Paul Casey Loses Twice, Out in Spain

October 29, 2009 by Jeff Greenwell
Filed under Golf

It was two and done for Paul Casey, the top-ranked player in this week’s World Match Play Championship in Spain. The Brit failed to progress out of the group stage after losing both his matches today. Casey lost to 168th-ranked Scott Strange of Australia, then to American Ryder Cup player Anthony Kim to cap off a most miserable day. But to be fair, Casey did just return from tearing a rib muscle on August 6, which may or may not have affected his play today.

Paul Casey (Image: Zuma Press)

Kim ended the day atop Group A, thanks to his win over Retief Goosen. Group C winners included Masters champ Angel Cabrera, and Simon Dyson. Jeev Milkha Singh of India and Ross Fisher of England came up big in Group D.

Play continues through the weekend.

Tags: anthony kim, Golf, paul casey, world match play championship

PLAY N TRADE: The BIG Franchise Discussion

September 8, 2009 by Sean Kelly
Filed under Business

3 Comments

In the past week, the website UnhappyFranchisee.com was hacked and dozens of posts and hundreds of comments critical of some specific franchise companies were deleted. Most posts related to Play N Trade and hundreds of comments related to that company were deleted.

Here is a nearly complete copy of the UnhappyFranchisee.com post PLAY N TRADE: CA Suspends PnT Franchise Registration that was originally published April 23, 2009. Also included below are the 379 comments the post generated through 7/25/2009. We hope to restore the 100 or so comments left in August, 2009 shortly.

PLAY N TRADE: CA Suspends PnT Franchise Registration

April 23, 2009

According to its CA COMPLAINT AGAINST PLAY N TRADE (pdf), “The California Corporations Commissioner… finds that Play N Trade Franchise, Inc. … has violated multiple provisions of the California Franchise Investment Law (“Franchise Investment Law”).“

In the complaint, the California Corporations Commissioner asserts that “…Play N Trade Franchise, Inc. has committed multiple violations of the California Franchise Investment Law in the course of conducting business with no less than 53 California franchisees since the date of its initial franchise registration in California.”

According to Play N Trade CEO Larry Plotnick, “This preliminary citation has just recently been received by the Play N Trade team and its attorneys with 60 days for us to appeal. We have not at this time been found guilty of anything…”

Here’s an excerpt describing the proposed penalty:

Based upon the foregoing findings, the California Corporations Commissioner is of the opinion that Play N Trade Franchise, Inc. has failed to comply with multiple provisions of the California Franchise Investment Law within the meaning of sections 31110, 31200, 31123, and 31115(a).

WHEREFORE, the California Corporations Commissioner hereby issues the following orders and seeks such additional relief as follows:

1. An order issued to revoke the effectiveness of the Play N Trade Franchise, Inc. unit franchise registration pursuant to Corporations Code section 31115(a);

2. An order issued to deny the effectiveness of the Play N Trade Franchise, Inc. area developer franchise registration application pursuant to Corporations Code section

31115(a); 2

3. An order issued to pay citations in the amount of $132,500 to the State Corporations Fund within 30 days of the date this order becomes final;

4. Play N Trade Franchise, Inc., Yuvi Shmul, and Thomas C. Bozarth are hereby ordered to desist and refrain from further violations of the California Franchise Investment Law, including but not limited to violations of Corporations Code sections 31110, 31200, and 31123, as specified above;

5. All franchisees of Play N Trade Franchise, Inc. shall have the right to rescind any contract for the purchase of a California franchise;

6. It is further ordered that Play N Trade Franchise, Inc. pay restitution in the amount of the franchise fee to each California franchisee to which it sold a franchise.

7. For the Complainant’s costs and reasonable attorneys fees, according to proof;

8. And, for such other and further relief as the nature of the case may require and the court deems proper.

Based on the foregoing facts establishing multiple violations of the California Franchise Investment Law by Play N Trade Franchise, Inc., Yuvi Shmul, and Thomas C. Bozarth, the issuance of the aforementioned citations and orders, and provision of ancillary relief, is necessary, in the public interest, for the protection of investors, and consistent with the purposes, policies, and provisions of the California Franchise Investment Law.

Dated: April 14, 2009 Los Angeles, California

PRESTON DUFAUCHARD California Corporations Commissioner

WHAT DO YOU THINK? SHARE A COMMENT BELOW?

Written by ADMIN · Filed Under ALL POSTS, PLAY N TRADE, VIDEO GAME FRANCHISES

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379 Responses to “PLAY N TRADE: CA Suspends PnT Franchise Registration”

PLAY N TRADE Franchise Registration Revoked : Franchise Pick – Picking the Perfect Franchise on April 23rd, 2009 11:46 am[...] Read the legal document and penalties here: PLAY N TRADE: CA Revokes PnT Franchise Registration [...]
Larry Plotnick on April 24th, 2009 9:21 pmAs the President and CEO of Play N Trade I feel it is important to be clear that the above headline is misleading and incorrect. It is very unfortunate that http://www.unhappyfranchisee.com would state that Play N Trade has been found guilty of anything, when nothing could be further from the truth.Play N Trade has not been found guilty of any wrong doing, and that the citation highlighted is a preliminary order that is not final. We are working closely with our Attorneys and the California Department of Corporations to clarify and settle this matter quickly and with the least amount of impact to our franchisees.
This preliminary order only impacts the state of California, and will not be finalized until the completion of a negotiation or appeals process.

Play N Trade Corporation takes this and all legal matters very seriously, and are and will cooperate fully with all state agencies.

We will be communicating with our current and future franchisees appropriately as facts become available.

Sincerely,

Larry Plotnick

President and CEO

Play N Trade, Inc.

Ed. Note: I don’t believe that the statement was false, as it was the Commissioner’s conclusion (yes, opinion) that PnT was guilty of violating CA investment laws. But I see Mr. Plotnick’s point that the original post could be misinterpreted as referring to the final verdict of a legal process that is still underway. I’ve revised the opening statement to make it clear that this is an ongoing process, and also changed “Revoked” to “Suspended” in the headline.
Jason on April 25th, 2009 2:16 amI have been in business for almost 20 years. I had great success and great faillures. I have been involve over a year ago in a franchise organisation and the help and support of my franchisor have been great. There are peoples who are not successful and are quick to blame the franchisor but the reality is that most of the time these peoples woudn’t have been sucessful anyway because they are simply not business peoples. They want a taste of the american dream but they are not entrepreneurs to start with and the only mistake that the franchisor really did was to accept them in his system. The problem, in my experience, is that you don’t learn business at school doing your MBA. (you only learn how to be good at school then, not much risk involve playing with monopoly money…) to learn what it take to be an entrepreneur, you have to be one or to become one. You have to take the risk if you want the reward and not eveybody gets it. It’s the only way to know if you are cut for this. Just like being a cop or any other career because being a businessman is just what it is…a different career, and not everybody is made for it.Some peoples are very quick at blaming others for their failures…It’s easyier to do when there is a franchisor involve because if you are just on your own, running your business alone…well you have nobody else to blame but yourself.
Your kidding on April 25th, 2009 10:13 amA big mistake, not true, so the State of California issues an Administrative Order to protect the public. You feel this is not the case and you can negotiate your way out of this. You have never disclosed how many stores that have closed, I am sure that is some how a misunderstanding as well. Their are laws in franchising, so try following them and your dance steps will improve.
LTTL on April 25th, 2009 2:29 pmAccording to what I have read so far I can be refunded for my purchase of my 2nd and 3rd store that I have not open here in California. Is that True?
Comment on April 26th, 2009 1:13 amI think that you can get refunded for your first store also. This will help the stores that have closed down or the ones that are preparing to close.
ADMIN on April 26th, 2009 8:27 amHow many Play N Trade franchise stores are open in California? Does anyone know how many would choose to leave the system and debrand if given the option? How many have indicated they would remain?
ADMIN on April 26th, 2009 9:03 amNo doubt Larry Plotnick and his Play N Trade team will work to minimize the damage to the PnT system and the brand, as they should. It’s worth noting that Plotnick just joined PnT in January of this year, so he inherited this mess – and didn’t participate or profit from any of the alleged deception or questionable sales tactics as far as I know. I think it’s a good sign that Larry Plotnick was willing to join the discussion and correspond respectfully (on a Saturday, no less). I hope he will continue to participate in the future.Larry Plotnick insisted that our post about PnT be accurate and fully disclose the big picture. If his predecessors followed the same standard, PnT might not have this mess on its hands. Hopefully, moving forward, Plotnick will insist on full and accurate pre-sale disclosure to prospective franchisees (whether in CA or not) – and will deal fairly with those who signed on without full and accurate information.
James Harrington, Esq. on April 26th, 2009 5:10 pmI will be speaking with the lawyers from the Dept. of Corp. who filed the administrative complaint against Play N Trade this week, if anyone wants an e mail summation of my discussions with them please e mail me. Include your store number for verification.James Harrington
The Law Office of James Harrington
Time For Change on April 27th, 2009 1:12 amIt’s about time that someone finally stepped in and put a stop to all the shady dealings these guys have been doing for years. They have destroyed countless lives and families with their lies and greed.There is no benefit whatsoever to being part of this franchise: there is no buying power, the POS system is completely defective, if your store is having any problems they just write you off, they always say that you are the only one complaining or having that problem, all their great ideas come franchisees themselves, they are constantly trying to get kickbacks from vendors, the royalties are a joke, it takes days to get a response about the simplest questions, they are completely unwilling to offer any sort of relief to floundering stores, the franchise advisor board was used as a tool to distract unhappy franchisees, I could go on and on and on. All of you past and present store owners out there know this to be true.
In my heart I hope and pray that now that *some* of their dirty little secrets have come into the light of day people will see them for what they are; greedy, evil people out to grab as much money as they can and then cut and run. Not caring about the damage they do and the lives they ruin. I hope the cause of justice is served and that those responsible finally get their comeuppance for all the damage that they have caused.

Stand up for yourselves! Don’t let yourselves be bullied by these thugs any longer! Their voice is small in comparison to ours! We have the power to effect change but we must be willing to take the first step! For far too long they have tried to play us off of one another, it’s time for that to change! File a complaint with your states’ corporate commission, consult an attorney, stop paying your royalties, now is the time to create change!
Larry Plotnick on April 27th, 2009 9:48 amI would like to caution anyone reading this website and the comments being made; that much of what has been said is incorrect, misleading and/or opinion only. If you have concerns with Play N Trade I would suggest that you call or contact our Corporate office and we can answer your questions appropriately and directly. Yes there are a few upset individuals, mostly ex-employees that have attempted to compete with Play N Trade unsuccessfully (Like Gamer Doc and others) that have reason to create problems. We will not use a public forum, such as this for discussions back and forth.We continue to work very hard for our franchisees, not only in clearing up this current situation and working with the state of California but in completing for rollout this summer our new POS system, the new unified buying program and a new national marketing campaign all to support our franchisees.
I hope that our franchise community can see through these “rants” and understand that their partners at Play N Trade are doing everything possible to create a world class brand and to create a continually improving model in an exciting and growing industry.

Larry Plotnick

President and CEO

Play N Trade
Jim Belanger on April 27th, 2009 11:27 amLarry,It seems very unfortunate that this is happening to anyone. We hope for the sake of your franchisees you are right. This hurts Gamer Doc as well. We would hope this would never have happened. Please concentrate on making this right for your community, so all of us in this industry can grow.
I have always had the utmost respect for you and your leadership, they have a very competent leader in you and I know your heart is in the right place.

Under your leadership, I believe Play N Trade will do well. My hope is that you have a contract and will be the CEO for a long time.

Good luck,

Jim Belanger

President and CEO

Gamer Doc
Doing My Diligence on April 27th, 2009 11:47 amWow, this is a lot of crazy stuff! I appreciate that the CEO of this company has taken a minute out of his time to talk to us here, though.One thing that Larry said really rang true, and that is the disgruntled ex employees. I talked to the guys over at Game Doc and when I mentioned I was also looking at PNT they FLIPPED OUT! They REALLY slammed on those guys in an unprofessional way, so it could be them making comments here, too.
Having said that, this whole thing in CA does scare me, and though I have been seriously considering a PNT, I am going to have to really think about what I want to do, now.
Franchisee on April 27th, 2009 12:56 pmIn response to the ADMIN’s post if I was able I would leave the franchise and debrand. I am sure MANY other franchisees would as well.
Happy Franchisee on April 27th, 2009 2:25 pmI am a current franchisee and am very happy with my store and with Play N Trade as a company, and although my store is certainly not close to the sales I would like to see, you have to realize that Play N Trade is very new and in no way has the notoriety of a Game Stop. Because of this you cannot expect a store to just take off after opening the doors, you have to put in a sincere amount of time, work and money. I can’t say I haven’t ever been frustrated, but I have seen this company take huge steps since I’ve have been with them and believe that many great things are to come.
Comment on April 27th, 2009 2:43 pmI am interested to know how many stores have closed down already.Also, how many stores are closing down or being sold.
Can the Play N Trade corporate office give us this answer?
Kevin on April 27th, 2009 3:31 pmI have really enjoyed my time with PNT so far. They are VERY quick on getting back to me on my daily questions I have for them. The people are nice and very helpful. The ability to make changes to advertiseing and then be able to print it off locally is a marketers dream. This is where I see the franchise blowing others out of the water. Marketing is the key piece and their system is awesome.I don’t agree with the negative talk about PNT. Also, for this web site to fly off the handle and say PNT is already guilty was surprising. The more I look at it, the more it seems like a “Enquirer” sort of publication. I won’t be back, it’s a waste of time.
Sharing on April 27th, 2009 4:56 pmRespond to Jason Apr 25.The mistake for PNT might be accepting what you called “not business people” but if PNT discloses all the stores that failed or closed, the “not business people” will probably not proceed with the franchise. The bottomline here is that they did not close this.
Duncan on April 28th, 2009 1:52 pmI think some people in this blog missed their point.The major issue is about the deception of PNT in their seling of their products– the franchise business. If you did not tell the truth about the business, how the hell of the people of future franchisees know if your product is good or bad??
If you only put the rosy number or phony ones in your UFOC, no wonder people will buy your stuff, then later find it is just a pile of crap!!!

Legally doing business is one thing, intentional deception is the other. Someone has to be accountable for what he did. Nobody is above the law. It is not relevant to the way you managing your store. That is the point.

Is this only limited to CA or other states as well?

I wonder how many PNT stores opened and how many there were closed. It should be an easy answer from the CEO of PNT right? I do not think he will giveus the numbers here. It is always “a top secret”.

When you have too many secrets, your company is having a big problem.

It is just matter of time to have an implosion!!!!!!!!!!!!!
Carol Cross on April 28th, 2009 4:33 pmDuncan is right! When franchisors don’t have to disclose the failure of other first-generation owners to other first generation buyers, this is a MATERIAL fact that would have prevented many buyers from purchasing the franchise.Apparently, however, if franchisors choose not to disclose in Item 20 of the FDD that transfers are failures, etc… or the failures don’t have to show up until the NEXT reporting period, they can get away with not clearly dislcosing the unprofitabilitry and failure rate of the system and still be in compliance with federal and state disclosure laws.
However, in California, this franchisor appears to have violated California laws and those franchisees in California were given some recourse by the State of California.

The question is, will they have recourse under California laws for a PRIVATE right of action for the violations of California Law that may be proximate to their damages.

Maybe, James Harrington, an attorney, who commented above, will comment on this matter.
James Harrington, Esq. on April 28th, 2009 4:42 pmNOTE: I am posting here not to seek clients but for the sharing of information and the promotion of association between Play N Trade franchisees as provided for by California Corporations Code section 31220.I AM LAWYER, and I represent more than one (1) Play N Trade Franchisee, and I have spoken with several others regarding their business concerns and their experiences with the Play N Trade Franchise.
The franchisees I have spoken with have lost considerable amounts of money.

Each of them I spoke with were “intelligent” (see below), knowledgable and all sounded educated and competent.

The violations as claimed in the current California Department of Corporations Administrative action against Play N Trades are serious. I have seen postings to this site by Play N Trade which suggest or tend to state the allegations against the company are not serious.

The complaint alleges inpart numerous infringements by Play N Trade of the California Franchise Investment Law. The intent of the California Franchise Investment Law is to provide franchisees information necessary to make “intelligent” decisions regarding franchises being offerred to them, to prohibit fraud in the sale of franchises, and to protect franchisees. In my mind any violations of the California Franchise Investment Law are serious, especially when large amounts of money have been lost.

Play N Trade have not posted to the site is any answers or explanations as to why such serious allegations would be brought against them to begin with.

Based on my discussions with franchisees, and the information I was provided, it is clear to me that Play N Trade should be compelled to answer numerous questions about their franchise registration, and its subsequent amendments, their franchise offerings and circular, their franchise sales practices, any failures to disclose material facts, and any earnings claims. This information must be disclosed under the California Franchise Investment Law and the Federal Trade Commission regulations.

Anyone is welcome to e mail me and I will add them to my e mail distribution list providing them with future information as alowed pursuant to California Corporations Code section 31220.

This information will include:

The current California Department of Corporations adminstrative action.

Play N Trades lawsuit against Henry Mangio, a Franchisee in Nevada.

The wrongful termination lawsuit brought by Harry Smith, a previous company director, in Orange County against Play N Trade.

Regards, James Harrington.
James Harrington, Esq. on April 28th, 2009 5:19 pmCarol and Duncan.Duncan’s posted comment was right on point from my perspective.
The underlying concerns and questions all franchisees should have, and which I have for my clients, is whether or not there was fraud, misrepresentation, failure to disclose material information and fact, and if untrue statemement were made by Play N Trade to its franchisees and prospective franchisees. Some of these issues are raised as allegations in the Complaint before the Corporations Commission.

Carol: The questions franchisees should have and which I note above and in my earlier post are a part of the allegations made in the Complaint before the Corporations Commission, but as I state in my earlier post of today, there are other equally serious questions that Play N Trade should be compelled to answer that are not included in the Complaint before the Corporations Commission.

Carol: The Complaint before the Corporations Commission does not preclude any later or further private action by any party against Play N Trade and its officers and directors for the same or other relief and damages which are requested in the Complaint before the Corporations Commission.

Any damages, relief or recovery in a later of further private action against Play N Trade by a franchisee would be reduced by any recovery made on behalf of an individual franchisee pursuant to any Orders issued by the Corporations Commission, as based on the Complaint now before the Corporations Commission.

I will post information about any rights Play N Trade have to appeal any Order issued by the Corporations Commission, if this matter reaches such a point.

My initial recomendation to franchisees would be to wait until the Complaint before the Corporations Commission is fully heard and any Orders issued, before deciding on any further private action, but at the same time begin preparation for such private action now.

James Harrington

This above information is provided pursuant to California Corporations Code section 31220. This is not a solicitation for business
things that matter on April 28th, 2009 6:17 pmAre you people serious? It looks to me that Play N Trade has not done anything with ill will. They actually cut some people a break and gave them a reduced price and because they were a young company and didn’t report it you should get your money back? Do you really care if they terminated a couple of area developers and didn’t report it. Those area developers are the franchisees that were terminated and not reported. It was not individual store owners. It sounds like the area developers did not fully pay their fee to be an area developer so they were terminated. The other complaint was that they fired an employee, get real! Yes there are laws and rules that need to be followed but if you people really think you should get paid your just trying to get something for nothing. Also by the way, there are only 14 states that are registered states for franchises that even require every liitle detail to be disclosed. California looks to be one of the most strict. Do yourselves a favor and make your business instead of trying to make your business make you.
Not a Victim on April 28th, 2009 6:35 pmthings that matter wrote “Do you really care if they terminated a couple of area developers and didn’t report it. Those area developers are the franchisees that were terminated and not reported. It was not individual store owners.”Correct me if I’m wrong, but this does seem like a big deal, doesn’t it? I mean, area developers aren’t going to walk away from their investments cuz they don’t feel like paying their fees, right? Doesn’t “terminate” mean they failed… and lost their investments? That seems like a thing that matters, doesn’t it?
On top of that, PNT has franchise lawyers and knew enough about the requirements to file their california registration, do their documents, etc. So could it be an innocent accident that they happened to leave these failures out? If not, they were intentionally leaving out required info, right? Seems like a thing that matters.

I don’t know how the area developer thing works in every case, but aren’t those guys responsible for selling and then supporting the unit franchisees in their area? Who provides the support they are supposed to provide if the developer is terminated? Doesn’t this hurt the unit franchisees too?
ADMIN on April 28th, 2009 6:41 pm
things that matter on April 28th, 2009 6:45 pmThese were Yakety Yak area developers who were offeded a discount if they wanted to also be area developers with Play N Trade. They failed to come up with the money for the initial investment. Play N Trade offered them a payment plan and they failed to pay the full franchise fee, so yes they had to be terminated. This was in the very early days of Play N Trade. There really were not many stores yet and because it was such a good oppurtunity new area developers were sold. Yes details that Play N Trades lawyers left out do matter, but these things are minor and I seriouslly doubt would have had an effect over someone joining the franchise or not.
james harrington, esq. on April 28th, 2009 7:19 pmThis post is made pursuant to Ca. Corp. Code section 31220.By now you should all have received the e mail from “your” president re: The California Department of Corporations complaint.
If he can write (if he actually did write it) a 2.5 page update on the above, then he should be able to answer the following simple questions:

How many PnT franchise’s opened in 2006?

How many PnT franchise’s closed in 2006?

How many PnT franchise’s opened in 2007?

How many PnT franchise’s closed in 2007?

How many PnT franchise’s opened in 2008?

How many PnT franchise’s closed in 2008?

How many PnT franchise’s closed in 2009?

How many PnT franchise’s are in the process of being closed?

Is this information material to franchisees and potential franchisees?

Why wasn’t the above information provided to franchisees and potential franchisees?

James Harrington
things that matter on April 28th, 2009 7:41 pmMr Harrington,Have you even looked at the Play N Trade UFOC. I have seen it and it lists several franchisee’s who have closed. As with all business ventures there is about a fifty percent failure rate. I know for a fact that Play N Trade has far fewer than that that have closed. Again what you are asking of our CEO is in the UFOC. It is not a complaint with the state of California because it is accurate. You should go back to specializing in family law. By the way it is very unproffessional of you to be blogging on this sight trying to drum up business. I think I will file a complaint against you with the MI. bar. Did you tell your clients that corporations rarely pay out when they lose in court because of high fines or lawsuits? They file bankruptcy and the only person that gets paid is the sleazy lawyers. You are only going to hurt the franchissees that are working hard and trying to be successful. You should be ashamed of yourself.
David on April 28th, 2009 7:43 pmThe memo from CEO Larry Plotnick is laughable — the same usual useless statements that Play N Trade puts out. They always resort to saying the same thing:1. This is what’s been said about us. None of it is true. Really. All of them are lying.
2. By the way, this won’t affect you (franchisees), so don’t pay any attention.

3. Just ignore this and focus on our Las Vegas Convention! We will have fun and everything will be great!

Right. I’m holding my breath for all the magic that will happen in Las Vegas.
shed a light on April 28th, 2009 10:33 pmMr Things that matter:I do welcome a lawyer joining this blog. We need someone who understand the law better than us (including you). Who else would tell us what’s our right?
Since Mr. Harrington mentioned that he has more than 1 PNT client, I’m certain he’s in this blog to shed some light to whoever wants to listen.
shed a light on April 29th, 2009 12:53 amMr Things that matter:I do welcome a lawyer joining this blog. We need someone who understand the law better than us (including you). Who else would tell us what’s our right?
Since Mr. Harrington mentioned that he has more than 1 PNT client, I’m certain he’s in this blog to shed some light to whoever wants to listen.
Joe on April 29th, 2009 3:55 pmYes I have read the Play N Trade UFOC, and so did my Lawyer. My guess is thatThings that matter works for T Street Management. I was about to buy a Play N Trade franchise, but when I couldnt get any straight answers, and the recomendation of my Lawyer, decided not to, thank god. First off, there has been 30+ stores that have closed since Oct 08, of course when you ask anyone at Play N Trade, they will tell you that the store have been transfered to another owner, and a number about 25 less. After talking to a number of Franchisee’s some who were still open, some in the process of closing, some closed for a while, they all said the same thing, the model doesnt work, period. Just to be honest, a couple did admit to being undercapitalized, but they went off the recomendations of Play N Trade, I can relate to that because I was told by PnT that 50k would be enough for the first year, when in fact you need 150-200K
Thats a huge difference. The one store closing that I did find out about, and surprised me, was the guy who they put on the postcard that PnT sent me.

Bo Stewart, his store just closed recently also, and one point he was the #1 store.
Shed some MORE light !!! on April 29th, 2009 5:17 pmI like the comment that was just made:“I do welcome a lawyer joining this blog. We need someone who understands the law better than us (including you).”
Well, I’ve got some very interesting information that doesn’t take a “lawyer” to figure out. I’ll prove my point.

Remember our Good ‘ol “Poster Boy of Success” – Bo Stewart ?!?! You know, the guy that was on the front of the PNT website with his nice “Smile of Success” and his arms “confidently” crossed? Guess what happened to him?

First he had his last round up meeting with the existing franchise buddies (who he sold the franchises to), you know, to find out how there store was doing and if they needed anything – never disclosing in that group session the most important thing (amongst “franchise friends”) and that was…

HE WAS GOING OUT OF BUSINESS !!!

How did anyone find out? Well, somebody tried to call him and found out the hard way… “The number you called is no longer in service. Please hang up and dial the number again or call your operator for assistance.”

Now this isn’t to pick on him, seriously – it’s just to prove a point. In my opinion (and this is JUST MY OPINION !!!) not only was his store NOT making any money to keep him afloat, he might have known what was coming down the pike; liquidated everything and boogied out while he still had the chance.

Now what are the rest of the franchisees going to do, be the NEXT – “Poster Boy and/or Girl of “Boogied Out” Success?”…

Bo should write a book and call it:

“Make It Big With Bo: How to Buy or Start a Small Business, the Best Investment”

Oh – I forgot, he can’t do that – Yuvi Shmul already wrote that book.

Thank you for coming to Tooled-N-Played – Have a day…
store owner on April 29th, 2009 5:40 pmWhat is being said about Bo Stewarts store going out of business is not true. He closed his store because his lease was up. His store was in a mall and they were going to triple his rent. They did not like him as a tenent because of the kids and the tournament crowds. He still has his franchise license. He can open another store in a cheaper shopping center. You people are spreading lies about things that you know nothing about. If your stores are suffering so much then maybe you should stop playing on the internet and get some work done. Do a little marketing, come up with a budget, plan an event. I’m just saying…..
Shed some MORE light !!! on April 29th, 2009 5:46 pmI just need to add something, Bo Stewart IS REALLY A GREAT GUY !!! It’s too bad because he (just like the rest of us) put in a lot of time working to make his life and what he represented a success. It’s just too bad the business model doesn’t work.In reference to his last group meeting. I’m sure quite a bit of us would have done the same thing; just told a few people individually then just wrapped up some loose ends, liquidated everything and left quietly…
PNT will get exposed for what it is. No one is going to say to me that a certain few person(s) PNT didn’t know what was going on… (Again, JUST MY OPINION…)
Not a Victim on April 29th, 2009 5:48 pmThere’s a comment on the other Play N Trade post here from franchisee Manny Velez. http://www.unhappyfranchisee.com/play-n-trade-video-game-franchise-played-out/He said he was the 2007 Franchisee of the Year but had to close after almost two years of operation. He didn’t blame PNT but his own lack of working capital. He wrote “If you have at least $100k of back up you can make it. I love the concept and dealing with people and making them smile, but hated when seeing them leaving the store due to lack of inventory. Nothing wrong to have one, but are sure you have the strong financials to keep it running? Just asked how many of us are in bankrupty today…”
Joe on April 29th, 2009 6:19 pmIsnt that the point of buying a franchise vs doing it on your own? If they are the so called video game experts, shouldnt they be telling prospective franchisee’s this is what you will need, not what they think you want to hear, so you will buy a franchise?? I would be willing to bet that, if they had said to 80% of their current franchisee’s, you will need 150k in working capital, instead of the 50k they told me, they would have walked. Thats fraud in my opinion, and it looks like The State of California Agrees
Brand new owner on April 29th, 2009 6:21 pmI have no issues with Play N Trade. In fact I am quite happy with the company. I don’t know why there is no forum for people to say the positive things about the franchise. I just had my grand opening this weekend and it was amazing. The support I received from the support team late on a Friday night – I had questions on setup – were top notch and my area developer was there with me every step of the way, every day.I had a very successful grand opening and you would never have known we were in a recession by the turnout and the numbers we did. The support I received from Play N Trade was excellent and came from several different people. Everybody was incredible and help made my store a success.
I guess it does not matter a heck of a lot what I think but I feel that the truth should at least be told from both sides. You know it’s a franchise you pay for and that comes with a certain amount of support and Play N Trade provides more than their share. In the end the franchisee has to want it and do some work as well and be a competent business person. You can’t just sit back and blame everything on everybody else. A person has to do their part as well.

Thanks again for everything to you and everybody else at Play N Trade.

I am proud and excited to own and operate my store and this weekend I realized a life long dream of mine and Play N Trade made that happen.

Why doesn’t somebody in the media get their head out of their ass and print that.
Doing My Diligence on April 29th, 2009 6:28 pmI am confused about one thing. Mr. Harrington claims to not be on here soliciting business. I don’t understand why a successful and busy attorney would possibly spend time on here posting to this blog for any other reason than solicitation of clients! I mean, come on! When have you known an attorney to give free advice? Either when they are giving you a “free consultation” to try to earn your business, or when they are your brother! I am personally going to be automatically suspect of ANY attorney that has the time to post to a blog all day without any hope of compensation!This originally raised concerns with me about Play N Trade, but now I am just getting irritated at all the bashers here muddying the water!
My advice to anyone here is this: If you are considering getting into Play N Trade, call the franchisees! I have personally spoke to many of them (including Bo Stewart who IS still with Play N Trade!) and so far have only ran across one unhappy franchisee! They are very informative, and in my opinion the best way to get the “real scoop”.
things that matter on April 29th, 2009 6:37 pmOK, shed some light, first off i am not a MR. I am a woman and second I do not work for corporate. I am a store owner just like you or are you just a tire kicker with nothing better to do than look for negativity. I do believe that I know more than this lawyer because of the stupid comments he has made and for the fact that I own one of the first stores that opened. I do not always agree with everything corporate says or does, but I signed a contract and agreed to thier terms. I also know that when I talk to other store owners the ones that seem to suffer and are unhappy it’s because they pick and choose which parts of the Play N Trade model they want to do. When I talk to Successful franchisees like myself, we do everything that corporate says. It’s not always ideal but we are making money and have control over our own futures. This was sold to us as an oppurtunity, but we still have to work hard and not just sit back and watch. Also Mr. Shed Some Light 30 or even 50 stores whatever it is that have closed is not a big number in the business world out of about 300 stores. It should be about half according to industry standards. As far as the transfered or sold stores those were just people that realized this is not what they wanted to do or thay had to move or they had a death. It doesn’t always have to be a negative thing. And one more thing anybody that knows Bo well enough will tell you it was time to renew his lease and the mall was going to raise his rent alot and that did not work with his business plan. As far as Manny Valez goes a little background on him is his store was robbed several times of everything including all of the fixtures. It was located in a bad area of P.R.. Play N trade corporate helped him out with inventory and better terms to try to help him out of a bad situation but when your location isn’t safe and you can’t get insurance to cover your losses you have no choice but to close. So there you have it. I know it’s not as fun to read something positive as it is the negative crap to make yoursef feel better but this is the truth.
Shed some MORE light !!! on April 29th, 2009 6:40 pmThis is to “Doing My Diligence”:I wonder what “CORPROATE HACK” this is?…
BTW, there ARE a lot of INFORMATIVE FRANCHISEES THAT ARE GIVING YOU THE REAL SCOOP – MR. HACKY !!!

ENJOY – “TOOLED-N-PLAYED” !!!
things that matter on April 29th, 2009 6:52 pmjust because you get upset when people are saying negative and untrue things about a franchise that you are a part of does not mean you are someone from corporate. If you own a store and have put your heart and soul into it it’s hard to sit back and watch as others without the same passion try to destroy it. I love my business, my store and my employees.
Shed some MORE light !!! on April 29th, 2009 7:15 pmIn response to “Doing My Diligence”:You said:
“I am personally going to be automatically suspect of ANY attorney that has the time to post to a blog all day without any hope of compensation!”

And I say:

I am personally going to be automatically suspect of ANY store owner that has the time to post to a blog all day without ANY NEGATIVE THING TO SAY ! – LOL !!!

I hear you Ms. Doing My Diligence. – Your point is well taken, ’nuff said…

BTW, how do you know I’M a “Mr.” and not a “Ms. or Mrs.?” You did call me “Mr. Shed Some Light” didn’t you ???

This is too funny, I needed this…
things that matter on April 29th, 2009 7:22 pmMR. Shed Some Light,You are confused. You need to stop and take it all in as you are confusing the posts. You sound stupid.
Joe on April 29th, 2009 7:31 pmThings that matter,First off, I never said that there were not any successfull stores, not all the stores I talked to were closing, but when you talk to an owner of a store thats doing50- 60k a month, and they are not making any money, that is not what any prospective franchisee whants to hear. But after talking to 15-20 franchisee’s
I did see a pattern that you cannot just put off as, “they dont work hard enough” or

“they dont follow the system”. Did some buy into get rich quick, sure, there are always people who do, on average, the ones I talked to were working 70+ hrs a week. But after 8 months of research, talking with Pnt Corporate, talking with store owners and getting numbers that just didnt add up, I passed and after reading the California complaint, im glad I did. I really hope your store makes it, I hate Gamestop, and from the outside it looks like a really cool concept.
things that matter on April 29th, 2009 7:40 pmThat is because in this business 2 stores can have the exact same sales per month but if one store is selling only new products and not the 60% used like the other you probably won’t make money. You have to follow the training and encourage trades for new products and then sell as much used instead of new as possible. Because the mark up on new is about 10% and the mark up on used can be as much as 100%. It sounds a little complicated at first but soon it’s very east to understand. My store is across the street from Gamestop and they even send me customers.
Shed some MORE light !!! on April 29th, 2009 7:41 pmTO “things that matter”:You said to me “You sound Stupid.”
And I say: YOU FINALLY “SEE THE LIGHT” !!! (That was in reference on my last post) – LOL !!!
Shed some MORE light !!! on April 29th, 2009 7:43 pmBTW, “things that matter” – what state is your store located in? I hope you’re doing okay there… really. All kidding aside…
Shed some MORE light !!! on April 29th, 2009 7:54 pmI’m sorry, I meant that last comment for Ms. Doing My Diligence. Actually I hope you both are doing well. But Ms. Diligence where is your store located ?
ADMIN on April 29th, 2009 7:58 pmbrand new owner wrote: I don’t know why there is no forum for people to say the positive things about the franchise. I just had my grand opening this weekend and it was amazing…. I feel that the truth should at least be told from both sides… Why doesn’t somebody in the media get their head out of their ass and print that.You raise some important points here I’d like to address:
1) This is a forum that, through your comments, IS presenting both sides, as all have equal opportunity to comment. You are able to state how pleased you are with the company & the concept. If someone states something that’s not true, you are free to refute it. Readers aren’t stupid. They tend to give credence to the specific & factual and dismiss the emotional & personal.

2) There are many sites that will report the positive aspects of your experience. Email your Grand Opening information and pictures to info[at]ideafarm.net and I guarantee you it will be posted on http://www.FranchisePick.com – a site with higher traffic than UF – and/or other sites in our network.

3) Until now, the only media coverage available to prospective franchisees was the advertiser-sponsored hype and bogus award lists of publications like Entrepreneur magazine. If you think some PnT franchisees joined with unrealistic expectations or don’t have the right “business owner mentality,” perhaps it’s because there wasn’t a site like this to give them a real-world perspective. Having franchisees signing on with their eyes wide open & proper capitalization is good – not detrimental – for Play N Trade.

If both sides stick to facts and respectful debate (and resist personal ad hominem attacks), the result will be fuller disclosure and transparency from franchisors and better informed, more realistic franchisees.
Doing My Diligence on April 29th, 2009 8:31 pmThis will be my last post to this site, I just want to respond to two things said about me personally.First, for the person that called me a corporate “hack”. NOPE! I am not. ‘Nuff said.
Secondly, to the gentleman who said I am a franchisee with nothing negative to say. You must not have read my first post. I am CONSIDERING Play N Trade. I am NOT a franchisee. Still don’t know if I am going to become one. The only thing that bothered me was the lawyer who was obviously lying about not looking for clients, and that is what I posted about.

As I mentioned in my first post, these issues that Play n trade is having with California DOES concern me, and I am going to continue to look into them, and they may influence my decision.
Jerry Abreu on April 29th, 2009 8:38 pmDear Played,I have been with this Franchise for almost 3 years now and have seen many changes and have overcome numerous obstacles, with the help of fellow Franchisees’ who have shared their knowledge and ideas with me, as well as me with them. I have had many confrontations and conflicts with Corporate over the years. It has been my experience that this Franchise has more oft than not placed its own personal gain ahead of creating a profitable business model for its Franchisees. That is only my personal opinion and is not reflective of everyone at corporate but the puppet masters pulling the strings. If Corporate were being sincere and were truly concerned they would acknowledge the countless Franchise owners that have expressed their disappointment over the last 2 years and have wanted to be released from unfair and unconscionable business practices that Corporate allows to gain higher royalty percentages. The reality is that many, if not the majority of owners are unhappy with the outcome of this business and that many of us feel we were mislead by this Franchise (evidently the State of California agrees). The fact is that the only ones they are trying to protect are themselves, they have not lifted a finger to help so many friends and fellow franchisees I have watched suffer through closures of their business and personal bankruptcy. If they truly believed in this franchise model then why have they not attempted to purchase these failing stores to revitalize them and keep the brand integrity intact, or offer them relief from royalties to help them get back on their feet? They would rather just sell more stores to other misguided prey because the profit margin is better on new franchise unit sales. They did purchase 2 stores that I am aware of for less than $0.20 on the dollar. Their “corporate store” and the one that Ron Simpson purchased in Florida for what I heard was $50,000, less than 1/3 the cost to open a new store, as per recent figures. Yes I understand that running a business is difficult and that not everyone can be successful but this doesn’t correlate to the effort put forth by the many owners I knew and watched fail. I don’t think corporate could ever say Manny Velez (Franchisee of The Year 2007) didn’t put in enough effort and he is now gone.
Many of you know that I have not chimed in on any of the corporate blogs or Franchise calls in some time. I have remained quiet to avoid any further complications with Corporate after I resigned from the FAB back in October. But I cannot and will not remain silent on this matter. Although it is true that the findings of the State of California and orders/fees imposed are at this juncture preliminary orders. It is only preliminary, in that, corporate has the right within 30 to 60 days to request a hearing and try to persuade the Commissioner to either amend or overturn any and all of the States findings. The findings and decisions by the State of California are based on a long and thorough investigation conducted and their orders are relevant. Corporate is only attempting to postpone the inevitable, which they have that right. These allegations and corporate’s response herein are completely indicative of this organizations attitude and blatant disregard for its Franchisees, the law, business ethics and the Truth. It is ironic that our hard work, blood, sweat and tears, afford corporate the money to contest a ruling that was made to protect us the Franchisees and by Top Counsel nonetheless, (we spare no expense for them!). It is my belief that these unlawful and deceitful actions by those in charge in the open and behind the scenes have irreversibly damaged the brand recognition that we as store owners and operators have tried to build through our goodwill and hard work. If corporate is sincere in their proclamation of wanting to protect its franchisees they should accept their fate, step down and option to all franchisees to rescind their contracts and go away.

