I noticed a few cars still there which I’ve never seen this late. First, they can have anyone sign non-disparagement agreements. It doesn’t mean they can’t answer questions if served with a valid subpoena. In fact, it will require them to give truthful testimony. I find the requirement that they not speak to each other very interesting. That tells me Dennis Jarrett is concerned about more lies being exposed. Otherwise, why would he care. The non-disparagement agreement should be enough. I know that early on he was wanting the masters leaving to indemnify Stratus Franchising for anything related to claims being made by the Unit Franchisees. Please tell me those that are leaving didn’t agree to that.

• As far as the trash talk coming out about those leaving, does that conduct surprise you considering who the lack of ethics of the CEO? No one will believe that BS. Hopefully, those leaving continue to take the high road. They gain nothing by engaging in a war of words.

• @ Fortman: Well I’ve heard rumors that they are still trying to do some sort of “fire sale” for the company as a whole and literally become silent partners in the new venture. Problem is, they are still wanting at least some cash up front and no one is willing to assume liability for the lawsuits on the books which includes at least one current/about to be former Master.

  I think that the Masters that have left and/or are leaving the system are handling themselves as well as they can. Can you imagine, that YOU were being made out as being incapable, disgruntled, under performing as YOU were the problem vs. THEM….Not only is it demeaning, but many of these Men and Women are already feeling embarassed for listening to these “snake oil salesmen” and giving them 100’s of thousands of their hard earned money in the first place, THEY didn’t cause the problems with the model, THEY didn’t lie in order to build a business based upon false promises, performa’s and financials, THEY aren’t trying to do anything but leave/left and wanting to start over/continue without Stratus Franchising, LLC.

  No, the Masters are handling it well, very well in my opinion. Let me ask you a question, just because they sign this agreement, does that mean they cannot turnover information to their respective State Attorney’s/Attorney General in order to have these two individuals brought up on/investigated thoroughly on FRAUD charges? Can’t they all at least send this information and accompany Affadavit to at least the Attorney General of Missouri? My understanding is just because they agree NOT to pursue in civil action, doesn’t mean they cannot assist or even start a CRIMINAL action, correct?

• @ Fortman, Sorry I didn’t actually see your question until I reread your post. I can only tell you I have personally seen two of the seperation documents to date…I am not an attorney, (nor do I play one on TV) but I can honestly state that I didn’t see anything specifically listed as you were describing about “hold harmless” for issues surrounding unit franchisee’s. However, I am sure that there is at least two areas that the “hold harmless” is as vague as I’ve ever seen in this type of document. As you know, “vague” can work both ways.

  Hope this Helps…..

• Reasoned Source you write that the master franchisees are “embarassed for listening to these “snake oil salesmen” and giving them 100′s of thousands of their hard earned money in the first place, THEY didn’t cause the problems with the model, THEY didn’t lie in order to build a business based upon false promises, performa’s and financials,”

  I am struggling to understand how the masters are the victims. OK, I get that they were sold an opportunity deceptively. But once they were masters, aren’t they the ones who sold franchises with guaranteed contracts, then either didn’t provide the contracts, provided hopelessly underbid contracts, and/or used fraudulent excuses to take away contracts and give them to other franchisees?

  All these complaints like in the Fox news article are also talking about fraud practices performed by masters, right?

  I’m just trying to understand this situation. Are you saying the masters did these things, but were forced into because of their situations? Or were those things done only by a couple of bad apples? Out of the group of 14, how many would you say took money from unit franchisees then didn’t provide the contracts, or moved contracts from one franchisee to another using questionable justifications?

  Also, is this the way it works with Jan-Pro, Janiking, etc.? Are their masters victims, or are the masters usually the problem too?

• Just like many of the Unit Franchisees, the majority of Masters had a dream of owning their own business and contributing to their communities. Despite promises/assurances by Stratus LLC, many of these masters are unable to take one dime out of their business even after years of hard work. They often depend on help from other family members if possible.

  Accounts can come and go, often times due to financial problems and inability to continue paying for the service. Sometimes performance issues happen and a change of crew is requested by the client or the account may be lost altogether. Examples include – babies, children and pets taken to accounts serviced. There are other scenarios too where Unit Franchisees are excellent and are paid very well.

  I believe the majority of masters are honest people who do not turn accounts around just to make money. Although promised by Stratus, the world class support is not there. Instead, they choose to intimidate and threaten some masters with termination and even deliberately sabotage others possibly hoping to resell the territories at a future date. Ask yourself – what happens to the unit franchisees that are left after territories either went bankrupt or offices were terminated. Do you think Stratus LLC did anything for them. Do you think Stratus LLC even cares?

