USA Mobile Drug Testing (USAMDT) franchise owners provide on-site drug testing to companies.
The company claims it is growing – from 77 franchises in 2011 to 93 in 2012.
The franchisor, CEO Joe Strom and their franchise sales firm, Rhino7, tell franchisees that for an initial investment of $83,731 – $115,611, they can make net annual earnings of $145,745*.
They claim the $145,745 number is based on the performance of an affiliated firm in CT, running a USAMDT business just like the franchisee’s.
On closer investigation, it appears that USAMDT does not have anywhere near 93 franchises, and the chain is losing locations – not growing.
CEO Joe Strom refuses to comment.
A group of irate franchisees claims that none of the franchisees are earning $145,745, as USAMDT and Rhino7 represent.
In a classic bait and switch scam, franchisees allege, USAMDT is using financial data from a firm that bears little-to-no resemblance to a USAMDT franchisee’s business.
CEO Joe Strom refuses to comment on the earnings claim allegations.
The franchisees have retained an attorney, have de-branded from USAMDT, and are demanding $635,000.
They have filed a complaint with the Federal Trade Commission (FTC) and are contacting the media, and governmental & law enforcement agencies to try to stop the alleged fraud.
Here are our posts on the USAMDT dispute and controversies.
* USAMDT claims it’s not promising franchisees will earn this amount, but the impression is clear.
Franchise Questions for CEO Joe Strom
(listed chronologically)
Franchise Complaints: CEO Joe Strom Responds
Strom Spins Franchisee Defection
Franchisee Challenges CEO Joe Strom
USA MOBILE DRUG TESTING Franchise Owner Warns of “Lies and Deceit” May 28, 2013
RHINO7 Franchise Development Cashed in on USAMDT Says Franchisee May 30, 2013
ARE YOU FAMILIAR WITH JOE STROM, USA MOBILE DRUG TESTING OR THE USAMDT FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
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I recently worked with Rhino7 and listened to the validation calls for this franchise. I was really interested in this concept, until I started digging. First, it felt impossible to talk with a franchisee. The pre-recorded calls are staged, like an infomercial. It was easier finding ex-franchisees and speaking with them. Once I did that, my Rhino7 rep connected me with a few franchisees, some were honest about their unhappiness. The others sounded strained. I left the call not believing that they really bought into the company. The final straw was a live validation call from a girl in Oklahoma. What a joke. She bragged about breaking $200K in revenue but she had no profits??? Much of what she said didn't add up. I am going a different route. At first, I thought this site was sleezy with the articles, but I was wrong about that. It spared me from making a huge mistake. I think this site is on to something good.