Regards

Jerry
Carol Cross on April 29th, 2009 8:47 pmWe should be grateful to Mr. Harrington, the attorney, for providing the information that he has on Unhappy Franchisee for NOTHING to the readers of Unhappy Franchisee, and especially to those franchisees in California, standing or failed, who don’t understand all of the implications of the State Administrative Ruling against this franchisor.It is attorneys who will not post under any cirdcumstances and who work always ONLY for the FRANCHISORS with a stacked deck that we should all worry about.
Mr. Harrington posted in compliance with laws that permit attorneys to provide certain information to the public for the education of the public.

I thank him for his contribution.

Yes, “Doing my Due Diligence” you would be smart to be concerned about the issues Play n trade is having with California.

Good Luck to you!
things that matter on April 29th, 2009 9:00 pmThe attorney did not disclose any new information about the California complaint, nor was he helpful. He made personal insults to our CEO and taunted questions that are not even in question. Again Play N Trade is not accused of misrepresenting the number of store that have closed. That has always been accurate in the UFOC. They are accused of not naming area developers that were breached for never fully paying thier area developer fee. If they are found guilty of any wrongdoing (which they haven’t been) and California franchisees offered back the franchise fee he will be the only one that benefits.
Joe on April 29th, 2009 11:24 pmThings that matterHere are some questions I had asked the franchisee’s, they didnt have the answers, since you are one of the first franchisee’s, maybe you can answer them.
1.Why has Play N Trade had 5 CEO’s in the last 2 years? Why the revolving door?

2.Why does Play N Trade have such a high turnover rate among its support staff,

training staff, executive staff? Cant be that bad of a place to work, especially with a 14% unemployment rate in CA.

3.Why did Play N Trade stop sending out detailed ranking reports with gross sale figures to Franchisee’s? Actually I never asked that, a franchisee in Florida brought that up when I was talking to him about the business.

4.Are you happy with the POS system? Is it worth the 4500 you payed for it?

Will you be happy paying another 5k for the new one?

This last question is not something I asked any Franchisee’s, but had more than 1 comment on it.

5.Would it be beneficial for your system, your franchisee’s, for PnT corporate to release the number of store’s that for 2008, actually made money?

The reason I ask this is because one Franchisee told me that the last CEO, Tom McMahon, said that he was going to release that, and never did.
Shed some MORE light !!! on April 30th, 2009 12:37 amHere’s another question to ask (things that matter):6. How many employees actually work directly for Play N Trade?
The number might amaze you…
Phil Giarraputo on April 30th, 2009 10:22 amI just had my grand opening this weekend and it wasamazing. The support I received from the support team late on a
Friday night – I had questions on setup – were top notch and my area

developer Tony Gioia was there with me every step of the way every day.

I had a very successful grand opening and you would never have known

we were in a recession by the turnout and the numbers we did. The

support I received from Play N Trade was excellent and came from

several different people. Everybody from Michelle, Sussan, Micah,

Ron, Jason, Whitney, Ros, Elijah, Mia, Jimmy and Tony were incredible

and help made my store a success.

These are facts not like some of the posts I have read here which seemed to be based on fantasy. I just opened my store and I am a franchisee so I have seen the process first hand. I would not have been able to do this on my own without Play N Trade. I made a great profit in my first weekend open and I am not the only store who has done this!

I am a very happy Franchisee and I wanted to post that. As far as any concerns I have read about in this forum they are being addressed directly and I receive e-mail updates directly from the CEO keeping me informed.
Comment on April 30th, 2009 12:32 pmEvery new Franchisee had the same exciting new experience in the begining. Fast forward 8-12 months and the Play N Trade fraud will be apparent to you. All your credit cards will be maxed out, your inventory will consists of worthless trade-ins and you will be out of money. Your next exciting event will be your bankcuptcy filing and being free from Play N Trade.
Paul on April 30th, 2009 12:42 pmNEWS FLASH: It is going to be hard work and you probibly will not make anything your first year in business!!!! SHOCKERYou know there are independent stores that are successful too
Play N Trade wants it’s franchisees to be successful if you think otherwise then you are delusional
Doing My Diligence on April 30th, 2009 12:44 pmWOW!!! What a complete and total JERK you are! Why would you possibly say this to someone?? Do you REALLY think that is constructive, or does ANY GOOD AT ALL?Whoever posted that, you are a serious piece of work! Your parents must be PROUD! I wish you failure in business and personal life, just like you are wishing upon that business owner!
Paul on April 30th, 2009 12:59 pmAre you responding to me?My post was in response to the comment above…….I think it was very constructive. If you think that owning a business is easy and that money will be immediate then you are kidding yourself. People that work hard deserve to be successful…..where did I wish anyone ill will?
You have got an interesting attitude……
Doing My Diligence on April 30th, 2009 1:02 pmSorry, Paul, we were typing at the same time. Responding to the guy above you, the unnamed commenter that said “Your next exciting event will be your bankcuptcy”
Paul on April 30th, 2009 1:12 pmgotcha…..haha then we agree!
Mr. Obvious on April 30th, 2009 1:38 pmWhat a sad reflection on a great industry by both parties!Greedy and incompetent franchisor.
Lack of do diligence on Franchisee’s.

Questions:

1. What experience did the original officers have in the gaming industry?

2. How many successful game stores did the officers own and operate before franchising?

3. What financial information did you receive on forecasted sales?

4. What was the success rate on existing franchisees?

5. How many franchisees did you visit before signing a franchise agreement?

6. Franchisee’s are not restricted on revealing actual or projected revenue numbers. You can not pay the over head on $15,000.00 in inventory!

7. What training did you receive in the gaming business?

8. Did the franchisor help you select a retail location?

9. What criteria did the franchisor produce for your site location?

10, Did the franchisor produce an itemized cost list on inventory, fixtures and equipment before you signed agreement?

The gaming industry continues to grow at a rapid pace and will offer many people an opportunity to join and prosper for years to come. But, there will always be greedy people looking to make a fast buck.

Don’t let this mess discourage you from joining a great industry.

A great marketing plan, doesn’t mean a company has a successful business model. “Buyer Beware”
Joe on April 30th, 2009 1:41 pmMaybe he could have used a better word than exciting to discribe bankcuptcy, but i dont really see How that was a bad or mean post. Lets just say for arguments sake, that All the 30-40-50+ stores that have closed since 07, were people who didnt have the money, didnt know how to run a business, Why does PnT still sellfranchise’s to these type of people, unless they are in it just for the money, not to promote a strong national brand, because every time a store closes, it effects you as a current franchisee, as far as buying power, and general overall perception of the business itself.
Bo on April 30th, 2009 2:32 pmThis is Bo Stewart, and I would like to set a few things straight.First, I would like to thank whoever that was who said I am a great guy. I try to be, and I try to give my all to my business and my fellow franchisees.
I am going to try to contain myself in this post, but I am VERY angry at many things said so far on this blog, both about me and this company.

To this mystery person who decided to talk about my business on some stupid blog site without having the proper information; That is about the most immature irresponsible thing I have ever seen done. I don’t know why you are so bitter and plain pissed at the world, or why you would drag my name through the mud, but I am here to set the record straight.

A. I am a Play N Trade Area Developer, and I LOVE IT.

B. As far as my store is concerned, it was doing GREAT. I had established who I was and what we do and it was working fantastic!

I asked the mall to sign a PERMANENT LEASE, and they said “oh your fine Bo Don’t worry about it. Gamestop may be leaving the mall and when they decide to we will work a new great lease up for you and give you exclusivity” etc etc.

I waited a few months and asked again with the same results. Then, all of a sudden, I get a call from the mall management and they tell me that they are going to have to relocate me, AT MY EXPENSE no less!

Now, anyone that knows ANYTHING about small business knows that moving is BRUTAL. I had already spent so much money on advertising and established myself at my spot and was doing great, when you move people automatically think that you’re closed no matter what you do to warn them about the move. The spot that I went to was a better location but on the other side of the mall. Additionally, the move and buildout of the new location cost me $60,000 over what I thought it was going to cost and that came out of what the store HAD MADE!! YES THATS RIGHT MADE AS IN PROFIT!

Oh also did I mention not one but TWO hurricanes hit Lake Charles??? YA thats good for business. I think THAT alone cost me over $30k. It was like I was closed for a month. I asked for help from the mall and they refused because I was MAKING TOO MUCH MONEY I was running over 10 percent to rent. I am a business man and someone told me a long time ago that it is going to be hard to be an Area Developer and a store owner at the same time and I thought they were wrong.

You know who you are Well, it turns out they were right. As far as the very few pissy franchisees saying it’s a broken model and blah blah blah. YOU’RE AN IDIOT. The model works… it’s you that doesn’t. ALL OF THE TOOLS WE NEED TO RUN A GREAT STORE ARE GIVEN TO US .. it is our responsibility to make that model work… You know… it really shows how many MENTAL MIDGETS that are out there when you see bad comments about a franchise that people are already in… What is that going to accomplish?? You think that blogging here and dogging what you invested in is going to make matters better??? Are you truly that stupid? ALL you are doing is hurting the brand as a whole, and doing damage to the existing stores. You are hurting people that, like you, sunk their life’s investment into this company. WHY? What did these people do to you? Do you really think you are going to hurt Play N Trade? You might, but you are going to do WAY more damage to the store owners!

This is a GREAT franchise with a HUGE amount of potential. We are still in the infant stages of it and I can’t wait to see what is to come.

As far as my store being closed, HELL YA IM MAD! Not at corp, however, but at myself! I am mad at myself for letting alot of things that I knew I should have been doing slide and all the crap that happened with my landlord. I want to re-open so bad and take advantage of all the things that are coming. I SAY AGAIN, Play N Trade is NOT a broken model. What you are seeing here is broken franchisees.

All I know is for you negative nerds out there.. PlayNTrade will move on with or without you people. So either stop blogging and praying that the blog fairy is gonna bring you more customers and sales, or get your ARZ up and get out from behind the counter and MAKE IT HAPPEN!
Duncan on April 30th, 2009 4:23 pmJoe, you got the bull’s eye!!!That is the point.
As franchisor you have to protect your brand name by diligently selecting the right people into your business!!! That is the core for a long lasting successful business.

If PNT really focused on their so called BRAND NAME, they should pay a lot of their attantion for the after-sale procedures, not just the royalties and the prospective franshisee’s wallet !!!

We do not know how many store are failed and are failing. Does PNT take any action to help those franchisees? That matters a lot!!!

The Order from DOC in CA only pointed out the facts when PNT sells their products with falsified “facts” and intentionally hiding many of their relations with other companies. These are “VIOLATIONs”.

You guys are talking about the way of running business and PNT’s support which are completely different issues. I am sure there are many competent staff in the supporting department. Do all the employees at PNT know what’s going on? NO way!!! It is the only top guys have the dirty laundries and they knew much better than anybody else in the whole universe!!!

If PNT leaders do not care about the PNT brand name, who will?? If they are trying to hide the truth from every franchisee, is not the fault of the frachisees for the failing of their business, rather than those guys with fraudulant action, deceitful information and phony data to be blamed for!!!!??? Who wants to just throw their hard working money out of the window? NOBODY, right?

“The brand name” should be leading to success for most of the franchisees, not to destruction, not to ruin other peoples’ life with bogus products. That is a crime!!!

Otherwise, why pay the franchisor so much and why to buy a franchise business if the rate of success is lower than non-franchise ones or there is no further help or support from them?

I hope the Order from CA State is a wake up call for those guys. I hope they take it really “seriously” as they stated.

Do not make stupid further self-destruction by playing games with other people-the State DOC, the franchisees, and the public. Pretend “business as usual” is futile and a sign of stupidity. Do not try to fool people again.

It is the time to reveal the truth, the whole truth, nothing but the truth.

Further denial of the charges and lying again will only make things worse.

Let’s see…………………
Not a Victim on April 30th, 2009 4:31 pmBo Stewart:Thanks for your comments, and sorry to hear about your store. I’m not a franchisee and have no dog in this fight, but am trying to make sense out of this situation and this business opportunity. I was following your story up until the hurricanes and then it got vague.
If I understand… you had a great store that was doing well, and also the right to sell unit franchises. Then the mall made you relocate and you incurred a large expense. Then your sales took a dive from natural disasters, and the mall would not give rent relief because your sales were still too high. Then what happened? You closed completely… and lost the investment in the new store? Did they let you out of your lease? Did you have to go BK?

And now you are solely selling and supporting unit franchises as an area developer?

I’m not one of the detractors and I’m just trying to understand. I believe franchisees should take responsibility for their own success. But your situation is scary and could happen to anyone. Shouldn’t the franchisor have prevented you from signing a lease that didn’t protect you? Isn’t that the kind of expertise you look for when you pay for a franchise?

It sounds to me that anyone considering a Play N Trade franchise should be aware that even a great store could go bankrupt if their landlord decides to move them and they have a couple bad months.

Am I correct, or am I misunderstanding your story?
michael on April 30th, 2009 5:48 pmI own three Play N Trade stores. I wish all you people that are out here bashing Play N Trade would stop. That hurts all owners and it hurts all the people who are working very hard to become successful in this business. Corporate Play N Trade has the same rights afforded everyone in this great country. Your innocent until proven in the court of law (not a website) guilty. So until this legal matter is finished I would ask each and everyone of you to think twice about bashing Play N Trade because ALL of us owners never did anything to hurt you or your family. In the mean time your bashing is hurting me and my family and every Play N Trade family out there.
Duncan on April 30th, 2009 6:26 pmMr. Stewart:I am really moved by your story and shocked by your unlucky events with all my due respects!!!!!!!!
I am sure you are a resilient business man and will definately thrive on the business again.

I am just wonder if there is any help, support or any efforts of relieve from PNT to navigate you pass the hard times.

That is the most important thing we want to hear. For me, that matters!!!!!!

I am all ears.

Regards.
Jason on April 30th, 2009 7:48 pmInteresting to see how this blog has developed since my first comment.It seems to me that PNT, despite all it’s flaws, is a company that have made tremendous progress in such a short period of time. I believe that 3 years ago, they only had less than 30 stores open… If you look today at any major brands like Quiznos, McDonald, Dominos pizza, DQ… you’ll find tons of lawsuits disclosed or not . This is the nature of the beast (the business beast !) I hope that this company will overcome this legal battle (which seem fairly minors as far as I understand comparing to other company’s legal problems) and will be able to move forward and focussed on developping and improve their model. Like the previous blogger “Bo” said rightly, a company this young is still in it’s infancy and I believe that the future can be bright for them as well as for all franchisees who care to work with them in the right way. They are definitely in the right market and seems to have the right model. I am still investigating and I am not put off by this California situation and neither am I from some obviously “UnhappyFranchisees”…I am seriously considering PNT for my next investment. I have been told by “PNT corporate peoples” and from the webinar that I have attend to, that PNT is coming up with a lot of solutions regarding the POS and buying program that seems critical to me. Let’s give them a chance to recover from that blow and see what happen next.
Big shot small shot on April 30th, 2009 8:18 pmThis is what I experienced with PNT, again this is just my personal experience, they give support or importance more to the stores that are doing good. If you’re at the bottom, forget it. You don’t get any visit or call from them.I depended more from other franchisees for advice. Big shots gets more attention than small shots!Also, I’m upset that they did not disclose about the very small profit in new games or systems. People buy more on the new games than used, that’s the norm. And the inventory, I have to buy it from target, costco or bestbuy because of the limited supplies, which means no profit, but I have to do it or else customers will leave! Oh, their PO system too, it’s a nightmare. You really gotta know what you’re doing or it will mess up your figures. Wished they have informed me all of these before I sign up!
Rofflecopter on April 30th, 2009 9:35 pm>JasonIts always easy to sell sugar coated pills than pills alone.
Fast growth doesnt mean theyre doing things right, any scam artist can make millions in days with the right lies. Madoff is definitely more successful than PNT Corporate, talk about fast growth there!!!

The point was that PNT was found to not have disclosed enough information which may result in unrealistic view of the success rate of the franchise they’re trying to *SELL*.

Also, from my point of view, PNT corporate is in the same boat as any Lawyer, theyre out to make money as well. Don’t kid yourself, theyre not pauper saints to help the stores make money, theyre in it for the money as well.
Ron Simpson on April 30th, 2009 9:57 pmIt hurts me to see what is being said about such a great brand and such great people like Bo. For the people thinking about buying any franchise, there is very real risk and take all the information you can gather before buying one. The allure of running your own business can cloud your judgment. I set out to compete against a true giant in Gamestop, and have always said the franchisees will decide the outcome. I truly believe the our franchisees are given as much as can be given to compete from PNT, and it is up to them from there. I have never promised anything I couldn’t deliver and never asked anything from franchisees that I haven’t accomplished myself. As for the State of California, I know PNT will prevail and a lot of what this blog is based on will cease. As for closed stores, that happens to all franchises, even coporation like Gamestop…it’s a fact of business and our economy. God bless everyone on this blog (negative and positive) and all of our franchisees, I hope nothing but the best for all of you.Ron Simpson
Founder

PlayNTrade Franchise Inc.
Comment on April 30th, 2009 11:57 pmCopied from the PLAY N TRADE: Video Game Franchise Played Out? thread:■Manny Velez on February 24th, 2009 12:03 pm
I was the franchisee of the year on 2007 and my experience was good. However, I had to close my operation after almost two years of operation. These concept requires a strong working capital to keep the business running in the slow months. If you have at least $100k of back up you can make it. I love the concept and dealing with people and making them smile, but hated when seeing them leaving the store due to lack of inventory. Nothing wrong to have one, but are sure you have the strong financials to keep it running? Just asked how many of us are in bankrupty today…

It’s shocking that this famous Franchisee had to close down!
PNT Owner on May 1st, 2009 1:09 amThe sad fact of the matter is that Play N Trade is a doomed franchise idea from the start. The pathetic margins make it impossible for anyone to make a decent living and from personal experience, it’s very easy to lose everything with this franchise. We’ve sank over 500k into this franchise. We were sold dreams of 600% profit!!! from the used games getting sold over and over but were not told that we would need to go to retail stores to stock newer items because Play N Trade really has no procurement system worth a hoot.We had to go to Target and Costco for consoles–Wii, PS3, Wii fit.. , we make zero profit off of them unless we bundle them and charge outrageous prices and then ADD to that we pay royalty fees. So, to summarize, we purchase a console from a retail store because we’re trying to satisfy our customer’s needs but we can’t buy it from Play N Trade corporate because they never really have anything hot in stock. We make zero money off of it and pay a royalty fee on it. Therefore we’ve just sold something for a loss but corporate sure gets their fees! And with the Wii fit, we had to recruit family members and friends to go buy one for us each because the retails stores we were forced to go to would only sell one per household. Oh Joy!
Corporate also likes to approve you for rent that is waaaaay too high for what you’re likely to make. But they don’t care. As long as they get you up and running, they can get their piece of the pie. What’s that you say? You want to open up a store in that mall for $10,000 / rent a month? Sounds like a winner, Guy! You’ll be rolling in cash so fast your head will spin!

This company is a F.R.A.U.D. Do not be fooled by the grandiose talk of high margins on used games (they lose value oh so quickly). Do not be fooled by the lure of owning a super cool video game store where your friends can hang out and you’ll all laugh at how rich you’ve become just by SELLING VIDEO GAMES!!! You’ll go bankrupt. Plain and simple.

And one final note for this trainwreck of a company. If selling video games was so profitable why the hell are Gamestop’s profits so small compared to their revenue? Margin baby. Razor thin.

Don’t take my word for it. Just go ask the myriad owners who have gone out of business and lost a significant portion of their savings from this sham.
Shed some MORE light !!! on May 1st, 2009 1:35 amI believe that all of what was said here in a lot of ways was bound to happen and this particular blog is here to point out the other side of getting into a franchise; particularly PNT. This is just a part of what can happen to any one of us.There is NO way you can open a PNT store for less than $300-$350K to make sure you have enough funds for your first 18-24 months, without getting into a financial mess. THAT IS KEY !!! And especially now in this recession and/or crash. No if’s and’s or but’s about it. PERIOD !!! Even Tom McMahon acknowledged that.
I made some big mistakes that put me into bankruptcy. Solely because I bought too many franchise rights and didn’t have enough funds to open my store. I have to say that I made that mistake, because if I don’t I take away the power of God trying to teach me the lesson NOT to repeat this again.

But I will say this, it’s hurts me that the ones who should be taking the biggest ownership here – aren’t… and that’s CORPORATE… No one has stepped up to the plate here on this blog and said: “We should have evaluated our franchisees better than we did and gave them more realistic financial goals to make sure they had more money (than less) in reserve, so THEY and the rest of us here at PNT – CAN BE SUCCESSFUL!!! It’s to our shame that this blog had to be what it is right now and for that we’re sorry.” – end of story…

Where is the humility and personal ownership? My fear (and again, what will hurt me) is someone from corporate will come on here any reply to this particular post that I’m writing and put the fault back on me and others like me. Again, you don’t have to do that – I’m living my fault as we speak, because I had to file BK. Again, that’s my fault and I take full ownership of that.

If we’re trying to “really” protect the existing store owners from not losing more customers and business (because of this “Bashing Blog” as some want to again pass the buck of blame) then proper due diligence SHOULD have went into PROPERLY EVALUATING EACH AND EVERY POTENTIAL FRANCHISEE IN THE PROCESS – AGAIN – TO PROTECT EVERYONE’S INTEREST – CORPORATE, THEIR BRANDING OF PNT AND THE FRANCHISEE.

BUT YOU CAN CHANGE THIS; stand tall and take the ownership. Don’t worry that someone looks down on you because of it, or tries to sue you (as if that isn’t happening now anyway). If they do, that’s okay too, because in the end you will become the winners.

Since you can’t sell any franchises right now, this IS the time to re-evaluate your approach so you’re not just selling to the first person who shows interest and passion, but has the proper funds to back it up and a resume that shows you their qualifications.

This is your chance to turn this around so more people won’t lose everything (like in my case)…
Shed some MORE light !!! on May 1st, 2009 1:41 amLastly, it ALWAYS starts from the TOP, (the victories and YES the mistakes) then gets passed DOWN to everyone else, Never the other way around… Hopefully Corporate will get this lesson (like I had to…)
Need advice on May 1st, 2009 2:42 amI’m a PNT casualty. I need some advice on how to get out of my lease without losing my house or going bankrupt.
Played N Traded on May 1st, 2009 3:03 amI didn’t want to become involved in this blog because it seems to be deteriorating into a childish, name calling tirade. However, I simply cannot sit by and allow anybody who might still be considering this franchise to read anything here that make them consider buying one of these. I wish no ill will on those who have opened a store and been successful. Congratulations on a job well done. But I will not be silent when there are those on here who are considering getting involved in this.First of all, I am not a stupid person. I have 20 years of business management experience. I have a bachelor’s degree in business administration. The story of this whole Play N Trade business model is not as simple as “everyone who is failing is an idiot who didn’t try, and didn’t do the right thing.”
I first looked at buying a Play N Trade in October of ‘06. I began doing my due dilligence by calling all of the stores that were open at that time. I then contacted the Area Developer, and asked him some questions. I participated in a conference call with Yuvi Shmul, Ron Simpson, and several other potential franchisees. It was asked directly of Mr. Simpson, “how much can I expect to make”. His response was, “I can’t give you a number, but if I told you, you would write a check tomorrow.” Wow, I thought, that’s a pretty strong statement, I’m going to really look into this.

I contacted the Area Developer and told him I was still interested. I was sent a copy of the UFOC. It contained all sorts of interesting facts and figures, the most important of which, to me, was what it would cost to open a store, and what it would cost each month to run it. Now, as I explained earlier, I am not stupid, I knew that these were estimates, and the actual numbers could be higher or lower. I began to run the numbers. I greatly inflated what it would cost, based on the numbers I was given, just to be safe. A worst case scenario if you will. I did this for the next two months before buying the franchise. The problem with this was my figures were all based on lies.

The UFOC, and my Area Developer, stated that it would cost on average about $140,000 to open the store. This ended up being fairly accurate. PNT suggested having “$20,000″ in operating capital. I had $40,000, so I thought I was doing pretty good. Even nearly doubling their estimates as to what it cost to run a store, I had enough money to last for at least 6 months. The problem was, their “estimates” were complete and utter fabrications. To use just one example, they put inventory replenishment at $3000 per month. That is a joke. At the time, one PS3 cost $600, and an XBOX 360 was $300. Just a few of those a month more than ate up your $3000, before you even bought one game. Not to mention the fact that you actually lost money on every console sale. That was not mentioned to me until I was in training for the second day, and had long ago paid my franchise fee.

I’m going to stop here, because I could go on for hours. My point here is to put a stop to this ridiculousness that corporate is still trying to spew out. I do not blame the current administration since they were not here at the time. However, they should not be covering for the previous administration. They screwed up, lied, and should be punished for it.

As for the franchisees who are making it. I don’t see why you are afraid to lose PNT as a “partner”. They are not currently doing anything for you that you could not do yourself. I have spoken to many of the “approved” vendors and found out that you can get yourself a better deal than PNT has gotten for you, especially if you are doing the volume it takes to be successful. I know a gentlemen here in my town who has opened up his own game store. He has a deal with VPD which gets him games for about $.80 more than what a PNT pays. He spent $70,000 dollars on store build out including inventory. It looks every bit as good as any PNT. He uses a readily available POS system that costs him $20 per month. It’s called Wolf Track. It is vastly superior to PNT’s POS in every way. Incidently, for those who are excitedly waiting for the new POS to roll out, do you actually believe it is going to be free?

In closing I just want to ask, again, how many stores are closing or failing? I know in my case, I begged for help from corporate, and was given nothing. They will never disclose how many stores are failing, or failed. I just know that in my state, the percentage is about 70%, and still climbing.
michael on May 1st, 2009 10:05 amI currently own and operate three Play n Trade stores and work very hard at making them profitable. I have read and listened to everyones comments concerning the issues at hand concerning Play N Trade. The most insteresting thing I have noticed is that in this country everyone is innocent until proven guilty. What this means is that Play N Trade has their day in the court of law and until the courts give a final verdict all owners should continue to take care of business.( Not assume wrong doing and convict them on a website) I have learned that if you focus on the positive usually success follows. All this website is doing is hurting everyone who owns a Play n Trade not just corporate. Hey, I love the Play N Trade concept and I am throwing every dime and every hour of my life into this. No matter what happens I have made some new friends met some great people and I took my shot at having a better life.
author on May 1st, 2009 11:01 ammichael says “All this website is doing is hurting everyone who owns a Play n Trade not just corporate.”So everybody should keep their opinions to themselves because you think video game customers are reading franchise owner blogs before they decide where to buy?
Don’t you think these opinions should be shared with people thinking about sinking their retirement savings into a pnt franchise? Wouldn’t you have wanted to read this before you bought in?

The law says that franchise buyers have the right to accurate information about number of stores open, number of stores that closed, and they should be given the opportunity to talk to franchise owners who have failed as well as successful. It appears that pnt corp. isn’t providing that information, so they’re getting it here.

The truth might cost you a few game sales and might keep Bo Stewart and corp. from closing a franchise sale or to, but it could also keep some others from losing everything they got.
Carol Cross on May 1st, 2009 12:26 pmThis has been a valuable blog/thread not only for Play & Trade franchisees and prospective buyers of Play & Trade but to all prospective franchisees because it demonstrates the “misunderstandings” that franchiSEES have about franchise regulation, and the contracts they have signed, and the contractual obligations of the franchisor to the franchisee and the franchisee to the franchisor.Hopefully, all of the posters understand that franchising was regulated to begin with in the late 1970’s to obscure the risk of a franchise purchase and to protect the franchiSORS and the franchiSEES who stand within the systems from those franchisees who FAIL. (my opinion) However, some State laws do recognize that some franchisors believe that they can commit fraud under cover of government regulation, the FTC Rule, and the State FDD’s, and some State Laws apprear to offer some recourse for a private right of action. There is no right of private action under the federal rule which is a statement of public policy and federal regulatory policy. ..
The regulators in all of the States are extremely busy today and if California has investigated this franchisor and acted against the franchisor — this, in itself, should be a warning to new franchisees to be very careful, Those franchisees in California are lucky to get some FREE information from Mr. Harrington, the Attorney, who tells it like it is and California Franchisees are free to consult with him, or not, as to whether or not a rescission is in their best interests, and whether or not they “may” or “may not” have a “right of private action” beyond the rescission that California has negotiated with Play and Trade, that may be accepted or rejected by current franchisees in California.

The consumer public who buys the games are NOT reading this blog and this blog will not hurt any of the standing franchisees. This blog is a public service provided by Sean Kelly that allows discussion and demonstrates the “conflict” between failed and successful franchisees.

Author is RIGHT. All of these comments may HELP prospective buyers of this franchise to think very carefully about what they are doing and this is the VALUE and the PURPOSE of the website UNHAPPY FRANCHISEE that is supported, probably not very well, by “contributions” to the Idea Farm.

Sean Kelly, who also owns the Franchise Pick Site, realized that there was NO VOICE for UNHAPPY franchisees to talk to each other and he gives a VOICE to both happy and unhappy franchisees on his websites. Sean Kelly is also good friends with Millionaire Richard Quick, Esq. who brings much needed humor to the subject of franchising.

“Gallows Humor” as demonstrated by the clever Sean Kelly”s

Millionaire Richard on Franworst is a great stress reliever! I highly recommend it to you!
Joe on May 1st, 2009 12:36 pmI highly doubt that PnT’s core demo is going to be reading any of this, so that is a very weak argument, stores closing left and right hurt the current franchisee’s much more that anything posted here. The bottom line is that PnT has been accused by the State of California of decepitve selling practices of its franchise units, both area developer and unit stores. The will have their day before the commision, and they will either win or come to some agreement with the state and the franchisee’s in California. If they win, PnT moves on hopefully rethinking how they sell their franchise, if they lose, the floodgates of lawsuits open, and PnT goes Bye, Bye.
Joe on May 1st, 2009 1:21 pm“For the people thinking about buying any franchise, there is very real risk and take all the information you can gather before buying one. The allure of running your own business can cloud your judgment.” Ron Simpson Founder Of Play N Trade Franchise IncIsnt that part of your job??? To give potential franchisee’s information about your franchise, open stores, closed stores, sold stores(Actual Transfers) and also to make sure that potential franchisee meets certain Financial requirements and basic business understanding??? It would seem to me that had you done that, PnT wouldnt be in the situation it is today???
Carol Cross on May 1st, 2009 1:48 pmBut, actually, Joe! Franchisors really ONLY have to comply with disclosure, as required under State and Federal Laws, and the disclosure laws are very weak and ineffective for the franchisees. Did P&T make an “earnings claim” within the Contract? Didn’t they disclaim that they promised you success and profits within the contract that you signed in which you acknowledged that you weren’t promised profits or success and that you weren’t relying on anything that wasn’t within the four corners of the contract.I believe, as a non-lawyer, that P&T’s only defense will be that they did disclose in compliance with federal law and that California Laws can’t trump federal law.
Remember that the high courts have not yet decided whether or not the franchisors have any “duty of competence” or duty to disclose MATERIAL information concerning profitability and failure of units in the possession of the franchisor to the buyer before the sale is finalized BEYOND what is required under the FTC Rule and State FDD.

Look at recent Court Case Appeals like the Peaberry Coffee Case, the Coffee Beanery Case, The UPS Store Lawsuit, Mama Fu’s, etc wherein it appears that the franchisors are KNOWINGLY selling high-risk and low-profitability franchises to the public with apparent immunity under the law because the FTC Rule appears to allow franchisors to churn their profitability while withholding material information that, if known to the buyer, would prevent the buyer from buying the franchise in the first place.
Duncan on May 1st, 2009 2:09 pm“For the people thinking about buying any franchise, there is very real risk and take all the information you can gather before buying one. The allure of running your own business can cloud your judgment.” Ron Simpson Founder Of Play N Trade Franchise Inc.MR. Simpson,Well said but EASY SAY IT THAN DONE!!!
How the hell people knew the infromation PNT given to them are real not just phony numbers. I dont’ think you have got the point of the Order from State of CA.

Does it say PNT is not a great brand?

Are the allegations truth or DOC FARICATED?

Please give the “real” numbers and tell the truth. How many stores had closed and what is the profit for the stores currently running in your UFOC are the most important things in the future, if PNT has any, I doubt!!!!

Fussy math tactic is a deception and it is a violation of the CODE.

The real numbers and the truth speak themselves!!! It is a million-fold stronger than your own bragging.

I think peoples here are smart enough to figure out it by their own.

Could not give? I bet it is not good or rosy and truth hurts. Right?

PNT does not have the guts to publish it because it is too bad for the GREAT BRAND NAME! Period.
Lease problem on May 1st, 2009 3:46 pmTo Need advice.Try to negotiate with your landlord if you can buy out your contract. It will cost you more loses but it’s worth it at the end. See if you can pay them 2 or 3 months worth of rental. If you don’t have available money, negotiate if you can pay installment. Good Luck and God Bless.
Duncan on May 1st, 2009 7:30 pmThe U.S. Department of Commerce reports that LESS THAN 5 PERCENT of franchised businesses have been discontinued since 1985. Statistics from the U.S. Small Business Administration document that approximately 35 percent of new business start-ups are discontinued in their first year. After five years, approximately 90 percent of all franchises are still in business, while only 23 percent of independently owned businesses are still in existence.Why do these statistics favor purchasing a franchise instead of starting a new business? Generally speaking, a franchisor will have perfected the business’ operating methods before beginning to sell franchises. Most franchisors then provide extensive training to
new franchisees to ensure they know how to operate the business. As a result, the franchisee will have far fewer operating decisions and problems to resolve. The franchisor is also strongly motivated to ensure that franchisees succeed since the franchisees pay royalties to the franchisor based on their sales.

What is the rate for PNT stores? Still a mystory?

Why?

How you call it a “GREAT BRAND NAME”?

Let the cats out of the bag, Mr. CEO of PNT and Mr. Simpson.

Will you?
Closure Info on May 1st, 2009 9:36 pmI can tell you that there used to be 10 PNTs in my state as of now there are only 5 left open. All these closures (except 1) occured in the past year AND there are two more stores on their way out as we speak. So lets do the math….that puts PNT at a 50% closure ratio and climbing. I also know that some of the stores that closed down owned the right to multiple units, which never even opened in the first place.
ADMIN on May 1st, 2009 9:37 pmDuncan: FYI those are bogus statistics – long discredited – that franchisors & brokers have passed around for more than 2 decades to perpetuate the myth that franchises are statistically safer than independent startups. The Department of Commerce & SBA never issued those stats and even the IFA has told members to not use them. In fact, Scott Shane’s studies show that franchises fail more often than independent startups. Read http://www.franbest.com/insider-secrets-of-franchising/lies-damn-lies-franchise-statistics/From a June, 2007 press release: “We are now opening a new store every other day, and are on target to have 200 stores open by the end of the year,” said Yuvi Shmul, CEO of Play N Trade……To date, the company has sold more than 250 stores, with close to 100 franchises sold in the first two months of 2007 alone.
Play N Trade is now opening a new store every other day across the

country.”

A 50 unit chain selling 200 franchises in 10 months and attempting to open a store every other day?

This doesn’t sound like a very prudent or careful approach.
Carol Cross on May 1st, 2009 10:30 pmYes, Duncan, read Sean Kelly’s article as referenced above, and also read http://w.w.w.smallbiztrends.com//2008/04/startup-failure-rates.html/ for a recent look at this subject matter. The Franchise Industry has used the 95% success rate and the myth that franchising is safer for many years because there is no penalty for spreading false myths and the myths do provide prospective franchisess who supply the cheap labor and cheap “venture” capital for the franchisor to grow their branded Chains and their EBITDA.The statistics are shocking in that 50% of startups have failed at the end of five years and only 29% survive to ten years. The Commerce Department doesn’t now gather statistics on franchising and hasn’t for years. They leave the statistics to a private corporation who runs The SBA Franchise Registry for the SBA. This corporation reports statistics only from the point of view of the FranchiSORS who do survive at a little better rate because they can churn the failed franchisee to their advantage and perpetuate themselves for a longer period in the economy.
If you wonder WHY the franchise agreements are generally for ten years or longer, remember that, usually, the lease is for the same term. This, of course, means that the franchisee who fails within the first five years can be squeezed to give his franchised business away for pennies to get out from under the great debt owned on the balance of the lease, and ALMOST always personally guaranteed by the franchisee.

If a failed franchisee has any assets that have not been used to buy the business, the courts do honor the lease agreements and the Landlord can get a judgment for the balance due on the lease that is good for many years, depending on the law of the state.

Is this malice? You decide, Duncan!
Duncan on May 1st, 2009 11:18 pmThank you Admin and Carol for the information.It seems that the fraudulent claims from the Franchise industry are widespread.
That is shocking!!!!

What is the truth and who we can trust are the big issues nowadays!!!

There are too many land sharks and traps waiting for the small business owners.
White Knight on May 1st, 2009 11:56 pmThe White Knight has heard your cries and over the next few weeks will lead the deserving ones among you out of the wilderness that is Play N Trade.
Mr. Obvious on May 2nd, 2009 12:01 amProspective PnT Franchisees, it’s not to late for you. Ask and demand the answer’s to vary basic questions before signing a franchise agreement.How many PnT corporate officers, present and past ever owned or operated a successful retail game store, before offering a franchise.
How many corporate employee’s have owned and operated a successful game store?

If PnT corporate won’t provide their failure rate, isn’t that a “Red Flag”?

If PnT Franchisee’s are instructed to stock new release games, does PnT corporate have an agreement with “Nintendo”, “Sony” and “Microsoft” at wholesale cost?