• @ Guest: I think when you talk about the literally hundreds of Masters in the Big 3, Jani-king, Jan-Pro and Coverall, there are most definitely Masters that are simply bad people and are taking advantage of their unit franchisees, their employees and even their own customers. Even in an Operation the size of Stratus, I know that there are at least four or five out of the 30 operating Masters that I personally don’t trust and therefore I wouldn’t want my name associated with them or in this case Stratus Franchising, LLC. To name just a few, “city of brotherly lovers”, “California Boy”, “Asphalt Jungle/Rocket City/BBQ Boy”…….

  I do agree with Guest #3 in the fact that there are good/honest/caring/upstanding Masters and in fact, I would state without a doubt that in all four companies talked about the vast majority of their masters fit into that category.

  Some bad apples, for sure. Was Stratus Franchising, LLC a bad apple? Without a Doubt.

  @ Guest 3- Many good points especially when you consider/ask what happened to both the Masters and the Unit Franchises in the previously opened/closed/undisclosed via FDD companies in the following States/Cities.

  Las Vegas
  New Mexico
  1st New Jersey Location
  Los Angeles/Orange County
  1st Minneapolis Location

  Including Troubled Transfers in Kansas City, Nebraska…..and?

  I think things are happening quickly in Stratus, I believe that more are leaving and more importantly, more are considering leaving as they should…..

• We served subpoenas on Bob Stapleton and Marissa Lather today. Within minutes of serving them, our investigator received a call from Pete Frese who said he’d be in the office Monday after 9. The investigator was told that Farrell and Garcia were not in the office. DJ was also absent. Guess he was home in Chicago. We’ll see if Pete tries to duck service. We’re beginning the process of getting subpoenas out to the Masters. Our focus for now will be the nature of the relationship between Stratus Franchising, LLC, and the master. We hope to have all of that done within 30 days. If anyone could give me your version of what happened in Las Vegas, New Jersey, LA, and Minneapolis I’d appreciate hearing it. Feel free to respond off list. Also, can you give.me some background on the switch in KC, Omaha and phoenix that would be useful. The info out there is sketchy. Thanks.

• @ Fortman: Can’t give you too much, but a place to look would be as follows:

  Nevada: Dennis Snyder
  Omaha/Kansas City: Paul Knutsen of Knutsen of associates
  New Jersey: Jerome Williams/JCDC/The Tabernacle Church

  Oldies but goodies: Bill Blair- CastleMaid Cleaning- former Exec. V.P.-St. Louis

  Past can help present: WNY very helpful for old MN

• Correction about the last post. Our investigator did not get Stapleton and Lather served. He showed up at HQ on Friday hoping to serve them. He did serve Pete Frese today. We are also in the process of arranging for subpoenas to be issued in 13 different states for 17 people. It will be interesting to get the facts behind the masters in Nevada, Minnesota, Omaha and Kansas City who are no longer in the system. In addition, it should be interesting to see what pastor D in New Jersey has to say. It can’t be good karma when a church is involved. Not surprisingly, within a short time of Frese being served, I received an email from Stratus’ counsel setting a date for the hearing on their motion to dismiss which was filed after their ill-advised attempt at having the case heard in federal court. We had previously filed our written response before the case was transferred back to state court where it belonged. That motion is set for hearing on June 26th. It will be good to get the case moving. Stratus may have bought some time and silenced some of the masters leaving the system. However, can they keep them from talking once they are served with proper subpoenas? My information is that once they are served, Stratus must be put on notice to give them an opportunity to object. It’ll be interesting to see what response we get.

• @ Fortman, well that should give Pete a few more sleepless nights….Hopefully, it will do the same to DJ soon…It disgusts me that they were recently “awarded” about being “vet friendly” and “top franchise choice for veterans”….Marissa obviously has no shame since she is the one posting this nonsense all over the web/media outlets.

  In regards to Knutzen, only thing that I know is that he ran out of money….He had an investor that cut him off…He couldn’t make it on operational income alone and wasn’t selling many franchises. I do know that it happened quickly, and like some others such as Ken Cassiri in Buffalo and Aibel in Atlanta, he was one of the “chosen one’s” for a while in regards to Stratus Corp.

  In regards to New Mexico or Las Vegas, I know both opened and closed quickly, they literally both opened and less than a year later, both were closed. In fact, Las Vegas was barely 6 month’s.

  In regards to the current “owner” of Kansas City and Nebraska, he picked them up for a “steal” (his words)…My guess is (based upon past) he only had to pick up what/if any promissory notes that Knutsen had outstanding to either Stratus Corp. or the newest entity Jarrett Realty.

  I know that at least four (4) more Masters have asked for their release, each are being told different stories as to how the “others” have seperated….Let me give you some advice.

  a) Don’t give them another penny, do not pay any royalties further
  b) Don’t give them any “future royalties” these bastards have already stolen from you and your family, why pay them any more.
  c) Don’t ask for any of your already paid monies back, they don’t have it any way. Per last filed FDD and another “source” Stratus is very “cash poor” right now.
  d) They are more afraid of you, then you should be of them, they cannot/will not fight any more legal battles.

