Criston Menz – Cuppy’s Coffee
We were immediately impressed with how friendly and family oriented the entire Cuppy’s Coffee organization was…. Once they had our money, everything changed.
[Please read the disclaimer at the bottom of this post]
Location: Albuquerque, NM
Franchise: Cuppy’s Coffee & More
Related Entities: Elite Manufacturing, Medina Enterprises
Current Status: “Trying to get return of our $35,900 “refundable” build-out fee, as per our agreement”
Time period: 11/06 – present
Total investment to date: $35,900 (not including any interest and incurred fees in trying to obtain our monies back)
UF: What’s your background? What were you doing prior to owning your franchise?
Criston had been in the café business for 26 years; owner/operator of Cheese & Coffee Cafe, General Manager at Einstein’s Bros. Bagels, and manager with Starbucks. At the time of purchase, I was on maternity leave as an Executive Team Lead with Target.
UF: When did you decide you wanted to own your own business? Describe the process you went through to determine which franchise to buy.
At the time, we had our first baby on the way, so we decided to look for a business opportunity that would allow us more freedom to spend with our new child. I came across a business/franchise opportunity for a café in the Sunday paper and called. The company was a new start up from an existing company Java Jo’z, now called Cuppy’s Coffee. They gave all the right answers to the questions I had. I followed up and did the research on-line at all the appropriate business bureau’s searching for anything negative. Any concerns I had vanished when I spoke with Robert “Morg” Morgan, a top executive. Again, he had all the right answers to any of my concerns regarding the negative publicity surrounding Java Jo’z, where Roy Snowden came into play with Cuppy’s as far as liabilities, how we could obtain financing for a new store, real estate assistance, franchise agreements, etc.
What did you find appealing about Cuppy’s Coffee?
We were immediately impressed with how friendly and family oriented the entire Cuppy’s Coffee organization was. It was so inviting to see a company value their people the way they described they did and what their vision was for the franchisor/franchisee relationship. We had heard horror stories about other franchisors. They seemed completely the opposite.
I had read a great deal on Baskin Robbins and Quizno’s regarding allegations of price gouging the franchisees, and charging excessive service, franchise and marketing fees. Cuppy’s made all of this seem as though they were not going to go down that path and hurt the franchisee. They claimed to be very franchisee oriented.
What was the company’s sales process? What interaction did you have prior to becoming a franchisee?
What I didn’t seem to realize then, but can comfortably say now, is that they used manipulative pressure tactics to get us to sign and get the money in. The charm of the Cuppy’s Coffee organization was the forefront “lure.” Throughout the application process they made you feel that you had to “audition” to see if you were right for them. Looking back, it was more about was your bank book looked like.
Once “approved,” they sent the franchise agreement paperwork overnight to us and called us on the phone to walk us through the signing of the franchise agreement. Once they got that back to them, Elite took over and called religiously to get our down deposit.
Elite was the company that coincidentally, was also a subsidiary of Medina Enterprises, that did all of the build outs for the cafés. (They never mentioned the possibility of using another vendor than Elite.) Theresa St. Clair was the VP of Elite and the “pusher” to get the money quickly since, “they did hold the deal over for us.” Theresa told me that she sold all of her Curves franchises and bought Cuppy’s locations for her daughter to run in Colorado. She said this was a gold mine. She really is what sealed the deal for us as far as a win/win situation because I knew if it were the right location and product, mixed with my knowledge, there was no way we would lose.
We signed in early November of 2006, and they called at least 2x per day until December 1st, when they electronically received our payment.
The purchase order gave us an “out” if we did not get financing. I thought it would be as easy to get out as it was to get in. Was I ever so wrong!
Was the initial support what you expected?
The initial contact was comfortable with people who knew our name, our background, and made us feel valued and wanted us as a part of their organization. The support was FABULOUS until they got our 20% down payment of $39,500 paid to Elite for the construction of the build out.
Once they had our money, everything changed. From then on, we were ignored and left wondering what was going on. Trying to get anyone from Cuppy’s to call us back was like waiting for it to snow in the summer time.
Is that when did things started to go wrong?