How do PnT Franchisee’s compete with a publicly traded company, with major buying power like “Gamestop”?

If PnT business model has been developed to compete with “Gamestop” as a Franchisee, would it not be worth your time to visit the store and count their game inventory and compare to the inventory you will be receiving from PnT?

Has PnT corporate made a major investment in their business Point of Sale program, Wholesale warehouse, Inventory, Marketing material or corporate stores? If a Franchisor has not made a major investment in their business why should you consider taking all the risk?

If the PnT founder or C.E.O. won’t respond to these basic questions “Red Flag”.

Has PnT corporate developed a forum where Franchisee’s can freely exchange information?

If you have to count on a government agency to protect your business – it’s to late!
White Knight on May 2nd, 2009 12:01 amGettting out of a lease 101. If you did not sign a personal gaurantee and you have no other assets in corporation that owns your store, then it’s easy to just walk away. However, I bet most of you out there signed personal gauruntees so unless you want to file personal bankruptcy, you are going to pay your landlord somewhere between 9 & 12 months of rent to get out of your lease.
White Knight on May 2nd, 2009 12:04 amWho remembers Victor Kiam?What catch phrase did he use in all his commercials?
White Knight on May 2nd, 2009 12:05 amMr. ObviousHave you been to the Jerry Cherry school of Gaming?
Simple answers on May 2nd, 2009 1:52 amMr. Obvious Said:Q How many PnT corporate officers, present and past ever owned or operated a successful retail game store, before offering a franchise.
I Say:

A There founder ran three, their CEO ran 700

Q How many corporate employee’s have owned and operated a successful game store?

A See above

Q If PnT corporate won’t provide their failure rate, isn’t that a “Red Flag”?

A it’s in their documents. Never has been disputed. California isn’t disputing it, either, even after reviewing their documents. Just get a copy! It’s not some big hidden secret!

Q If PnT Franchisee’s are instructed to stock new release games, does PnT corporate have an agreement with “Nintendo”, “Sony” and “Microsoft” at wholesale cost?

A Yes

Q How do PnT Franchisee’s compete with a publicly traded company, with major buying power like “Gamestop”?

A as the third largest video game store in the country, they are able to compete.

Q If PnT business model has been developed to compete with “Gamestop” as a Franchisee, would it not be worth your time to visit the store and count their game inventory and compare to the inventory you will be receiving from PnT?

A Sure! In fact, before I signed up, they suggested I spend a lot of time in video game stores getting the feel for it.

However, PNT doesn’t chose your initial order. They give you a suggested initial order, but from what I have heard, most of the failed stores didn’t order what was suggested. . .Hey, you can lead a horse to water. . .

Q Has PnT corporate made a major investment in their business Point of Sale program, Wholesale warehouse, Inventory, Marketing material or corporate stores? If a Franchisor has not made a major investment in their business why should you consider taking all the risk?

A I wouldn’t! But thankfully, they have. PNT has a corporate store. They provide a TON of marketing material. They are upgrading their POS. They are setting up a wholesale warehouse right now (you have to be pretty big before you can do that).

Q If the PnT founder or C.E.O. won’t respond to these basic questions “Red Flag”.

A I can’t speak for the CEO, but he has been pretty forthcoming so far. I am sure he has better things to do then blog all day, though.

Q Has PnT corporate developed a forum where Franchisee’s can freely exchange information?

A No but franchisees have created one.

Q If you have to count on a government agency to protect your business – it’s to late!

A There is NOTHING in the California claim that in any way effects my business. I didn’t buy a business from PNT. I bought a business MODEL. it is my job to evaluate that business model, determine if it is a good fit for me, and if so EXECUTE it. If there are ANY successful franchisees, then the biz model works, and my failure would be my fault.

So that is just my two cents. Sorry, I am busy running a business, so I won’t be checking back into this blog. Just wanted to provide some answers to those questions.
Played N Traded on May 2nd, 2009 5:05 amI’m sorry, I can’t let this go. Play n Trade is now touting this as their big marketing coup. They got rapper 50 cent to appear at one of their stores in New York. Great, awesome, what exposure, you might say. I say, I do not want my name associated with this criminal : http://en.wikipedia.org/wiki/50_Cent
On the Fence on May 2nd, 2009 10:18 amI own a store and while corporate has done very little for me up to this point, I am prepared to continue to try and work with them to make it better.The issue I would like to address is the idea that PNT Corproate sold franchisees to people that did not have enough money to run the business. The cash flow of a PNT store to different than a standard retail store because we take trades. While coporate does try to explain this, they do a very poor job. Let me give you an example as an issue that many stores face:
Because of our low purchasing power we all have little or no credit with our vendors. This causes us to literally pay for the games before we receive them. Let’s say I put out $52 for Halo 3. Then being a “good” store I follow the training and get someone to try in two recently released games to help them pay for the copy of Halo 3. Let’s say they get $27.50 for each game they trade. We sale Halo 3 for 59.99, they get $55 for the trades and pay $5 on their credit card. Of the $5 we get in cash, $2.40 goes to royality and a little to the credit card company, and X% of the total sales to taxes. Trades/inventory cannot pay the bills so we have to turn that inventory ASAP. We start the games at $49.99 and if we sell them at that price everything works well. But, if we don’t sell them quick, in two weeks the price is likely to be $39.99 (not on Halo 3, but many games), in a month the price will be $29.99. What could have been $45 in profit quickly becomes $5. Games are traded for games and your inventory grows. Without great volume of sales, excess inventory loses value. It is very difficult to carry enough cash throughout this process to pay the bills.
On the Fence on May 2nd, 2009 10:47 amAs a follow up:The stores that do have a high enough volume to turn the inventory quickly have noted that increased marketing, rent, and personnel expenses eat up all the potential profit from the quick turnaround.
The real issue for a PNT store to locate that “razor’s edge” where volume is high enough to turn inventory, but not so high that it increase costs.

Many stores are finding this elusive.
Need advice on May 2nd, 2009 1:01 pmThank you for your answers on how to get out of the lease. You are correct, I did sign a personal guarantee. All my money is already gone ($350k) because of my failed PNT store. Will bankruptcy protect my house which still has some equity in it?Since so many stores have gone down this road. Can I get some help and advice on this lease problem.
Carol Cross on May 2nd, 2009 1:50 pmTo: Need Advice —–I hope Sean Kelly will allow me to pass this on to you.The Bankruptcy Laws on the primary residences offered as security are written to favor the creditors and business interests, etc… and have been the subject of review, etc.. by the Congress in the meltdown of the mortgage securitization market, , but this is a current MESS that won’t be straightened out any time soon, and I’m not sure of the current status quo of the drive for new laws that are meant to bring some relief to middle-class owners of primary residences in bankruptcy proceedings.
You really need to talk to an expert on “debt” problems in the current market as influenced by the current problems of the economy brought about by the robber barrons who right the laws to begin with.

You could go into the Blue Mau Mau Site on Franchising and search for Jim Herst, who is an advisor and negotiator of Debt problems who has been around for many years. He offers a FREE and ANONYMOUS consultation about your debt problems and seems like an honest and good man who, at least, would level with you about your personal situation and what could be the best “longterm” outcome for you. What can you lose if you remain anonymous and it won’t cost you anything? (I can’t give you his telephone number because I am blocked out of this website and it is not available to me)

Sean may have a better solution. Good Luck to you and remember that you are not alone. I’m sure others will offer advice as well.

Carol
Jason on May 2nd, 2009 2:44 pmAs a prospective franchisee, I just received the new updated FDD and considering the latest events in California, I have no reason to believe that the facts are false or incorrect.Just to bring some facts in this blog regarding the astonishing number of stores supposedly closed….well since 2006 all the way up to the end on 2008 (3 years)there as been a grand total of ….38 contract terminations/ store closures all together out of 237 stores currently open. Which is 16% rate of failure only.
Considering the current economic recession (the worst in decades) of the last 18 months…that rate is quite below the current national rate of business closures and faillures in the retail system.

Tha’s my last comment on this blog since it seems apparent to me that a few individuals here are trying to kill that brand for personal reasons or personal gain …

PS: there is a store owner who blogged on April 29th…a Mr. Abreu.

In the new FDD it is stated that on February 2009, PNT filed a lawsuit against a Gerard Abreu and Abreu entertainment for breach of contract….

I don’t know all details on the allegations but this fact sheds some light on his comment…
WOW on May 2nd, 2009 2:47 pmSo “On the Fence”, let me see if I understand,You pay $52, upfront, for a game. You sell the game for $60 and get roughly $2 (after fees) and 2 used games. Then you have to come up with another $50 (out of pocket) to rebuy the game you sold and have nothing in cash to pay any of the monthly bills. Then, if the 2 used games you have sell, and they are purchased with “trade-in” credit, you have more inventory, but still no cash to pay the bills. And if your inventory builds and it takes time to sell the used games, you can actually lose money by selling the used games at a loss. So, not only do not get any cash for the used games, you have to come up with even more money to cover the loss in the trade?
White Knight on May 2nd, 2009 4:29 pmJason: A fool and his money will soon be parted. The video game business is up right now, not down. The recession is an excuse that uninformed people use. I’m not sure what the real number of store closings is, but I know there are many more that are on the edge of closing. I don’t own a PNT store, but I have been into many and I don’t see it as a viable model. My experience in the business has been 180 degrees from what the average PNT operator has endured. More to follow:
michael on May 2nd, 2009 5:00 pmAll play n trade franchisees: Is their any franchisees out there that are making the kind of return on investment that they expected. Lets asume that it takes $200,000 for the cost of the franchise and cash to get the store to break-even are their any owners experiencing $50,000 to $100,000 net income from there store.We have heard on this blog from franchisees that have gone bankrupt, lost upto $350,000 on the franchise, or are doing everthing to keep the doors open.
Based on the numbers of Franchisees sold I am sure there are a number of stores breaking even, but where are the ones who are making good money for this kind of investment?

We have heard so many horror stories since the company started in 2006, but I have heard very little about store owners that are having incredible success.

When I hear positive stores like we are not high volume, but we work hard and make a living is the best it gets at play n trade how can anyone justify the investment?
Shed some MORE light !!! on May 2nd, 2009 5:15 pmThis is to: Need Advice.You can ask for help in this forum, but honestly, if I were you I would hire a Bankruptcy Attorney. They would know all the “ins and outs” of the business. Also, shop around and interview at least 5 BK Attorneys. This way you have a better understanding of who is “way too aggressive” or “just plain weak.” Use the middle ground person who will only “apply pressure” when it’s needed and someone who will not only give you advice but will give you choices. This way, you’re working together. If you don’t have any money for an attorney, then unfortunately (if this was me) I would find a way to afford those funds needed to make that happen and hire that BK Attorney. They are the experts not us. Believe me, I know, because I’m right in the middle of my BK because my personal experience with PNT. I have a feeling much more BK’s are to come from this situation. Again, as always, all of what I just said is just my opinion. Hope this helps…
Played N Traded on May 2nd, 2009 5:34 pmTo JasonI don’t think anyone here is trying to “kill the brand”. The purpose of this blog is to bring the whole truth to light. PNT will not tell you anything bad about their stores, or business model. They would be stupid to do so. Therefore, it is up to the “unhappy franchisees” to let you know the truth about owning one of these stores. Can you be successful with this franchise? Yes, but it takes an enormous amount of volume to do so. The problem is that very few stores are able to attain that. PNT does not disclose this reality in any of their publications. They refuse to give earning expectations, or even to realisticaly portray what it costs to open, and run a store. To me, this is a deceptive business practice, and that is what you should be concerned about.
As for Mr. Abreu, if you are saying his comments are suspect due to a lawsuit being filed against him, then the same thing must hold for PNT itself. After all, they have had several lawsuits filed against them.

I would hope that if you are still considering this franchise you think about the following: 1. You will need to have at least $100,000 to $150,000 in operating cash to allow you to stay open long enough to realize any profits. This is in addition to the $150,000 to $200,000 you will spend on opening your store. So, figure an investment of $350,000 to be truly safe. 2. At the current time PNT’s training is less than complete. They will not show you everything you need to know about running your business. That is fine if you have business experience, and know about the accounting, and other operating proceedures that goes into it.

In my case, had I known then what I do now, I never would have bought into this. There are numerous other business opportunities out there that are far cheaper to start, and offer greater rewards. It is this complete lack of the truth, and disclosure, that has made so many of us unhappy. I think many people continue to buy into the hype that the video game industry is the strongest retail sector. That is true, but it is the game studios, and software developers who are getting rich.

If you are dead set on opening a game store, and you know a lot about the business, consider doing it by yourself. As I stated in an earlier post, I know a person who opened a game store for $70,000 total. It is every bit as nice as a PNT store. He currently pays about $.80 more for a game from suppliers than a PNT franchisee does, however, he pays royalties to no one. In addition, the supplier is willing to negotiate better terms with him if and when his orders increase. At this point in their development, it simply is not worth paying PNT for the “support” you get, and their “brand name” is worth little to nothing as well.

I wish you luck in whatever it is you decide to do.
Played N Traded on May 2nd, 2009 6:49 pmTo simple answers:Some of the answers you gave to Mr. Obvious’ questions were just plain false or inaccurate.
1) Larry Plotnick, the current CEO, did not personally run 700 stores. He was a Vice President of Hollywood Video, and had responsibility over their Game Crazy brand. I would not dispute that this qualifies him for the position.

2) The failure rate depends greatly on the date of the documents you are reading. Most of this information is 6 months to a year old. These documents do not take into account recent closings.

3) The statement that PNT has wholesale agreements with Nintendo, Sony, and Microsoft is just plain false. They have never had any such agreements, and are forced to buy all of their merchandise from suppliers, and not directly from manufacturers. These suppliers charge more than a direct agreement does.

4) PNT stores cannot compete with Game Stop on price or amount of inventory. They compete by offering a far superior experience to the gaming customer. The fact that PNT is the third largest gaming specialty retailer is not in dispute. However the numbers break out like this: Game Stop – approx. 5,000 stores, Game Crazy – approx. 650 stores, and PNT – approx. 235 stores.

5) The have invested in their business, but their are problems here as well. The POS system was developed by a third party vendor, Shorecliff Software. PNT took over the company eventually. However, the author of the software has since left the company, and that is part of the reason why they are replacing the POS, not upgrading it. The one corporate store that the company is operating is in California. They bought it from a failed franchisee sometime in the late summer of last year. As of the latest rankings put out by corporate in February 2009, that store was well in the lowest third of all stores. The statement that they are working on a “wholesale warehouse” is also false. They are working on a “national buying plan”. This is to be discussed at the convention in Las Vegas in June. If this is to be similar to other buying plans they have discussed in the past, it will require 100% participation from all current franchisees. I believe it would be in their best interests to participate in such a program, but it will require them to give up some of their autonomy as to what they order, and the quantities they get. It is my belief that some of the franchisees will not be willing to give up that control.

6) Larry Plotnick, the current CEO has responded to these questions as best as he can. PNT is currently under a lot of legal pressure, and I am sure he is limited in what he can or is willing to say. I do not fault him there.

Please understand I do not wish anyone ill will, but I won’t stand by and allow other potential franchisees to get information that is incorrect. If you are considering this franchise still, please be aware of all that is currently going on. Do not make this decision lightly since it could affect you for the rest of your life.
author on May 2nd, 2009 9:18 pmJason wrote “Just to bring some facts in this blog regarding the astonishing number of stores supposedly closed….well since 2006 all the way up to the end on 2008 (3 years)there as been a grand total of ….38 contract terminations/ store closures all together out of 237 stores currently open. Which is 16% rate of failure only…that rate is quite below the current national rate of business closures and faillures in the retail system.”Jason: The number of contract terminations/store closings do not necessarily mean that failures are not much higher. If a franchisee invests $200K into a store and sells it back to corporate or to someone else for $1, they lost their investment but it will only show up in the FDD as a “transfer.” There was mention of Corporate taking over a franchisee store last summer… Did that show up as a failure?
There are a number of ways that franchisors can obscure lost investments without it appearing as a closed store.
Shed some MORE light !!! on May 3rd, 2009 10:31 amNot to mention franchise rights that were purchased and NEVER opened… How many does that now bring to a grand total?Answer that one Jason. Really, answer that Jason…
Simple answers on May 3rd, 2009 11:26 amTo Played N Traded, I will answer your points below:1> Accepted, but in the concept of the question it was relevant and the distinction not necessary. The obvious gist of the question was who among PNT is qualified, and I feel he more than fits that bill
2> The new disclosure is 4 days old. I believe it contains all store closures up to April 09, though I am not certain on that. Even if it is just to the beginning of this year, I think it i s a pretty good snapshot.

3> You are wrong. PNT DOES have wholesale agreements with Sony, Microsoft, many others (not Nintendo). They are new agreements that have recently put into place, and are not yet being utilized. The franchise had to reach a good size before it could get these agreements done, however. People are dogging on corp for trying to sell franchises, but that is the only thing that will allow them to get agreements like this in place. I am sorry that I didn’t qualify my answer by saying no Nintendo agreement. It is supposed to be coming, however.

4> Acknowledged that there is a big dif between PNT and GS. However, I have been able to compete with them by offering the same product at the same price (new) or a better price (used), and a service that BLOWS Gamestop away.

5> I don’t care why they are changing POS systems. I am tired of the old one and excited for what I have heard about in the new one. As to the corporate store, I was answering a question as to if they had one. I know they took over a failing store, in Jan 09. I don’t know how that store is doing now, because we no longer see sales numbers of other stores (yes, this sucks). Whoever sent you those rankings must be a corp insider, because we don’t get corp rankings any more.

As to the buying plan, I have been speaking a lot with corp about it. You have the wrong idea about it. It is going to be a virtual warehouse, whereby we will be buying our inventory straight from corporate. WE will still decide what to buy, though they will give recommendations, so we are not giving up any autonomy. The question of 100% participation was asked on a conference call, and Larry explained why that was not necessary. Additionally, this will allow us franchisees to buy on net terms, so we CAN order the quantities that need and know we can sell, and there again compete even better with Game Stop.

6> agreed

I want you to know where my information comes from. Conference calls and emails. We have weekly calls, and Larry has done two since he has been here. We get one email a day that has all this stuff in it, plus usually a couple more throughout the day. However, conference call participation is usually only 20 or 30 store owners, and I have talked to many owners that “don’t have time” to read the daily communication email. These franchisees are the same ones who tell me they are failing. In my opinion, if they are not using resources provided to them, it’s their fault.
Ken on May 3rd, 2009 8:10 pmBrand New Owner,So you’ve been open one whole weekend and you’re happy with the franchise?
Pucker Up on May 3rd, 2009 11:01 pmMaybe you PNT owners should hire a lobbyist and see of Obama will give you some bailout money, as PNT is just too big to fail. ROFLMAO!!!!!!
Pucker Up on May 3rd, 2009 11:06 pm$350,000 to open up a one game store? What is wrong with you people?
Duncan on May 4th, 2009 2:40 amTo simple answers:You said “I don’t know how that store is doing now, because we no longer see sales numbers of other stores (yes, this sucks).”
Do you know why? I think you already knew it already. If there is no rosy numbers, PNT just cut out it because it would have a negative impact for the so called GREAT BRAND NAME. It is very bad for all the stores. Even the top ones were not making the profit as they claimed any more. We understand the economy now, and there is something beyond that.

The rank is a joke and for the franchisees there is no information at all. It is a useless pile of ridiculous numbers. Nobody can figure it out and use it to improve their store.

Do you know the reason why the area develpopers gave up there stores even some of them were the front runners? Becasue there is no profit at all. If you describe the profit as “Razor thin”, it is also an exaggeration.

Do the franchisees deserve the truth?

Do the prospective franchisees have the right to know the full picture of this business?

The answer is a BIG YES.

Brand name is a real thing. You cannot just “MAKE” it with the thin air.

I do not think PNT tell all the truth to the franchisees. Even the latest Order from DOC of State of CA. If there was nobody sent the e-mail to all the PNT franchisees, PNT top guys will hold it until the last day and pretend nothing happened like “BUSINESS AS USUAL”. That is their “POLICY” and part of their “FOOLING AROUND” tactics in doing their business.

However, you have to follow the rules, regulations and the law. Do not scare or try to fool the franchisees with corp bossy tactics. That’s just simply wrong.

That is a shame!!!!!!!!!
Victor Kiam on May 4th, 2009 8:26 am“I liked it so much, I bought the company!”
PLAY N TRADE: Execs Respond to Blog Critics : Franchise Pick – Picking the Perfect Franchise on May 4th, 2009 10:50 am[...] reporting on the suspension of the CA franchise registration of Play N Trade (See PLAY N TRADE: CA Suspends PnT Franchise Registration), website Unhappy Franchisee set off a lively debate about the video game retail concept and its [...]
ADMIN on May 4th, 2009 10:53 amFranchisePick.com has picked up the story:http://www.bizzia.com/franchisepick/play-n-trade-execs-respond-to-blog-critics/
Lost it all on May 4th, 2009 1:56 pmPeople looking to join PNT should appreciate this blog. At least now they have the option of not joining this fraud of a company based on real franchisee experiences. I wish I had this resource to draw upon before I became a PNT victim. PNT always covered up it’s fraudulent actions and tried to silence any complaints.Thanks for this blog. Maybe now innocent people can avoid this nightmare.
Duncan on May 4th, 2009 4:08 pmMr. CEO of PNT said ” This preliminary order only impacts the state of California, ……..”Are you kidding me? It is true that the Order from CA DOC will impact the CA stores because the other states are beyond jurisdiction of CA’s DOC.
You company registered in CA and it will definately affect other PNT franchisees’ stores if PNT is found guilty. If PNT loses its license and has to make conpensations for those CA franchisees. The payment only will bankcrupt PNT, the franchisees of other states will get nothing!!!!!

By the way, it sounds ridiculous to believe that a company found guilty in one state, you can continue your business “as usual” in other states.

PNT really needs a frachise lawyer, a great one!!!!!!!

GOOD LUCK!!!!!!
Carol Cross on May 4th, 2009 6:21 pmCarol Cross comment moved here: Carol Cross
Store Owner on May 5th, 2009 12:08 amAs a current store owner, I have found this blog to be honest, very accurate as far as many store owners have shared their horror stories about his franchise. Ill chime in with my 2 cents. YOU will make NOTHING on anything under 60K a month, period. The reason is MEMBER CREDIT, lets say youir doing around 20k a month, your running your reports on your wonderful $4500 POS system(Ill get to that in a moment) and you see that in gross profit $8700, OMG I may have made a little money this month, my operating cost is $7000, wrong, you had 6000 in member credit used(using PnT Corporate’s 70/30 deposit rule)In reality, you did 14k and your store just lost around 5k, but you paid sales tax on 20k, royalties on 20k, and thats being very conservative. When you look at the numbers PnT gives you, for first year, its a store that is doing 30k a month, with a 60/40 used to new sales, but the one thing they leave out of the P&L is member credit, so it looks all rosey, the cpa thinks it looks good, but when you add member credit, (9K) you lose your ass. The numbers they tell you are way lower that what you will really do/need
In all honesty, you will need 500k to have any chance, with 150-200k for operating capital for the fist year, plan on spending at least 10k a month in advertising, unless your the only game in town, word of mouth doesnt cut it when you have Walmart, Gamestop, Best Buy, Target. To quote The former CEO of PnT

Tom McMahon, “There is no way in hell you can open a store for 130k, we have to get that out of there” overheard at Basics Training, Jan 08. The POS is overpriced by about 4200, and im guessing that the new one will be even more expensive, and not much better. Are there stores that actually show a profit, yes im sure there are a couple, by an act of god had, no competition, owned the building they were in, and had family that worked for them for free. In the later part of 08, PnT CEO Tom McMahon said the they would release stores that were making a PROFIT, he never did, because they could not legally do it, but under section 8.02 Record Keeping and Reporting Requirements Item F on all UFOC’s thru 2008 states, PNT has the right to use any financial or statistical information that franchisee’s provide PNT, as PNT deems appropriate. However, PNT will not disclose any information shown in any Franchisee’s Tax returns except (I) with franchisee’s written consent, (ii) as required by law or compulsory order, or (iii)in connection with audits or collections under this agreement. There is a reason why they didnt, and why they stopped giving out detailed ranking reports, because they are a very small number of store that are making any money, probably 15 or less(My guess, not a fact) and the reason why they stopped sending out detailed ranking report because they didnt want potential buyers to realize that the AWUS for PnT stores is probably around 3-4k. In the end for me, being I do have some money left, ill be negotiating my way out of my lease, which in the end will cost me around 30k, selling off my remaining inventory at a fraction of the cost, and closing my store, at a cost of just under 400k, which is a tad bit higher that 140k I was told that I could do it for by 4-5 people at PnT. Am I pissed, yes, would I love to file a massive lawsuit against PnT, yes, but in the end, im more pissed at myself for falling for this con, yes it is a con. In closing anyone who is really considering this franchise, I would ask you to do 3 things,

1.Google Yuvi Shmul interviews for PnT, You will here the following a couple of times, Many of our owners are profitable after 6 months, and many of our franchisee’s have paid their SBA loans off in 6 months.

2.Google Ron Simpson interviews for pnt, you will hear, or read, “I could give you the numbers, and you would write me a check today”

3. Run
Shed some MORE light !!! on May 5th, 2009 9:23 amThe person “Store Owner” who just posted ISN’T the only one who has shared this story. As much as I didn’t want to believe this; and believe me, I made an effort IGNORING those that had anything negative to say about PNT and the profit they were losing. According to the numbers that I wrote on my spread sheet (which were “VERY CONSERVATIVE”; according to Ron Simpson when I showed him my spread sheet) with that 70/30 split (70 New inventory sold / 30 Used inventory sold) that “Store Owner” spoke about, I was making “money” all day long. At training the PNT trainers said that if you pushed a 60/40 split you were pretty much the doing AWESOME. They (PNT Trainers) said that some were stores that were pulling these numbers.Unfortunately, my own dream of LOSING MORE MONEY TOO was NOT realized. (sarcasm emphasized).
What was even more surprising to me were the store owners that either closed, are closing or just hanging on – congratulated me on NOT opening my store because they said I would have LOST MORE MONEY !!! I personally lost close to around $200K. Those that I chose to IGNORE lost $350,000 – $1,000,000 along with their homes, cars and family’s borrowed funds. Ron said on this post he was “sad” (for his reasons) and he has that right. But again, how much “sadder” is it for those that lost everything.

Remember when I said “it ALWAYS starts from the TOP … then gets passed DOWN to everyone else, Never the other way around…” I said that for a reason. You see, this is MUCH BIGGER than what PNT (and us as franchisees) has created. (Again, I take my own ownership for financial mess I created, just so PNT Corporate doesn’t think I’m blaming them completely). But here’s the reason why I said it starts from the TOP then gets passed DOWN…

We’re heading into a one of the worst depressions ever in recorded history. Now I know this is a topic not too many people want to dive into or may disagree with, but think about it. We almost didn’t recover from that $1.2 Trillion Sub-Prime mess that hit us back in Sept. ‘08. Come the middle of next year (2010 or maybe sooner) we have another Tsunami Title Wave of new defaulting loans that we are GOING TO SEE COME. They are:

$1 Trillion – “Alt – A” Loans

$600 Billion – “Option Arm” Loans

$3.7+ Trillion – Commercial Real Estate Loans

That’s around $5.3 Trillion. I haven’t even mentioned the defaulting Credit Card, Personal & Business Lines Of Credit loans that are coming too. That coupled with the amazing amount of money that being printed out of thin are from our incredible Federal Reserve that’s all back by the “good faith” of our amazing government. The inception of the Federal Reserve and everything it stands for is at the root of this financial fiasco. Unfortunately, the rest of the world has imitated (in some form or another) from our corrupt system, so now this is GLOBAL ISSUE. We are just at the beginning stages of this FINANCIAL MELTDOWN. I’ve been following this financial issue for the last 5-6 years from different economists and all I can say is get prepared. I really say that in all sincerity, get prepared. I hope that all of what I just now said about this financial crisis that I believe we’re heading for is wrong. I really do…

And lastly, I just wanted to say that – EVERYTHING THAT I JUST WROTE IS JUST MY OPINION.
A successful franchisee on May 5th, 2009 11:44 amPLEASE! If you are considering a Play N Trade and are reading this blog, READ THIS!!There ARE successful PNT Franchises! I own one of them!
Here’s the deal. What you are reading here is nothing but a bunch of bitching from the same franchisees that we have heard WHINING since we all joined up (Gerry!).

If you are considering buying a PNT franchise, and want the real scoop, IGNORE the franchisees on this blog and CALL THE STORES! Get the real scoop. And make sure that you don’t call one store and base your opinion on that. Call them ALL. That’s what I did. YEP, EVERY LAST ONE OF THEM. Guess what I found . . . That most of the franchisees that were failing or NOT following PNT programs and those that were succeeding WERE following the programs!! That simple!

DON’T take some blogs word for it, DON’T take Play N Trades word for it (obviously, they are trying to sell you!), and don’t even take MY word for it! Call the franchisees, figure out from those conversations what it takes to be successful, and then DECIDE if you have it in your to be successful. REALLY think about it, though, and decide if you have what it takes. . Can you support your family for 6 months to a year with no income? Can you work YOUR ASS OFF for 2 years? Can you go to work EVERY day and give your all EVERY day? If not, move on! If you can, however, Play N Trade might be a good fit for you.

Again, I am NOT defending corporate. I will tell you my opinion about corp when you call my store. And No, I am not going to tell you which store I am because I want you to call them ALL!

Best of luck to all of you.
Carol Cross on May 5th, 2009 12:39 pmTo Shed some More Light !I think your opinion in the next to last paragraph is right but, hopefully, those pundits who run our country and who say that we will be out of this depression by the end of 2009 have a chance of being right and the blood will stop flowing.
The Commercial property meltdown is visible where I live. They have overbuilt retail space and offices and Mall areas to the point where the SATURATION prevents the small business people from making a living and many are failing and defaulting on their leases, etc… Our City paper ran a piece on Sunday on the front page about the thousands and thousands of feet of of empty commercial spaces in the City.

There is no doubt that the growth of franchising accompanied the growth of the wealth created by the housing bubble and the seemingly never-ending rise in real estate values, residential and commercial. There is no doubt in my mind that public policy that disguises the risk of investment in franchises is the direct result of the need to provide cheap labor and cheap “venture” capital to overbuild and saturate markets in which someone (who?) makes money! The 3-Net leases are securitized and are part of REITS that will fail.

I hope you and I are wrong! But, I agree! The worst has not yet been seen! It is a global issue and throwing money at the problem appears to be the only solution but will it work? Nobody has the answer to that question.
New Franchisee on May 5th, 2009 2:41 pmI was pretty confident that I had made the right decision going with a PNT franchise after doing what I thought was my due diligence. I had called over a dozen stores and only received one negative comment on how franchise’s individual stores were doing and their interactions with corporate head office. I went and toured existing PNT stores and interviewed their owners and got good feed back On the advice of my attorney I went to corporate offices and met the staff first hand. I personally had ‘crunched’ the numbers to see that there were ‘lean months’ and ‘good’ months but on average it looked like there was profit to be had.I have owned many businesses in the retail sector before and am not naive to the fact that it does take ALOT of hard work, ALOT of personal hours and ALOT of capital to start any new business, so I was not attracted by all the ’smoke and mirrors’.
I have read all the posts on this site, some people were very informative and others just using it to vent out negative energy (too bad).

In my collection for information, I am curious to ask a question. I am in the process of looking for real estate to lease, hypothetically, if I were to decide not to open my location can I get out of the franchise agreement with PNT corporate? Or do I need to go BK first?
Guest on May 5th, 2009 3:12 pmCarol,This depression will not be over in 2009, we have a whole new wave of foreclosures in 2011 when the ARM reset, not to mention the continued meltdown in the financial… the delusional current administration and all their useful idiots in the media are back to pumping the illusion that the economy is on it’s way back up and in recovery after using the politics of and fear mongering for months. This ain’t over yet and I suggest everyone hold on to your seats because it will be a wild ride.
This economy has been an illusion for 30 plus years and we have learned nothing and fixed even less to make a difference.
Carol Cross on May 5th, 2009 3:54 pmTo New Franchisee!Isn’t is STRANGE that prospective franchisees have to do their “due diligence” with curerent and ex-franchisees who have no LEGAL obligation to disclose to them at all and who will not actually open up their books to prospective buyers. I’m sure that PNT have promised you NOTHING concerning profits and success in writing and that you have acknowledged this in writing when you signed the contract.
Why doesn’t the franchisor have the obligation, under the law, to disclose the unit historical financial statistics in their possession to new buyers since they are the party that profits from the sale?

Once you have signed the contract and put up money, you generally can’t get out of the contract without punishment but this punishment cannot compare with the puniushment of building and financing a business that may fail after a few years. I am sure that you are aware of the KNOWN statistics that ALL small retail businesses fail at a rate of 50% in the first five years and that only 29% survive as long as ten years. You might wonder why these franchisors insist on ten-year contracts. Could it be malice?

Take the warning of the California action against this franchisor seriously.
Guest on May 5th, 2009 4:22 pmCarol, I happen to agree with you wholeheartedly, the playing field should be level for ALL involved…Speaking as an ex-franchisee, I wouldn’t trust what store owners tell me any farther than I can throw them In my case I was on the “contact” list for prospectives to call, UNTIL I started telling the prospects my true numbers and my business outlook. I got pulled from the list faster than you could say meal assembly…In fact some of the people that I spoke to when I was doing my due diligence gave me a rosy picture about the company and earnings and was in the process of closing shortly after my store opened. There are other stores in my network that got “paid” for talking to prospects. Think about the fact that franchisee have a vested interest in their franchisor selling more franchises so their websites can get upgraded ect, they want to stay in the good graces of their franchisor who have the bad habit of threatening you when you do something that displeases them…so, someone tell me again how good the current protectionism of franchisors by the FTC is???
Shed some MORE light !!! on May 5th, 2009 4:58 pmThis is to: “Successful Franchisee”That is great that your store is doing well. I wish you continued success; you deserve it. So did the others that came into this as well. For you to say that they (or we) are “bi*chng” & “whining” is a bit presumptuous.
I am NOT the same (as you claim) and I would say that there are others here who aren’t either. There have been quite a few that came into this NOT just with “hopes & dreams,” but a well laid out financial plan along with hired (YES, paid for) financial advisors and CPA’s that did the numbers with us. I say this because “ON PAPER” the numbers (money wise) look good, BUT – and I say this with a BIG BUT (actually I have a small behind, but that’s beside the point), when you open your doors to actually work the plan only a small percentage of stores are actually making any money versus the majority who aren’t. Well, “Successful Franchisee” is correct in saying to “CALL THEM ALL!” – PLEASE, CALL ALL THE STORES !!! You WILL find out very shortly that again, ONLY A SMALL PERCENTAGE OF STORES are ACTUALLY making ANY MONEY. That small percentage had (again, according to “Store Owner”),

1) No competition

2) Owned the building they were in

3) Had family that worked for them for free

I know this to be true (with the exception for #2 – but I’m sure there is one owner out there who fits that criteria), because I spoke to quite a few owners DOING THIS VERY SAME THING that “Store Owner” mentioned. Even right now there are some store owners doing this JUST TO STAY OPEN WHILE THEY’RE LOSING MONEY !!! Can you imagine having your Dad work at your store? That’s a humbling situation to be in. And those very owners that were “scratching there head” trying to figure out what they did wrong, re-worked the numbers, got out there and spent more money for advertising; even spending thousands for their own TV commercials, passing out flyers, going to schools and promoting there business, passing out massive amounts of swag, doing tournaments and there own give-aways, and the list goes on. AND STILL, they are LOSING MONEY !!! And we’re not just talking a $1,000 a month; we’re talking THOUSANDS a month !!!

So “Successful Franchisee” I don’t disagree that you aren’t making a profit, BUT THIS WEBSITE IS FOR THOSE WHO HAVEN’T, AND THEY ARE GIVING THEIR REASONS WHY !!! WITH REAL NUMBERS !!! (financially speaking). Actually I’m surprised that people on here are as open as they are about their personal business when it comes to those numbers.

Oh and lastly “Successful Franchisee,” did you read the title of this website? It’s NOT called “Successful Franchisee,” It’s called – UNHAPPY FRANCHISEE for… a… reason… So please, go find the website that suits you best and STOP COMPLAINING about our legitimate reasons why this business model doesn’t work for us and spread YOUR good news of “success” on other blogs elsewhere that will listen to you. BTW, notice how I didn’t have to use the word “bi*ch” to describe you?

Have a “successful” day…
Shed some MORE light !!! on May 5th, 2009 5:05 pmThis is to “New Franchisee”Like I mentioned earlier, if it were me, I would speak to a BK Attorney. You’ll see what I personally did to find the right one (on this blog). That is what I would do… Just my opinion.
Also, (to ALL my prior and future posts on this blog) ANYTHING AND EVERYTHING THAT I HAVE (OR AM GOING TO SAY, WRITE OR WHAT HAVE YOU) IS JUST MY OPINION…
Guest on May 5th, 2009 5:20 pmHere’s what I find interesting…I see the same verbiage reiterated over and over again, same words but different business, different franchise concepts…one begins to wonder if the exception is the “success” story rather than the rule and the rule is the “disenfranchised” franchisee. Is it dumb luck or good business sense? I vote for dumb luck. I was lead to believe that the rule for financing a new business was an SBA loan, I was also told by more than one bank (actually 3) that the only way an SBA loan was remotely possible even with a gazillion dollars down was to collateralize my home in order to get the loan. So I guess I was just a ropa dope to listen to my accountant, attorney and SBA consultant when they all told me the same thing.
Shed some MORE light !!! on May 5th, 2009 5:27 pmIn response to what I, Carol Cross & Guess just posted, I wanted to give you ALL a link that will hopefully open your eyes to what is going on out there. It’s about 2.5 hours long and exposes so much of what has happened NOT just in the past 30 years but the last 100-200+ years. I hope you will set some time aside and watch this in full (or at least watch them in parts).http://video.google.com/videoplay?docid=3149990642797444340
Again, this will open your eyes to what (I think) is really happening behind the scenes of our daily lives; completely separate and WAY beyond what’s happened to some of us with PNT…
Disenfranchised? on May 5th, 2009 5:59 pmThroughout this blog I have heard from a number of supporters and detractors of PNT. It seems both parties are proportionately similar in size. Many of you have blogged multple times sharing your experiences good and bad about PNT.I appreciate hearing both points of view on this topic.
Not too terribly long ago, I became a PNT franchisee, payed my fee, training, etc. I have not executed a lease but, would be in a position to do so in the near future. Hearing these comments has definitely been an eye opening experience. I have no doubt by the virtue of this blog disclosure I will be told to run, not walk away, while I still can. However, I feel that the same handfull of PNT detractors will respond and only reiterate their bad experiences.