  In closing, I can only hope that they will be spending time in jail, my guess is they will either get someone to do a literal “fire sale” or they will get someone else to become the face of the organization and rebrand sooner vs. later.

  Hope this helps the “viewers”…..

• I would add one more word of advice to what ReasonedSource has already offered. Do not sign any indemnification agreement. There is no reason you should take responsibility for the fraudulent actions of these crooks.

  Interesting that ReasonedSource should bring up Jarrett Realty – add one more issue to the long list of lies/deceits and disclosure violations. Jarrett Realty received payments for notes related to franchise fee. However, Jarrett Realty is not mentioned in any FDD or anywhere else. Guess what?? This means their “audited” financials are also completely inaccurate.

  These crooks belong in jail…

• @Guest: Guess your right about FDD violation, but hell when you’ve already violated it a number of times, what’s one more really? However, I completely forgot about the “audited” financials, that might be a real big problem especially in Missouri.

  It seems as though the “poodles” are getting a better grasp of what they are really dealing with here, but I still believe that DJ/Pete haven’t given them everything needed yet. Settlement Documents are becoming more precise, now including items that they didn’t even just a month or so ago.

  I would think that the “poodles” would wise up and quit trying to piecemeal everything, they are only causing themselves and therfore their clients more harm than good, they should make these agreements as simple as possible, as quick as possible and simply “clear the decks” so they can focus on the various lawsuits and probable future lawsuits. A seperation agreement can be as simple and direct/detail enough as a page or two. Last version I saw was nearly double the size of what they offered some of the “first” disgruntled masters.

  Yes, they belong in jal, the families they’ve destroyed financially between the Masters and various Unit Franchises, the issues that they have brought against the BRAND and the remaining Masters, the issues that they are hopefully going to face in civil and maybe criminal courts is only going to do more harm than good to the remaining Masters and Unit Franchises. Of course, you would need to have some level of Morals in order to care.

  I can only hope, that the remaining Masters “wise up” and that there be some sort of final walk out that would protect at least the majority of the remaining Masters and Unit Franchises. Those previously harmed, would then go to the “front of the line” and should have enough ammunition to go after remaining assests and possibly personal assets of Dennis Jarrett and Pete Frese.

  I final shout out to Marissa Lather, David Farrell, Carmen Garcia, Marvin Ashton, Bob Stapleton and the former Bill Blair…Think your names are mud in the commercial cleaning industry now, wait until the stench follows you elsewhere from politics (Bill Blair) to side businesses etc…

• I think Bill Blair can forget about any future political ambitions – if he runs in a state or federal race, all this stuff will be brought up by his opponents. And now that it’s on this forum, a simple google search will bring them right to it.

  ReasonedSource – what I don’t understand is why a collection of masters don’t get together, gather all their evidence, and send it to the FTC? The fraud has occured in multiple states, everyone has the same allegations around fraudulent mis-representation, and the mis-representations and omissions in the FDD are clear and in black and white. It seems to me you guys have more than enough evidence.

• @ Guest- I would agree in regards to the FTC but it moves very slowly as all govt. related agencies do. However, I know at least one Master that has connections through their attorney directly to the attorney general of one state. Documents are already in their hands. But I doubt anything will take place very soon as again, things take time.

  Pete/DJ are attempting to “bully” many of the masters into various settlement agreements and think they can silence those that have already settled. It is amazing to me that so many people haven’t learned how to deal with bullies such as these two. You take bullies down by hitting them right between the eyes with everything you have.

  To answer your question, things take time and many Masters have been struggling financially for so long, that they are simply trying to seperate as quickly and cleanly as possible, they need to focus on their business and assist their owner-operators in building theirs. Very few of the Masters are truly successful and can walk/chew gum at the same time in the sense of building their business, protecting their unit franchises, fighting Stratus Corp. and thinking about what may happen next week, next month, next year. Fortunately, in this “house of cards” it only takes one or two to bring these guys down.

  Look how far things have come in only 90 days. To date:

  More than 30% of the Masters have left in regards to overall “true dollar volume”.
  Nearly half of the operational Masters have either left or are in the process of leaving. (In terms of cities/states)
  Stratus Franchising, LLC has at least three (3) active lawsuits on-going
  Stratus Franchising, LLC has been damaged both in real dollars and in future dollars literally in the millions.
  DJ/Pete are truly faciling not only on-going civil action, but are now coming aware of REAL criminal action coming to a theatre near them.
  The support system is crumbling before their eyes and they don’t know who to trust as too many “family” business information is becoming/has become public.
  I could make a legitimate argument that the brand has lost a minimum of 50% of its value in the last 90 days.

  All because they lied, mismanaged by attempting to threaten/bully, because they thought they were the “smartest people in the room” at all times and because the truth has come out in not only their current dealings but past dealings.