Things went wrong as soon as the monies exchanged bank accounts. We had little to no contact with anyone in December, and by January 2007, they stated that they were having problems securing our financing. Ironically, one of the initial draws to the company was all the proposed help they offered getting financing from the SBA with their “in-house” financing department.
They were well aware that we had financed the downpayment via a home equity line. At this point, they told us that we should not have taken out an equity line due to our debt ratio. They recommended that we purchase a Kiosk or a mobile kart instead of the café/drive thru that we wanted.
I gave birth the first of February. By mid March, we were thoroughly disillusioned with Cuppy’s Coffee. Our calls were not returned and the run-a-round was getting to be too much. We thought If it’s like this now, what kind of support could we to expect once we began building?
Who was helping you obtain financing?
Apparently, they were trying to finance us through a 3rd party financer, Bill Manning, who told me we were approved. Then upon speaking with Rob Folk (a supposed Franchisee who was contracted out to help the financing department in creating appropriate “verbiage” for the SBA applications) he said do not use Bill, he has been telling several people they are approved but cannot come through with the money. This was the final straw, them sending us to someone to finance us and then once approved, they turned around and said don’t do it.
Your downpayment was returnable if you didn’t get financing?
Correct . And it was also returnable solely within 30 days of 3rd party financing. Funny thing is we didn’t get 3rd party financing and they still paid the 15k to Cuppy’s some 48 days after the fact. The contract was never checked to which offer we wanted, etc…(look at PO. We decided to pull out.
Have you tried to resolve your issues with the franchisor? What was the outcome?
In March, 2007, we sent a letter requesting the return of out $35,900 refundable deposit, per our agreement. Instead of sending us a check, they sent us a settlement agreement that stated they would keep the franchise fee of $15k and pay us $20,900 in 8 equal installments over 8 months. They stated that they had invested our monies in their “new” company.
We found that unacceptable and unethical. We thought they had our refundable deposit set aside in escrow, as a professional company would have. We retained an attorney and sent a demand letter in May, 2007. We received no response. Our attorney sent a second demand letter in January of 2008. Still no response.
In January, I reported them to the Better Business Bureau of Florida, the Department of Agriculture and Consumer Services of Florida and the Florida Attorney General. They made one response to the Dept of Agriculture after 2 attempts, claiming their previous secretary lost the paperwork and they were in negotiations to settle. At that time, (March 14, 2008) Elite, Cuppy’s or Medina, had not contacted me since the previous March regarding a settlement.
Another person who was in an identical situation as myself got my name from the attorney general’s office and contacted me by phone letting me know about the negative stories being posted on the FranchisePick.Com and BlueMauMau.org blogs by many others in the same situation. I began blogging about our situation and, low and behold, they actually contacted us!
Cuppy’s Coffee emailed us an offer to get our initial monies back in one lump sum, but before we had a chance to respond they said we missed a “deadline” we knew nothing about. They claimed we were now a prime candidate for “mediation” as we refused to settle(!)
What is your current situation? What would you like to see happen at this point?
I am tired of being bullied by a company that did me wrong. We have asked solely for a return of my initial monies in one lump sum as we paid to them. I told them I would sign their settlement offer and make good on the blogs and to all public agencies. Thus, once I agreed to this, it was too late.
At this point, I would like my monies returned with any extra fees I have incurred, a public apology from them as well and as much negative publicity that will make them accountable for the damage emotionally and financially that they have caused us.
Do you think that the franchise concept is a viable?
I truly believe that this company is a fraud being carried over from its predecessor, Java Jo’z. It is the same people and the same concept doing the same things. There are too many similarities in all the companies under Medina that have made me question the validity of this franchise or any other that they are attempting to create. The people’s names are the same, but the franchise name has changed. I have yet to hear a warm and fuzzy happy ending with this company that has not been “created” by the company.
What mistakes did you make? Looking back, what would you have done differently?
I would have talked my partner out of wanting to go into business for ourselves. I would have not assumed that the purchase order for Elite would be placed in 3rd party escrow and would have insisted that it be done that way.
How has your franchise investment decision affected your life?
Our debt has increased and we have nothing to show for it. We pay monthly on something we do not have. The time that we have invested to get this Cuppy’s Coffee franchise, and the time and stress we have invested to get out of the Cuppy’s Coffee franchise has been a nightmare. It makes it difficult to do our normal day’s work with this hanging over our heads and having to tend to it regularly.