My real purpose of responding to this thread is to throw out some numbers and reach out to PNT store owners who are happy with their decision to develop a PNT. I would love to hear from the guys who are at breakeven or showing profit.

In preparing my preopening finacials I came up with the following projections.

The following are assumptions but, to the best of my knowledge would hold true for the average PNT store.

Let’s make the assumption that the average PNT store is faced with a $10,000 dollar a month overhead. This figure may be higher or lower depending on rent, owner/operator salary, or presence of business loans. Of coarse these are variable but for the sake of arguement, average costs.

Lets also assume that the store is running a 20% average profit margin . So, with an annual overhead of $120,000 and a 20% profit margin this PNT would have to have $600,000 annual gross revenues to breakeven.

If this store does $600,000 in gross revenues, then its cost of goods sold must approximate $480,000. This actually could be lower due to the differential services each owner provides. So that being said,the store should have capital monthly reserves of at least $40,000 dedicated to inventory replenishment. Some months higher depending on the cyclical nature of retail.

In my personal opinion, the store owner should begin operations with enough operating capital to cover six months of operations or $60,000 based on our assumptions. We all would hope people would flock to our new business however, that might not be the case and prepare accordingly.

Lastly, we must allocate marketing funds. Contractually, PNT expects you to allocate $5,000 to $10,000 for grand opening and $ 2000 dollars a month thereafter. Using our six months buffer, an additional $22,000 dedicated to marketing.

This brings our total working capital to $122,000. $100,000 is a recurring number that a few folks said may have changed their outcome in their investment.

The PNT’s I see failing and / or for sale have stated gross revenues that are anywhere from $250,000 to $450,000. There could be a whole myriad of reasons for underperforming. I wont even get into it. The common theme I see throughout the blog is the undercapitalization of the individuals who have failed. It seems to me they were unable to carry the costs of their inventory and began offering their customers subpar products.

For those of you that have failed and lost so much, I sincerely wish the best for you. I realize that I could be in your shoes in the future and I do not mean to seem like I am condesending. I know none of your personal obstacles.

My sincere hope is to appeal to those of you out there who have some degree of sucess with the PNT model. I would wecome your feedback and critiques of my PNT metrics. Are you guys hitting that approximate $600,000 figure or are your BEP’s higher or lower than my estimate? Is a 20% profit margin realistic?Do you have any general advice?

Throughout this blog, I have heard that PNT is a broken business model. I’m not sure what a broken business model is. If the model is in fact broken, then I can honestly say that I love the concept no mattter the out come.
Guest on May 5th, 2009 6:32 pmHey,I understand political shenanigans, but I am NOT a conspiracy theorist. I understand political interests working in concert towards the same ends (re Unions and the current administration for campaign paybacks/favors) that is a far cry from a specific conspiracy by a cabal of puppet masters…with us being unwilling and unknowing dupes. I’m sure your site is well intentioned but I like to deal with tangibles and reality…not nebulous theories that are strung together to seem coherent.
Carol Cross on May 5th, 2009 7:35 pmCarol Cross’ Comment moved here: Carol Cross
Shed some MORE light !!! on May 5th, 2009 7:51 pmTo Guest and Carol:Just to clear any misunderstanding, I meant that link for anyone else who’s interested in looking at why (I think) things are the way they are, Globally Speaking.
Like I mentioned before, this is completely separate and has nothing to do with PNT or franchising at all…
Carol Cross on May 5th, 2009 8:14 pmI understand “Shed some MORE light! I too believe that these last thirty years need to be looked at very carefully since obviously we have come to a point where “capitalism” appears to have failed in global economies where democracy and capitalism have been advanced as the cure for world problems, etc.. and a lasting peace among men.In the search for “isms” to rule the World and for economies that will sustain the people within the countries, not even the economists agree. It all appears to be trial and error. In the global economy, where sovereign countries will surrender the interests of the citizens to the interests of the global economy and to BIG Multinational Business Interests, the rules have changed.
But why shouldn’t average people who are not bankers and economists try to understand where we are and where we have been, and where we are going? I agree!
On the Fence on May 6th, 2009 12:01 pmDisenfranchised? – Your assessment would appear correct. Once established your profit margin will be closer to 30%. In my opinion, your big error is believing you can generate $600,000 in sales. Please believe me when I say that $300,000 would be much more realistic. I base this on the 2 years worth of store sales data I have seen and my own experience.
Jim Herst on May 6th, 2009 12:31 pmToo many franchisees are caught in a bind. Those in financial distress find Debt Management a breath of fresh air. Since 1963, thousands of businesses have found relief thru Debt Settlement services as their creditors are satisfied. Without charge, a caller may maintain anonymity as we offer telephone counsel on Liabilities Administration. Our website, http://www.performancesourceinc.com, tells more. Steve or Jim can be reached at 800/883-5080.
someone who knows for a fact on May 6th, 2009 1:31 pmI can clear a few things up here as I do know all of these details intimately.You all need to know that this all started with Yakety Yak Wireless.
The same Charlatans that ran YY into the ground are the exact same people to bring PnT to you. Call those YY Franchisees if you want evidence.

1. You can bet the state did not file this without proper cause AND evidence to back it up. All of the allegations are merited.To brush it off lightly as it has been is irresponsible. It is a MAJOR deal and isn’t going away.

2. It was prompted by former AND Current franchisees and AD’s alike. (they provided the information and filed the complaint)

3. I will state that the concept is a good one ,albeit a bit flawed, but you can succeed. You would need $500k and much more marketing than that required.

It will take you much longer to recoup your investment than those promised.

4. You will never make the bucks that you are promised. Not one franchisee ever hit it, not even the best performing store in the best location has ever hit those numbers consistently. EVER.

5. The reason for 5 CEO’s is because of the great hubris and giant ego’s that come with making a little money. That they were entrepreneurs and NEVER Senior Business Management nor do they have that kind of pedigree to run an operation something beyond 30 stores. All of the earlier CEO’s had equity and cashed out. You can bet that they are all burying their personal assets as we speak.

6. I would have Mr. Harrington to look into what the cash reserves of the holding company has on hand. It is nothing. It is in all of the Board Members and Founders wallets. There are no real assets this company owns. A fact.

7. Any NEW franchisee will see the light as time goes on. Any positive comments are taken by looking through rose colored glasses.

8. Employees and even SR. Management are compensated not only on the sale of the franchise license, but also given incentives to have your store open as quickly as possible. That is why you see the approval for rents and locations that are not sustainable. PnT has it’s own interest at heart. It is a business and should be viewed as one. Make no mistake, they are there to make money.

Any mention of ‘good will’ in here is only to avoid negative publicity and a reduction in sales.

9. I would give Mr. Plotnick a break. As stated earlier, he inherited the mess, and I’ll bet that he was bamboozled as well. Although he may have drank the koolaid.
The Real Truth on May 6th, 2009 1:41 pmLets not forget where these charlatans got their start. I realize this is a Play N Trade thread, but to understand the future, you must understand the past. Yakety Yak is where the founders learned how lucrative it was to defraud people by collecting franchise/AD fees to line their own pockets knowing that there wasn’t a chance in hell that franchisees could be successful. The eureka moment was when they realized that they could use the same formula to sell the hotter video game retail segment. History has truly repeated itself and the house of cards will once again fall (cease and desist has also been ordered for Yakety Yak as well). It amazes me that the company continues to claim ignorance as they sail off in their yachts cooking up their next ponzi scheme.
Carol Cross on May 6th, 2009 1:51 pmLet’s not forget that all of this activity is possible under Regulations that are supposed to protect franchisees but, in effect, protect the franchisors and allow them to sell unviable franchises to line their own pockets and then just disappear into the sunset.
Someone who knows for a fact on May 6th, 2009 1:56 pmAgree. Buyer beware. The ’smartest guys in the room’ that are claiming ignorance and no ill will, figured out the formula, found the loopholes and exploited it. It is not the regulators fault by any stretch. They broke the law.
On the Fence on May 6th, 2009 2:44 pmDisenfranchised? – General Suggestions:Don’t determine your estimated expenses and then calculate the sales that will be needed to gererate a breakeven. Assume that you will be an above average franchase and sell $300,000 per year. At 30% margin this creates enough capital to pay $90,000 in expenses a year, or $7,500 a month. Find ways to get your total monthly expenses to under $7,500 a month. Then, if your sales are higher, it’s profit. If you cannot get your expenses under $7,500, plan to have about 2 years worth of working capital in savings.
Played N Traded on May 6th, 2009 3:46 pmTo – Disenfranchised?I do not know of a single franchisee who has been able to get their expenses under $10,000, let alone $7500. Your rent will typically be almost half of that alone. I also believe the 30% margin is too high. You will not hit that unless you are better than 50% used. The problem is that the stores that are doing the most in revenue typically do not have better than 35% used sales. Also, you use a figure of $600,000 to break even. I would more or less agree with this number. The problem with this number is that about 80 % of the stores that have been open longer than one year are not hitting this number. (These numbers can be inferred from comparing the rankings of stores’ sales that used to be sent to franchisees. They never used actual numbers, but you can infer what the numbers are based on knowing what a middle range store is doing, and what a top store is doing).
If you have the money to sustain a business like this, I would caution you to ask yourself: Why am I willing to spend $350,000 to open a new store that will take two years to make any money? Why am I willing to be happy with a pathetic 20% margin that will never make any real money compared to my investment? Could I invest my money in something else and be happier and richer in two years?

The simple fact of the matter is most of the franchisees who are making it have special circustances that others don’t have. They are in an area where little competition exists, they have their entire family staffing their stores, or many other factors most stores do not enjoy. I am not saying they haven’t worked extremely hard to get where they are, they simply have enjoyed a certain degree of luck that others haven’t. The bottom line is that if you have the money to sustain one of these, you should be looking at other alternatives. You simply will not get enough return on your investment to make it worthwhile. Accept your franchise fee as lost money for now. With the amount of ill will being generated among customers because of stores closing, I don’t believe the brand has any legs at this point. Do a google search of gaming forums. People love the concept, and the stores in general, but are wary because of the amount of stores closing. It will be difficult to get trade in any area where stores have opened and closed.
Duncan on May 6th, 2009 4:11 pmDisenfranchised? – General Suggestions:The total sale of $600k/year/store is not realistic number in your first 1-2 years.
As you said “The PNT’s I see failing and / or for sale have stated gross revenues that are anywhere from $250,000 to $450,000″, that is the right range for most of the PNT stores (at least 80%) closesd or currently running.

However, the overheads will still be the same between $7k to 10k/month. If you can not reach that at least $250k for 2 years, how much cash reserve do you need to be afloat? At least $100k to 200k. Those amount is only for your store running, does not include all your family living expense.

It is very difficult for most of the PNT franchisees to get that amount of loan or savings. Otherwise, the bully-up is inevitable!!!!

Too high the bar you raise, the more upset and disappointment you get!

Too sad, but true.

Good luck and all the best for you.
On the Fence on May 6th, 2009 4:15 pmPlayed N Traded…I do have family that staff my store. I have no wage expenses. This was planned before I opened my store. I paid cash for everything. I have no loans. My monthly expeses are always under $6000. My average profit for all of 2008 was 29%. Through April, for 2009 it is 35%. We average 60% new and 40% used. We focus on our repair business. One of the few key advantages we have over the competition. I have 4 competitor’s within 1 mile of my store. Based on my personal experiences, sales over $400,000 per year tend to lead to expenses that dimish returns. A large volume store only benefits corporate and our vendors. A well managed, middle volume sales store can make money.
While I agree, if I had it to do over again, I might not have invested in PNT. That said, if my money was left in the stock market I would have maybe half of it left. I’m making the best of the situation I am in and tring to help Disenfranchised? to make the best of theirs.
Joe on May 6th, 2009 4:36 pmDisenfranchised?Keep in mind also from a previous post, plan on 20-30% of that $600k will be credit from trade ins, lets just say 20%, 120K in credit used, so total cash would be 480K
Carol Cross on May 6th, 2009 4:40 pmCarol Cross’ Comment moved here: Carol Cross
On the Fence on May 6th, 2009 5:39 pmRegarding Family Members working at the Store…Create a corporation with the family members that will work at the store as members. Assign corporation shares to the family members in porportion to their position at the store. Fund the corporation with the money you will use to start up and run your store. Loan the money from the corporation to your store. Then as your store pays back the loan, with interest, each family member will receive a portion based on their shares in the corporation.
Disenfranchised? on May 6th, 2009 5:51 pmThank You for all of your comments. I appreciate every point of view. When I stated my expenses at $10,000 I did this mostly for the sake of easy math. In my own personal case my overhead should approximate $8900. This includes an owner/operator salary of $2500. The salary I am figuring is optional as my spouse works, can pay our personal expenses and will have no part in operations. Rent is cheap and favorable where I am due to excess supply and lack of demand. It looks like most are in agreement that profit margin runs 20 to 30% depending on the split.I agree totally with on the fence’s point of view that 20% is better than the stock markets rate of return. In reality, there are more lucrative business investments to be made. I chose PNT because I felt that I would enjoy what I did. I had no false notions that franchising a PNT would bring me wealth. My own personal dream is to assimilate and be accepted into my community. I feel that PNT provides one of the best ways to do so. Maybe I could do this with tacos, subs or exercise clubs but, PNT best appealed to me. Money is not happines however, happiness IS positive cash flow. I just want make sure I’m not hemmoraging money. Thank you all for your time in responding to me.
Mr. Obvious on May 8th, 2009 11:03 amPlay n Trade’s success or failure will not be decided by the slow process of justice that favors the wealthy.It will be decided by the Franchisee’s and prospective Franchisee’s, based on management’s “Credibility”.
The Founder, so far has blamed the economy. The real risk of buying a Franchise.

Franchisee’s allure of running their own business can cloud their judgement. All the information was given to Franchisee’s to run a successful business.

“I can’t give you a number, but if I told you, you would write a check tomorrow.” The Founder defended and thanked great people like Bo, who responded to the unhappy franchisee blog with “stupid blog site”, “immature & irresponsible”, “you’re an idiot”, “mental midgets”, “pissy franchisee’s”, “are you truly that stupid”, “what you’re seeing here is broken franchisee’s”, “negative nerds” “I’m a Play n Trade area developer and I love it!”

The Founder and C.E.O. should be proud of their professional management team.

The C.E.O. blamed ex-employee’s, Gamer’s Doc and other’s for Play n Trade’s problems. How every Play n Trade is developing a new POS program, new Unified Buying Program and a new National Marketing Campaign. When did Play n Trade start Franchising?

Hollywood Entertainment/Game Crazy, has been declining for the past 3 years? When was the last new store opened?

“Credibility” whatever happened to taking “some” responsibility, company names come and go, your personal name and reputation, follow you the rest of your life.
The Real Truth on May 8th, 2009 12:09 pmA few more comments for corporate that you can ask them about on your next webinar. As for Yakety Yak, ask them how many employees actually work for the company. On the website they have a beautiful picture of all of more than 40 employees standing on the beach living “the good life”. They would like to make you believe that you have this huge support system behind you while in reality, there are less than 5 dedicated employees to the Yakety Yak franchise.http://yakitup.kwiqq.com/about_us
Now lets look at Play N Trade. Same story as above but they took down the picture of the employees since they laid off more than half of their staff. Strangely enough,the photos on their website showcases stores that have been closed for more than a year. http://www.playntrade.com/franchise/gallery#/uploads/franchisegallery/images/3659eb43b6fbfd8c3669d3c5a87d95b0.jpg

When you buy a franchise system, you are buying the marketing and training support that will help your store become successful. Given that most of the employees that they feature on the sites don’t exist, the stores that are pictured have closed, and the UFOC does not accurately disclose any of this leads to just one conclusion- Dont get duped into investing a single dime as you will fall victim to the same scheme that has tricked so many other honest investors out of their entire life savings.
Flip Wilson on May 8th, 2009 11:40 pmI cant believe you guys are still flapping your lips about this company. It’s a loser and that’s all there is too it. To continue on with this is a total waste of time.
Duncan on May 9th, 2009 12:29 amlet’s the number talk.Give the real number about the profit of each PNT store and let the prospective and current franchisees know what is the best to own a PNT store, Mr. CEO and Mr. Founder.
What are you guys afraid of????

You cannnot do that can you? Because if you tell the truth, the numbers will scare all the people. You do not need to give all the stores, you can just give the top 5 or to 10 stores in your ‘best knowledge”. I am sure you are not willing to do so and you and all of the others knew it as well.

It is too bad for “the fast growing video game franshise in the nation or world”.

Do not just give excuses, these are all non-rosy numbers.

Go on for your “great brand name”.
Joe on May 9th, 2009 11:14 amThey will never give up their numbers, if a majority of their stores were profitable, they would be giving them up in a heartbeat. Anyone who is still considering this franchise, I hope you have about 2 pages of questions for them at corporate, and I would call every owner, both closed and open, add that info to the questions for PnT corp.
Carol Cross on May 9th, 2009 1:31 pmJoe is right, Duncan! And, there is nothing in the law that requires a franchisor to give up the “bad numbers” to new buyers of the franchise. What does it tell you when over 80% of all franchisors DON’T make earnings claims within the Franchise Disclosure Document because they can OPT not to disclose these numbers, and it is against the law to disclose them OUTSIDE of the actual FDD and the Contract. (Read “Franchising Fraud: the continuing need for reform, by the American Business Law Journal, l Jan 03, in a Google Search)
Duncan on May 9th, 2009 11:51 pmCarol and Joe:Thank for pointing out the reason for PNT not giving out the numbers.
It must be bad for them, otherwise, PNT will get it out to let the whole universe know the “brilliant and great brand name”.

The law does not ask them to do so, it does not mean that they cannot let it out in the FDD and UFOC if it is benificial for them to sell their franchise.

That is the real goal of my question.
ADMIN on May 10th, 2009 9:20 amHere’s a short discussion between a franchisor attorney and a franchisee attorney on the use of earnings claims and whether it should be mandatory:http://www.allbusiness.com/franchises/franchisee/11675060-1.html
Carol Cross on May 10th, 2009 12:05 pmThis short discussion on the site referenced above made my white hair stand up on my head. Thanks Sean! I’ll just comb my hair back down and use a little hair spray and I’ll be ready for Mother’s Day fun.Warren Lewis did not in any way explain the real reason, in my opinion, that almost 80% or MORE of franchisors DON’T disclose “earnings claims” after 30 years of the FTC Rule. It is laughable to say that franchisors haven’t lobbied against mandated earnings and that the franchisors haven’t actually written the FTC Rule through their lobbying efforts.
I’m sure that Mr. Lewis doesn’t live in a parallel universe. It is prospective and current franchisees who perhaps live in an “unseen world” where government and special interests premeditate that the pool of prospective franchisees must always be full and uninformed —and vulnerable to prohibited earnings claims, implied or otherwise, made OUTSIDE of FDD and the actual franchise contract.

If franchisors know that their franchises have weak performance and poor earnings, why would they want to expose this to new buyers when the government has made it possible for them NOT to disclose poor performance of their units to new buyers, and with apparent immunity under our laws.

Mr. Lewis appeared to want to lay the blame on the FTC and this is okay because the Congress and the Executive did decide that franchising was so important to the economy that “true and accurate” disclosure of the actual risk involved to NEW buyers of franchisors would inhibit the sale of franchises and slow down business activity.

Duncan, if you carefully read “Franchising Fraud: the continuing needf for reform” by the American Business LAW Journal, (l Jan 03) you will understand that ALL of the SPECIAL interests who benefit from franchising, including The American Bar Association, KNOW that prospective franchisees don’t get sufficient or even “legal” disclosure of the risks involved from the seller, the franchisor, but that prospective franchisees are designated as premeditated sacrifices to stimulating and growing the economy.

To do this, the federal government had to take franchising out from under State Laws in order to protect the franchisors from “fraudulent inducement” claims with the FTC Rule BECAUSE they knew that it was the franchisors’ SYSTEMS that had to be protected in order to grow franchising in our economy. (I was so dumb when I first started to research that I thought “churning” was illegal and didn’t understand that managed “churning” is what has made franchising so durable in our economy)

In effect, the FTC Rule PERMITS the franchisors to OBSCURE MATERIAL INFORMATION from new buyers of franchises and maybe this is what Mr. Lewis was really saying when he indicated that it was the FTC who decided in 1979 and again in 2007 that “earnings claims” would NOT be a mandated disclosure item and would remain an OPTION for the franchisor —And, “ha-ha” — earnings claims made OUTSIDE of the Disclosure Document (FDD) would be prohibited. And, of course, there would be NO private right of action for franchisees who would be fraudulently induced to contract.
Duncan on May 11th, 2009 1:19 am“To stimulating and growing the economy” on all the expenses of the small business people????How many franchisees have been lured into the traps and then fell into the black hole of bankruptcy by those franchisors are not the interestes of those shameless crooks.
The law has to be changed. The lawmakers are standing by the big corporates, the banks, and the health insurance companies “to prosper the economy” like we are in now. “No lobbists, then there will be no low”. What’s a joke!!!!

Actually, the lobbists make the laws and the comgress just bought by those guys.

That is the big problem in America.

Thank you Carol!! Your post is very informative and I believe many people in this blog appreciate for that, except those frauds. They may also learn something too.

They are laughing now because the law is on their side.

Crooks are always crooks. They will never changes!!!
John on May 11th, 2009 4:20 pmCarol and Duncan – Earnings claims are a good idea and prospective franchise buyers should seek out franchisors that make Financial Performance Representations – FPRs -(i.e., Earnings Claims) instead of doing a poor job of pre-purchase due diligence and buying some fly-by-night or poor quality franchise. At the same time the FTC made the right decision in 1979 and 2007 in NOT making FPRs/Earnings Claims mandatory.Whether you like it or not franchise buyers are subject to caveat emptor and have to look out for their self-interest forst and foremost. In other words the government ain’t your mommy or daddy.
Joe on May 11th, 2009 6:55 pmHere are a list of questions I had asked PnT corporate when I was looking into them, this is before the California Issue and why you should be asking them if your still interested.1.What is the AWUS(Average Weekly Unit Sales) on stores that have been open over 6 months. They had told me that they would get me something, but never did, my guess is that the number is probably pretty low.
2.Some examples of the marketing they are doing with the 1% of royalities that go into their national fund.

3.Why do they have a tier royality system? meaning that after yr1, 2, 3, if your not

doing a certain amount, your royalties go up, sometimes double or triple.

4.What is being done by corporate to try to slow the store closing issue. Are they working with the franchisee’s to maybe, lower royalities, finding new buyers. 23 stores closed and 28 opened in 09 is not a very appealing number.

5.If PnT losses its appeal with the state of California, can they afford the penalty?

These are all questions that they can answer, there are no earnings questions, if they dont, tell em your not interested untill they can give you answers.
John on May 11th, 2009 7:01 pmActually Joe your question “1.What is the AWUS(Average Weekly Unit Sales) on stores that have been open over 6 months. They had told me that they would get me something, but never did, my guess is that the number is probably pretty low.” if answered outside of an Item 19 FPR (Earnings Claim) would be a violation and can only be answered in an FDD in the Item 19.
author on May 11th, 2009 10:49 pmWhat Carol & co. overlook is that retail sales in general are down considerably, so earnings claims based on sales from 2 to 3 years ago would be misleading by being overly optimistic.Earnings information is there for prospective franchisees who actually dig in and get it. Even with earnings claims information, franchisees need to be willing to do their homework and take responsibility for their own decisions.
Free enterprise means that people are free to succeed but also free to fail. Why is it that when they’re successful, it’s the franchisee’s doing but when they fail it’s the franchisor’s fault? Nobody held a gun to anybody’s head and made them start a new business. If you don’t want risk, keep your money in your mattress.
michael on May 11th, 2009 11:13 pmjoe,Are the numbers of 23 stores closed and 29 stores opened the correct numbers for 2009?
Looking at those numbers if this is the case along with the allegations in California, it appears that it would be business suicide to open up one of the franchises at this time as the company might not be around to support the new franchise.

I would love to hear from someone who is getting close to committing to opening a store soon on what their thoughts are now.
Carol Cross on May 11th, 2009 11:51 pmJohn and Author!Try to understand that “franchise purchases” are treated differently under the law because they were taken out from under State Law when the FTC promulgated the rule.
Franchisors are permitted to sell franchises without disclosing ANY of their proprietory UNIT statistics to new buyers of franchises. This is a unique situation in commercial transactions, wherein ALWAYS the SELLER, who stands to profit, is required under law to DISCLOSE all material facts to the buyer or be vulnerable to a claim for fraud.

If a franchisor doesn’t disclose in the FDD and the Franchise Contract, it is AGAINST the law for him to disclose anything concerning “earnings” etc. before or after the franchise contract is signed.

Why should new prospects have to do their due diligence with current and ex franchisees who have no legal obligation to tell a new buyer anything, and anything they say has no legal significance when the prospective franchisee buys the franchise based on the recommendations of ex and current franchisees? Can’t you see that this is just an artifice to permit the franchisor to sell the franchise and not make any earnings claims himself, in the WRITTEN FDD and Franchise Contract.

If PlayNTrade are in trouble in California, there is good reason for this and this alone, in my opinion, is a good reason to avoid this franchise

Understand that less than 20% (nobody knows for sure) of Franchisors actually make earnings claims in Item 19 and these are usually less mature franchisors who actually have produced profits in return for the risk taken by the franchisees. Most of the big national franchises make no earnings claims and haven’t for 30 years. The ability to overseed and to churn has contributed to the durability of franchising in our economy.
John on May 12th, 2009 10:22 amDue diligence is a buyer’s responsibility.
Played N Traded on May 12th, 2009 10:47 amTo John:It is very hard to do due dilligence when the numbers and information given to you by the company you are researching are false and/or misleading. It is this type of deceptive business practice which has landed PNT in the situation it is currently in. When I went to purchase my franchise, there were only about 14 stores open, but there were 75 franchises sold. I phoned each and every franchise that was open. They were all happy. I was not given a list of any closed franchises at that time. Of those 14, only 4 are still open 2 years later. That doesn’t sound like a success case to me. Blaming this situation on lack of due dilligence is incorrect.
Carol Cross on May 12th, 2009 10:57 amTo John!If Due diligence is a buyer’s responsibility, why doesn’t the SELLER, the franchisor, have the obligation and responsibility under the law to make a timely disclosure of material information in the seller’s possession upon which prospective franchisees can conduct due diligence?
Joe on May 12th, 2009 11:03 ammichaelAccording to the franchisee ive talked to, that was the most current number he had, but he did say that was thru April, he knew of about 6-10 stores that were in the process of closing, or preparing to close, so by the end of this month, that number could be as high as 40+. He also said that a majority of the stores that had closed in 09, had been open less than 6 months. Can anyone say undercapitalization, my guess is they were told that they could run their store with 50k in operating capital, which is what they told me when I was looking into it. I guess that number is a little off!!!
WakeUp on May 12th, 2009 11:26 amNo offense, but I think you franchisees want to have your cake and eat it too as they say.You wanted to go into business for yourself but you don’t want any risk. You want to go with a brand new concept that is evolving, but you want it to be a proven, sure-thing winner… guaranteed.
It doesn’t work that way. That’s what you are finding out just now.

Sorry, but you should have thought of this before but you didn’t and now it’s on you.

Play N Traded wrote there were only about 14 stores open and 75 franchises sold. He called them all and they were all happy. Didn’t it occur to him that there were only 14 stores open (meaning no track record) and they were about to quadruple in size in a short amount of time. It just occurs to him NOW that these guys were figuring it out as they went along?

If you wanted something with an established track record and years of operating history, why didn’t you buy a Subway? or a 7-11?

You wanted to take a chance on a new untested concept and risky trend. You gambled and you lost and now you want to blame the franchisor.

All new businesses are a risk, especially something involving buying and selling electronic media and competing with huge retailers. Did you honestly think because you bought a franchise you would be immune to the high risk every new startup faces?

I’m not saying the franchisor is right if they lied about the capital needed, but come on… take some responsibility for your choice of a risky, trendy venture.
Yes, please do wake up! on May 12th, 2009 11:34 amI want to second what he said. Please, by all means, if they lied to you sue them. But I don’t think they lied. I think that you talked to some franchisees that told you it was a great business, you saw Game Stop kicking ass, and you wanted a piece of the pie! That is TOTALLY understandable, but you got in over your head. From what I have been able to discern by talking to franchisees, the company used to tell people they needed about $130K to start a store, and now they have figured out that that is wrong. They are telling me more like $225K, and I am thinking it will actually be closer to $300K. . . Like Wake Up said, they are still figuring this out. If I wanted a safe (albiet low) return on my investment, I would go with a Subway (who all their owners seem consistently to profit about $30K per store per year after 2 years open). However, I plan to aim for the fences, with PNT or another newer franchise, and I know that is a higher risk.Whatever venture I chose, if I fail that will be on me. Unless the franchisor blatantly lies to me. If they do that, then I have a great suit against them, and I sue. But that doesn’t seem to be the case with PNT.
Joe on May 12th, 2009 1:11 pmWhy do you think they used a figure of 130K???To sell franchises, 130k sure looks a lot better on paper, then lets say 500k
John on May 12th, 2009 1:56 pmIf franchising and franchisors are so bad then why aren’t there thousands of failed and failing franchises posting non-stop on the internet sites like BMM, FranchisePundit and Unhappy Franchisee?
Duncan on May 12th, 2009 3:02 pmJohn:You are right. Deadly right!!!!
If someone cheated you and it is not the fraud’s fault but yours because you did not make your own “Due diligence” research!!!

If PNT told the prospective franchisee that you need $250k to $500k capital to run the business, do you think the people would be still flocking to it?

If they gave the real numbers of profits, the things would be completely different.

Nobody think when you open a PNT store, you are guarantied to be a millionaire and every one knew the risk to start a new business.

However, you have to tell the truth in the FDD and UFOC according to the regulations and law!!!!!!

Don’t you think the Order from CA DOC mean anything?

It is not just coming from the thin air, right?
John on May 12th, 2009 3:13 pmPNT may very well be a crap franchise and CA certainly to offense to their selling non compliant offerings. I am referring primarily to the ridiculous posts by Carol that damns all of franchising as a giant fraud.
Inside Info on May 12th, 2009 8:48 pmI heard the officers were pulling 60K a month each out of the company. Most people I talk to have never heard of Play N Trade.Where is the marketing?
LU on May 12th, 2009 9:04 pmI am very tired very broke after Oppening and eventualy clossing a PNT store, PNT corporate did cheat me and many other good hard working people who were taken to the new port beach headquarters were they hired a pitch man and we were misslead. And the lack of due diligence on our part is crap. All the numbers we had came from corporate or they showed us general industry numbers on how this industry was growing they never mentioned the astronomical cashflow needed to run and operate a store or how many stores were clossing all they gave us was RAH!RAH! Play N Trade and how many store had been sold. I bought a franchise with the best intentions and I made a mistake for me and for my family now I have to recoup what ever I have left and hope there are franchisees out there with better luck.
John on May 12th, 2009 10:42 pmLU – If they used industry statistics to make their offer look attractive in their sales material or presentation they may have made an illegal earnings claim. You need to have a conference call with someone at Dady and Garner http://www.dadygarner.com to see if you have an opportunity to recover anything.Listening to a fool like Carol or simply complaining on websites will do nothing to put money back in your pocket.
Joe on May 12th, 2009 10:50 pmInside Info,Yea it would seem that way, just by looking at their Financial’s from their UFOC,
for 07, they had management fee’s of 5.4 million, so yea they are making a killing, while most of their franchisee’s are broke. By looking at their P&L, you can see that they reinvest a big fat 0 into the company.
Joe on May 12th, 2009 11:30 pmHere is Yuvi Shmul, former CEO of Play N Trade and Yakety Yak Wireless, also named in the California complaint.“What type of investment would you recommend to business opportunity seekers?
While I would obviously recommend someone to enter a fun and rewarding business, I would strongly encourage people to look into their return on their investment. Yakety Yak created a licensing structure without the enormous up-front franchise fees and outrageous monthly royalties.

Our licensees can open and operate a store with a very reasonable level of investment, return their entire investment in less than a year, and enjoy a very simple yet profitable business within the first year and thereon after. Our licensees can be owner/operators, or owner/ absentees, while owning one store or multiple locations.”

http://www.franchisegator.com/interviews/yakety_yak_wireless_ceo_interview.html

This why PnT is in the trouble they are in, i bet he said the same thing, just take out the Yakety Yak, and insert Play N Trade.
Played N Traded on May 13th, 2009 2:33 amTo Wake Up:Wow, you must think myself and the other franchisees here are complete idiots. Do you honestly believe that anyone with the means to gather $150K to start a business isn’t aware of the risk. There is no such thing as a risk free investment. The closest thing is U.S. T-bills or bonds. I wouldn’t buy either one right now! You’re damn right I saw Game Stop and other companies making a killing on this. However, I didn’t expect a “guarantee” of success. Incidently, I’m not sure what you mean by “trendy”. That implies that there is a downturn as well. Game sales have risen every year since 2000. That’s a pretty long “trend”.
The issue here, and what this whole post used to be about, is whether or not PNT made proper and/or fair disclosure of the realities of their model. The state of California sure seems to think they didn’t. I have told my story here in the hopes that someone considering this franchise will think twice, and go somewhere else. The only thing I am guilty of is falling for a rotten scheme, and believing that the information I was given was accurate. I didn’t think, and don’t think, that any franchise or business is a license to make money.

The fact here is that myself and many other franchisees were given false information about start-up costs, product margins, and store operating costs among other things. These are facts, and we have the documentation to support it.

The founder of the company ran stores in Colorado for several years before franchising. We were led to believe that he was successful at doing it, and that his model worked. Are you believing he didn’t know how much it would cost an average store to replenish it’s inventory each month? Are you believing he was unaware of the miniscule margins in this business? This wasn’t about them needing to “still work things out”. This is the same man who has been quoted by many franchisees as saying ” I can’t tell you how much you will make with one of these stores, but if you knew, you’d write me a check today”. Please don’t make genaralized comments about the franchisees if you don’t know the FACTS involved.
Jim Herst on May 13th, 2009 9:53 amPnT people, and any others in financial distress should consider how a Debt Management service can bring a breath of fresh air to their problems. Franchisees facing debt will sleep better when they recognize a solution exists and can be in place in 24 hours.Free and confidential discussion with a professional Debt Management specialist will be an eye opener. My 46 years of experience has delivered meaningful relief to thousands. My successes exceed 93% of all matters handled. Try me? Jim, Herst 800/883-5080. Let’s talk.
michael on May 13th, 2009 9:58 amInside info:If what inside info is saying is true, the officers are taking $60,000 per month and the P&L shows the officers are not reinvesting anything back into the company, along with the allegations in California, if I was a PNT franchisee I would contact an attorney immediately as it may appear that by 2007 the officers realized the model won;t work and might be trying to oversell the hype to get is much out of the company with no long term intentions that the company will succeed.
All franchisees should consult and attorney immediately in my opinion.
Ricky on May 13th, 2009 10:15 amIt continues to absolutely amaze me that there are still open stores and the owners who know they will never make a dime from this flawed, defective model PNT calls a franchise that still want to say that all the closed stores were do to the people running them. So many if not every one of these stores had owners with high hopes of success and the knowledge to obtain the funding and the background to run a successful small business. The problem with Play N Trade is that number one there is absolutely no buying power, there is no brand recognition, a seriously lacking POS system without proper support and a group at the corporate office that changes monthly. One other tidbit of information that was and maybe still lacking, and is major, and that would be start up costs. There is absolutely no margin in this business and you cannot possibly sell enough used merchandise to sustain your business. PNT never let potential franchisees know how fast stores were closing, only how fast how many were opening…major deceit. PNT has destroyed many families and many lives and I believe that cannot and will not continue and it is now thank god only a matter of time before this company will have to claim bankruptcy. I understand there are many lawsuits now pending and many more on the way. I sincerely hope no one else gets involved in this scam.
Joe on May 13th, 2009 10:26 amThey make 75-80% of their money on franchise sales, not royality payments.With the economy in the tank, and small business’s not being able to get loans,
im sure their franchise sales are way down, and thus their cash flow is way down, add that to the California issue of returning 50+ franchise fee’s and fines from the state, plus all the other states that may now be investigating PnT.

Its not a very pretty picture for any franchisee with PnT, open or closed
Duncan on May 13th, 2009 11:48 amCarol:As Joe said what is the out come for other franchisees of PNT in other states if CA find PNT guilty as charged?
What is the worst or best scenario for the current opening stores?

It may be at the best interests of the prospective franchisees to fall into the financial black hole.

Will the law protect the frachisees interests if the franchisor files bankruptcy? In what way? Or can they just close their doors and walk away without any financial resposibilities to the franchisees?
John on May 13th, 2009 11:58 amBankruptcy allows PNT to affirm or reject the franchisees’ franchise agreements and while in bankruptcy PNT with the bankruptcy court’s trustee and judge will compel the franchisees to pay PNT royalties and ad fund remittances. Bankruptcy protects the estate on behalf of the creditors of the filer (PNT) not the franchisees of the filer.However corporate bankruptcy does not protect the executives on a personal basis especially if they enriched themselves through fraud.
Joe on May 13th, 2009 1:07 pmIf I was a PnT Franchisee right now, I would be doing a few things.1. Talk to your Lawyer about everything that has happened in the last few weeks.
2. Talk to your CPA, find out where you stand money wise, how much and how long do you have.

3. Carefully talk to your landlord, DO NOT tell them you about to go under, there is a good chance that with all the defaults, they are hurting as well, something is better than nothing and you might be able to work out a settlement to get out of your lease(consult your lawyer on this also)

4. While you may be going under, your store does have inventory, nice tvs, computers. Start going thru your inventory, start looking at e-bay, Craigs list, find out what you can sell there, there is no point of having a liquidation sale at 50% off when you might be able to sell it there for 5-10 less than retail.