  Judgement Day for them is coming soon…..My guess is they will rape the companies for everything they have and attempt to hide somewhere safe for awhile and attempt to re-emerge after they think everyone has forgotten about them. Cowards usually do that.

• Bob Stapleton and Marisa Lather were served with deposition subpoenas at their homes yesterday. We are now going forward with the out-of-state subpoenas which include Dennis Jarrett, Blair and Farrell. I still can’t figure out their litigation strategy. The piecemeal approach only works in situations where there’s no publicity.

  I pretty much know through various sources what’s happening. They have no intention of negotiating with the Unit Franchisees. It is apparent to me that there is no plan for Dennis and Pete to stay in for the long term. They are only trying to shut the masters up and delay as long as they can in order stash money away. Missouri has a fraudulent transfers act which will subject any transfers to scrutiny if made after they are aware of potential claims. The speed at which all of this is happening will make it difficult to hide money.

  Our case is now in high gear. There’s some good info from the California case and we have a lot of info from various sources that absolutely proves blatant fraud. They scheduled their lame motion to dismiss for hearing next Tuesday. However, I have appeared before the judge assigned to this case many times. She is not going to tolerate any tactics used for the sole purpose of delay. My worst case is that she orders me to add the masters as necessary parties. It just subjects Dennis and Pete to more scrutiny and will expose more fraud.

  If they believed there was any chance to save this ship from going under, they would be coming to us to talk about resolution of the issues. The masters, including the guy out there in the mountains, should be smart enough to see that Jarrett and Frese are desperate and don’t care about anyone else. They are selfish, greedy and they have been exposed for the con men they are. I don’t see how any master franchisee who has been hurt by these guys can stay in the system.

  I would again caution the masters to be careful about the manner in which they deal with the Unit Franchisees. Those are my clients and we are very uneasy about the lack of open communication caused by the confidentiality agreements. My clients signed franchise agreements in the Stratus system. However, they have suddenly been switched to another company. We are cautiously optimistic that it will improve their opportunities. Open communication is key. Many of them have been cheated out of money, lied to about accounts, and threatened. It is very important that they be given adequate assurance that positive changes are being made. We still have the nuclear option. It is not the path anyone wants to take. However, I cannot allow anyone to take money that should, by all rights, be returned to the Unit Franchisees hurt in this case.

  Stratus has about a month to figure something out. Once I take Pete Frese’ depo, the window of opportunity will close. Will he testify or will he plead the fifth? I’m not sure. All I know is that I have so much information now, that I can be ready to present our case to the court for determination by the end of August.

  @Reasoned Source, thank you for your continuing contributions to this post. It is important that accurate information get out in the open. You have the same mindset that I do. The only way to go after guys like this are to bash them in the face. Waiting for the FTC or a state’s attorney general to do anything is a mistake. This is a complicated scheme. They have to start from scratch. I’ve worked my ass off and by the time the feds would catch up, the case will be over.

• @ Fortman, I don’t know maybe the “poodles” are into the catnip or something harder…..Seems logical to me what you proposed in the past and currently, but Hell DJ/Pete turned down multiple offers to have assistance by multiple people including the one’s that left.

  I’m not sure there is a month left, they are delaying and stalling on multiple fronts for a reason, you could be right, they might be attempting to get more money, but per all accounts, there simply isn’t that much left. I think it is more about trying to work out a “deal” to sell the company and whomever they are in talks with are weighing the costs associated with the lawsuits vs. the remaining value of the company.

  Don’t be surprised if there is a big announcement soon (by June 30th) in regards to potential new owners, Pete/DJ will get what little cash they can, sign over the none personal litigation to the new owners and be on a plane outside of Missouri as quickly as possible and possibly even out of the country if needed.

  Deadlines being what they are, it wouldn’t surprise me one bit that they can find some “sucker” to purchase the assets and agree to any current litigation on the books as assuming, again those not personal related.

  I find it humorous that Jarrett Realty is becoming such a hot topic, I didn’t fully realize what they were doing and the ramifications not only of the FDD but more importantly to the “audited” financials. How stupid of both of them for what little money they actually got for that “company” to divide. They have just opened themselves for more direct legal action against themselves in civil court and depending on a couple of items I am doing research on, their may be some criminal aspects especially if they had their accountant’s actually monitor the financials of both companies. Can anyone say Bernie Madoff?

  Could get real interesting…Of course, little to none of this would have come out if they had simply come clean and handled literally everything differently. But I guess I go back to the same old thing “they think they are always the smartest people in the room”…..