What advice would you give to prospective franchise owners?
Read the blogs. You will find out more information regarding any company by reading the blogs and asking all the right questions there. Be informed, very informed.
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Disclaimer: All personal stories on UnhappyFranchisee.Com are information, claims and opinions are those of their respective authors and do not reflect the opinions of UnhappyFranchisee.com, Relentless, Inc., its owners or the other contributors that appear on this blog. These interviews reflect the opinions and perceptions of the franchisees who provide them, and have not been verified for factual accuracy. If you are investigating a franchise opportunity, we encourage you to do your own due diligence and draw your own conclusions.
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Criston, I hope everything works out for you. I don’t know what else to say. Cuppy’s Coffee does not live by their word and they are greedy. All they want is to obtain people’s maoney to make payroll. You have done a lot to get your money back, and it is a chame they can’t just do so. I believe they are seriously going bankrupt or they would have given it to you already. Have you filed a complaint through the Better Business Bureau? I really wish you the best for you and your family!
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Ms. Menz,
You are right on with your statements. Cuppy’s and Elite too have my $35,900 deposit that I was promissed would be put into escrow by Theresa St. Clair of Elite. Danny Jones (creep) must read his resposes. He too told me it was not in the budget. They had spent it. Although he admitted I was due a full refund. My check to Elite stated on the check, “escrow account of Charles H.”. Did not matter. They claim, Danny Jones said, they did not see it and it was spent on the business. How can they go ahead and spend our deposit’s without signing the franchise agreement? Fraud! They originally sent me a UFOC statement before i sent the deposit. However, it was NOT complete and they sent me a corrected one via email after I had sent them the money. Again, this is illegal according to the FTC, that NO monies are to be solicited until the UFOC agreement had been reviewed by US and a rep from the company. My big mistake was that St. Clair talked me into back dating the NEW UFOC agreement. BIG MISTAKE on my part. But again, i was assured that all would be okay. Wrong! I also agree with you about the FTC and Attorney General of Florida. They sould be doing something for us all who have money owed to us by Elite and Cuppy’s. I did contact the ATT. Gen. and got a response that I should contact other agencies and that they would NOT do anything or investigate unless other were having problems with Elite and Cuppy’s. Wonder what they think now with all the complaints? One franchisee who got bilked by Elite said they called every day, many times a day to Elite. They were finally sent an agreement to get their money back over payments/time. We should get FULL REFUNDS. Not payments. This was not a loan and there is no interest paid back or even the original deposit for that matter.
They are illegally holding people’s money and they know it. They all lie and are crooks.
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The cuppy’s in Jacksonville Beach Florida is over priced, un-friendly and I believe it is a miracle that they remain in business.
I am in the same situation, my lawyer has hooked up with a law firm in Florida and we are thinking of a class action suit against Cuppy’s please contact me if you would like to get involved. Hope to hear from you.
One thing is for sure, experience in the 9 to 5 world and formal education does not prepare one for dealing with unscrupulous or misrepresented franchisors and business opportunists. This is a personal testimony because like Criston, I have an MBA and over 20 years of work experience working with major corporations in various capacities (e.g. management, contract management, project management, etc.). I sincerely believe that after five years of researching and seriously considering approximately thirteen different franchise opportunities that what helped me avoid a bad franchise investment experience is 1) My built in paranoia, 2) Conducting extensive research, 3) Following my gut instincts.
Criston gives good advice regarding using the internet and the different blogs to conduct research on the company’s an investor is considering investing in. Thank goodness for the internet. It is imperative that would be franchise investors utilize this resource! Obviously and unfortunately the internet is being used by predatory and nefarious companies to promote their so call opportunities. Investor can level the playing field, so to speak, by making others aware of inauspicious companies and investor’s bad experiences.
There is a plethora of information available online to franchise investors that will assist them with vetting franchises. I know because I’ve used these sources during my five year investigations. The problem is that most investors are not aware of these sources and it takes time to research and find them. Most investors simply do not have the time to do the research and pull it all together. The majority of Franchise Consultants will not do the research for you, if even if they knew how to.