My point is that while you may be in finacial hell for a long time, you might be able, if you play your cards right to avoid BK
jd on May 13th, 2009 1:09 pmI’m curious to know how many of the franchise owners that are posting on this website read the SEC filings of Gamestop. From what I understand, they would be one of your largest competitors. Their cost of sales are at 74%. Add on your royalty percentages, and it doesn’t leave much for other SG&A costs.
ADMIN on May 13th, 2009 9:59 pmComments relating to, discussing or referencing Carol Cross have been moved here:http://www.unhappyfranchisee.com/carolcross/
Jim Herst on May 13th, 2009 10:58 pmI read and hear much about the problem facing PnT franchisees, but very little on what steps are being taken to preserve sanity and money. Having seen other situations like this, and having had the satisfaction of seeing relief bring smiles to those stumbling in what is believed a lightless tunnel, I’d love to share ways that have made others sleep better. There are services available that resolve such problems. Rather than talking of personalities, I can show HOW proven actions can bring a breath of fresh air where and when needed. No commitment either side, of course.
Duncan on May 14th, 2009 1:26 amJim, you may be the light at the far far end of the looooong tunnel. Please enlight us with your insight views and knowledge.I am all ears and I am sure others the same as well.
Jim Herst on May 14th, 2009 9:28 amI thought you’d never ask. Thank you.If there are debts one wants to pay but can’t, Payables Management is a process of achieving strategic debt settlement, executed by an Authoritative Third Party, on behalf of a financially distressed entity.
It is an alternative to bankruptcy and serves to either sustain a going business or to enable orderly liquidation when a business terminates. Creditors are satisfied as a debtor saves money.
Shed Some MORE Light on May 14th, 2009 10:48 pmNot that I still don’t have anything else to say…I just wanted to be the 200th post.
Thank you for shopping at Tooled N Played… Have a day…
Shed Some MORE Light on May 14th, 2009 10:51 pmOkay, 201th post (try to pronounce that one), on this “Bashing Blog”…
Shed Some MORE Light on May 18th, 2009 5:48 pmIt looks like things have slowed down a bit on this blog, and I was considering never to post anything on here again; since most of what’s on here has been covered already.BUT… here’s something that I received today on http://www.franchising.com:
http://www.franchising.com/playntrade/?ref=ED_Newsletter_2009-05-18

Look at the title of this article:

“Cash in on our ‘recession-resistant industry’”

I’ve got to say something here, (and AGAIN, all of what I’ve said before and am writing now is JUST MY OPINION). This is the reason why I believe PNT has the problems they have; it’s what you might call: “predatory marketing !!!”

I could be completely wrong but I thought using “industry standard numbers” (like they did in this article) could be interpreted as an “earnings statement,” as to entice you to buy into this franchise. Isn’t that illegal to post those kinds of statements?

If not, then where does PNT fit into those ‘recession-resistant industry’ numbers, not only in gross sales, but actual profits (on average) per store?

BTW, this link said that PNT has 250+ stores currently open. If I were to take that number of stores then subtract around 34-37 stores (that closed in 2008) and subtract another 23 stores (that have closed SO FAR for this year in 2009). Then add the 28 that have opened; that equates to 37 (give or take a few), that (in total) have closed. You now have around 218 stores that are currently open.

This doesn’t take into account the stores that are going to be closing soon. And you know which store owners you are…

ALSO, this doesn’t include the amount of FRANCHISE RIGHTS that have been taken off that list of stores that NEVER OPENED AND ARE NOW EXPIRED !!!

Again, they (PNT) claim that they are in a ‘recession-resistant industry.’ Okay that may be true for the “retail game industry” in general, BUT can someone please post the actual percentage (up or down) for their same store sales this year for the first quarter for PNT? Can ANYONE PLEASE DO THAT?

While we’re waiting for those numbers for that BOLD person out there to post it, check this out the link (below). This is actually on the same article that I just posted (above). This link (when you select it) has a picture of Tim Dunnigan:

http://www.playntrade.com/popup/pnt_testimonials.html

Here’s the thing that URKS ME, in this video (for whatever reasons why) two of the three franchise owners have already closed. And what gets me even more, they are STILL USING THESE TESTIMONIALS for stores that HAVE CLOSED !!! WHAT IS THAT ALL ABOUT !!!

That is just: “Bad Marketing 101.” Hey, there’s another book title that Yuvi Shuml can write about. (You know, you just have to have a good laugh while you’re crying with all the money we’ve lost !!!)

I want to emphasize I feel bad that those two store owners had to close their stores, but WHY IS PNT STILL USING THIS VIDEO !?!?!?!?

Oh wait, I could be wrong, but maybe PNT’s marketing strategy in this video let’s people know that: “YOU TOO could be the next store that CLOSES no matter how amazed and enthusiastic you are about the franchise !!!” That’s it – NOW I GET IT !!! Man, how could I have missed that ?!?! Well at least I know now…

ALSO, what are these numbers that they’re still using? “Total Investment Range:

$197,250 – $412,900″ – You need bare minimum $350 – $500K. But see, using THOSE numbers that I just mentioned; NOW you’re getting OUT of the range of what people CAN afford to get into this business. And that’s the point. I believe PNT are here to sell franchises – PERIOD !!! I’d like to know which store owner out there that only had $197,250, was able to use that amount of money (and not a penny more) THAT IS STILL OPEN – MAKING ANY KIND OF VIABLE PROFIT FROM THAT STORE…

PLEASE REVEAL YOURSELF… PLEASE… I want to give you a “virtual-blogging” high five !!!

Ultimately in the end, you have to be the judge of knowing if this franchise is worth investing into with doing your own due diligence… Enjoy “due-diligencing”…. I know, there’s no such word, but if there was…
ADMIN on May 18th, 2009 6:24 pmPlay N Trade Franchise Sales Video posted here:http://www.unhappyfranchisee.com/play-n-trade-franchise-sales-video/
This video is still active on YouTube.com Comments invited.

Who is the couple that is featured and where is their store located? Is it still open?
Shed Some MORE Light on May 18th, 2009 8:13 pmI don’t know. All I know is that Bo Stewart and Martha Cunningham are the two that I was referring to who now have closed their stores. It’s really sad, because PNT is STILL using a video that totally misrepresents the true success that they were reaching for. Again, it’s still sad to see that those two store owners are not open anymore…But don’t forget – “Cash in on our ‘recession-resistant industry.’
I just watched that video again and I still can’t believe they have the GALL to still use that video…

Thank you for shopping at – Tooled-N-Played – Have a day…
Joe on May 18th, 2009 11:16 pmWow, thats pretty low, I wonder if that lady knows that they are still using her as a way to sell franchises? I wonder how many of their franchisee’s feel that their business is a ‘recession-resistant industry’? Im guessing not the ones that have closed, or are about to? The other person in the video, Bo, I just re-read his post on here, my reply would be I guess all the gamers that fell to their knee’s in your store, hit their head on the way down, and could’nt find you on the other side of the mall???? give me a break, it would be one thing if you moved, to the other side of town, but to use a move, in the same mall to a better location(your words).Your first problem, PnT should have never let you sign a lease like the one you had, month to month?? any reputable franchisor would have red flaged the move at your own expense?? Being a former franchisee(not PnT) myself, ever heard of Business Interruption and extra expense insurance?? Guess not. Hopefully some poor sap that you sold a franchise to, puts your name next to PnT Franchise Inc on the lawsuit.
Bill Metussi on May 19th, 2009 10:17 amI looked into this a year a ago. How could you call a video game business recession proof? (which they had claimed) Their erroneous statements and deceptive advertising alone will bite them in the butt. The company will not be around in the next 5 years.
Money Back on May 19th, 2009 11:09 amSpeaking of lawsuits, when is the class action lawsuit going to happen?
Shed Some MORE Light on May 19th, 2009 2:43 pmThis is to Bill Metussi:In NO WAY did PNT “say” “Recession Proof.” What they DID say though is “recession-resistant industry.”
But this proves my point all the more; it’s not WHAT was said – just what was IMPLIED.

That’s part of what I believe what I said before; it’s “predatory marketing !!!”

Although PNT didn’t SAY “Recession Proof,” what did you walk away thinking PNT said?

That is what might get them in the end; maybe not on a legal standpoint, but after reading this blog in it’s entirety people are smart enough to see through this…
Bill Metussi on May 19th, 2009 4:30 pmWere you listening in on my conversations with reps. from their comapny? It was stated sevral times at a franchise show and follow up phone calls.It’s also stated in many of their advertising pieces. Here are a few for example.
http://www.franchise.com/franchise/photo-video/dvd-rental/Play-N-Trade-Video-Games/company-information.cfm

http://www.franchisegator.com/startupnation/Play-N-Trade-franchise/

No creditable source cited as to which “experts” say the video game is recession proof. They are making these claims themself.

From what I have found it is not a bad business, but their earnings claims and statements are questionable.
Shed Some MORE Light on May 19th, 2009 5:15 pmWow, I don’t ever remember ever seeing sites like this. I can’t believe this kind of statement was posted. Well, I shouldn’t be surprised.I get what you’re saying, but again, WHO are those “experts?”
Also, I have another question. You said – “From what I have found it is not a bad business” then said – “but their earnings claims and statements are questionable.”

Help me to understand this please.

Also, please don’t take this the wrong way, but that seems like an “oxymoron” comment.

From the one end you’re basically saying they’re not a bad business, then you’re questioning their earnings claim. Doesn’t make any sense to me.

How do you know that this isn’t a bad business?

Wait, I get what you were saying, that although you believe their earnings claims and statements are questionable you found it to be not a bad business.

Wait, that STILL doesn’t make any sense. I got a headache now, I need some Ibuprofen…
Bill Metussi on May 19th, 2009 10:32 pmMaybe I should have said not a horrible or bad industry, but Play n Trade is in question. I have looked at a few other video game concepts and I think the industry and game business will always be around in some form, but your not going to get rich off of it
Shed Some MORE Light on May 20th, 2009 9:26 amWell, it looks like a few people at PNT corporate did…
2007 Franchisee and STILL OPEN! on May 20th, 2009 5:51 pmQUESTION WAS:ALSO, what are these numbers that they’re still using? “Total Investment Range:
$197,250 – $412,900″ – You need bare minimum $350 – $500K. But see, using THOSE numbers that I just mentioned; NOW you’re getting OUT of the range of what people CAN afford to get into this business. And that’s the point. I believe PNT are here to sell franchises – PERIOD !!! I’d like to know which store owner out there that only had $197,250, was able to use that amount of money (and not a penny more) THAT IS STILL OPEN – MAKING ANY KIND OF VIABLE PROFIT FROM THAT STORE…

**********************************

I opened a store in 2007 for less than $150,000….inventory included, fixtures included. I ran on less than $30K in the bank for almost 16 months. Gross Sales for my first year were $452K. My accountant did tell me that I was MAKING money. I took home a paycheck every 2 weeks.

Is this business frustrating — HELL YES!! Did I have to go out and make my own marketing — HELL YES!! After 1 year, I was confident enough in the concept that EVERY prospective franchisee that called me heard what I had to say. I am positive and upbeat about the business….to this day!! I did not expect to see a turn until year 2 and beyond. if you thought you were going to change your income structure and move into that million dollar mansion in less than a year then you were “dazed and confused”.

It is now 2009…economy has slipped, money is tighter, and EVERYBODY’S lifestyle has taken a different turn. Pull yourself up by your boot straps!!

Can you compare last years sales when people were buying new cars left and right and my house was worth 5X what it is now to todays REAL market??

I have to market differently than last year. My sales are down but not for PNT Corps lack of respect to me…but because of my local market. I do not blame PNT Corp for my sales being down…I do not blame anybody. Go forbid I was in the car dealership business.

With that said, are there improvements in the current system that can be worked out ALWAYS! Subway came out with a toasted sub after Quiznos came up with the concept. But I do not know of a lot of the Subway franchisees that I have spoken to that said they should have thought of it first.

Larry P inherited a mess…like Obama…and you have to move forward with the best knowledge at the given moment. If anyone on this blog has a crystal ball and can see into next year and what the economy/local markets will do then you need to go on OPRAH and tell her about it.

Does PNT Corp need to follow rules/law/disclosures…yes.

Should PNT “pay” for thier errors..only a judge can say.

Was I duped in 2007? No way…I did my background work..I followed through with my diligence..I visited stores (still do).

If you wanted get rich quick, just watch late night TV and you could “make $3500 in your first 4 hours” working for the comfort of your poolhouse…results are not typical!

At least PNT’s CEO, COO, VP’s are not Fugitives like Cuppy’s.
Shed Some MORE Light on May 20th, 2009 7:33 pmThis is to: 2007 Franchisee and STILL OPEN!I did say: “I’d like to know which store owner out there that only had $197,250, was able to use that amount of money (and not a penny more) THAT IS STILL OPEN – MAKING ANY KIND OF VIABLE PROFIT FROM THAT STORE…
PLEASE REVEAL YOURSELF… PLEASE… I want to give you a “virtual-blogging” high five !!!”

YOU HAVE BEEN – HIGH FIVED !!! (virtually speaking)

CONGRATS MAN !!! Honestly, that’s very encouraging to hear. I truly hope you continue to push through this fiscal mess that we’re in globally and be one of the stronger PNT stores that is able to stay open. I wish you the best.

It’s too bad though most of the franchise owners that I spoke to that were “so-called” negative about the franchise (after being open between the first 12-24+ months) were really sharing a warning call to me. Although I still chose to ignore them, we kept in touch from time to time. But honestly I didn’t want to believe what they were sharing. It’s only until they showed me actual numbers (like what’s been shared here on this particular blog). Although I wasn’t able to open my store and lost my franchise rights on top of that, all of the other owners that I kept in touch with are still open pumping money into this business and are still losing. That’s why I said before more stores are on their way to closing soon, and that’s what’s sad. Some PNT owners even CONGRATULATED me for NOT opening, because they said I could have lost MORE than what I already did. Quite honestly, I’m still very torn about what’s happened, not only in my case but many others as well…

Lastly, when you talk about PNT’s CEO, COO, VP’s not being fugitives like Cuppy’s – one thing I’ve learned with what’s happened in the last 20 years or so, never say never…

To the rest of the PNT owners out there you may want to listen to this and prepare for the possibility of what Gerald Celente (and other economists like him) believe will happen. Can your store handle this if this happens?

Part 1 of 3:

http://www.youtube.com/watch?v=GD4fQzACdJs&feature=related

Part 2 of 3:

http://www.youtube.com/watch?v=r5j2vs5Rxo4&feature=related

Part 3 of 3:

http://www.youtube.com/watch?v=NqlwEVSZNVI&feature=related

As I’ve stated before (and will continue to say) all of what I’ve shared on throughout this blog is JUST MY OPINION…

Again I say to you (2007 Franchisee and STILL OPEN!) – CONGRATS MAN !!! I wish you the best success for your store…
privatename on May 21st, 2009 2:51 amI think some are missing the point. They are making valiant efforts to reorganize the company. They bring an industry expert and boot any individuals that were assumed by franchisees to have been misled. The CEO is always online and taking calls from franchisees (who was the reason Game Crazy is what it is today). If everyone would just stop bitching and actually listen to the guy maybe some might make some money and certainly learn a thing or two. This shouldn’t be a meeting of buyers remorse as much as it should be about how do things get better and as I have been witnessing, PNT has been working their butt off to help stabilize franchisees and help them return higher profits. If you feel you got a lemon, make lemonade, if you don’t know how to make lemonade start asking, you might actually get the help you need!!
Guest on May 21st, 2009 11:25 amprivatenameWhat point are we missing?? They are reorganizing the company because of the California issue, which by the way is like the 5th time in 18 months that they have done that. Who have they booted?? If they fired Tom Bozarth today, wouldnt that just prove California’s case??? You are correct in that the current CEO has nothing to do with this, but do you really think that the california issue just happened there, that they were honest with everyone else??? If out of 250 stores open, there were 5-10 they had problems, some getting by, and the rest doing well, your point would be valid, but it is the exact opposite, a majority of stores are losing thier buts, you have 60+ stores that have closed in the last 18 months, between 25-30 alone this year and growing. To this day they are using a online commercial to sell franchise’s, 2 of the 3 stores owners in it have gone out of business???? Does that seem right to you? Does that seem like a company which cares about stabilizing their current franchiee’s, by lying to future ones????
Shed Some MORE Light on May 21st, 2009 12:25 pmThis is to “privatename”:I would like to know that “some” is, who are “missing” the point here on this blog. And please be specific with the “stage” names that have been used here on this blog. I’ll be waiting for your reply. Thank you…
pntanonymous on May 21st, 2009 4:38 pmLet me start by saying I have yet to post any comments on this topic but I have been watching very carefully since the article was posted almost a month ago. I am a fellow franchisee and have been with Play N’ Trade for a good long while. We have survived only because of used games and accessories. It is pretty obvious that corporate has failed us, I don’t mean fail as in going out of business, having franchise registration revoked in CA or lack of support because that differs from situation to situation (however, I do feel the support or lack there of is disgusting but more on that later.) The true failure is the inability to unite all the stores under one name so that we don’t have to rely on corporate all of the time. Instead what is everyone doing, arguing on the internet. Sounds pretty counter productive to me personally but to each his own. I love my store and my employees just like everyone else. I don’t think if people truely hated their store they would be so upset. It is out of the passion we all have for our stores that this inner rage comes from. I personally have been pretty upset with the way things have been going for the past few years. The company changes people so often that you never know who to call or email. I don’t feel that Larry Plotnick is the root of any of these problems but I am getting pretty tired of the “everything will be okay once we go to vegas” excuse. I mean what is going to happen in Vegas, group hynosis into thinking everything is going to be allright? No, Vegas is not going to fix anything, nobody from my store will be there because sadly we cannot afford the airfare. Honestly even if the tickets where paid for I wouldn’t waste my time by flying to the middle of the desert to hear more empty promises.I hope all of you owners out there do your research because we found a very interesting article in Playstation magazines June issue of this year. In the article Larry Plotnick was quoted as saying “There are a lot of moms who are buying from places like Target, and later find their way to us. We end up training them about trading in games to buy new games. The difference is these new traders will bring in a ton of games all at once to buy something new, rather than come in more often with the game they just finished.” If you don’t understand the problem with this statement then go ahead and start your “going out of business sale” now. Used games are the backbone of our stores and without them you will not make any money, however, if you have worked in a store for a while you will realize that these mothers will only bring in games once they are pretty much worthless. My ideal situation is for a kid who has just played through one of the hottest new releases to walk in the door trade that game towards a portion of a new release and drop some cash along with that trade. Filling up store acounts with trade credit so that in six months that same mother can come in and get your most expensive system along with serveral games and accessories gets pretty costly after the first few times.
These problems are not confined to California, Play N’ Trade has been failing to inform its inverestors of many things over the years it was just a matter of time until someone took action. For those of you that are truely happy and making loads of money, congratulations! Seriously I am glad that it has worked for some people out there. As for our store we are still here and don’t plan on going anywhere, but i will tell you that none of the credit for making it as long as we have can be given to PNT Corporate.

As far as small businesses are concerned it can take a few years before your location really shines. We all know this to be true, if your lease runs out before that time frame, corporate failed you. Good lease negotiation was supposed to be one of the pros to signing up with a franchise.

Thanks
Shed Some MORE Light on May 21st, 2009 7:27 pmThis is to “Guest”:YOU GO BOYEEEEEE !!!
(Again, all of what I just stated is just my opinion)…
Shed Some MORE Light on May 21st, 2009 11:00 pmThis is to “privatename”:Still waiting for your reply my man…
Shed Some MORE Light on May 22nd, 2009 6:42 pmThis is to “privatename” (aka: LemonBoy):Hey LemonBoy, I still haven’t heard back from you yet. That’s what I thought. I hope you’re enjoying eating your lemons and serving them to your customers.
But we didn’t get “lemons,” when we bought into this franchise, we got “plums,” and you know what they turn into… yup – “prunes”… and you know what they turn into… yup, you’re right again, “hershey squirts”…

I say it like that because of there a few things you still don’t understand. So let’s tap into one or two of your lemon brained thoughts:

Oh, and if what I say “offends” you, please don’t take it personal and be “sour” about it. You said: “They are making valiant efforts to reorganize the company.” Right there, that SOUNDS corporate; “valiant efforts?”

Let me “shed some MORE light” on what “valiant efforts” PNT made.

Remember what I mentioned here on this blog before when I said: “How many employees actually work directly for Play N Trade? The number might amaze you…” Well that number was – 0. Let me explain.

First read this:

“This communication was sent from an employee of T-Street Management Inc (”T-Street”). T-Street is an independent training and management company. T-Street has an independent contractor agreement, a management and training agreement, with Yakety Yak Wireless Inc. (”YYWI”). T-Street is not a general agent of YYWI. T-Street has an independent contractor agreement, a management and training agreement, with Play N Trade Franchise Inc. (”PNT”). T-Street is not a general agent of PNT.”

This what they used as a header for their typical emails that they would send anyone.

It is interesting to the fact that PNT has no employees and how this header supports that. What makes this worse is that I should have seen this and questioned it. Oh well, I guess I’m eating the prunes now…

What’s surprising (not really), since the State of CA is coming after them, they have “reorganized” (once again).

They’re in the process of dissolving T-Street (unless they’ve done it already) and possibly selling Yakety Yak (whoever would want to buy that nightmare). PNT is NOW it’s own company (with employees finally)…

What gets me the most, with all the unemployment issues that we’re currently facing in this nation, why such a high turn over rate? I would think people would be “chompin’ at the bit” to be a part of a “recession-resistant industry” as PNT “valiantly” claim.

So I thought this might “pucker” up your thoughts a bit the next time you decide you want to share your wonderful “fruitful” opinions.

By the way, if I’m off on any of what I’ve just shared please correct me, as I could be totally wrong about all the things that I’ve just mentioned, but my past and current experience tells me different.

Now here’s my “staple” header – “Everything I’ve just mentioned here is JUST MY OPINION.” Far easier to understand than what PNT USED to use for their header.

In the end, no matter what PNT does (I believe) will be a “fruitless” effort… Enjoy your lemons, plums, prunes, whatever…

Wasn’t this supposed to be about video games and not produce? You tell me Lemon Boy…
pntanonymous2 on May 22nd, 2009 11:24 pmAs store owner also, I would agree with everything pntnonymous stated above. the article in Playstation magazine does not surprise me at all, they could care less if everything in your store was purchased with store credit, they still get their cut, in cash might I add. My take on Vegas is the same that was stated above, its more or less just a fundrasier for corporate with the vendors. A unified buying program with 250 stores, or whatever the number is, it will force low volume stores to order more product then they will need, and there isnt enough high volume stores to make up the difference. Anytime you go direct with a publisher(Capcom) or a hardware manufacture(Microsoft) you have to maintain buying levels, monthly, quarterly, ect. Tom McMahon said the same thing. One e-mail stated that vegas was so important, that if you had to, close your store for 4 days to attend. That statement right there tells you the level of support you get from Play N Trade Corporate. As far as the California issue goes, nothing in it surprises me at all. Are their problems with the business model? YES, too many to discuss here. Is the POS junk, YES, complete waste of money, it is so bad, corporate cant even get acurate ranking reports from it(thats not the reason they stopped sending it though). My advice to people who are interested in the franchise, do it on your own, you can do it cheaper, faster, and have just about the same deal I have with the same vendors I have, and NO royalties to pay.My advice to people who have paid their franchise fee, but have yet to open(Sign a lease), take a good hard look at how much cash you have, if its less than 400-500k, walk, just walk. If some had told me a year and a half ago, to do that, i would go your nuts, im not losing 25k, now I would take a 25k loss in a heartbeat.
Shed Some MORE Light on May 23rd, 2009 2:20 amThis is for all you franchise owners in malls throughout the country.1) http://online.wsj.com/article/SB124294047987244803.html
Something for anyone to think about. Gerald Celente has been right for a very long time…

2) http://www.youtube.com/watch?v=vFlKJmE4gVE&feature=response_watch

Here is the ultimate video to watch. Since it’s a long weekend then this will be well worth watching. Weather you believe it or not is up to you. The decisions you make as a result will be what matters…

3) http://video.google.com/videoplay?docid=3543161691381895251

Lastly,

4) http://video.google.com/videoplay?docid=7886780711843120756

Please try to watch them in the order that I have numbered them. Later…
Shed Some MORE Light on May 23rd, 2009 12:10 pmHere’s something else that you all might want to see.http://neocrisis.com/content/view/3918/1/
I wonder how this will affect your stores. At least you’ll have less of the problem with all the Member Credit issues some of you PNT store owners are having. Then again, this might cause more challenges; like them (the customers who use this “Video Game Buy Back” Kiosk) going right into WalMart and buying more games…

What do you think this will do to your existing store(s)?…

What’s relevant to what I just posted (above) is what this person on “comments” of the link that I just provided said:

Marine:

“Can’t say i didn’t see this coming, especially with the global economy gone to

hell.”

All I can say, get prepared… I feel that there’s a storm coming, are you ready?…

Again, just my opinion… Later, all…
PNTScam on May 23rd, 2009 5:33 pmPlay N Trade is a scam and is going downhill fast. If you are thinking of purchasing a franchise from this mess of a company think again. They have recently laid off a number of key people from the company, while the owners and the owners family members are still employed and just milking as much of the exisiting franchisees money as they can.They have recently laid off the following people:
Franchisee coordinator, the person who actually helps the franchisees with their store openings.

Lease and property manager, the person who helps you find a location, negotiate a lease, and helps you with your paperwork.

Director of Training, the sole person who actually shows you and trains you on how to run a PNT store.

As well as a number of other employees.

Now think about the fact that the current CEO Larry Plotnick was the CEO of Playntrade back in 2007 for a period of a couple of months, then took all the information from Playntrade and left to go start his own PNT type franchising business. It failed and now he is back as CEO of Playntrade? This is utterly pathetic, the fact that these owners would hire back a person who literally took information from PNT to start his own competing business and failed at it.

Nevertheless, it shouldn’t be a surprise at all given the fact that the owners have hired family members with no prior experience and hired them on as executives. If your thinking about purchasing a franchise or are a current franchisee I would ask for complete resumes of all executive level personel. Take a look at their experience and you can make the judgement for yourself if they are qualified or not.

If the current franchisees truly knew what goes on at PNT corporate they would all be filing lawsuits against this mess of a business. If PNT is doing so well as Larry Plotnick would lead you to believe then why have they laid off roughly a quarter of the work force and employees that actually did some work.
Mr. Obvious on May 23rd, 2009 9:48 pmTo: PrivatenamePnT new industry expert (one who has “special” knowledge”)
Has the industry expert, assisted individuals in opening and operating their own business? (Franchisee’s?)

How many “Game Crazy” stores were stand alone businesses?

When Hollywood Ent. closed stores in my town, “Game Crazy” was also closed, does that mean they were doing good numbers in “Game Crazy” but not good enough to keep open?

How many “Game Crazy” locations have opened in the past two years?

Per your comment – “CEO is always online and taking calls from franchisee’s, who was the reason Game Crazy is what it is today?

Please advise what Game Crazy is today.
Shed Some MORE Light on May 23rd, 2009 10:11 pmTo Mr. Obvious:I hope it’s “obvious” to you that our man LEMON BOY (aka: privatename) is a “corporate lackey” (definition: 1. a servant of low rank, usually in some sort of livery or uniform. 2. a follower who carries out another’s orders like a servant; toady) of PNT.
To me it’s way too obvious… But again, that’s my opinion…

You did present some great points to help “pucker up” more of his beliefs…
Shed Some MORE Light on May 24th, 2009 5:14 pmThis is to: PNT Scam,Sorry that I missed this one. Obviously this took a little bit before it was finally posted sometime today. Although it did say that it was posted yesterday.
Anyhoo, I am THOROUGHLY IMPRESSED with what I’ve read here AND at the same time… not surprised; but still THOROUGHLY IMPRESSED!

YOU’VE GOT TO KNOW THAT “PNT SCAM” MUST HAVE BEEN A FORMER EMPLOYEE OF PNT. If not, he/she might have KNOWN someone that was.

Now that we’re “exposing the truth,” let’s take it a step further. Can someone out there tell us HOW MUCH MONEY Ron Simpson’s original PNT stores (before he franchised this puppy) ACTUALLY MADE? The number might surprise you. Then again, maybe not. I wonder if his original stores are STILL open?

Come on, you know you want to say it. I’ll be waiting for that answer. Until then thanks for shopping at TOOLED N PLAYED !!! Where knowledge is your “tool,” and the power is when you “play.” Oh, and don’t forget to take one of our 10-10-10 cards; where we let you buy 10 franchises, in 10 minutes and then let you tell 10 more of your friends they can do the same… (huh, pun intended or maybe not)…

Huh… again, everything I just metioned here is just my opinion…
Shed Some MORE Light on May 25th, 2009 6:25 pmHey everybody:Remember on the 05/25/09 when I posted and said:
“I wonder how this will affect your stores.” Well, Look at this link:

http://franchisepundit.com/index.php/2009/05/20/trouble-for-gaming-franchises-like-play-n-trade/

I can’t believe it; I was actually onto something. I guess you could call me “Gerald Celente, Jr.” or something like that. Where “Current events form future trends” (as Gerald Celente would say). Or better yet “Where Walmart’s marketing quickens PNT’s already falling demise.”

BTW, I’m STILL waiting for an answer on what I just posted yesterday. Does anyone have an answer for Ron Simpson’s ACTUAL store profits and if those same (original) stores are actually open today?

In the link (that you’ll see) Larry Plotnick, CEO of Play N’ Trade noted:

1. “We have been aware of this test for some time, and have discussed the use of similar kiosks within our own stores; however it does not fit within our business model.” (The reason? because PNT can’t TAKE franchise and royalty fees from kiosk machines as they can from actual people).

2. “The impact of Walmart is taken very seriously, considering the size and scope of their business and we will be watching and tracking their progress in detail.” (as PNT continues in it’s own demise and then it won’t matter anymore as Walmart will become the Video Game Retail kings… eventually).

3. “We believe there is positive implications to Walmart “legitimizing” used game and trading to a larger/broader demographic.” (unlike PNT’s business model where they focus strictly on acquiring funds from the said above; franchise and royalty fees from actual people).

4. “We strongly believe that our customer service, product offering and immediate customer gratification creates a better overall trading venue then does a kiosk type environment.” (as PNT will have it in their possible plans to buy out current PNT franchise owners for pennies on the dollar and become corporate stores like GameStop and eventually sell there stores to Walmart and retire with more money and laugh there way to bank where the Banks and Federal Reserve will have the last laugh and money will become worthless).

5. “Studies have shown that the significant majority of game trading is done by serious/hardcore gamers that prefer to trade in games for new gaming product (which is typically done in specialty retail not in big box stores).” (Until now… Since Walmart started introducing these Kiosks. Damn’ it)…

Again, all of what I just posted here is just my opinion…
Paul on May 26th, 2009 10:58 amI posted on here alwhile ago thought I would check this out…so Shed Some More Light…..do you have a life. You post daily several times a day the same garbage as before. Are you a franchisee? Are you working for one of those lesser video game franchises that’s only edge is bashing on PNT. Are you a disgruntled employee that lost their job, or are you just some nerd that sit in front of his/her computer all day waiting to anonymously point out any little issue you can. From what I see they are just like many other companies struggling to survive todays climate. Seems like they are trying to do the right things for their franchisees but trimming the fat and focusing on the model. Looks like they just need better franchisees that don’t spend all day crying on message boards and spend their day hard at work in their store……who said it would be easy and profitable year one. BTW I have spoke to several franchisees that are quite happy….but I am sure you have a excuse for that too
To Paul on May 26th, 2009 11:03 amPaul, Shed Some More Light is the franchisee from AZ that PNT is currently suing.
Paul on May 26th, 2009 11:24 amAhhh ok well that makes sense
joe on May 26th, 2009 12:30 pmPaul,Maybe if employee’s at PnT corporate would spend more time with lets say a marketing program, instead of replying to people on a messageboard, or hey maybe even reading up on California franchise law(if they had, no one would be here on this board) I dont think anyone here has said that every franchisee is losing their rear end, but when I was looking into the franchise, and i talked to a bunch, it was very clear that a majority of them were not even comming close to making a dime, and some of the stores were open for more than a year. they are on track to have 70+ stores close this year. Yea, that looks like they are focused on the model.
Ridiculous on May 26th, 2009 1:46 pmPNT should be the one being sued, not the other way around.They provide nothing to the franchisees but still want to suck them dry.
This makes no sense.
ADMIN on May 26th, 2009 1:56 pmIs PnT corporate really not worried about WalMart or is LP playing it cool while working on a way to sell against this threat:http://www.unhappyfranchisee.com/play-n-trade-should-pnt-respond-to-wal-mart-threat/
&

http://www.bizzia.com/franchisepick/play-n-trade-will-walmart-crush-pnt/
Shed Some MORE Light on May 26th, 2009 3:59 pmHey Paul (aka: Tough Guy):I’ve got to say that this post is going to be a bit lengthy… But I have to help Tough Guy out with a few things (since he doesn’t like to read) !!!
I love that word you said – “excuses” – LOL – LOL – LOL !!! I can’t stop laughing !!! Ha ha ha ha, Ahhhhhh, you’re too funny… you’re so foolish… I was one of the original persons on this blog (along with a few others) that ACTUALLY took their OWN OWNERSHIP to the mistakes that we made. And I STILL DO. So no EXCUSES have been made here – TUFFY !!!

Yes, I was a franchise owner. If you would done a bit of due diligence and READ some of my prior posts here on this blog you would’ve been able to find that out. Actually I am quite busy doing other things to restart our lives again. As I know others are as well who lost even more money than we did when we bought into this franchise.

Believe me, we were VERY MUCH in support of this franchise and didn’t want to be faked out by the “hoopla” of being able to make money within our first year or two. We know this because of all the homework we did on just franchising alone; how much it would really take to open a store like this one and how many years until we break even and actually make a profit (typically 3-5 years; now it’s more like 5-7 years because of other factors, like the economy). So we knew.

BUT, and here’s the reason (and you may want to define that “reason” as an “excuse”, “defensive attitude”, whatever you want to call it), but never the less there are reasons. When you have your AC and Corporate Executives (when we went to training) pulling you aside from time to time telling you comments like:

“You know those numbers on your financial spread sheets are VERY conservative, right? You know you’re going to be making more than that?” (this is when I actually sat down with Ron Simpson himself and he said that to me directly).

“If you follow the plan you’re not only going to just break even, but you’ll be able to make a profit within the first 12-18 months. Look at what is going on with our store. But we can’t guarantee it. But again, look at our store. Don’t believe me, call up the other franchise owners that ARE doing it; the successful ones that are making it happen. Not the stores that are struggling, because somewhere in there, they aren’t following corporates plan…” (When they actually were).

“I can’t give you the “numbers,” but if I did you’d write me a check tomorrow…”

I could go on with similar comments, but why bother when you can just read everybody else’s comments on here if you don’t want to believe me.

You see the ONE main thing that BOTHERS me the most (and I said this before) is that PEOPLE (and I’m talking to YOU – CORPORATE) is that NO ONE IS TAKING ANY OWNERSHIP !!! THAT’S WHAT GETS ME !!! NO HUMILITY in saying “You know, we blew it. We were wrong and naive in how we handled our business. We were very excited about selling franchises that we overlooked one main thing; protecting the “BRAND” and most of all, the potential franchisee. We should have made sure that we were dealing with ACCREDITED INVESTORS that HAD the ACTUAL funds to open up there FIRST store. We should have started slow, and reinvested our funds back into the business instead of paying overblown salaries to the top 5 execs while we were crankin’ in all that money…” I could go on about how corporate should present this apology to all of us past and present franchise owners, but there’s no point, since you GET the point now. I hope…

Look, let me prove my point. And this is also is to my shame also, (because I should have used TRUE successful franchise like Dominos Pizza and similar franchise companies) but again, when you have passionate knowledgeable AC’s and franchise owners “saying” they’re making money (when in the end they’re coming to find out that they’re LOSING money along with WHY, HOW AND WHERE they’re losing it) and then you’re hearing it over and over again the SAME EXACT WAY from other owners 6 MONTHS TO A YEAR LATER, well then it’s too late because you’ve already bought INTO the franchise and now you’re part of the PNT “Family” (or Fiasco). Here’s a perfect example of what I’m talking about.

Here’s what it take to run a typical (and successful type of) franchise:

Domino’s Pizza Franchise Criteria:

1. Must be a sucessful General Manager (YES and ACTUAL EMPLOYEE) for 1 year (80+ on all audits) takes 3-4 years on average, can only buy 1 store. So that means you typically start from the bottom (pizza driver), then work your way up. That alone could take 6 months to 1 year.

2. Must have 30k in bank (notarized statement) your money, cant be borrowed, or have investors (probably that amount of money is more now since you need more collateral to open any kind of franchise).

3. Must go to a regional class and pass

4. Must take the main class in Ann Arbor which is 10 days and must pass the final exam or re-take the entire class

5. Must have a credit score of at least 720 or better (now according to what the banks need 750 or above; who’s got that nowadays – very few people).

6 Must be able to pass a full background check

These are just a few things that need to happen. I’m sure there’s more detail than what’s been mentioned here (so I could be off a bit with some things). But you get the gist of what I’m talking about.

But with a company like PNT, we thought we found a “Black Swan” (very rare bird; or should I say VERY RARE FIND) of company that when I was in my due diligence period (yes, I actually had a due diligence period of 6-8 weeks). That meant 6-8 hours a day doing these things:

1) What a franchise consists of

2) Who founded the franchise

3) Who’s the competition

4) Finding out the competition’s gross and actual profits

5) What makes this franchise better than the competition

6) How much will this cost

7) How much do we need till we break even and start paying our debts back

Many, many days and nights running the numbers (conservatively of course) to make sure that didn’t miss anything (LIKE MEMBER CREDIT !!! THAT CORPORATE SWEPT UNDER THE CARPET !!!) I can give you an example on my next post (if you ask nicely)…

9) Calling as many franchise owners (there were only about 12 of the 15 that I was able to get a hold of at the time) to find out how they were realistically doing. (That is another reason why (if you ask politely) I’ll be able to expound on more on my next post.

10) Running everything from the UFOC, to the numbers, to the area location of where your store is (doing a thorough demographics study of your neighborhood) to your lawyer(s), Financial advisors (yes we even paid for those guys), Bankers (not the ones that wanted to do business with us, but the ones that were going to be honest with us), TRUE commercial Real Estate agents that actually were not looking to make a deal happen but again, produced reasons as to why or why not this location was the best or worst for this type of business.

12) Tons of passion for not only this industry but gaming as well (it definitely helps – I guess not in this case as I mentioned in a previous post).

13) I could go on and on, again you get the point.

Now, here are my questions to you Tough Guy (paul):

1) Who are these franchise owners that are “QUITE HAPPY” with the current business model as it stands right now? You don’t have to give out any names, just the cities they’re in.

2) Actually, WHO ARE YOU, a franchise owner or a corporate guy?

If you STILL want a PERFECT example of the “Flaw in The PNT Law” of why this business model didn’t work when it came to Member Credit, then please ask me why and I’ll post a very important (but missed or avoided) reason why.