• Interesting day in court. For any Master on the fence, let me tell you that Stratus has no loyalty to you. Our case is simply asking the court to look at the relationship between Stratus Franchising, LLC, and the Masters. Our position is that Stratus maintains or has the right to maintain so much control over the Master that the relationship is an agency relationship. The judge raised some concerns over the fact that we have not joined the Masters as parties. In my argument to the court I tried to get the judge to see that the Masters really have no interest in the outcome and, in fact, would benefit if she rules in favor of the Unit Franchisees. Stratus’ attorney took the position that the Unit Franchisees had no contractual relationship with Stratus Franchising and any claim for damages must be made against the Masters. They also brought up the mediation requirement in the Master Agreements. I told the judge that we would be more than happy to go to mediation. Of course, Stratus isn’t interested in resolution. This is all about delay.
  I have tried to keep this case streamlined so the court could actually look at relevant issues. This is another example of a company that cannot defend against the underlying allegations of misconduct and must use delay tactics to avoid having to answer to a court. While my preference had always been to keep the Master Franchisees out of the litigation, it appears that we will have to explore adding them as defendants in this case. Not my choice. You can thank Stratus Franchising for that. These guys have absolutely no shame. They are not interested in a fair resolution. They are coming up with an exit strategy which will allow them to keep as much money as possible. Looks like we’re in for a bit of a battle. Should be interesting. They will not prevail because the truth is on our side and we are committed to doing whatever it takes to hold Pete Frese and Dennis Jarrett accountable for the harm caused to so many innocent victims.

• @ Fortman, I don’t think anyone that has seperated or in the process of seperating from Stratus is surprised by this at all. If you remember, one of the “heros” that I described in an earlier post read directly from the Federal Case the words that the “poodles” used to throw the Masters under the bus. Still they attempted to deny. Right now the biggest issues with the seperation agreements are as follows:

  a) Mutual Idemnification
  b) Not speaking with current, past, future Masters
  c) Not releasing Promissory Notes in full and/or past due royalty fee’s

  It amazes me that they think (Pete/DJ) that they have any negotiation room at all, but unfortunately that is partially due to the lack of will by some of the Masters remaining to “break away” even though they are convinced that Pete/DJ committed fraud, that they have over promised and under performed, that they gave them false information, that they gave them false statements and presented them as fact, even though they lied about Affiliated Service, Support Services, National Contracts etc….. There are some in the following cities that are simply just like them, I have described them as “City of Brotherly Lovers”, “Asphalt Jungle Boy”, “California Boy” and let me now announce “Chargers Home” as another member of the “Dirty Players Group”.

  For awhile, I was attempting to be reasonable with those that chose to “stay” in the system and abide by their wishes, but if they cannot see the harm they are doing by staying, if they cannot see the clear intent of these men, if they cannot see the harm that these men have done to numerous Masters and possibly hundreds of owner-operators, then at the end of the day, they don’t deserve any respect, they don’t deserve any forgiveness or sympathy from me and/or the Masters that have shown the courage and determination to do what is right.

• Let me tell you a story, a story about a man, Two Master, Two Executives from Stratus and Pete/DJ.

  The Man: Fernando Limas the infamous “Fernando” talked about in the Goldeneye Lawsuit (both of them)

  The Master: Pete Vevan and the “Chargers aka Dirty Player”

  The Executives: Carmen Garcia, Marvin Ashton

  This is kind of a long story, but it needs to be told, because from what I hear, one of the arguments presented by the “Poodles” the other day in court was there was little to any direct knowledge or control that Stratus Corp. has over its Masters…….

  In the Beginning, Fernando and Pete Vavan were the “Golden Children” of Stratus Corp. They scored tons of franchise cash, they won awards, they had their respective pictures taken with Pete/DJ, they were held in the highest esteem and used as the “how to build your business, the STRATUS way”. After at least two month’s of bringing in 100k plus in franchise cash, Pete/DJ were so proud of them that they were asked “how did you do such a great job of bringing in the cash?” Well, even after they found out, they were still happy, they were still promoting and pushing EVERYONE in the System as to HOW to SELL a Franchise! They were talked about in the Stratus Newsletter, they were on conference calls, they were brought up in front of Everyone at the Los Angeles area Regional Meeting……

  Pete Vavan attempted to do it the “Stratus Way”. He hired more T/M’s, He hired more Sales People (remember in earlier postings, we talked about the Performa that Stratus Corp. had given to EVERY current and former Master, you know the one that says each Salesperson would be able to bring in 9100.00 per month in sales) Guess What? The Performa’s were lies! After one year in business, after spending ALL of the Franchise Cash, After even more months of 50k plus in franchise cash coming in the door, Pete Vavan was only doing 47k per month in commercial cleaning/janitorial business! Not nearly enough to fill 1/2 of the “business owed”….DESPITE doing it the “Stratus Way”…..

  Now the story of Fernando, the grumblings, the pending showdown, the lawsuit, the Executives in Question and the “Partners in Crime”.