I personally came very close to investing in a company headquartered in Canada. Although the company sold franchises, it was not registered as a franchise in the state where I reside, which is Maryland. Consequently, the franchisor offered me a license agreement that required me to pay approximately $30k in an initial franchise fee and roughly $600 per month in royalty, advertising and other fees. After a few weeks of negotiating, I managed to negotiate a reduction in all of these fees and a termination in the monthly fees if the license agreement was terminated for any reason.
Nonetheless, after placing a call and speaking to someone in my state Attorneys General office and receiving a stern warning from them not to invest in this company, I decided to pass on the opportunity. After this close call, I decided to find a way to educate and help others (like me) who just want a good business opportunity and work hard for themselves in an attempt to control their own destiny; to help them avoid being victimized by savvy marketers and business opportunist that are less than honest.
I failed to mention that I learned during my research of the aforementioned company that the company came close to going into bankruptcy less than five years ago. I also failed to mention that I was introduced to this company via a Franchise Consultant that I was working with. That is until I learned that the Franchise Consultant was aware of the company’s not so long ago financial woes, but fail to mention them to me.
There is just so much that a franchise investor must be made aware of before investing their hard earned money into a so call business opportunity.
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Who can give us an answer????? Yes I am another victim. Desiree nor Danny Jones have no answers for any of us. All they can say is that there is no money, and that the company is making cutts to pay us, but they still don’t have an answer to when we are goint to get our money. Who can tell us How many VICTIMS are out there? For the new owers of ELITE & CUPPYS is nice to have your feet up and keep this SCAM going.
How much do they owe you, Vivian? When did you sign the agreement and send your money?
Were you unable to get financing?
I think there are more victims than anyone realizes. We have been trying to contact our FSM, she has been “away from her desk” all day. We cannot get anyone to answer our calls or call us back. Now we have rumors of Federal charges against dale. I wish someone could give us an answer as to when we will see our down payments.
This whole process has really shaken my belief in people. We have now been taken by two franchises, this is our second time around after the first one failed to deliver on promises as well.
Rick:
From what I hear no one wants to answer the phone right now because no one has any answers except Dale, and he doesn’t even return emails to his own employees.
There are a handful of employees making the move to AL, so most of them are on their way out. They are reportedly being required to help back up the office Thursday and Friday if they want to get Unemployment Compensation (not that that’s Dale’s call). That must be a happy bunch… the recently fired employees working shoulder to shoulder with the Chosen Ones.
Stall, stall stall is one of the constants with this company and always has been. The frontline employees have to face the wrath of the justifiably angry callers, yet they have little information to provide and no authority to act. I think most of them meant well and believed in what they were doing. They were conned just like the franchisees.
Ex-employees rejoice. Dale just did you a big favor. You get to move on.
The question is: what is there to update? Who is being hired to complete the construction of projects now that SBT and Elite are deadlocked? Elite does not DO construction… they just sub it out.
Yes I am another victim, $37,900. The downpaymen was july/2007. I just file compainted to Florida BBB. Please help me, do you know anyone or agency so I can report to and seeking for assistant to get my money back.
The construction company now being used is called Eden, they are out of Ohio I am told. I have no other information on the company.
For everyone out there that are wanting to go foward left me know a way to contact all of you. I am looking for more Victims Because I am one of them. Please lets find a way together, the more people the better. I think we are ready to show this people that they are not going to get away with this.
Vivian, please contact stacie@aafd.org. We are organizing a legal trust through the aafd.
We are also victims to the tune of $125,000…we will be contacting Stacie as well.
Same here, I will also contact Stacie about this.
In the meantime, please sign up for the Cuppys group at yahoo.com, You will get more info and details about what’s being done to get our deposits.
Here’s the url
http://finance.groups.yahoo.com/group/CuppysCoffee/
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I am a franchisee who was just getting started about this time last year. As noted in others comments everyone was VERY attentive. Once they had my deposit, the calls subsided. When I requested my deposit back from Elite, I was sent a form to complete. I returned it and never received a response back. I continued to email, and call to no avail. Though my deposit was not as large as most of you, it was all that I had. Yes, I took a risk that we all did; to trust people who were supposedly good , moral, ethical people who wanted to make you feel a part of their family. I gues this is the world we live in today. Very sad and unfortunate.
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