All of what I mentioned in this post is just my opinion…

Again, I’ll be waitin’ for your reply – TUFFY !!!
PNTScam on May 26th, 2009 10:28 pmOk here is the deal about Paul (AKA PNT cronie). You can tell by the 2 bit responses he has posted that he is either Michael Peterson, Chris Wilson, Charles Franklin, or Jimmy Kindred. Those four slugs are the 2 bit sales people at PNT that try to milk franchisees out of their money. Go ask for thier resumes or work history and you will see who you are dealing with. Nothing but shady corrupt used car salesmen posting as franchise experts.Existing franchisees and potential franchisees looking into PNT, do your research on these guys and ask for resumes. You will be surprised at what you find out. Of course one of these slugs will reply to my post and you will be able to identify who they are based on their response. I speak the truth.
Shed Some MORE Light on May 27th, 2009 12:48 amTo PNTScam:What I love even more is that “Paul” and “To Paul” are probably the same person posing as two different individuals, trying to make a feeble attempt to find out if I’m that person in Arizona. I’ll say the same thing that Paul the Tough Guy said (although slightly reworded for obvious reasons): “do YOU have a life?” “…don’t spend all day crying on message boards and spend your day hard at work at your desk scamming more potential franchisees…… who said it would be easy and profitable year one.” Huh… the AC’s who sold us this SCAMMING FRANCHISE ALLUDED TO THAT !!!
PNTScam, once again thank you for your insight…

Enjoy my opinions on this post…
Shed Some MORE Light on May 27th, 2009 11:34 amWhen you called the franchisees that were open at the time, they would look at their POS YTD (Year To Date) and probably say to themselves “Wow, this is great, I’ve made $14,000 !!!” But wouldn’t take into consideration that the POS system SUCKS and they had $10,000 in “Member Credit” (used), NOT CASH, so not only do they NOT know that the numbers they are giving you are wrong, they really have NO CLUE AS TO WHAT THEY’RE MAKING OR LOSING…Sorry for being “Doom & Gloom” about this; WAIT !!! I’ve got a great idea why don’t we watch this video to inspire us to be more forward thinking here at PNT !!! Here’s the link !!!
http://www.unhappyfranchisee.com/play-n-trade-franchise-sales-video/

You still want to know what’s painful about this video? Is that I read and IGNORED (at the time – BUT NOT ANY MORE THOUGH) what Charles Cunningham had to write on the PNT Google Groups email that we received Jan. 7th 2009. (actually I should post it here so you get to see what this store went through in more detail). They weren’t bitter, just real. Now they’re really broke, having to start over again, and in this economy? I wish them and ALL others like them TRUE SUCCESS !!! While Yuvi Schmul are on to “bigger and better” things with our money. I wonder if Ron Simpson feels “saddened” by this situation while he’s still (I think) driving his Mercedes SLK…

There you go TUFFY (”Paul” or “To Paul” or “To To Paul” or “Peter, Paul & Mary” what have you) – Have a day at – TOOLED-N-JERKED !!!

I hope you’ve enjoyed MY OPINIONS on this post…
Shed Some MORE Light on May 27th, 2009 2:00 pmI’m sorry, I left something out accidentally. What I should have started out saying was:“This is in response to Tough Guy’s (or “Paul” or “To Paul” – same person) comment about the “QUITE HAPPY” (existing) PNT store owners out there thinking they’re making money money.”
Now you can read the rest of my last post. It should make more sense now…

Again, enjoy my opinions on this post…

P.S. Still waitin’ for you TUFFY !!!
Not a Victim on May 28th, 2009 6:55 amSince Larry Plotnick and Ron Simpson have both posted here, it’s safe to assume that the corporate office reads this thread. So PnT franchisees have a golden opportunity to communicate what changes they would like to see, what tools or programs they want Pnt to provide, or what they need in order to compete and survive. Or they can just prove they’re whiners who have given up.So franchisees: what do you want? Here’s your chance. Do you have any ideas, or do you just want to complain, bicker and make personal attacks and call each other names? Is that all you got?
What’s done is done. If you were lied to, sue’m. But there are a lot of franchisees still operating. What should Pnt do to help keep them from losing their investments? They’re listening…
Bill Metussi on May 28th, 2009 10:06 amNot a Victim ,I know your trying to help but that is completely ridiculous. A franchise owner shouldn’t have to post feedback on a public forum to talk to their franchisior. They should be able to pick up the phone and contact them directly with any problems or complaints they may have.
This whole thread is ludacris. Most of these people PnT should never even had put into business. They would have failed no matter what business they bought. The hard, car salesman sell is going to attract weak people and bad franchise owners who cave in and buy. Simple as that. ““I can’t give you the “numbers,” but if I did you’d write me a check tomorrow…” Come on, how can you fall for that? Second I heard that line I got the hell out of there. Just think about the type of person a video game franchise attracks.

Half these people sound like they had no idea what they were getting into. That’s partly the franchisors fault but also the franchisees.

…. I bet you could give them the best business in the world and it would still fail.
Joe on May 28th, 2009 11:27 amNot A VictimIts too late for many of the franchisee’s, there is nothing PnT Corporate can do, short of buying back their stores for pennies on the dollar. Whats funny, being I told them about 10 weeks ago that I wasnt interested in purcahsing a franchise from them, I still get spammed for their webinar’s, matter of fact, I got one last night, still promoting their recession resistant business!!!! Why is PnT redoing their FDD?? If the problems is with the franchisee’s, not the franchisor, and it was legit from the start, why rewrite it?? I think California opened the flood gates of lawsuits on PnT, which in my opinion, will not survive it. I talked to about 30 franchisee’s during my due diligence, I did not talk to any franchisee that PnT recomended that I talk to. 7 of then have closed, 13 said that had doubts that they would make it to the fall, and 6 had doubts that they would make it to Thanksgiving. I still talk to a couple, to see how they are doing, not too good.
In the end, the numbers just didnt add up, and the cost of the investment, which to this day, is still vastly understated by PnT. My initial projections for start up were around 315K, after doing my due diligence, i revised that number to 460k

(1400sq ft space, initial inventory order, build out, operating cash for the first 18 months) Pnt is still using from 197k to start. It appears to me that they low ball every aspect of it, monthly advertising, inventory replenishment, member credit usage. Thats the problem, people went off the numbers that PnTgave them, and because of that, are way undercapitalized, and go under. That im my opinion is the problem, and why PnT is where it is now.
Shed Some MORE Light on May 28th, 2009 11:56 amTo “Not a Victim”:Here are my thoughts toward your comments; I’m glad Larry and Ron are reading this blog since others have telling them (Corporate) this information WAY before this whole thing with California’s investigation on PNT – when it started 2 YEARS AGO. That, in and of itself should tell you something. To me PNT NEVER cared, although I thought they did and (again, like I posted in one of my prior posts) I chose to ignore all the so-called “Negative Nerds” that were really just screaming was – HELP !!! But, again, I, just like many others at Corporate CHOSE to ignore them and look at it as complaining. Now to me looking at another franchisee “complaining” really isn’t and shouldn’t be my focus, BUT FOR CORPORATE TO IGNORE THIS FOR THAT LENGTH OF TIME UNTIL WHEN; NOW ?!?! Well, now it’s a little too late for that don’t you think? But, I wonder why?… Maybe because Corporate really knew what was going on. IN FACT (I believe) THEY DID.
I mentioned on this blog that I was thinking about posting Charles (& Martha) Cunningham’s situation that OTHER franchise owners had similar situations they too were going through. But again (as I will continue to mention) their words were ignored. So to help you out “NOT A VICTIM” I will post it for you to read. Now mind you this was written January 7, 2009, BUT this was cried out many times before this date by other franchisee owners to no avail. The amazing thing is, that very shortly after their post was put on the Google Groups, PNT QUICKLY cut off whatever little communication other franchisees were able to have with them by disconnecting their email service. Now I know that’s what any company would do, but to NOT leave a forwarding email address or phone number so that others that want to communicate with them weren’t provided is simply unacceptable. My opinion is, PNT DIDN’T WANT ANY COMMUNICATION WITH ANY OTHER FRANCHISE OWNERS WITH THE CUNNINGHAM’S (but again, that’s my opinion). Here’s their side of the story that I hope Corporate WILL RE-READ and FINALLY LISTEN TO. But I doubt it…

“Hello Everyone -

Due to the slumping economy and Corporate’s failed business model, the only PNT store open in Maryland is now officially closed for business. Many of you will agree with the things written in this email. Some of you will disagree and believe that our failure was solely our own doing. With that in mind, I’ll give you a glimpse into who we were…

Our Story – We were one of the early adopters. We were the seventieth store to open overall. While we never made it into the Top 10, we did make it into the Top 20 for gross sales (the past few months notwithstanding, since it was the beginning of the end). We were also ranked number 2 for all Play N Trades in Madden Sales after launch. We ran tournaments every weekend, exceeded our $2,000 suggested advertising budget every month, running ads in Money Mailer, Clipper Magazine, Direct Mailing, local newspapers and even once on a large radio station that covers the greater Washington Metropolitan area. We offered “Buy 2 Get One Free” used game sales as well as other traffic generating promotions on a regular basis. We kept in weekly contact with our customer base through emails announcing tournament schedules and such. We offered special orders, ran midnight sales/tournaments, pushed pre-orders and did everything corporate told us to do to be successful. It didn’t work.

With this said, here is my message to all of you…

Corporate -

While it is too late for us, please make the following changes to allow the remaining franchisees the ability to compete in this very challenging and competitive industry…

1. Create a system that allows the franchisees to purchase as a whole, thereby increasing the chances of receiving games on the actual release dates (enabling them to better compete with GameStop) as well as obtaining harder to find titles (Mario Kart/Wii Fit) and perhaps reducing the wholesale cost to boot. And while Ditan has been helpful, we should be able to receive ALL games on time, not just AAA titles.

2. Create a means of viable redistribution. While Gamers Factory is an option, it’s not a very good one. In a best case scenario, each store is merely breaking even on games they send in. And in too many instances they’re actually losing money. Even if you take out AAA titles, there surely are some stores that are in need of games that other stores have a surplus of.

3. Create and at least help pay for advertising to promote a national brand awareness. I’ve talked to owners of stores involved with other franchises and they’ve told me that national advertising is part of their royalty fees. If other franchises can do it, why not Play N Trade?

4. Do not EVER take royalty fees on new consoles. Having done so in the past is nearly criminal. You know as well as we do that while you’re making money on them, we in turn LOSE money on each console sold when you do. It is shameful that you’ve done it in the past and it shows your lack of commitment to each and every store owner.

5. Stop allowing financially under qualified candidates to join the franchise. I consider myself as one of them. Before we opened you told us that $200,000 was enough to make this work. Knowing what I know now, this is ridiculous. A successful store needs much more than this in working capital in order to continue to order a proper amount of inventory while waiting for the used games to eventually sell. $200,000 may be more than enough to get a store up and running, but it’s nowhere near what it needs to continue its operation.

6. Stop selling the “dream” to prospective owners and tell them the realities of this industry. Many, if not most, people would never sign on knowing the hardships of your current business model and the industry as a whole. I, for one, would not have. Honestly, your questionable dealings with all of us suggest that you’re in this more to make a quick buck off of our loan money than to sustain a viable business.

The Owners –

1. Hold Corporate to these standards. Email them, call them on the phone, never stop making your voices heard. These changes NEED to be made for this to work and don’t let them make you believe otherwise.

2. If it seems that Corporate won’t make these crucial changes, seriously consider disenfranchising.

Check your contracts with them. It will most likely be difficult to do this, but in the end it is worth it. Think about it – as it stands now, with no national branding, no redistribution and no collective buying power, and since you have a singular relationship with your distributors anyway, you are, at your core, a mom and pop shop. However, you’re a mom and pop shop that has to pay useless royalty fees. You don’t need a franchise to do what you’re already doing if they are not going to help you in the process.

3. Be careful in dealing with your distributors. Make sure you pay them on time. In our case, once the economy hit us hard (we went down 20 and then 30 percent) we accidentally bounced one single check. This was the beginning of our end. We were instantly put on COD status and were not able to order more games until we paid our balance in full. We had net 30 terms that were instantly taken away from us and we were expected to pay everything up front before we could receive more inventory (just in time for the holidays). A good relationship with your distributors should be one of your most important goals.

4. Stop taking loans to keep afloat. I cannot stress this enough. Most of you are not going to be profitable. Many of you are only still open because of loan money. The more you borrow now, the more you have to lose if and when it all comes crashing down. And definitely, DEFINITELY DO NOT BORROW MONEY FROM A RELATIVE OR FRIEND. The last thing you want to do is bring someone you care about into this mess. I’m speaking from experience here – my father took a loan against his house to help us out and despite the fact that we’re declaring bankruptcy we obviously can’t walk away from him. Do NOT follow in our footsteps. You’ll regret it for years to come.

5. Do not live in denial. Do not believe that your enthusiasm and hard work are enough to make it work. I did. I believed that my success rested on my shoulders. I opened and closed the store every day. I worked constantly on creative advertising and talking to the customers and training my employees how to sell and be a positive force in our community. I managed the inventory as best I could – reading everything I could get my hands on regarding upcoming games. I took part in VPD’s price protection program and personally got involved in tournaments and did everything that most of you are also doing. I believed with all my heart that it was going to pay off. That my positive energy and sweat would make it work. I was wrong. It’s not enough. A stronger business model with reliable franchise support is essential. Take a close look at your own situation and make a critical assessment. Do not let yourself be deceived into ignoring a failed system for fear of failure. Yes, closing your store is one of the worst things imaginable; however, it might happen to you whether you want it to or not. Wouldn’t it be better to manage it on your own terms?

The Bottom Line….

Having spent a year and a half trying to make this business successful, I truly cannot see how this can happen if significant changes aren’t made immediately. And if you are unfortunate enough to follow in our footsteps, you’ll likely find that corporate won’t really care if it does fall apart – Here’s what happened to us when it did…I called Matt Ward a month ago to let him know that things weren’t going well and told him that I thought we were going to have to close the store. He replied by saying that he’d get a conference call together with me, Tony Gillette and himself. I haven’t heard from him since.

Sorry to call you out Matt. Of all the corporate guys, I always liked you the most. But it’s true.

When all is said and done, we’ve lost our business, we’re declaring bankruptcy, we’ve already lost one of our cars and we’re going to lose our house as well. Yes, the economy is partially to blame; however it’s not the sole reason. In its current state, this business model will simply not work and we are a shining example of this fact.

Please believe me – I am not a bitter person. I never once took part in any of the angry emails that were sent around by some of the disgruntled owners. This email is merely meant to impart honesty through one man’s story and warn many of you of the possible, if not probable, pitfalls that loom ahead.

I wish each and every owner the best of luck, because unfortunately your hard work and tenacity will not be enough. I truly hope that you all succeed.

Charles Cunningham

(Former) Owner

Play N Trade

Olney, MD”

So “NOT A VICTIM” do you or does anyone out there at PNT Corporate (or any PNT AC) want to call them “Negative Nerds” or “Whiners” now? I hope not. This (to me) is one of the most profound and detailed explanations any PNT franchise store owner has ever given (that AGAIN I believe) PNT CHOSE to ignore. Posting this I hope will HONOR the Cunninghams as they have been financially (& emotionally) devistated along with the other PNT Franchisees (Past and Present).

Oh, “NOT A VICTIM,” You said: “What should PNT (Corporate) do to help keep them from losing their investments?” Here’s what I believe PNT should do with ALL PNT Franchisees (past and present; YES, I SAY PAST FRANCHISEE that is no longer a part of the PNT “Family”). They need to reimburse at least 50% of all franchise right fees and 100% of all royalty fees from when those monthly fees started to present. I say 50% because (in my opinion) I believe this was a 50/50 fault on both parties. Like I said before, I don’t take away the mistakes that I made by what (I thought) was an investment into this business. I should have done even more homework on this company and the individuals who started this business and done a COMPLETE background check on them. I would have then had a better idea who I was dealing with and requested Ron Simpson to provide me with his financials (profit/loss statements) on his actual profits made with all his original Play N Trade stores. But I didn’t, so again, shame on me. BUT Ron Simpson should have OPENLY PROVIDED those finacials to ALL potential franchisees, BEFORE they bought into this franchise. I think that most of us reading this post know that only a very FEW would have made that move to buy into this franchise with PNT had they had the chance to look through those profit/loss financials. Again, all of what I wrote and posted here is just my opinion…
Joe on May 28th, 2009 12:12 pmBill.“Most of these people PnT should never even had put into business. They would have failed no matter what business they bought”
I would agree with that statement to a point. Some of the Franchisee’s I talked to. I could tell that they were in way over their heads, and a couple actually admitted it. But, on the other side of the coin, there were a good amount of Franchisee’s that were not in over their head, had run a business before, sucessfully.

So it goes both ways, i get your point though, PnT makes most of their money off franchise sales, and yes I didnt care for the used car salesmen pitch either, and walked
Shed Some MORE Light on May 28th, 2009 1:41 pmThis is to Bill Metussi:You said: “Just think about the type of person a video game franchise attracks.”
FIRST – LEARN HOW TO SPELL !!! “ATTRACKS ?!?!?!” what a boob; doesn’t even use spell-check…

You also said: “Half these people sound like they had no idea what they were getting into. That’s partly the franchisors fault but also the franchisees… I bet you could give them the best business in the world and it would still fail.”

Well, I’ve got to give you SOME props there, half of those people shouldn’t have bought into this this business and/or shouldn’t have been allowed the franchise rights from the franchisor to begin with. No matter what you say, there is always something more we could and should have done as individuals to prevent this situation. But that’s how you learn; by doing… Unfortunately, this is not a good time to learn those lessons in this economic downturn that we’re facing, but then again, it might be. By learning from this painful experience, this might force us to think more creatively about what we can do to recreate ourselves THIS TIME in NEW ways to become more resourceful and finally be the success stories that we desired when we bought into this franchise… So not ALL is lost…
Shed Some MORE Light on May 28th, 2009 1:46 pmThis is to “Joe”:and what he posted to “Not A Victim” on May 28th, 2009 11:27 am :
VERY WELL PUT !!! Again, lesson learned. But sometimes you have to learn it the hard way, like we did…
Shed Some MORE Light on May 28th, 2009 7:07 pmHey “Not A Victim” (aka: “Ms.” So&So)I haven’t heard a response back from you from all the hard work we’ve put into “whining” about our issues. I hope all the information that was given to you today has helped (or actually humbled) you out a bit. I gather you’ve tucked tail and aren’t going to say anymore on the topic anymore (I hope). Again, there have been quite a few people from the beginning that have been on top of PNT Corporate to help them try to make those changes happen, AND STILL STAY POSITIVE – WHILE THEY WERE LOSING THEIR ARSES’, but like you they were looked upon as “whiners”; not problem solvers or doers…
BTW, speaking about who hasn’t responded back yet; whatever happened to Tough Guy (”Paul / To Paul”)? I guess that Corporate Lackey is doing the same thing you are… not saying much… as it should be…

In the end it won’t matter what you (Ms. So&So or Tough Guy) continue adding here on this blog, because (I believe) PNT WILL TANK; right around the end of July/August of this year.

Here’s what I see happening. The day after the state of California (the “Lion”) is done with PNT (the “Carcass”), they will be filing bankruptcy and the rest of the Franchisees (the “Vultures”; I don’t mean that in a bad or demeaning way, please believe me as all I’m doing is making an analogy) are going to try to go after PNT (the “Carcass”) for the rest of what PNT took from them. But it will be too late, because there won’t be any “MEAT” (or should I say MONEY) left over, because you can’t legally go after the business that filed BK. All the while (like probably right now, if they haven’t done it already) the rest of the Corporate Execs will be laughing all the way to the bank with the little bit of what’s left over of our money to conjure up another Ponzi Scheme to try to scam someone else. How nice… Again, it’s a wonderful day at TOOLED-N-PLAYED – Have a day…

Here’s where you can FINALLY do your due diligence since all the pundits have said we didn’t do enough of that when we got involved this FRAUDCHISE. I think (and I could be wrong) you can go after them individually after PNT files BK. That’s if they do any of what I just said. I’m sure you’ve done this or are doing it now; seek legal help on this so you know your rights…

BTW, if I’m wrong on any of what I just said, could someone please correct me…

Again, all of this is just my opinion…
To Shed Some MORE Ligh on May 28th, 2009 7:21 pmYes you are wrong. You are wrong and you are an idiot. You spend WAY too much time on here. Since you have all these opinions and predictions, why don’t you at least tell us who you are or why we should believe you?Time will show you for the idiot you are.
PNTScam on May 28th, 2009 7:46 pmThis is in response to Charles Cunningham’s post:I can tell you why Matt Ward never responded back to you, that’s because they laid him off along with all the other employees that actually did work on behalf of the franchisee’s to assist and help them within the last couple of weeks. These corrupt thieves at corporate are running a Ponzi scheme called Play N Trade and the only people left at corporate are the thieves and their minions that are running this Ponzi scheme and paying themselves ridiculous salaries with the hard working franchisees royalty fees.
Charles you are completely right in your assessment, the business model is flawed and will never work. More and more franchisees will close, and eventually and hopefully these criminals at PNT will have to pay back all franchisees they took advantage of. Corporate provides nothing for the franchisees at all and the entire operation is nothing but a mess. They will say that Las Vegas will solve things and try to lie to all the franchisees that everything will be okay and that many changes are on the way. This is nothing but BS because the business model is flawed and doesnt work. No matter what these crooks try to do or say to the franchisees, in the end, they have no clue what they are doing and their sole purpose is to milk the franchisees of their royalty fees and pay their hefty salaries.

I ask all franchisees and potential franchisees to research and look into which employees are left at PNT. Roughly 75% are owners, realtives of owners, or friends of owners. This is called nepotism and these people are completely unqualified. Research how many times they have changed positions at corporate within the last year and a half. It’s no coincidence that the owners, owners relatives and owners friends remain, and that is why this crooked system is a mess and will never work. I speak the truth.
PNTScam on May 28th, 2009 8:04 pmOne more thing you franchisees would be interested in. The new VP of Product at PNT Alexander Skelton’s linked in profile:http://www.linkedin.com/pub/alexander-skelton/3/871/275
His “vast” experience includes being the “Manager of Mrechandising” at Hollywood entertainment. This is your new VP of Product a guy who can’t even spell or maybe he was indeed involved in Mrechandising whatever the hell that is. What a coincidence he worked at Gamertag with Larry Plotnick and his title was “buyer” from store manager to buyer to VP. Yeah these guys are nothing but a bunch of liars. Beware franchisees.

Also,

Jeff Putnam the new “CFO”, please research this guy and notice that in his PNT profile there is no mention of his most current business ventures which include a failed mortgage broker business and a failed attempt at an internet business called franchise mama.

Once again your PNT corporate liars exposed for who they really are.
Shed Some MORE Light on May 28th, 2009 8:56 pmTo PNTScam – You’re RETARDED !!! I CAN’T STOP LAUGHING !!! It’s so funny it must be true !!! Who are you ?!?! You must have been an employee. (BTW, that “retarded” comment meant that you’re TOO FUNNY !!! I didn’t mean that as an insult). But I don’t take away from the what you’re saying. It makes sense. You know, this little (and I do mean little) gathering that PNT is having in Vegas is a complete joke. They have this rally at one of the worst hotels in Vegas. Actually it’s not a rally it’s another way to market and target new potential franchisees out of money by buying into this FRAUD-CHISE !!! It looks like they may have sponsors paying into this so PNT can make more money. I guess they’re looking to gather as much funds as they can from WHOEVER they can to pay the all the legal fees they DON’T want to pay out there own pocket !!! What franchisee would want to got to this “rally” anyway ?!?! LOL !!! But again, this is all just my opinion. Man, I can’t stop laughing & crying at your last two posts. I gotta know who you are man… LOL !!!
Not a Victim on May 29th, 2009 2:23 amShed Some MORE Light:Thanks for posting Mr. Cunningham’s email. It was well thought out, and substantive. He’s obviously a professional. No namecalling or personal attacks. He didn’t call a single person retarded.
It was your best contribution to date. You’re at your best when quoting others.

Thanks to the others who replied to my question.
Guest on May 29th, 2009 12:54 pmhttp://www.bbb.org/central-california/business-reviews/video-game-dealers/play-n-trade-in-fresno-ca-89037632Customer Complaint History
BBB processed a total of 0 complaints about this company in the last 36 months, our standard reporting period.
Guest on May 29th, 2009 12:59 pmhttp://www.digitpress.com/forum/archive/index.php/t-106786.htmlanother info source
scam on May 29th, 2009 1:21 pmThe reason they have no complaints on that link, is because that store is not accredited with the BBB!!!
Guest on May 29th, 2009 1:48 pmbecause they don’t have a history with the bbb!!!!!
Jim on May 29th, 2009 2:39 pmThis is totally absurd. This BBB listing is for an individual store- not for corporate franchise operations. No one has questioned the morality and business ethics of the franchisee, just the ponzi franchisors!Here is the address in the listing:
Name: Play N Trade

Phone: (559) 275-8575

Address: 2450 N Brawley Ave Ste 105

Fresno, CA 93722-5101

Website: http://www.PlayNTrade.com/Fresno
Shed Some MORE Light on May 29th, 2009 5:20 pmTo “Ms. So&So” (aka: Not A Victim):You said three things that made me laugh at how “STUPID” you sound. I said “STUPID” in quotes for a reason… I’ll explain in a moment, but first let me reply to your other BRILLIANT (play on words; meaning “STUPID”) comments…
You Said:

1) “He didn’t call a single person retarded.”

My Reply:

Like I mentioned in my prior post the used word “retarded” to PNTScam in a different way. The comments he said (besides being more than likely true), were downright HILARIOUS !!! But I used the word “RETARDED” to express that to him. It’s a play on words. But I think he got the point; especially since I mentioned that right afterwards by saying: “BTW, that “retarded” comment meant that you’re TOO FUNNY !!! I didn’t mean that as an insult.” But I guess you can’t see through that; even after I explained that because you’re “RETARDED.” (play on words NOT intended).

You Said:

2) “It was your best contribution to date.”

My Reply:

Thank you I appreciate that very much, since you really HAVEN’T made any kind of REAL contribution yourself, with the exception of INCITING others here to prove the point all the more that this FRANCHISE is a FRAUD-CHISE !!! So I stand corrected, you HAVE contributed something. Again I say, thank you…

You Said:

3) “You’re at your best when quoting others.”

My Reply:

Ahhhh, I saved the best for last. Remember when I said that I was going to explain why I had “STUPID” in quotes? Here’s why. You said in an earlier post (April 29th, 2009 7:22 pm) “You sound stupid.” to me. Mmmmm, I don’t know, but doesn’t that sound like “name calling” or a “personal attack?” I’ll let you figure that one out by yourself. BTW, you are correct when you say that I’m at my best quoting others (since I just quoted what you just said)… “STUPID.”

Keep ‘em coming Ms. So&So, you’ve DEFINITELY earned your new name…
Guest on May 29th, 2009 6:04 pmTo Shed Some MORE Light -Way to tell it like it is!!!!!
Not a Victim on May 29th, 2009 6:23 pmYes, Shed Some MORE Light, Way to tell it like it is!!!!!You really nailed me with this one: “You said in an earlier post (April 29th, 2009 7:22 pm) “You sound stupid.” to me.”
Only problem: I didn’t post at April 29th, 2009 7:22 pm. I never wrote “You sound stupid.”
Shed Some MORE Light on May 29th, 2009 6:54 pmTo: Ms. So&So…Well, don’t I feel like a complete BOOB. My apologies. At least I was right on first two comments you said… Again, sorry about the last one. I was wrong… This is your second good contribution to this blog. Keep it up…
Shed Some MORE Light on May 29th, 2009 8:06 pmTo: Ms. So&So:Again, I hope you forgive me for that mistake. You know, come to think of it, I could have been just like the PNT Scamming Execs and not taken any ownership for making a mistake like that and swept a under the carpet and moved on by saying: we’re restructuring for the 5th or is it the 6th time?…
You know I had to say something… Again, just my opinion…
It’s going under… on May 30th, 2009 4:29 pmI hope everyone who has read all these posts realize that this “boat” is going to sink here very soon and the only ones who are going to drown are the musicians who stay behind playing the music (the ones who still believe that system can sustain itself in it’s current state). Catch a clue and do what Charles Cunningham said – TRY to DISENFRANCHISE as SOON as possible… Those are my thoughts…
Not a Victim on May 30th, 2009 5:35 pm“I hope you forgive me for that mistake.”All is forgiven
michael on May 31st, 2009 2:11 amShed so more lightCharles Cunniham
All franchises

After seeing blog, talking to franchisees, and going to numerous play n trade stores this is my assessment:

1) All you “whinners” out there who lost $300,000 to $500,000 followed corporate policy to the T and ran you into bankruptcy in a flawed system driven by Greed.

A) Corporate said by lots of new games and prebooks with low margin and you did and lost your butt.

B) Corporate said by new systems with 0 margin and you did and lost your butt.

C) Corporate said follow there policies 100% and you did until you had no money left and filed bankruptcy.

(I am sorry for all of you who followed corporate policy to the T and lost everything)

I beleive it is BS about early frachisees that were not qualified. The problem was that all the early franchises followed corporate policy to the T all the Way to “Bankruptcy” BECUASE CORPORATE DIDN’T KNOW WHAT TO DO AND HOW TO ADVISE EXCEPT SAY BORROW MORE MONEY AND SOMEDAY YOU WILL MAKE SOME MONEY

2) For all you low volume stores who have very few to no employees and have to work this model 100% on your own :

A) Corporate said by low margin new games and prebooks and you said no way I can not afford the negative cash flow so I am just going to stay low volume, keep my costs low and make my money on “used games”

B) Corporate said by new systems with no margin and you said no way I can not afford the negative cash flow so I am just going to stay low volume and make my money on “used games”

C) You low volume stores owners who take this approach: I applaud you for doing the opposite of what corporate is telling you to do so that you can stay open and avoid bankruptcy, and minimize losses. But It is funny that to minimize losses you have to do the opposite of what corporate is advising you to do to stay in business. Any other franchise would get you disenfrachised, but under this flawed system this is what keeps you doors open. In time though you will burn out and I BELIEVE THE RESULTS WILL BE THE SAME AS THE WHINNERS WHO LOST $300,000 TO $500,000 WHO FOLLOWED PNT TO THE T. THAT RESULT WILL BE THE STORES CLOSING OR GOING BANKRUPTCY.

i believe that shed so more light and charles cunniham is right on.

1) The leadership of the company collected a lot of franchise fees up front and made a lot of money knowing that the franchisees would never fullfill there obligations and open up all the stores that they purchased territories on,

2) They always take the veiw of how much money is in it for them then they think about the franchisees.

3) They will continue screaming from the cheap seats by 20 copies of this and that and we can get a great deal, sell new systems and new games “QUICKEST AND FASTEST WAY FOR CORPATE TO GET MORE ROYALITY FEES” without any considerations for the negative cash flow that you as a franchisee will experience.

4) Do more tournments even though this is all sizzle and ONE BIG FAT WAISTE OF TIME AND RETAIL SPACE.

5) TELL YOU NOW THAT WE HAVE FIXED THE PROBLEMS, RON WILL JUST SAY “IF I TOLD YOU HOW MUCH MONEY YOU WOULD MAKE, YOU WOULD WRITE ME A CHECK TOMMORROW” , BUT PLEASE DON’T ASK ME HOW MUCH MONEY OTHER STORES MAKE OR HOW MUCH I MADE ON MY STORES BECAUSE THE LAW DOESN’T ALLOW ME TO TELL YOU THIS AND IF I DID YOU SURE AS HELL WOULD NEVER BUY ONE OF THESES.

HEY, IF I AM WAY OFF BASE HERE WHICH I AM NOT, I WOULD LOVE TO HEAR FROM ALL FRANCHISEES THERE OPINION.

iF I AM ABSOLUTELY CORRECT ON THIS WHICH I BELEIVE I AM VERY CLOSE, I AM SORRY FOR ALL PLAY N TRADE OWNERS WHO LOST HUNDREDS OF THOUSANDS OF DOLLARS FOLLOWING CORPORATE WHO DID NOT KNOW WHAT THE HELL THEY WERE DOING, BUT GREAT AT MAKING IT SOUND GOOD, AND FOR THE LOW MARGIN STORES I HOPE THAT THE JOB SATISFACTION IS ENOUGH BECAUSE I DON’T BELIEVE YOU WILL MAKE ANY KIND OF REAL MONEY AND DEFINITELY FOR THE INVESTEMENT AND RISK INVOLVED.
Jim Herst on May 31st, 2009 8:05 amAll you folks who banter about your losses may be overlooking a solution regarding your losses. Debt Management is a substitute for Bankruptcy. It works.Stop crying, seek relief, and get on with your life.
Shed Some MORE Light on June 1st, 2009 4:06 amI call this: PNT-Gate…To: “To Shed Some MORE Ligh” (I love that “Ligh” – LOL !!!) That’s great that you spelled my stage name wrong…
You said: “Yes you are wrong. You are wrong and you are an idiot. You spend WAY too much time on here. Since you have all these opinions and predictions, why don’t you at least tell us who you are or why we should believe you? Time will show you for the idiot you are.”

First, I have to say, for someone who wants me to “reveal” myself, you sure have a funny way of “revealing” YOURSELF… NOT !!! – What a Boob !!!

Second, it’s because of people like YOU that INSPIRE me to DIG DEEPER and find out what I can do to help you understand the other side of the story, (and basically help shut your mouth up along the way)…

Third, I do this not only to bring clarity to an already messed up situation, but to help others who may or may not have bought into this FRAUDCHISE to do there own DUE DILIGENCE. Which I can only hope they will do for themselves and their families involved.

Alright, now that I’ve got that out of my system on to BIGGER AND BETTER THINGS… Like EXPOSING this FRAUD-CHISE for what it is… (On a side note, I love that word – FRAUDCHISE. I can’t believe that I made that up; or at least I thought I did. I actually did a google and wouldn’t you know it, that word has already been used on the web. So much for originality. They should actually call this website http://www.fraudchise.com. No one owns that domain name… yet. Who knows who’ll be inspired to do that. Definitely not me because I don’t have the time, because I “…spend WAY to much time on HERE.” LOL !!! according to what “Mr. Ligh” thinks).

Okay “Mr. Ligh” – so you think I’m wrong, huh? Well… I did some more research (after reading what PNTScam had to say) on this BAND OF NEPOTISTIC SCAMMERS and here’s what I found out.

Its very interesting that two executives with PNT (or a company owned by PNT), have the time to be excutives at ANOTHER company that would also be involved with selling of franchises at the SAME TIME; Franchise Mama. Marcos Moura (CEO of Shore Cliff) and Jeff Putnam (CFO of Play N Trade) have the same titles at that company, or did before it folded. What it more intersting is that they use Pat Harriman, who used to be the Director of Public Relations with PNT, as their Director of Public Relations, but who is also the Director of Public Relations for Gamer Doc, a direct competitor of Play N Trade. This begs the question, how can she be employed by two executives of PNT, and employed by a direct competitor of PNT at the same time ?!?! Something (I believe) is NOT right about this picture.

Still doesn’t make sense? Okay, imagine an executive of Mcdonalds, starting is own little side company, while still employed, that helped sell a franchise that was a direct competitor of McDonalds, using a PR person, that was employed by Burger King ?!?!?! Here are couple of links for you to view to let you figure that yourself. Whatever you get out of these links I hope will help you, but this is what I got out of it:

http://www.franchisemama.com (Go to the bottom of the website page and click “About Us,” there are two employees of PNT)

http://www.franchisegator.com/GAMETAG-franchise/

http://www.buythatfranchise.com/Gametag.cfm

http://www.franchisetimes.com/content/story.php?article=00773 (Go to the bottom of the web page. This just has these two guys pictured together). I love their quote in their little blurb. It SHOULD say: “NEPOTISTIC SCAMMING – Cure for the Common Job !!!”

Now the question of Larry Plotnick comes to light. He was hired by PNT in January 2008; he left in March (no real reason why; maybe it could have been because of a No Compete clause issue. But why let that stop him). He then (right after leaving PNT), helped start a video game franchise Gametag, (basically the same model) in May 2008. Well Gametag did about as good as most PNT’s are doing today, they went under in November 2008, and PRESTO !!! – Janruary 2009, Larry Plotnick is RE-HIRED (yup, you guessed it) as CEO of Play N Trade… again. Why would PNT hire him back after he bolted to start a company that would at best, try to compete against Play N Trade, and at worst want someone BACK into the SAME company who just FAILED at running the exact same company into the ground ?!?!?! And here’s what GETS ME. He said (on April 27th, 2009 9:48 am) “Yes there are a few upset individuals, mostly ex-employees that have attempted to COMPETE with Play N Trade unsuccessfully (Like Gamer Doc and others) that have reason to create problems.” AND HE DIDN’T DO THIS – AND HE DIDN’T CREATE (MORE) PROBLEMS !?!?! THIS GUY IS THRICE HYPOCRITE !!! Again, this is nothing but a NEPOTISTIC SCAMMING CLUSTER FUDGE !!! Again, here are couple of links for you to view to let you figure that yourself. Whatever you get out of these links I hope will help you, but (again) this is what I got out of it:

http://www.oregonlive.com/business/index.ssf/2008/09/movie_gallery_sues_mark_wattle.html

http://www.linkedin.com/pub/marshall-hawkins/10/ab7/83a

What about our former CEO Tom McMahon? Well if you go here you’ll notice something about how he has his current resume set up and how he’s linked himself to PNT…

http://www.linkedin.com/pub/tom-mcmahon/6/395/2a7

WHAT ?!?!?! You DON’T SEE Play N Trade on his resume ?!?!?! WHY NOT ?!?!?! That should be VERY obvious !!! Bottom line – HE DIDN’T WANT THAT ON THERE !!! And for good reason !!! Who would want that scamming disaster on there resume?!?! Out of all the people at PNT, Tom McMahon (I believe) was one of the few persons there that ACTUALLY HAD INTEGRITY, saw what was happening at PNT and left. GOOD FOR HIM (and the other execs and employees like him) !!! They’re aren’t too many people like that left in this world. I hope he is doing well in his new position.

You know, I laugh and I poke fun at how RETARDED this whole situation is; honestly I had too or else I probably would have been crying, but for me to know that this is as corrupt as it is; especially after finding this information out within the last 72 hours ?!?! It’s is BEYOND WORDS !!!

Better dust off and put on those old “UNEMPLOYED” PNT t-shirts. But the DAMNING thing about that t-shirt is since you’re essentially self-employeed, YOU CAN’T COLLECT UNEMPLOYMENT !!! Makes me wonder if Yuvi Shmul did that on purpose so he could have a good laugh at all of us. People can do some strange and cutting things, and I wouldn’t put it past someone like him to do something like that. Especially after watching a few “American Greed” episodes that CNBC produces; you’ll see what kind of things people can do to each other that is truly disheartening.