• Continued Story:

  After realizing that all of the information given to him, Pete Vavan started openingly challenging Pete/DJ on what is known as the “master licenses email”. Which is an email portal that allows all Masters to post and all Masters plus Pete/DJ/Marissa/David Farrell/Marvin Ashton/Carmen Garcia get copied on. The emails were in the forms of questions at first, Pete Vevan thought maybe he was simply doing something wrong…Then when he got the responses he did, he realized he wasn’t DOING something wrong, that he had been LIED TOO, MISLEAD and that literally NO ONE was making the kind of monies promised, kind of sales alluded too, running the kind of operation that he was etc….

  So the rumblings grew stronger, both in and out of Stratus, the BBB got envolved because they had gotten numerous complaints, eventually lowering his rating to “F”. Then the “Telemundo fiasco” where dozens of owner-operators literally marched on his office building, with signs and did interviews. Stratus Corp. response to the “Group” was that Pete Vavan was a “rogue” that he did not run his business the “Stratus Way” that he had “Cut them off”……..Really?

  So Pete/DJ ordered Marvin Ashton to facilitate a move for “Fernando” to another Master location. aka “Chargers/Dirty Player”. Because “Fernando” knew how to sell a franchise, he knew the “Stratus Way” and that he wasn’t the problem, in fact he was the PRIZE!

  So DJ ordered Carmen Garcia to contact ALL of Pete Vavans owner-operators and attempted to “Quell” the problems? Really? Well if that was her goal, she did a really poor job of it! I think, the slime that DJ is, he really told Carmen was to attest that Stratus Corp. had nothing to do with this, that they should SUE Pete Vavan/Goldeneye and that Stratus Corp. wouldn’t stand in their way….Sound familiar to what happened in both Federal and now State Court? It’s the Masters Fault! ( I tell you, with Partners like Pete/DJ, who the hell needs ENEMIES?)

  So now, what do we have left?

  Fernando was assisted by Marvin Ashton and hired by “Chargers/dirty player” he continued where he left off, bringing in tons of franchise cash, doing things the “Stratus Way” and then something really bad happened…Look up Fernando Limas on your own and find out for yourselves.

  Carmen Garcia contacted all of Pete Vevans franchises and stirred them up vs. calm them down. She contacted them with information gathered from where? Inside information? BOSS operating systems? FDD? Information supplied by Fernando?

  Pete/DJ, ordered Marvin Ashton to facilitate a move, ordered Carmen Garcia to contact all of Pete Vavan’s owner-operators, they claim not to have any knowledge or information about what is going on in their Masters.

  What about the monthly reports, figures seldom lie, if you bring in 100k in franchise cash, it isn’t difficult to figure out what your business owed is, if you do this in back to back month’s how much business owed is that? If they didn’t know what was going on, how could they APPLAUD it? How could they REWARD it? How could the make it as a pitch to everyone else, Look at what Orange County is doing and Why aren’t YOU doing it the same way?

  If they don’t have control, how did they know what was going on? How can they say such things in a court of law knowing fully well that those on the BOSS Operating System, monitored daily by Carmen Garcia has ALL of the information on EVERY owner-operator, Every dollar of Franchise Cash, Every dollar of “business owed”, Every customer/account in their respective offices. HOW do they not kno? HOW do they not have Control? How do they not understand what is going on in EVERY office when they get a monthly report for Royalties, which includes all sales information, franchise cash, plan size purchased and other valuable information?

  HOW could they get up in court and make these kinds of statements?
  How could they facilitate the move of someone that they know lied directly about what Stratus was about, what kind of “business owed” was so far out of control that NO ONE could recover in any amount of time what was already sold?
  How could they contact ALL owner-operators in Pete Vavan’s System?
  How did they not know, even when contacted by Telemundo?
  How did they not know, when they got the reports monthly?
  How did they not know, when they responded to Pete Vavans emails?
  How did they not know, when the Pete Vavan was telling them directly?

  All viable questions, all varifiable statements……Are you still wanting them as partners?

• Reasoned Source:
  Thanks for a very detailed interesting and detailed account. I am going to publish it as a separate post. I’m also planning on posting more on the story of Fernando – really sad and mind-boggling.

  Unfortunately, the automatic comment notification feature (comment subscriptions) is temporarily not working but I’m planning on sending out an email with a link to your story.

• Reasoned Source writes: “if you bring in 100k in franchise cash, it isn’t difficult to figure out what your business owed is, if you do this in back to back month’s how much business owed is that?”

  What are those ratios? In Fortman’s amended petition, he states that a franchisee fee of $10,000 would require $24,000 in cleaning contracts to fulfill. Is that an accurate rule-of-thumb (FF x 2.4 = Amt of contracts needed)?

  If so, then for every $100,000 in franchise fees reported, DJ/Pete/Carmen should have known there was a problem if there wasn’t $240,000 in new cleaning business also?

• @ Admin. Yes, that is true. You would need to bring in a minimum of 8k per month within the time allotted in order to simply fill those two month’s worth of sales…Would you like to know how many of the 30 plus Masters that were in the system at the time averaged 8k per month in r/s sales? NONE! (including St. Louis)

  You also need to remember, there were “business owed” BEFORE and AFTER those two (2) month’s and all we are talking about was those two month’s.

  Once everyone started comparing notes, MOST Masters were averaging around 3k per month in r/s sales. Approx. 1/3 what was stated in the Performa’s that were given and openly discussed by people such as Dennis Jarrett, Pete Frese, Bill Blair, David Farrell, Marvin Ashton and others.

  In fact, many Masters had terminated their Sales Staff, Telemarketing Staff and Operations Staff simply based upon the Performa’s not being met and the fact that they believed DJ/Pete. Primarily due to the FALSE figures given by them for the St. Louis Branch which was ballooned by 600k in transfered business from the existing Jan-Pro Operation in St. Louis.

  So bottom line was, MORE lives/families ruined, directly because of the falsehoods given as Facts from DJ/Pete/Bill/Marvin/David. It is simply amazing to me how these people sleep at night….ALL are guilty of something!

• @ Current Masters- Those of you that are finding the courage and wanting to “clean up” the mess as best as possible…..Here is a way out for you, you must protect those investors (owner-operators), your customers, your employees from further harm. You cannot allow these men to continue to spread their LIES and at best Half-truth’s any longer. You cannot allow them to ruin more lives, take more peoples money. Remember, we are talking about Masters that have lost hundreds of thousands of dollars, we are talking about owner-operators that have lost ten’s of thousands of dollars. If I simply took the Masters that closed, the owner-operators affected by those closings, those in the Goldeneye Lawsuit, those in the Fortman Lawsuit, I am talking about MILLIONS OF DOLLARS!

  These men, because they still believe that they will have at least one-half of the system left, believe that they may actually survive this fiasco. I am telling those of you that are sitting on the fence as boldly as I can “Future Blood/Harm done is on your hands”! You can leave now, protect those that need to be protected, should be protected and you will be honored and called HEROS! If you stay and allow them to continue to Operate, allow them to continue to cause HARM to unsuspecting dozens/hundreds of owner-operators, allow them to potentially cause harm to other Masters, Future Masters, then that is on YOU!

  YOU are the reason DJ/Pete think they can survive this fiasco
  YOU are the reason that idiots such as Marvin Ashton, David Farrell, Marissa Lather, Carmen Garcia and the former idiot Bill Blair are allowed to work and lie to, persuade others in a false premise.
  YOU are the reason that potenially 100’s of owner-operators will lose their investments, their life savings.
  YOU are the reason that potenially area developers and future Masters can be scammed by these two.
  YOU are the reason that criminal acts have been white washed.

  YOU have no one else to blame now other than yourselves!

• @ Current Masters- After Fielding back to back phone calls and going through this on the phone, here you go…

  Seperation from Stratus Franchising, LLC if you have no notes. If you have notes, you must write the letter to both Stratus Franchising, LLC and Jarrett Realty.

  A) Termination of Agreement for Cause between (your company) (your name) and one or both of the above.

  B) List the general reasons for the Termination.
  1) Fraudulant Inducement- You lied about how you started Stratus including the facts that it was a previous company, you showed it started from zero, that all the facts/figures/performas were based upon starting from zero vs. 600K. You lied and committed a fraudulant act in order to receive monies from me in excess of 10k.
  2) Fraudulant Presentation- FDD was incorrect, it didn’t show any closed, terminated, sold, open/sold branches. When in fact, when I signed on there were at least (3) open/closed branches.
  3) Fraudulant Performas- All Performas given were known by DJ/Pete/Bill/David to be false. They started from the a false premise and were engineered all the way down to how many telemarketing hours resulted in appointments set, to each salesperson would bring in an average of 9100/month, to your area based upon population, known square footage of commercial spaces should generate not less than “X” in overall business within 1yr, 3yr, 5yr.
  4) Damage to Brand- Since March 2012, the Brand has lost at least 50% of it’s overall value, your recent reduction in Royalty Payments is verification of that statement and if it wasn’t, here are some facts.
  a) Over 40% of the actual number of branches are in the process of leaving, have left, have closed in the past 3 plus month’s.
  b) Over 50% of the actual biling volume of the company as a whole has left, or is in the process of leaving.
  c) You don’t have to look any further than the lawsuits in multiple states such as Florida, Oregon, Missouri, California and others to see that there has been substantial damage to the brand including in name and real dollars.
  d) You don’t have to look any further than the interent to google and see all of the issues, problems, causes that Stratus Franchising, LLC has caused.

  Finally state for the record that if Stratus Franchising, LLC decides to pursue a legal remedy that immediately, a counter suit will be filed listing not only Stratus Franchising, LLC but Pete Frese, Dennis Jarrett, Marissa Lather, Bill Blair, David Farrell, Carmen Garcia and Marvin Ashton in the suit.