For anybody continuing to read this blog (Current Franchisee or Potentianl Franchisee) I say this, if you have made up your mind to go to this Vegas rally thing, then I encourage you to do what Larry Plotnick said on his ONLY post on this site (April 27th, 2009 9:48 am). Here’s what he said:

“If you have concerns with Play N Trade I would suggest that you call or contact our Corporate office and we can answer your questions appropriately and directly.”

B.S. !!! Don’t bother calling or emailing. It’s a waste of time. BUT, here’s what you CAN do. I would call several key franchise owners that are going through the same money losing situation. Go over the numbers together. Then when you go the this rally, go to him DIRECTLY (and TOGETHER AS A GROUP). Sit down with him at this rally and show him your numbers from your “wonderful” POS system. Then show him what you’ve personally done to get the REAL numbers off an Excel type spreadsheet. I’m sure those numbers won’t match. Again, make sure you do this SEPARATELY, but then COLLECTIVELY show him all this information in front of him. If he sees 5-10 different (but same kind of fiscal issues) from your Income Statements, then you can go from there. If he’s any kind or “REAL” Business Investor, it won’t take him much time to read the numbers and answer your questions right there. But I doubt it… That’s when I would demand the rest of your funds back for all franchise rights that you purchased but have yet to open. If you’re about to open soon, then I would really think about reconsidering that. But that is up to you. I hope you make the right decision.

For anyone NOT being able to see through this scam you would have to be completely OBLIVIOUS to NOT understanding how scammed you will be in the end. Hey “Mr. Ligh”, you’re probably so oblivious that you could have all these men stand in front of you and uniformly tell you at the same time “WE HAVE SCAMMED YOU” and you still would think I’M the idiot… Doing a little homework will take you further in understanding that I’m not.

I think I’ve said enough as this will probably wrap up most of everything that I had to say here on this blogging forum. Again, ALL OF WHAT I’VE SAID HERE ON THIS POST (Past, Present & Future) IS JUST MY OPINION. I wish all of you the best at the upcoming rally and in the future of your business…

P.S. I wanted to personally wanted to thank PNTScam for inspiring me to do my own due diligence into these scamming individuals (the best I could)… Again, THANK YOU PNTScam !!! I just hope this will OPEN more eyes to this terrible situation…
Not a Victim on June 1st, 2009 8:12 amShed Some MORE Light:Take a break, man. Take a deep breath. Get some help. I’m serious.
You’re not warning anyone of anything because you’re raving like a maniac.

There’s no point to your conspiracy theories and your assertions are filled with blatant inaccuracies.

For instance, you write about Tom McMahon “You DON’T SEE Play N Trade on his resume ?!?!?! WHY NOT ?!?!?! That should be VERY obvious !!! Bottom line – HE DIDN’T WANT THAT ON THERE !!!”

But the page you yourself link to (http://www.linkedin.com/pub/tom-mcmahon/6/395/2a7) clearly lists Play N Trade on his resume: “Chief Executive Officer T-Street Management Incorporated January 2008 — January 2009 (1 year 1 month) T-Street is a management company that trains and develops franchaise operations/owners for retail video game stores under the brand Play N Trade and wireless stores under the brand Yakety Yak.”

You claim Pat Harriman is employed both by PnT and Gamer Doc: “how can she be employed by two executives of PNT, and employed by a direct competitor of PNT at the same time ?!?!”

But Harriman’s LinkedIn profile lists her as self-employed as “Principal at Harriman Group” and her website shows her clients: http://www.harrimangroup.com. No PnT.

But even if she did, it’s rare but not unheard of for a specialty PR firm to represent competitors. What’s the conspiracy? What’s you’re point? [Please don't answer]

Take a break. All you’re doing is killing what was, at times, a rational and useful discussion. It’s sad to see somebody coming apart. Get some help and move on.
Your A Victim on June 1st, 2009 1:44 pmThis is in response to not a victim”s (corporate cronie) last response.Why are you doing the due diligence of researching what Shed some light has said and attacking his comments if you are not a PNT corporate monkey. We know who you are and it is most likely Mike Peterson or Jimmy Kindred both nothing but liars and scammers. So let me ask you this Mike or Jimmy, why did Tom Mcmahon leave his position as CEO at PNT in December of one of the most turbulent times in this nations economic history and knowing how bad the job market was, to take a VP position at Grocery Outlet away from his family and up North? Your telling me that he walked away from this great Video Gaming opportunity called PNT to go take a lesser position at a second rate grocery market for no reason? Hmmm, now isn’t that puzzling. The reason he left is because he saw that PNT was nothing more than a bunch of liars and scammers and a nepotistic operation that was falling apart and about to crumble. This nepotistic operation has gone through 4 CEO’s in a matter of 2 and half years. How is that even possible? That should be a red flag right there that the “family” is running this scamming operation similar to the mafia. The CEO’s are just the front men.
Not a Victim on June 1st, 2009 2:29 pm“Why are you doing the due diligence of researching what Shed some light has said has said and attacking his comments if you are not a PNT corporate monkey.”Actually, if I were a “PNT corporate monkey” I would be delighted with everything Shed Some Light has said and would be egging him on to say more. More crazy conspiracies that lead nowhere! More name calling! More factually incorrect rants using ALL CAPS !!!!!!
Corporate monkeys are rejoicing that this conversation has gotten so far off-topic, become so unprofessional and so easy to dismiss.

Maybe Shed Some Light is the corporate monkey! Think about it:

He loudly attacked me for saying something I didn’t say, then apologized.

He linked to Tom McMahon’s resume saying it didn’t mention PnT, and it had an prominent paragraph on PnT.

He ranted about the Pat Harriman being “employed” by competitors when a simple search revealed she’s employed by her own PR agency.

Then Your a Victim accuses them of being a used video game mafia family!

Yep. I think Shed Some Light and Your a Victim are Mike Peterson and Jimmy Kindred trying to make the franchisee commenters look dumb. And it’s working!
Joe on June 1st, 2009 4:51 pmNot A Victim“But the page you yourself link to (http://www.linkedin.com/pub/tom-mcmahon/6/395/2a7) clearly lists Play N Trade on his resume: “Chief Executive Officer T-Street Management Incorporated January 2008 — January 2009 (1 year 1 month) T-Street is a management company that trains and develops franchaise operations/owners for retail video game stores under the brand Play N Trade and wireless stores under the brand Yakety Yak.”
Yes that is what it says, what it should say is that he was CEO of Play N Trade Franchise Inc also, and it does not. When i talked to him on the phone with some questions early on in my due diligence, the title he said was CEO pf Play N Trade, when he was hired, all the press releases said CEO of Play N Trade Franchise Inc. Its probably alot easier to explain CEO of T-Street in an interview, then use the CEO of Play N Trade, and have to talk about that train wreck
Shed Some MORE Light on June 1st, 2009 7:51 pmWow, it looks like “Admin” had a lot to say…You know I was just about to post my thoughts (which I’m still going to do), when I read your last post “Ms. So&So.” (aka: “Not A Victim”). You think I’m an employee or one of these NEPOTISTIC CRONIES AT PNT ?!?!?! Now YOU’RE CRAZY !!! LOL !!! Oh man, you’re too funny…
Like I said before (and continue saying) EVERYTHING I SAID IN THIS POST IS JUST MY OPINION. I could be way off base, with what you just pointed out in my prior post (on June 1st, 2009 4:06 am) “Ms. So&So.”

You said: “All you’re doing is killing what was, at times, a rational and useful discussion.”

I hear you on that. I (again) made a error and see that I needed to be clearer, I hope this doesn’t lessen my credibility. So for that, I appreciate what you said.

As JFK said in once said in (what I believe) one of his most profound speeches: “For as a wise man once said, “an error doesn’t become a mistake until you refuse to correct it.””

So I WILL correct my error.

Here’s what Tom McMahon’s description says:

“Chief Executive Officer

T-Street Management Incorporated (Retail industry)

January 2008 — January 2009 (1 year 1 month)

T-Street is a management company that trains and develops franchaise operations/owners for retail video game stores under the brand Play N Trade and wireless stores under the brand Yakety Yak. Responsibilities include sales, marketing, training, customer support, supply chain operations, human resources, IT and several smaller companies supporting T-Street.”

What I should have said is that NO WHERE does it say that he’s CEO of PNT, just… well now that you look at it closer, it really doesn’t say much at all about his “real” link to PNT, it just says: “T-Street is a management company that trains and develops franchaise operations/owners for retail video game stores under the brand Play N Trade…” Basically, it leaves Tom in that “Safe Zone.” As it should be. He was very wise to keep as much distance from PNT as possible in his wording…

Now, about CLEARING up the “Pat Harriman” thing:

First, the http://www.harrimangroup.com is not a company, it’s just her. So when you hire the harrimangroup, you’re really not hiring a “group,” just her.

Second, when McDonalds hires a PR FIRM, that’s the key, it’s a FIRM, the same person who does work for McDoanlds, doesnt work for Burger King, some other employee in the firm handles the Burger king account, not the SAME person. That’s a CONFLICT OF INTEREST.

BTW, just to let you know (if you haven’t noticed already), I don’t mind when my errors are pointed out. It’s still unfortunate corporate can’t and won’t do the same, because doing that brings about the “obvious”… admission. But that also brings about another concern, possible lawsuits. But why have that FEAR if you are REALLY a LEGITIMATE BUSINESS like PNT “should” be, right? It STILL puzzles me why a SMALL business like PNT “needs” to “restructure” their corporate staff 4 to 5 times, yet keep the same persons within that “restructuring” within an 18-24 month period. I’ll give you an example. Do you know how many positions Roger Lloyd has had (so far) within that time frame? CEO, COO, VP of Franchise Development, Board of Directors and his current title: EVP of Marketing. You don’t see anything wrong with that? Do you see companies like Dominos, PapaJohns or Starbucks (and the like) doing the same thing? No… I didn’t think so. Shouldn’t that tell you something?

Also, “Mr. Ligh” (I think) mentioned “how much time I had on my hands.” And even you said “Take a break.” (twice). Well, why do Excutives at PNT, have ALL THE SPARE TIME ON THEIR HANDS to form shell companies, to sell franchises, but NO time it would seem to help the many current franchisee’s that are going under ?!?!?! For a company that has so many problems, they have a lot of “FREE TIME” it would seem.

Also, why were there NO employees (at the time) of PNT’s inception; only T-Street Management Inc. employees? Then after this California citing, all of a sudden why did T-Street “dissolve” along with T-Street selling that franchise Yakety Yak off to another investor(s) and NOW everything is under PNT? Something is NOT right…

Again, I could be way off of everything I just said. If I am incorrect then please correct me. I look forward to your reply “Ms. So&So.” I’m always open to that. I NEVER want to be so staunch in my thinking to believe that I’m always right. I know that I’m flawed. But thankfully not to the point of being CORRUPT.

On my last note, although It’s too late for me, since we’ve lost our money to PNT, this is to ALL THE PNT FRANCHISE OWNERS !!!

YOU ARE:

- The ones that purchased PNT Franchise Rights (who’s rights are still valid)

- The store owners that will be opening soon

- The store owners that are already open and still in business (barely)

I can only hope you all do your own furthered Due Diligence (if you haven’t already) for own sakes and seek (and only if you can, be willing to possibly pay for) legal council, because haven’t you paid enough already into this FRAUD ???…
PNT is History!!! on June 1st, 2009 11:11 pmXbox 360 getting full retail games delivered on demandhttp://adjix.com/6jt6
See ya PNT!!! With the introduction of this and set-top boxes with video games on demand it will only be time… PNT=Tower Records!!!
michael on June 1st, 2009 11:21 pmShed some more lightCharles Cunningham
All franchises

After seeing blog, talking to franchisees, and going to numerous play n trade stores this is my assessment:

1) All you “whinners” out there who lost $300,000 to $500,000 followed corporate policy to the T and ran you into bankruptcy in a flawed system driven by Greed.

A) Corporate said buy lots of new games and prebooks with low margin and you did and lost your butt.

B) Corporate said buy new systems with 0 margin and you did and lost your butt.

C) Corporate said follow there policies 100% and you did until you had no money left and filed bankruptcy.

(I am sorry for all of you who followed corporate policy to the T and lost everything)

I beleive it is BS about early frachisees that were not qualified. The problem was that all the early franchises followed corporate policy to the T all the Way to “Bankruptcy” BECUASE CORPORATE DIDN’T KNOW WHAT TO DO AND HOW TO ADVISE EXCEPT SAY BORROW MORE MONEY AND SOMEDAY YOU WILL MAKE SOME MONEY

2) For all you low volume stores who have very few to no employees and have to work this model 100% on your own :

A) Corporate said buy low margin new games and prebooks and you said no way I can not afford the negative cash flow so I am just going to stay low volume, keep my costs low and make my money on “used games”

B) Corporate said by new systems with no margin and you said no way I can not afford the negative cash flow so I am just going to stay low volume and make my money on “used games”

C) You low volume stores owners who take this approach: I applaud you for doing the opposite of what corporate is telling you to do so that you can stay open and avoid bankruptcy, and minimize losses. But It is funny that to minimize losses you have to do the opposite of what corporate is advising you to do to stay in business. Any other franchise would get you disenfrachised, but under this flawed system this is what keeps you doors open. In time though you will burn out and I BELIEVE THE RESULTS WILL BE THE SAME AS THE WHINNERS WHO LOST $300,000 TO $500,000 WHO FOLLOWED PNT TO THE T. THAT RESULT WILL BE THE STORES CLOSING OR GOING BANKRUPTCY.

i believe that shed some more light and charles cunningham is right on.

1) The leadership of the company collected a lot of franchise fees up front and made a lot of money knowing that the franchisees would never fullfill their obligations and open up all the stores that they purchased territories on,

2) They always take the veiw of how much money is in it for them then they think about the franchisees.

3) They will continue screaming from the cheap seats by 20 copies of this and that and we can get a great deal, sell new systems and new games “QUICKEST AND FASTEST WAY FOR CORPATE TO GET MORE ROYALITY FEES” without any considerations for the negative cash flow that you as a franchisee will experience.

4) Do more tournaments even though this is all sizzle and ONE BIG FAT WASTE OF TIME AND RETAIL SPACE.

5) TELL YOU NOW THAT WE HAVE FIXED THE PROBLEMS, RON WILL JUST SAY “IF I TOLD YOU HOW MUCH MONEY YOU WOULD MAKE, YOU WOULD WRITE ME A CHECK TOMMORROW” , BUT PLEASE DON’T ASK ME HOW MUCH MONEY OTHER STORES MAKE OR HOW MUCH I MADE ON MY STORES BECAUSE THE LAW DOESN’T ALLOW ME TO TELL YOU THIS AND IF I DID YOU SURE AS HELL WOULD NEVER BUY ONE OF THESES.

HEY, IF I AM WAY OFF BASE HERE WHICH I AM NOT, I WOULD LOVE TO HEAR FROM ALL FRANCHISEES THERE OPINION.

iF I AM ABSOLUTELY CORRECT ON THIS WHICH I BELEIVE I AM VERY CLOSE, I AM SORRY FOR ALL PLAY N TRADE OWNERS WHO LOST HUNDREDS OF THOUSANDS OF DOLLARS FOLLOWING CORPORATE WHO DID NOT KNOW WHAT THE HELL THEY WERE DOING, BUT GREAT AT MAKING IT SOUND GOOD, AND FOR THE LOW MARGIN STORES I HOPE THAT THE JOB SATISFACTION IS ENOUGH BECAUSE I DON’T BELIEVE YOU WILL MAKE ANY KIND OF REAL MONEY AND DEFINITELY FOR THE INVESTEMENT AND RISK INVOLVED.
PNTscam on June 1st, 2009 11:51 pmTo Shed some more light,Do you happen to know the Google group where all the PNT franchisees talk to each other about news etc. They need to be informed about the treachery occurring at corporate. The inside scoop needs to be revealed about this scam to stop others from losing their lives. The current franchisees need to know the truth and the truth is what I want to tell them.
Shed Some MORE Light on June 2nd, 2009 1:53 amTo PNTscam:Believe me, there are quite a few franchisees that know this and are on this blogging forum quite frequently. But those that choose to believe will, and those that choose NOT to believe won’t. It’s unfortunate for those that choose NOT to believe (like myself, in the beginning) UNTIL I saw it happen to most of the franchisees around me that are now either closed or about to close. Again, most all congratulated me for NOT ever opening. It’s too bad it had to end up this way. But do you know what really pisses me off? Read this:
It’s PNT’s NEW EMAIL BLAST !!!

And do you know who receiving these email blasts – yup, existing franchise owners. Great marketing strategy dollars at work; the Franchisee’s royalty fees monies !!! That’s the way to spend it, COME ON NOW – YOU GO BOYEEEEEEEE !!!

“LAS VEGAS, NEVADA

June 20, 2009

Reception 5:30pm – Presentation 6:00-7:30pm

Golden Nugget Hotel and Casino

St. Andrew’s Meeting Room, South Tower, Second Floor”

“Come see why Play N Trade is the fastest growing video game franchise

in the country. The video game industry is a $21+ billion industry

and Play N Trade is at the forefront.”

1) “Come see why PNT is the “fastest growing” video game fanchise in the country.” It’s the ONLY video game franchise, with the exception of Gamer Doc that has sold TONS of Franchises within the last year – YUP – FIVE !!! That’s what I’m talkin’ bout baby !!!

2) Now what about that earnings claims statement? “The video game industry is a $21+ billion industry and Play N Trade is at the forefront.” Okay then, PROVE IT !!! With some actual numbers how you can back up this claim !!! “…and Play N Trade is at the forefront.” – WHAT ?!?!?! Who’s crack pipe are you smokin’ ?!?!

3) They big this up and make it alluring enough for any potential franchisee to entice them to come (with just enough creative writing to keep them legally from messing more things up for themselves) and possibly invest in this FRAUDCHISE by telling the public all the facts about the gaming industry (where basically GameStop, WalMart, Target, Best Buy, ToysRUs, and the like are really raking in the cake). All the while (I believe) they’ll be saying statements at this convention like: “But we’re not “allowed” to sell you this franchise…” They’ll contort some KEY phrase like this one that they’ll repeat over and over again to “protect” themselves legally, but all the while sucker punch you into eventually buying into this FRAUDCHISE. It’s REVERSE PSYCHOLOGY at it’s best.

Now get a load of the rest of this fudge packing information…

“Hear from Larry Plotnick, CEO, Jimmy Kindred, EVP of Sales,

Tony Gillette, SVP of Retail Operations as well as talk with some of our franchisees,

store development, real estate and financial partners there to answer your questions.”

“GET YOUR TRIP PAID FOR!* ASK US HOW!”

“We hope to see you all there! For questions and RSVP,

contact …”

“PLAY N TRADE ANNUAL FRANCHISEE CONFERENCE BRIEF AGENDA

Monday: Vendor Fair in the afternoon and Opening Ceremony Dinner

Tuesday: Training and Breakout Sessions with approved PNT vendors

Wednesday: Training and Closing Ceremony”

“*As an incentive, if you arrive at this event with an already approved application and signed Franchise Disclosure Document, and sign on as a Play N Trade franchisee at this event, you will be able to attend our Annual Franchise Conference the same week at our expense! We will reimburse you, up to $1000 for your travel and hotel costs (at the Golden Nugget or similar hotel) at the conclusion of the event.”

“Important Note: This communication is not an offer to sell a franchise. The offer of a franchise can only be made through delivery of a franchise disclosure document. Certain states require that we register our franchise disclosure document in those states before offering either unit franchises or area development franchises. This communication is not directed to any resident of those states.”

I love the “Important Note” part where they explain how this is NOT an offer to sell a franchise., but why are they willing to pay up to $1,000 to attend this crap ?!?!?! So they can tell you what you already know (or could find out for yourself on the web)? All you have to do is Google: “video game industry is a $21+ billion industry” and SEE for yourself how PNT is NOT a part of that equation. Well, maybe they are when it comes to the “gross” sales that INCLUDES ALL THE MEMBER CREDIT that you’ll NEVER get paid on…

This “conference” is nothing more than a “Tupper-Ware party” sales gathering for potential franchisees to attend and buy into. And do you know who’s advertising dollars they’re using to drain more money for these NEPOTISTIC CRONIES? Yup, you guessed it, THE FRANCHISEES MONTHLY ROYALTY FEES MONIES !!!

What’s worse, they have the GALL to put out an ad like this DURING A STATE WIDE INVESTIGATION !!! These people have gonads the size of VY Canis Majoris. Don’t know what VY Canis Majoris is, well here’s the link:

http://www.universetoday.com/2008/04/06/what-is-the-biggest-star-in-the-universe/

scroll down a bit and you’ll you’ll see a picture of it. Yep, That’s about the size of it !!!

To me, this is nothing but a big mess and a HUGE waste of Tax Payers monies – Opps !!! Did I say Tax Payers monies? Sorry, this situation reminded me of how our “great” government takes care of us (along with the Federal Reserve); I meant to say Franchisees Monthly Royalty Fees Monies. Again, all of what I just said on this post is just my opinion…
ADMIN on June 2nd, 2009 5:35 amFYI New (and old) Play N Trade posts are listed here:PLAY N TRADE: Overview & Links
What are the dates of the Vegas convention?

Doesn’t it seem risky/unwise for PnT to invite prospective franchisees to the same place where there are likely to be many disgruntled franchisees?
Shed Some MORE Light on June 2nd, 2009 1:47 pmTo “PNT is History!!!”:You said:
“Xbox 360 getting full retail games delivered on demand

http://adjix.com/6jt6

See ya PNT!!! With the introduction of this and set-top boxes with video games on demand it will only be time… PNT=Tower Records!!!”

When I read that I immediately thought of another way Microsoft could capitalize on this market and make even MORE money; using there own Visa/Master Card-type Credit Card. Well guess what, I Googled it and THEY ALREADY HAVE !!! A year ago, according to this article. Who knows, they could’ve done it sooner. This was just one link.

http://www.siliconera.com/2008/06/11/jump-into-the-xbox-360%E2%80%A6-visa-credit-card/

In response to what “PNT is History” about the demise of PNT as a result of what Microsoft is doing, well you don’t have to worry about Microsoft putting us out of business, PNT Corporate sealed the deal on that one already. Anyway, Retail in general is very much in trouble. Take a look at this link:

http://online.wsj.com/article/SB124294047987244803.html

I think I posted this link on a prior post on this forum, but this is just the beginning. You should Google: Ghost Malls (or Ghost Malls Coming). The sad part is I actually enjoyed going to Tower Records. Here’s another link:

http://www.lvrj.com/business/43165932.html

This is NOT a joke. On this particular post I won’t poke fun at this topic, because THIS affects EVERYBODY to some degree. And again, this is just the beginning. Still don’t believe me? Okay… Remember that “smack in the face” we got back in September of ‘08 with all that Sub-Prime Debt garbage we went through? Our dow went from around 14,000 points to 7,000. Now let’s look at this. We have another:

- $600 Billion in “Option Arm” loans that will be defaulting (starting in Mid 2010 and peaking the end of 2010).

- $1 Trillion in “Alt A” loans that will be defaulting (starting in Mid 2010 and peaking the end of 2010)

- $3.7 Trillion in Real Estate loans that (as you can already see) starting to collapse.

- $2 Trillion in the printing of all this bailout money (between now and next year).

- Goodness knows how many Trillions in Defaulting Credit Card Debt that is also happening now.

With around – what, $8-10 Trillion (it could be more or less, give or take a couple Trillion) of ALL this uncollected defaulting debt, how can we print our way out of this one? And, how can this nation recover from a hit like that? Simply put… it can’t.

I know this may sound VERY LEFT FIELD in most people’s thinking, but I would honestly start storing up on dry foods, like dry beans and rice and canned goods that will at least last 18-24 months. Again, I know that sounds CRAZY, but if nothing happens, and we somehow miraculously come out of this fiscal catastrophe, you’ll at least have plenty of food to eat and it won’t go to waste. Again, just my thoughts.

That’s why I’ve been in support of what Charles Cunningham said about trying to disenfranchise from PNT (ONLY if you can). If you can’t, I feel your pain. That pain is felt for those that have had major financial losses already (and for those about to) as a result of buying into this franchise. And if your store ISN’T open yet, my thoughts are you might want to seriously rethink your plan. Knowing what I know now (and where I think we’re heading), we should have just taken the hit and walked away. We didn’t and we lost more money. A LOT MORE !!! You know that old saying: “the writing’s on the wall.” Well now (I believe), “it’s been tattooed on our foreheads.” But like I said before, all what I’ve said in this post is just my opinion…
author on June 2nd, 2009 3:23 pm“Knowing what I know now (and where I think we’re heading), we should have just taken the hit and walked away. We didn’t and we lost more money. A LOT MORE !!!”Shed More Light: Did you ever get your store open? If so, how long was it open? How much do you figure you lost?
author on June 2nd, 2009 3:25 pmHow much have you others lost , or will probably lose, from their decision to buy a Play N Trade franchise?
Shed Some MORE Light on June 2nd, 2009 4:24 pmTo Author:To answer your question, We bought some of the Franchise Rights, but never opened. If you want to find out the details why then I would encourage you to read all my posts from the beginning so you can get a better understanding of what we did and what we lost $$$ wise…
Also, to answer your second post, I would again, encourage you to read through what everyone here has posted to gain a better understanding of their own gains/losses. Mostly losses…

I hope this answers your question…
PNTscam on June 2nd, 2009 10:08 pmThis to anyone foolish enough to consider PNT as a viable franchise opportunity. Be forewarned that the end is near for retail video gaming locations. Within a 3 to 5 year timeframe all video games will be accessible via the net or some device that hooks up to your HD TV. Shed some light has already posted Microsofts unveiling of their plans to release on demand video games purchased as well as rental. But Onlive.com is already launched and will in a matter of 3 years, along with what Microsoft is doing basically extinct video game retail. Remember the name existing franchisees and potential franchisees “Onlive.com”. This is a big secret PNT is keeping from you all because they are nothing but scoundrels and liars and want to line their pockets with your hard earned money. Check the link below. I speak the truth.http://news.cnet.com/onlive-could-threaten-xbox-ps3-and-wii/
You have been warned, do not be deceived and if you already have do not give these scoundrels any more money, as that is what they will be asking you for in Las Vegas while lying to your face. The truth will be unveiled.
Shed Some MORE Light on June 3rd, 2009 12:56 pmHey Ms. So&So (aka: Not A Victim), we miss you. What’s going on? Still think I’m delusional and need to “take a break” or that I actually “work” for PNT in some form or another; especially after all this information that’s been posted? ha, ha, ha… aaaahhhh… I still can’t get over that one… Man, that’s still funny… I just wanted to follow up you and with anybody that viewed what I wrote yesterday. It’s hard to read what I posted and quickly dismiss it because you may feel that I’m a “doom and gloom,” person, but honestly I’m not. I think about that story of Noah and the Ark, where he was out in the middle of the desert and telling passer-bys that a flood was coming. Of course everyone that passed by thought he was smokin’ a different kind of wood pipe (back then, they didn’t have crack pipes, so I picked the next best thing). Well, the flood DID come and I think you know the rest of the story…If I can only make an impression on one or two families that just so happened to read what I posted yesterday (and throughout this blogging forum), I hope they do their own due diligence to come up with their own conclusions that hopefully lean towards getting and being more prepared for what I believe is coming. That would mean a lot to me personally, aside with what’s going on with PNT and what they did to add to this disastrous situation that we’re facing globally. Obviously I said things in this post that were sarcastic, but honestly that was my way of venting since we lost sooo much money in this franchise, fraudchise, whatever you want to call it. In the end what matters are the lessons we learn from this; for the ones that have handled things incorrectly (and yes, what I believe – corruptly) at PNT and our own personal errors, so we don’t make those same errors again. That’s the power of knowledge and wisdom is making those changes. I wish and hope everyone on here (reading this post) the best in their quest to becoming people of EXCELLENCE; as I know I need to grow in that too… everyday…
ADMIN on June 3rd, 2009 7:49 pmNOTE: There was comment posted here made to look like it was an ADMIN comment addressing Shed More Light. It wasn’t.The comment was immediately deleted as was the user account. However, it may have gone out to those subscribed by email.
Please disregard – and sorry to SML for my not catching it sooner.
Joe on June 3rd, 2009 11:27 pmWow, almost 300 posts. I would hope that anyone who has even thought aboutgetting involved with Play N Trade, has gone thru and read every post here. its a shame that they have resorted to free Las Vegas trips, to sell their franchise, when it should be the brand that sells it. I just talked to a franchisee yesterday, and the end has come for him, as he is out of money, and will close sometime in the next month, actually right around the time of the convention, this is what he said, “Its funny how corporate can offer new franchisee’s a free Vegas Trip, but they can’t offer a current Franchisee, a small break on their royality payments.”
That right there sums up Play N Trade, a charge that many franchisee’s have made, that they dont give a crap about the current ones, they dont make any money off them anymore, they need the franchisee fee’s that they collect to pay their outrageous “management fee’s”.

Im not really big on lawsuits, but I really hope that indidvidually, or by class action

they go after Play N Trade Franchise, Inc, and take whatever they can get.

The golden rule to investing: If it sounds too good to be true – it probably is!
PNT is History!!! on June 4th, 2009 12:01 amYuvi Shmul’s new gig… or SCAMSUE SUE SUE and go after his assets!!!
http://www.beatmike.com/
Shed Some MORE Light on June 4th, 2009 1:04 pmTo PNT is History:I couldn’t figure out why you had this web site link here in the beginning but as I looked at the “About Us” page your jaw will drop (or maybe not; since nothing surprises me anymore).
http://www.beatmike.com/about_us

I love this statement (sarcasm emphasized):

“Co-founder Yuvi Shmul, an entrepreneur who owned and operated several start up and growing companies.”

WHAT GROWING COMPANIES ?!?!?!

I just can’t believe this. This just blows my mind !!! Now he’s going after gamblers that are weak already… Although they advertise this ISN’T gambling; this (I believe) may not be “direct” gambling, but it has the “feel” of it and will more than likely lead gamblers back into doing and what they were trying to avoid… gambling. Yuvi amazing, he’s got his hands up every scamming orphus possible. I guess when all else fails you can gamble the rest of your losses. Who knows, you might make more than you did when you bought into this FRAUDCHISE with PNT !!!

And to “Joe”:

I too had a conversation with a couple of other franchisees who will be closing down very soon, who also know and are in touch with others that will be closing down very shortly as well, because of this failed business model that everyone who has posted their reasons why on this blogging forum. PNT is going down quickly and yet the people who started and/or contributed to this mess use statements like:

“… and Play N Trade is at the forefront.”

and Yuvi adds:

“…operated several start up and growing companies.”

Even a crack addict would now know better than to believe this garbage…

Again, I’m glad I never had the opportunity of opening and LOSING MORE MONEY. One franchisee basically said the same thing, saying it’s amazing how they’re using the Franchisee’s Monthly Royalty Fees Monies by reimbursing up to a $1,000 to each person who attends. That person also mentioned, what a great waste of money. They could have used that for their “national” advertising campaign for the existing franchisees who need it the most. But what’s the point of that since it won’t bring in more money to sell more franchises to pay PNT’s overblown salaries at Corporate and the California state’s legal fees T-street – OOPS, I meant to say PNT – have to pay. I too, Joe hope many people are reading these posts do one thing… run… in polar opposite direction…

There is a passage in the Bible that says this:

Psalm 37:

1 Do not fret because of evil men

or be envious of those who do wrong;

2 for like the grass they will soon wither,

like green plants they will soon die away.

3 Trust in the LORD and do good;

dwell in the land and enjoy safe pasture.

4 Delight yourself in the LORD

and he will give you the desires of your heart.

5 Commit your way to the LORD;

trust in him and he will do this:

6 He will make your righteousness shine like the dawn,

the justice of your cause like the noonday sun.

7 Be still before the LORD and wait patiently for him;

do not fret when men succeed in their ways,

when they carry out their wicked schemes.

You can read the rest of the Psalm on your own (if you’re interested)…

You know it’s hard to stop contributing towards this forum. Although all of what I said here on this post is just my opinion, I believe people need to know how much of a mess this FRAUD-CHISE really is; and especially looking at this BeatMike.com thing, it just makes it all the more clearer. It’s just sad…
Shed Some MORE Light on June 4th, 2009 1:42 pmCame up with a new PNT slogan:“Be ahead of the “game” and don’t get “Played !!!” – Tooled N Played – Have a day…
PNTscam on June 4th, 2009 6:01 pmFYI: All employees at PNT which worked on helping new franchisees with finding locations, ordering equipment, building out stores, and even training and technology are long gone. The only slimebags still there are the chairmen of the boards brother in laws, and a bunch of other cronies, milking the franchisees royalty fee’s dry and not providing any sort of support or assistance what so ever. The only people left that do much of anything are the support personel and they are limited in what they can do for the franchisees as they have little experience. Go ahead, ask them who’s left and ask them what they do. Also, go one step further ask them how many titles they held at PNT. They most likely will lie to you, but I will tell u the truth. So if you ask them and then post your responses here I will be glad to tell you if it’s the truth or not.I want all the franchisees to understand the insidious plan these con artists have in store for you. They most likely will wait until you fail and they buy your store for pennies on the dollar and then make it corporate owned. Ask them about their plans to open more corporate stores, let’s see if they tell you the truth. I sure will. I truly hope that the all the franchisees will do their due diligence and look into this. Please do for your sake you will regret it if you dont.
Mr. Obvious on June 4th, 2009 6:33 pmComment:Michael
Shed some more light

Excellent observations on a failed PnT business model from day one!

1. Management’s experience prior to Franchising retail game stores. “Zero”

2. Proven policies. “Zero”

3. Profit on new release games. “Zero”

4. Profit on new consoles. “Zero”

5. Profit on tournaments. “Zero”

6. Point of sale program. “Zero”

7. Store site selection. “Zero”

8. Franchisee’s opportunity to expand to multiple locations. “Zero”

9. Franchisee’s bank account 8 – 12 months from opening. “Zero”

10. PnT Corporate investment. “Zero”

11. PnT Corporate due dilligence on prospective Franchisee’s. “Zero”

12. Corporate buying power on new release games and consoles after 3 years. “Zero”

PnT Area Developer’s have a legal responsibility for their conduct and actions.

I am sure the California Corporation Commission would appreciate “Bo Stewarts” comments about struggling and failed Franchisee’s (April 30, 2009) “Unhappy Franchisees” attachments prior to California Corporation Commissions Ruling.

Play N Trade Founder has cast the darkest cloud over the gaming industry since it’s conception, and the sooner this mess is over the better for all the good people who count on the gaming industry for their livelyhood.
played on June 5th, 2009 1:04 amwhy don’t you franchisees sue them??
Shed Some MORE Light on June 5th, 2009 1:47 amTo PNTScam:Remember when I wrote on post #229 (May 25th, 2009 6:25 pm)
http://franchisepundit.com/index.php/2009/05/20/trouble-for-gaming-franchises-like-play-n-trade/

““We strongly believe that our customer service, product offering and immediate customer gratification creates a better overall trading venue then does a kiosk type environment.” (as PNT will have it in their possible plans to buy out current PNT franchise owners for pennies on the dollar and become corporate stores like GameStop and eventually sell there stores to Walmart and retire with more money and laugh there way to bank where the Banks and Federal Reserve will have the last laugh and money will become worthless).”

Well I very much agree with what you said about PNT buying out the existing stores for pennies on the dollar. I had a conversation with PNT franchisee who said they would be happy to sell of their store $50K; even $25K if they could just walk away.

But with the current market being what it is and more of those “experimental” Walmart Game Kiosks coming around more and more AND the introduction of downloadable games for your Xbox 360 (and Nintendo and Sony joining that bandwagon pretty soon) that WILL eliminate the used game industry almost completely. And that’s what Microsoft wants. They NEVER make ANY money off of used games, ONLY NEW. There will be NO NEED for used games because you’ll already have an account that you can download that game you bought lets say a year ago, anytime you want. Because you already purchased it. So that game will stay with you as long as you have that account and you continue using their credit card to buy more games. Now that’s a win, win situation right there. The only thing is… we didn’t see it…

When it comes to this particular industry it’s NOT the experience you offer, IT’S THE GAME !!! Because that’s what keeps you at the house NOT the store. Think about that. Really… Where do you game the most?… at HOME… So, there won’t be a need to LEAVE HOME when you can download and play… I’m sure they’re already going to create bigger (1TB) hard drives to hold those games. Wait !!! That’s even MORE money for them; selling bigger hard drives…

On another sad note. I just found out that a couple of more stores will be closing soon within our area. Very sad. And these people were VERY creative, personable, caring, go getting, and did everything by the book and then some. But in the end… well, I just said what’s going to happen to them… again, very sad…
Shed Some MORE Light on June 5th, 2009 1:59 amOh, and to add to PNTScam’s comment:You said: “…go one step further ask them how many titles they held at PNT.”
Remember when I mentioned how many titles Roger Lloyd has had (so far) within that 18-24 month time frame?

1) CEO

2) COO

3) VP of Franchise Development

4) Board of Directors

5) EVP of Marketing

He’s going to go for broke and claim the ever so desired position of: Janitorial EVP. He CAN’T have Janitorial CEO, because Yuvi Schmul claimed that one a long time ago. You go Yuvi – Yeah, MAKE IT BIG !!! (get it?) I wonder how he’s going to “clean” this mess up?…
Turn out the Light on June 5th, 2009 9:30 amSony’s Playstation network has been offering full retail games for download for close to two years. Sony’s offerings have been mostly games that are at the end of their product life cycle at retail or are dedicated to online play such as the case with Sony’s Warhawk. These offerings have had no measurable effect at retail. The game industry has enjoyed growth in all but two months of the last two years. One of the larger issues facing downloads becoing more popular is the available storage space of consoles. Only a few games can be stored in the largest of systems. Hardcore gamers dont want to delete these files to make room for new games only to delete and restore to be able to play the original download again. Has any one ever downloaded a 5 minute demo? It takes forever.The real revelation of Microsoft’s offering is that you will no longer have to use Xbox Live points cards purchased at retail to be able to buy content. Customers now have the convenience of using a credit card to purchase directly as has been the case with Sony for the past two years.
As far as Walmart selling used games in vending machines? I think a recent gamer blog post summed it up best. Gee, I cant wait…I now have a place to take my defective games for Walmart store credit. I can make a purchase, return it and head over to Gamestop.