  Also, you should sue your “validators” you remember those people/Masters that DJ/Pete used to “validate” the falsified information that they gave you. Especially if those validators were some of the following people or Cities:

  1) Ken Cassiri
  2) Jeff Aibel
  3) Asphalt Jungle Boy- Rocket Boy- BBQ King
  4) California Boy
  5) City of Brotherly Lovers

  I can almost guarantee you, a Lawsuit from Stratus Franchising, LLC will not happen. I can guarantee you a settlement will be reached quickly and as quietly as possible. I can guarantee you that Stratus Franchising, LLC and its “Poodles” are simply trying everything they can NOT to go to JAIL!

  Hope this Helps!

• Reasoned Source, all I can say ias “WOW.” You have provided a wealth of information which will take a while to digest. We filed our amended petition adding former and current master franchisees. We must get the permission of the court to file this so we set it for hearing on July 10th. After we left court last week, my paralegal and I spent two full days tracking down info on as many masters as we could. We have included Nevada, Minnesota and the tabernacle in New Jersey. The failure of Stratus Franchising to comply with the law as far as the failure to provide the info for the former franchises, made it more difficult. I think we are close to having the complete picture.

  As far as the issue of control,there’s one provision of the master agreements that will kill Stratus. They have the masters appoint stratus as their attorney-in-fact. That means they must give Stratus a power of attorney. Even if Stratus never uses the powers, they have the right. Control includes both actual control and the right to assert that control. They lose either way.

  I received a nice letter from the “poodles” that was reminding me of my ethical duties. They stated that they saw on my blog that I was going to subpoena all of the masters and that under the Missouri rules I was required to provide copies to them. The only place that was discussed is on this post. They are definitely monitoring these sites. I used to get pissed off at these types of letters. After all, the “poodles” have the audacity to call my ethics into question when they represent con men who have no ethics or morals. I’ve received several of these types of letter since this case started. Normally, I would have shot off a letter telling them to go f#$@ themselves. However, these days I just let it go. Instead of a letter, I gave them the amended petition. Now, we’ll see what kind of crap they spew to try and delay this case any more. I just listened at the arguments they were making and shook my head. They have to know the inevitable result will not be in their favor. I look forward to getting Pete Frese under oath and asking him very pointed questions.

  Reasoned Source, there is no way they will be able to convince others to invest hundreds of thousand of dollars to purchase a master franchise with everything out there now. The Stratus name is trashed and they will never recover. I still believe that they are trying to keep whatever they can so that they have something to sell. I’ll post a link to the amended petition tomorrow.

  PS: We are trying to get more info on Jarrett Realty. There’s nor such entity in Missouri or Illinois. Anyone have any info?

• Shazer Fernando Limas: The “Killer” Franchise Salesman of Stratus Building Solutions

  Stratus just seems to have a dark cloud over it. This is the most tragic chapter yet.

  Thanks, RS, for the reference to this sad story.

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• Fortman’s amended petition is very interesting and easy reading (for a legal document). Here’s an excerpt and a link to the complete document:

  STRATUS BUILDING SOLUTIONS Amended Petition Adds Master Franchisees to Lawsuit

• Funny, I too sold Franchises to Hispanics for the Chicago Master. I read the article about Fernando, but I didn’t read anything out of sort from I did. I am an accomplished salesperson, but this endeavor was a massive fail. I got frustrated after 2 months and decided to leave knowing I would never make the money the Chicago Master promised. Thankfully, he eliminated my sales position on the day I had a job interview so I could get out and get real.

  But, after reading about Golden Eye, all I can conclude is that it wasn’t what Fernando did, it was what he said. Clearly, he lied, over promised and made guarantees when he should not have. And I guarantee he did this with the blessing of his Master. His job was to sell Franchises and he did so. It was not his job to get them their accounts. The Franchise cash was too important to turn away while waiting for more accounts. I am not excusing him, but showing how this is all a big muddled mess. My Chicago Master would often tell me that, while he would listen to corporate input, this was his business and he can run it the way he wants. At the same time, it just seemed he jumped whenever they told him to do something. I bet most of the Masters had the same opinion. So they can’t run and point fingers to corporate for all the ills the unit franchisees are feeling. Many were complicit in going for the money.

  I also feel that many realized they were lied to and put themselves first in order to pay the bills and get some kind of cash flow generated. They were caught in the middle of bad situation. The unit franchisees are the ultimate victims in all of this. My Bullshit Moment came when I realized that the System run by Stratus was no different from Jan Pro, Jan King, Coverall. No difference. So what was the big, unique deal about Stratus. Nothing. So Stratus lied, but the person who hired me to sell Franchises and promised all kinds of income if I can get to Year 2 should have known better. It goes to show that this is a disaster on multiple layers.