I would caution anyone reading these posts by a handfull of people how inaccurate and misleading they have become. It is sad, this could have been a constructive way to educate potential franchisees some of the potential pitfalls of owning a PlaynTrade. The negative posts (with some exception) have spiraled into immature, name calling, conspiracy ladden rants that have discredited what you set out to acheive. I would also caution that by wishing the demise of PnT you are also wishing for the demise of 250 families who are working hard every day to provide for the best life they know how. Usually, I never reply to blogs, I am too busy. My feeling is that my family is under indirect personal attack and I am warning some of the posters how cowardly your actions have become.

My best advice is to reach out to the franchisees who have had success and learn what they do to succed. Learn the mistakes of franchisees past, and avoid these things. There are sucessful franchisees and are more than willing to share with you. Visit these stores, go watch a tournament, ask if you can spend a day in the life. This is what I did to influence my decision to develop a PnT.

To shed some light, thank you for the Charles Cunningham post. It was a meaningful submission. You know, its interesting, the itemized concerns in his letter almost read verbatim the areas of improvement PnT corporate is addressing in Las Vegas. I guess meaningful concerns are sometimes met with meaningful action. I also agree with shed some more light on another topic. You said you were spared even more losses by not getting your store open. I would have to agree, with your lack of industry knowledge and misrepresentation of fact, it would have been a disaster.

Ben Kennedy

Clarksville, TN

Opening Sept. 09
Ben Played on June 5th, 2009 12:14 pmTo Ben Kennedy,You will feel the pain from Sep 2009.
You will see your bank account shrinking daily.

We all have the hypes even stronger than you have right now.

Follow the instructions from PNT strictly, one by one, you will know how the model works by sucking your money like a black hole.

Your royalties are continuing to bleed you, whatever you make profit or not, but PNT corporate does.

You are losing money on:

1. New games and console sales: 3 or more % royalty, 2% credit card transaction

2. Price drops for both new and used games.

3. Broken console systems.

4. Ad cost.

5. Overheads.

6. POS monthly fee.

7. Loan interests.

8. Royalties.

9. Tournies.

10. Broken equipment.

The bills are falling like snowflakes and quicker than you can imagine.

Please come back after your opening a couple of months later and tell us your feelings and experiences with us.

Best luck to you (Good luck is usualy not enough for most of the PNT owners)!!!!
PNTscam on June 5th, 2009 12:22 pmAre you kidding me Ben, if indeed that is who you truly are. You believe that PNT is a viable business? Have you done the due diligence of digging into past history on this franchise operation and the people running it? I don’t think you have or else you would have never purchased a store. Let me ask you this Ben, who is helping you with the opening of your store? There’s no one left at PNT that is qualified to do that. Who is going to train you Ben? There’s no one left to train anybody, who is going to work on your lease agreements and assist you? There is no one left to do that. Why don’t you fill us in on your whole process to open your store Ben, let us know who is helping you. You say Vegas will change everything? How? Please explain. How is corporate going to change a failed business model?You emphasize in your previous post that “Sony’s offerings have been mostly games that are at the end of their product life cycle at retail or are dedicated to online play such as the case with Sony’s Warhawk. These offerings have had no measurable effect at retail” Well yeah, Sony has released games that no one wants to purchase so obviously they will have little effect on retail. When Onlive and Microsoft (both true technology companies) begin their marketing campaigns and start selling their services like crazy you will without a doubt see this used video game market collapse. You must be in denial if you think that the technology doesn’t exist to store huge numbers of games on Hard Drives. It’s called compression, you will see in the next couple of years just how many games can be stored on a 1TB hard drive, hundreds can.
Let me also address your other statement, “As far as Walmart selling used games in vending machines? I think a recent gamer blog post summed it up best. Gee, I cant wait…I now have a place to take my defective games for Walmart store credit. I can make a purchase, return it and head over to Gamestop.”

So your basically taking one post, on a blog forum, from one gamer and coming to the conclusion that Walmart will not be successful with their Kiosks and that gamers will shun trading in their games at Walmart? Please, you must be delusional. Walmart has the capacity to outright undercut any pricing PNT or Gamestop offers. Do you understand how big Walmart is and how much capital they have? If you had done your research like you stated you would understand this.

Ben, I truly don’t believe you are a new franchisee looking to open a store but a corporate cronie, otherwise you would be busy working on getting your store open (since no one at PNT is left to help you do that). If you truly are a new franchisee that fell for this scam I feel sorry for you. I can tell you that one year from now you will be on this board posting stating that you are going out of business and how PNT corporate lied to you and failed you. Vegas will change nothing, and if Vegas had odds on this I would bet everything I had on it. Mark my words Ben, if you truly are a new franchisee, corporate is incapable of fixing this mess, they have people working there that are unqualified and have no clue what they’re doing, and the most important thing of all, the business model doesn’t work.
A successful franchisee on June 5th, 2009 12:37 pmTo Ben:Ben, now that you have heard from two nut cases, one of which is obviously a disgruntled franchisee (give it up already, Gerry!), and the other is obviously a disgruntled (ex?)employee, I hope that you immediately give up your dream and throw everything you worked for out the window!
Not a Victim on June 5th, 2009 12:47 pm“It is sad, this could have been a constructive way to educate potential franchisees some of the potential pitfalls of owning a PlaynTrade. The negative posts (with some exception) have spiraled into immature, name calling, conspiracy ladden rants that have discredited what you set out to acheive.”I think it’s still a constructive thread as long as prospective franchisees read from the beginning and skip every one of “Shed Some Light”’s posts. No offense, Shed, but your frequent rides on the crazy train negated anything credible you said earlier.
“I would also caution that by wishing the demise of PnT you are also wishing for the demise of 250 families who are working hard every day”

The problem with discussions like this is they end up dominated by wannabe franchisees (like Shed) or failed franchisees who want to see the whole thing collapse to justify their contention that it wasn’t their fault and the whole thing was doomed from the start. They won’t acknowledge anything positive or remotely hopeful.

But there are still a couple of hundred franchise owners trying to make a go of it, address the problems and build their businesses. Unfortunately, the only advice the pity partiers like Shed and Ben Played can offer is “Give up. Like we did.”
Ben Played on June 5th, 2009 1:39 pmTo Not a Victim and A successful franchisee (FRANCHISOR?):I never said to “Give up.” I am just telling the truth about the video game business.
There many ways to lose money and the profit margin for new console and games is definately NEGATIVE for most of the small stores. However, if you do not carry new stuff, the customers think you are a junk store and they will not come back. That is the dilemma.

Do you really think the publishers like Sony, Microsoft, care about the buying power of PNT? You must be kidding me. A few hundred or even thousand copies of new games does not make big difference for them, unless PNT has 500 more stores. PNT corporate has to invest a lot ($500K and up/year) to expand the buying power from those publishers. Will PNT do it?

What benefits you can get from other vendors as PNT owner?

If you do not have the ability to lower the cost for your goods and you cannot controll the price, how can you compete with the other giants like Gamestop, Walmart and others.

Did PNT corporate tell you the truth about all of these before, Ben?

Do you have special channel to lower you cost of goods? If the answer is NO, then you will definately lose money!!!!!!

It is easy to have a dream and it is also hard to prevent it to become a NIGHTMARE!!!!!

I am not preventing anyone from their dreams but trying to stop them to have nightmares.

I hope all the PNT store owners successful and make tons of money. However, the reality is just the opposite.

Anyway, the worning is there.

The choices are all personal decisions.

Do not throw you hard working money away or work hard to lose it after you have opened your business. That is all the truth.

Please do not forget the NAME of this website!!!

If you want to hear GOOD, POSITIVE news about PNT, go to their website.

You will be extremely excited.

NO OFFENSE to anybody.
Shed Some MORE Light on June 5th, 2009 2:07 pmYou know, I was actually going to post this as an addition to what is coming, (fiscally speaking) but after reading Ben Kennedy’s post he definitely challenges me to dig deeper. Here are my thoughts.To answer his question. About this downloading of games into your consoles a couple of things to factor in when purchasing any game, they’re not getting rid of Microsoft Points. Some will be on CC, but the rest of Microsoft Points is still going to apply. So MS Points aren’t going away. And the Sony network doesn’t even compare because the games you download are typically average games that were never available retail. Not that these games were terrible, but if you can’t buy those games on a retail shelf then why are they only available for download? What does that tell you? Nothing like the AAA Xbox’s games and Games On Demand.
Now about Walmart and their Kiosks. Let’s look at the DVD movie industry converting to Kiosks throughout the country. I think you know what’s happening to Blockbuster’s retail stores. At least they’re getting smart. Don’t believe me, look at this:

http://www.paidcontent.org/entry/419-blockbuster-adds-dvd-vending-kiosks-50-machine-pilot-redbox

Also, ONE Walmart has MORE buying power than ALL the PNT stores put together. Don’t believe me, look at your vendors. That again, should tell you something…

I hear you on what Corporate is going to “try” to do to correct it’s errors, but it’s a little too late for that one. Still don’t believe me? Look at how long it’s taking for this situation for PNT to get out of the hole it’s in with the State of CA? Franchisees who have sought advice about this situation with their own attorney(s) have given their own insight into this, from their past experience as attorneys. Knowing that the State of CA is standing their ground. Again, “The California Corporations Commissioner… finds that Play N Trade Franchise, Inc. … has violated multiple provisions of the California Franchise Investment Law (“Franchise Investment Law”).“ Again, the State of CA ain’t buckin’ on this one. And for good reason. Honestly, in DEFENSE FOR new potential franchisees NOT to be handled the same way we were handled. Ben, you’ll find that out soon enough…

Also, you said:

“I would also caution that by wishing the demise of PnT you are also wishing for the demise of 250 families who are working hard every day to provide for the best life they know how.”

If you’re fitting me into that category then I caution YOU to also look at what Corporate caused. Remember, it always starts from the TOP on DOWN; In other words the “sheep herder” LEADS the “sheep,” NEVER the other way around. So I’m NOT here to EVER wish the rest of the PNT franchise owners to go out of business. Like I said before PNT sealed the deal on that one already, through the greed and selfishness of those that were paid overblown salaries and no extra money being reinvested back into PNT for their continued growth of the business. So that’s why I believe; and again like I’ve stated before, ALL OF WHAT I WRITE ON THIS BLOGGING FORUM (PAST, PRESENT, AND FUTURE) IS JUST MY OPINION. The bottom line, I don’t see PNT reviving itself. PNT is not big enough and especially in this economic downturn, I see it worsening…

So me writing what I’ve written on this forum STILL doesn’t get away from the fact that PNT Franchisees:

- Still don’t have any buying power.

- Member Credit that wasn’t properly explained into the financial “gross profit” picture when we were initially trained taking away from those actual NET PROFITS.

- Royalty fees that have doubled.

- No national advertising campaign what so ever for the existing PNT franchise owners.

- A terrible POS system that gives inaccurate reports with absolutely no support from PNT.

I can probably still go one with this one, but I think you get the point. Even with this “so-called” new POS system that they’re are going to introduce, it STILL doesn’t take away from my other points which STILL leaves PNT Franchisees venerable to going under, STILL. So PLEASE don’t blame us the so-called “failed” franchisees and put it on us. Again, you see that’s the problem – NO PERSONAL OWNERSHIP. Actually Ben, you have been TAUGHT well from PNT – PUT IT BACK ON THE FRANCHISEES, NOT PNT CORPORATE to learn from it’s errors quickly and then help the other PNT franchise owners (sarcasm emphasized). If those other PNT franchise owners are doing well, then I believe they will CONTINUE doing well. And if PNT goes under, then at least they won’t have to pay anymore royalty fees and then they’ll make 100% of the profit, because at it’s core they are essentially STILL a “Mom & Pop” store.

And Ben, Thanks for not succumbing to the same level of insults like:

“…with your lack of industry knowledge and misrepresentation of fact, it would have been a disaster.”

I really appreciate that, Ben. YOU’RE AWESOME !!!

Aside from Ben and his REGURGITATED PNT “BROCHURE” TRAINING, here are some more things to factor in…

As you know there’s quite a few of us (maybe not the ones reading this) that have talked to people in our neighborhood and other retail store owners (and I’m not talking about PNT) that talk about the recession.

I say, what recession? I believe we are already in the start of a depression! So far the “media” is only reporting the national unemployment numbers (being around 8-9%). But the REAL numbers (the TRUE BLS U-6 Rate) is MUCH HIGHER. Here are the links for you to view yourself:

http://redfishemergingmarkets.com/blog/2009/05/08/unemployment-update-8-may-u3-to-89-u6-to-158/ (BLS U-6 Rate: 15.8%)

And what’s even higher (which they don’t report on the news is the “suffering rate”):

http://chartingtheeconomy.com/?cat=9 (Suffering Rate is: 17.8%)

The “suffering rate” includes all of those who have STOPPED:

- looking for work

- who aren’t collecting unemployment any longer

- and who are only working part time

Do you know someone close to you that fits that description?

So now comes into question:

- Where are the customers going to come from to shop come the Holiday season?

- Who’s going to fill up all those empty spaces that have gone out of business? I’m talking about the Circuit City’s, Linens & Things (and the like) that have gone out of business and more that are coming…

Again, with the coming holiday at the end of the year; there is going to be LESS OF NO SPENDING on gifts. And when the retail numbers come in for the first quarter of 2010, you’re going to see MORE retail businesses going under. Which means again “Ghost Malls” (and Strip Plazas included).

So again, WHY do you think businesses like Walmart, Blockbuster and the like are utilizing Kiosk machines? I’ll let you come to your own conclusions on that one… So Ben, still think I don’t know what I’m talking about?… Enjoy being Tooled N Played… Have A Day…
Shed Some MORE Light on June 5th, 2009 2:21 pmTo Ms. So&So (aka: Not A Victim):You said:
“..to justify their contention that it wasn’t their fault…”

You obviously don’t read very well when I have posted many times here on this forum my own errors that I’ve made. I WILL NEVER TAKE AWAY FROM MY OWN ERRORS – Period. And I was VERY MUCH IN SUPPORT of this company ONLY UNTIL MY EYES WERE OPENED seeing what other Franchisee’s were trying to tell me all along. But I’ve already explained that, so this is my last time saying that. The Business Model as a WHOLE DOES NOT WORK. But Ben and people like him will find that out soon enough…

Look, you really just need to go away now. You aren’t even a Franchisee Owner, just a “looker” wannabe, so step off. People like you make me laugh. Go away now… go ahead… go away…
Simple question on June 5th, 2009 3:16 pmWhen is the outcome of the California Corporations Commissioner lawsuit going to be known?
Turn out the Light on June 5th, 2009 4:08 pmTo Ben Played and others:What benefits you can get from other vendors as PNT owner?
If you do not have the ability to lower the cost for your goods and you cannot controll the price, how can you compete with the other giants like Gamestop, Walmart and others.

We all have access to a couple hundred vendors with a company directory and the telephone. I would assume based on the conversations I have had recently with some store owners there might be others with multiple copies of some used titles. There might even be some owners who are sitting on new titles that they over forecasted demand. Some might even be willing to independently broker a mutually beneficial deal, discounted inventory for liquidity. You enter into vendor contracts with your customers daily, why not tap store owners for titles that are not selling? I know I will make mistakes in ordering.

I do not feel misled by corporate. I came into this knowing where your revenue comes from. Pnt is a used game store that just so happens to carry enough new games and systems to satisfy their particular customer bases needs in a Just In Time inventory turn model. If you order 6 copies and dont have 100% sell through you make nothing on a $300 investment. I get it. If you don’t have these games the customer walks. If the customer trades in 2 used for a new you now have a credit instead of a revenue. I get it. But, if those games sell in 30 days you stand to make great profit. That being said, If your in an area that is value concious and is largely buying used isn’t it just a matter of used volume, inventory management and turns. If your store is selling enough used, isn’t it somewhat irrelevant how supportive corporate is or how strong the buying power you have?
Shed Some MORE Light on June 5th, 2009 5:26 pmHey PNTScam or Mr. Obvious.:I’m tired… Can somebody help out “Turn out the Light”, cause his name is starting to fit his comments to a “T” (like “T”-street). There’s no “Lights” goin’ on upstairs. If you know what I’m saying… All I can say is I feel bad for the money you’re going to lose and anyone you borrowed from…
Not a Victim on June 5th, 2009 8:13 pm“You aren’t even a Franchisee Owner, just a “looker” wannabe, so step off.”Actually, Shed, I’ve run the same number of PnT stores that you have.
You just invested in a defective business model you weren’t capitalized to open. I guess that makes you an expert.

“The Business Model as a WHOLE DOES NOT WORK. But Ben and people like him will find that out soon enough…”

According to your apocalyptic retail forecast, we should be storing rice and beans for tumbleweeds will soon be blowing through deserted strip centers and we will be in a devastating dark depression. All businesses will soon fail, so what does the business model matter? Why quibble about deck chair placement on the Titanic?

I think Ben hit the nail on the head. You should be celebrating the fact you couldn’t get open and do real damage. Just because you failed to get out of the gate doesn’t mean he will.
Shed Some MORE Light on June 5th, 2009 8:41 pmTo Ms. So&So:From what I read you were just looking into it, so I didn’t know you actually bought into yet. My error.
You said:

“According to your apocalyptic retail forecast, we should be storing rice and beans for tumbleweeds will soon be blowing through deserted strip centers and we will be in a devastating dark depression.”

NOW you get it. But I don’t think so… Not ALL businesses will soon fail, but with an expected 25% unemployment rate soon befalling us, you’ll soon see what will happen. It will be nothing the world has ever known in recorded history. As for PNT they are way too small, so that’s why they won’t last. After they file BK the existing PNT Franchisees that do survive and stay open will do so obviously whatever new name they choose. Even then, I hope they survive, but that will depend on how much they sunk into and lost ($$$ wise) with PNT… Again, just my opinion…

Enjoy being “Tooled,” since you’ve been “Played.”
Shed Some MORE Light on June 5th, 2009 10:05 pmBTW, Ms. So&So, since you enjoy putting me out there (not like I haven’t done you the same way), explain to me how we are NOT going to face this collapse globally; especially since I’ve given you facts and figures. If you can lead me to some true findings that are backed up with some kind of validity, then I will consider what you have to say. If not, then you really don’t have much to say on the topic. Honestly, I didn’t think it was going to hit this hard as soon as it has, but it has. Please educate me and the rest of the other franchisees that everything is going to be okay… I’ll be waiting for a reply…
Joe on June 6th, 2009 12:54 amSome interesting post in the last 24hrs, where do I start?Ben Kennedy.
I found your first post to be at best, laughable, and your second post to be at best incoherent. The playstation network has had at most, 3-4 games that were available at any retail outlet, it is nothing that even close to what Microsoft is proposing to do, on demand games for download, which buy the way, are titles that still sell pretty well used(your bread and butter) and with upcomming sequels for mass effect and assissins creed, will continue to sell well up thru the release of the new ones. Your next statement about microsoft points is flat wrong, and by no means the most relevant story from E3, points are not going anywhere, they will allowing the use of credit cards on some downloadable content, but there will some content that will require the use of points.

Your statement about Walmart shows your lack of any business understanding what so ever. They are the 500lb gorilla in the room, and to toss one of the largest and most sucessfull companies in the WORLD aside by using a post from a gamer on a message board, I mean do you even know how their program is going to work? because if you did, you would’nt have used that example, thats unless Gamestop starts accepting Walmart gifts cards???

The rest of your first post, I take this as a personal attack on my family, the imature name calling, then you end you post by doing exact same thing.

Your second post, well where do I start, PnT has deals with Ingram and VPD, this allows you the ability to order when you need to, this book of hundreds of vendor that sell new games, well you just cant use them like a walmart, you will have to set up an account, AND maintain a monthly minimum order, because they dont have deals with PnT. In all the conversations I had with PnT before I decided not to buy one, never once did they refer to their stores as “Pnt is a used game store that just so happens to carry enough new games and systems to satisfy their particular customer bases needs in a Just In Time inventory turn model” That quote from you makes me question why they even sold you the rights to a store, just in time inventory turn model????? The next quote is even better, ” If the customer trades in 2 used for a new you now have a credit instead of a revenue” First off, you dont have a credit, the customer does, you have a debt, which is a liaiblity on a P&L statement.

I dont mean to pick on you Ben, but i think your glowing example of why PnT has the problems they do, they will sell their franchise to anyone who will give them 25-30K. Good luck on your store, after reading your 2 posts, your going to need it.
Shed Some MORE Light on June 7th, 2009 3:27 amTo Ms. So&So (aka: “Not a Victim”):You said:
“I think Ben hit the nail on the head. You should be celebrating the fact you couldn’t get open and do real damage. Just because you failed to get out of the gate doesn’t mean he will.”

Reading Joe’s post, although he had his own views (BTW, EXCELLENT VIEW POINTS JOE !!!), how far off did his post differ from mine… really? Basically about the same. Regardless of why I couldn’t open my store, why can’t you come up with topics that relate to the current gaming end of the industry and what’s needed to produce those net profits? This, coming from a person (you, in this case) who HASN’T really made ANY contribution to ANYTHING that points out what makes the gaming industry (as a whole) what it is, and staying on top of that game on a daily basis. At least Ben Kennedy (although very wrong) made SOME sort of contribution. And you talk about ME doing more damage if I had opened a PNT store? And you think MY posts are laughable… About as laughable as you still thinking I’m a PNT nepotistic crony?… Yeah… right…
PNTscam on June 7th, 2009 7:34 pmJust came across PNT’s new blog on their homepage about the E3 conference and I just thought I would ask you all to read it and post your comments. I had to LOL for a second because it was so hilarious. Both Plotnick and his cronie Skelton (The guys who can’t spell) provided such a good laugh they should be on comedy central. I mean the nerve of these scoundrels believing they can lie to franchisees and the public about what’s really going on with the video game industry and PNT. Plotnick has stated that he sees a “strong” second half of the year for video game retail. Mr. Plotnick do you understand econimics? Do you understand that only Black Monday and the Christmas period are the only times any franchisees will make money. Why don’t you tell all the franchisees what you expect for the third quarter of 2009? Please explain Plotnick.Plotnick the liar also explains how downloadable video games are a ways away and that there are many issues involved with downloadable video games on demand. By his statements he will lead you to believe that this technology will not be successful and that Microsoft and Onlive’s downloadable technology are just a waste of time because players will want to come into stores and purchase accessories and used games. This guy along with his cronies and the nepotistic scoundrel owners relatives have no clue what they are doing and are flat out liars. Please research Plotnick on linked in and tell me he’s not a liar. Click the link below and notice his linked in profile. What happened from February 2008 – December 2008? Why did he leave out that he previously worked for Playntrade for 2 months in 2007 then left and stole all the information to start his own video franchise business gametag? There is no mention of gametag anywhere on his profile. Why? Well because he’s a liar just like the rest of these slugs at corporate. Let’s go a step further. Why did he leave as COO of Hollywood Video to become a Divisional VP at Kinder Care? Why would you do that? Tom Mcmahon did the same thing, left PNT as CEO to become VP of sales for a second rate grocery market chain? Hmmm? Puzzling? Check the link below and come to your own conclusions but it’s puzzling why the “CEO” of PNT would lie on his linked in profile. If he covered this up what else is he covering up? A whole lot. I am telling you all, PNT is being run by a bunch of Mormons and their family and friends. Do the research and ask questions about not only the executives and employees, but also who is running the show behind the scenes, and old Mormon guy who is a family friend of the chairman of the board. These scoundrels have a master plan to buy the existing franchisees stores for pennies on the dollar and turn them into corporate stores then sell them to a Gamestop or Blockbuster.
Franchisees, They will ask you for more money in Vegas, more support fees and more royalty fees, they will claim they have new technology that is supposed to fix everything and make everything better. Don’t believe the lies. They want to take over all stores and make them corporate then sell the operation off. That is why they fired all personnel in training, franchise coordination, and real estate. Once again don’t believe the lies, do yourself some justice and research for yourself. Check Plotnicks Linked In profile and ask him why he lied on it.

http://www.linkedin.com/ppl/webprofile?action=vmi&id=7504107&pvs=pp&authToken=bfnM&authType=name&trk=ppro_viewmore&lnk=vw_pprofile
Shed Some MORE Light on June 7th, 2009 10:33 pmTo ALL:This is not to deter from PNTScam’s post. Actually this is to help add to an already messed up situation. I just spoke with another PNT Franchisee “Pat” (we’ll name this person “Pat” so as to not reveal the gender). Well anyway Pat has had several collector’s to Pat’s store. But one particular collector keeps coming into Pat’s store and usually spends a good amount of money buying old games; but obviously not enough to keep this Pat’s PNT store in business. Pat has had some great conversations with this particular collector “Sam” (we’ll (again) name THIS person “Sam” so as to not reveal the gender). But just the other day, Sam asked a personal question. “I know that I’ve been to your store and all the others, because of all the particular games that I keep for my personal collection so I hope you won’t mind me asking this. But out of curiosity, since you bought into this franchise, if you had to do it all over again, would you have bought into PNT or would you have just opened a video game store like this one on your own?” Pat laughed and quickly said, “I definitely would have done this on my own. Why are you asking?” “Well, (Sam replied) it seems like ALL of the 13-15 PNT stores owners that I’ve gotten to know and asked that question have answered it the same exact way. But I was just curious…”
It’s too bad I can’t reveal the names, because this sounds very much like it was made up. But this is no make believe story, this is a very true situation that just recently occurred. I hope all that read this (and PNTScam’s Post on June 7th, 2009 7:34 pm) realize what they are getting themselves into. A better way to know is to run an “Inco” statement (Profit/Loss sheet). This will include everything from the loan, the lease, insurance incentives, state taxes, all your daily expenses, to all the games (on average) you’ll think you’ll be buying/selling, (there’s more to this list, but you get the point). Now make sure you use the PNT (70/30 split – 70% New, 30% Used). But MAKE SURE to take 50-60% of that 30% Used out of your net profit, because of the Member Credit that you need to include in that “gross” profit. So in actuality, you’re making about 10-15% profit from that. Oh, I almost forgot, don’t forget the ROYALTY FEES that you will ALSO be CHARGED for having to give that “Member Credit” game away for free. YES, FREE, so you’re actually LOSING MONEY on that FREE game you’re giving away… Can’t make this stuff up folks…
Shed Some MORE Light on June 8th, 2009 3:16 pmComment moved to http://www.unhappyfranchisee.com/play-n-trade-shed-light/
Bob Wilson on June 8th, 2009 3:46 pmNeed Help ASAP!I bought into the PNT franchise in September of 08 for $30,000. Then went to there training program which cost me around $5000.00 (hotel room for 2 weeks,rental car,airline tickets, and meals.) Came back home and had a business plan done for $1500.00. Then had Incorporation papers filed $900.00. Spent 3 weeks looking for a great location for the new business, found one and hired a laywer to look over the lease $300.00. Have been paying PNT $300.00 a month since sep. 08 $2700.00 since I cannot get a loan due to the banking crisis. So $40,400.00 plus so far. Can I stop paying PNT there 300.00 a month? And is there any way to get my franchise fee back after signing the contract due to false statements as to how much I would need to open up one of there stores. They told me it would be a total of $250,000k and I would need $50,000k down. But out of the 4 banks that they sent me to they are all telling me I need $85,000k down which I don’t have and never did. If I knew it was going to cost that much I would not of got involved in the first place.
Ben Played on June 8th, 2009 4:08 pmTo Shed:Calm down, man. Keep cool.
Where is the hell of “State of Chicago”?

Come on! Life goes on!!

People will buy stuff as long as they live!!!

There are always gamers to play video games whatever they get them, in stores or over the internet.

The ecomony definately affects the market, but your “dooms day theory” is far-fetched.
Shed Some MORE Light on June 8th, 2009 5:01 pmComment moved to http://www.unhappyfranchisee.com/play-n-trade-shed-light/
PNTscam on June 8th, 2009 5:07 pmBob,You are not the only one they lied to. They have been lying to franchisees since they began selling franchises 3 years ago up until today. I would suggest the following if you have the 50k available, I would use that money to sue them on the grounds of false advertisement etc. You can also, talk to some of the franchisees on this board who already have lawsuits against PNT and see which lawyer they have retained. I do know that they have paid out not only franchisees but employees that have sued them as well. I would not give them one more penny from this point onwards as they are providing you no services and have lied to you about the startup costs as they usually do to sell franchises. See Bob, these criminals are all about the franchise fee so they can pay themselves your hard earned money up front. They don’t care if you succeed or not, all they care about is the franchise fee of 35k.
Bob, my suggestion is to stop all payments to them and go see a lawyer. That is the only way you will see any of your money back. It’s better to spend your money there for the potential to get your money back, then waste all of your money on PNT as it is nothing but a scam. At least you haven’t opened your store which is a good thing, but that is what they want, they don’t want franchisees to open stores they just want to steal your 35k from you. Spend your money wisely Bob and hire a lawyer then go after the owners personally once PNT files for Bankruptcy protection which is inevitable.
PNTscam on June 8th, 2009 5:14 pmBTW Bob,250k is not enough to get you through 1 year of operations for a PNT franchise. They just flat out lied to you. The capital needed to have any remote chance of success is somewhere along the 500k. Go research existing franchisees and see how many of them have been successful with 250k. I guarantee you all the one’s who have been lied to just as yourself and were under capitalized have gone out of business and lost their house, car, 401k etc to these criminals. I hope the state of California shuts them down so they don’t do this to other people. Whatever I can do to help you Bob don’t hesitate to ask. These thieves need to be stopped.
Joe on June 8th, 2009 5:21 pmBob,If I were you, I would contact an lawyer ASAP, get their advice on the stop payment and what your next move should be. Im sure that there are plenty of Franchisee’s that are in your exact same position, cant get a loan without a huge down payment.
Shed Some MORE Light on June 8th, 2009 5:52 pmTo ADMIN:I know from time to time you moderate these blogs. Could you please “moderate” this soliciting IDIOT off of this forum? Thank you, Admin…
To Jim Herst:

I love your form of advertising. Your “Quityourbitching, …act.” statement is really going to WOW everybody over. Keep it up… You too will get less of no business like all the other failing PNT franchise owners have at there stores. Who knows, maybe Jim Herst was a former PNT exec. He speaks to us like PNT corporate did…
To Shed Some MORE Ligh on June 8th, 2009 6:05 pmDon’t you realize that everyone on here (except your co-lunatic “PNT Scam”) looks at you the same way they do the spammers on here? You have become a true spammer, and you all you do is spill drivel from your mouth.Admin, I know you monitor this board from time to time. Could you please get rid of the CRAZY people?
Jim Herst on June 8th, 2009 6:05 pmFar from being a PnT exec, instead, since 1963 tens of thousands of businesses have saved tens of millions of money by use of my services. Advertising, yes. OK, if you so think. But in the meantime, if those of you who may be seeking an answer to debt pressures and wish to avoid bankruptcy and are seeking a breath of fresh air, they may be happier by talking with me.Besides, what’s wrong with advertising? Consider: How did you meet your spouse? Think about that before answering, please.
PNTscam on June 8th, 2009 6:34 pmTo: “To Shed Shed Some More Light”I speak the truth and nothing more. If you think what I’m posting is not the truth than prove me otherwise PNT corporate cronie. Try contributing something of value on this site instead of complaining about “Shed Some More Light” consistently.
michael on June 8th, 2009 6:42 pmBob Wilson and all franchisees who paid fees and have not opened:Play n Trade Claims: Sold 500 + OPPURTUNITIES AND OPENED ONLY 250 STORES
THAT IS 250 FRANCHISE FEES TIMES $30,000 = $7,500,000.00 AND HAVE NOT HAD TO PROVIDE ANY SERVICES YET TO GET THAT.

YAKETY YAK- 200 SOLD ONLY 40 OPENED THAT IS 160 FRANCHISE FEES AT

$30,000 (EST.) = $4,800,000 AND NOT HAD TO PROVIDE ANY SERVICESS YET TO GET THAT.

THAT IS A TOTAL OF $12,300,000 FRANCHISE FEES AND NOT HAD TO PROVIDE ANY SERVICES YET TO GET THAT.

1) WHERE DID ALL THE MONEY GO?

2) WHAT COMPANY ETHICALLY WOULD NOT RECEIVE A BANK APPROVAL LETTER FOR A LOAN BEFORE EXCEPTING A NON-REFUNDABLE FRANCHISE FEE? (VERY UNETHICAL PRACTICE)\

3) HOW ARE THEY ALLOWED TO HOLD 250 FRANCHISE FEES THIS LONG YET THEY HAVE CLAIMED FOR AT LEAST 18 MONTHS THAT THEY HAD SOLD 500 OPPURTUNITIES AT PLAY N TRADE?

4) IF YOU WOULD HAVE KNOWN THAT THEY HAD AN AFFILIATED COMPANY CALLED YAKETY YAK AND SOLD 200 OPPURTUNITIES SINCE 1999 AND ONLY OPENED UP 40, WOULD YOU HAVE PAID THE FRANCHISE FEE UP FRONT WITHOUT HAVING BANK APPROVAL, RETAIL SITE, AND KNOWING PLAY N TRADE S ABILITY TO GET YOU OPEN? (LACK OF CORPORATE FULL DISCLOSURE- WHY I BELEIVE EVERY FRANCHISE SHOULD BE ABLE TO GET THERE FRANCHISE FEE PAID BACK IF THEY HAVE NOT OPENED A STORE)

I THINK THE EVIDENCE SHOWS THAT THE COMPANY IS MORE INTERESTED IN THE FRANCHISE FEES THEN OPENING STORES WHEN THE 2 COMPANIES COMBINED HAVE SOLD 700 + OPPURTUNIES YET ONLY OPENED UP ROUGHLY 290. (THAT IS A HUGE DISPARITY)

WHAT ARE YOUR THOUGHTS POTENTIAL FRANCHISEES THAT HAVE MADE THE FEE PAYMENT BUT YET TO OPEN UP?

LETS HERE FROM YOU.
ADMIN on June 8th, 2009 6:51 pmJim:Nothing’s wrong with advertising. Please contact me at unhappyfranchisee[at]gmail.com to discuss rates & options.
Comments sections are not for direct or blatant solicitation. Participate in the discussion and people can click on your name to go to your website.

To Shed Some MORE Light:

It would be very lonely here if I were to ban ALL the crazy people But those visionaries who tend to have ideas so big they dominate the thread are sometimes awarded their very own comment thread (ala http://www.unhappyfranchisee.com/carolcross/).

Is Shed Some More Light a candidate?
To Shed Some MORE Ligh on June 8th, 2009 6:57 pmAdmin:For goodness sakes, YES PLEASE! Give him his own rubber room (page) so that we can have an intelligent discourse here without someone ranting about the end of the world every third post, and insulting EVERY posting that doesn’t 100% agree with him. Maybe you can call his page “this is just my tooled and played opinion”.
A successful franchisee on June 8th, 2009 6:59 pmI just popped on here for the first time in a few days, and reading up on the crazy people.I, for one, nominate Shed some Light for his own page, where his amazing insites can be enjoyed in their own dedicated forum!
Shed Some MORE Light on June 8th, 2009 7:30 pmComment moved to http://www.unhappyfranchisee.com/play-n-trade-shed-light/
To Shed Some MORE Ligh on June 8th, 2009 7:39 pmI am going to SHOCK you right now. I am going to tell you somthing that your posts have made obvious that you don’t know. . . . Ready. . . Here it is! I don’t have to, nor do I have any reason to, do what you say. Now, if you had asked like a decent human being I might actually consider getting into a conversation with you, but your constant insults to ANYONE who tries to speak up against your psycho ravings and your speaking with lack of facts. You want one example? Sure, here ya go: You said that people would come to a Play n Trade, try a game, and then travel to a Wal-Mart, go to a kiosk, trade their game in, and then go find someone to open the new game case for them, get the game, and then go to a check out wait in line and pay. The fact that you would say that shows you have NO grasp on retail, or how the consumer mind works. Walmart, on the hand, does. Why do you think they merchandise so many things at the front of the store? Because a huge portion of retail purchases are impulse. Every major retailer knows that. That is why the milk is at the back of the store.What you describe is a purchasing game-plan, and that is JUST NOT HOW RETAIL WORKS!
There ya go, there’s your one example. Not because you asked for it but because I want anyone who reads your posts to be able to see that you are an idiot.

Ok, go ahead, post your “tough guy” response. I won’t be responding back. You are an idiot, and you have made that clear as a bell.
Shed Some MORE Light on June 8th, 2009 7:43 pmComment moved to http://www.unhappyfranchisee.com/play-n-trade-shed-light/
michael on June 8th, 2009 10:59 pmBob Wilson and all franchisees who paid fees and have not opened:Play n Trade Claims: Sold 500 + OPPURTUNITIES AND OPENED ONLY 250 STORES
THAT IS 250 FRANCHISE FEES TIMES $30,000 = $7,500,000.00 AND HAVE NOT HAD TO PROVIDE ANY SERVICES YET TO GET THAT.

YAKETY YAK- 200 SOLD ONLY 40 OPENED THAT IS 160 FRANCHISE FEES AT

$30,000 (EST.) = $4,800,000 AND NOT HAD TO PROVIDE ANY SERVICESS YET TO GET THAT.

THAT IS A TOTAL OF $12,300,000 FRANCHISE FEES AND NOT HAD TO PROVIDE ANY SERVICES YET TO GET THAT.

1) WHERE DID ALL THE MONEY GO?

2) WHAT COMPANY ETHICALLY WOULD NOT RECEIVE A BANK APPROVAL LETTER FOR A LOAN BEFORE EXCEPTING A NON-REFUNDABLE FRANCHISE FEE? (VERY UNETHICAL PRACTICE)\

3) HOW ARE THEY ALLOWED TO HOLD 250 FRANCHISE FEES THIS LONG YET THEY HAVE CLAIMED FOR AT LEAST 18 MONTHS THAT THEY HAD SOLD 500 OPPURTUNITIES AT PLAY N TRADE?

4) IF YOU WOULD HAVE KNOWN THAT THEY HAD AN AFFILIATED COMPANY CALLED YAKETY YAK AND SOLD 200 OPPURTUNITIES SINCE 1999 AND ONLY OPENED UP 40, WOULD YOU HAVE PAID THE FRANCHISE FEE UP FRONT WITHOUT HAVING BANK APPROVAL, RETAIL SITE, AND KNOWING PLAY N TRADE S ABILITY TO GET YOU OPEN? (LACK OF CORPORATE FULL DISCLOSURE- WHY I BELEIVE EVERY FRANCHISE SHOULD BE ABLE TO GET THERE FRANCHISE FEE PAID BACK IF THEY HAVE NOT OPENED A STORE)

I THINK THE EVIDENCE SHOWS THAT THE COMPANY IS MORE INTERESTED IN THE FRANCHISE FEES THEN OPENING STORES WHEN THE 2 COMPANIES COMBINED HAVE SOLD 700 + OPPURTUNIES YET ONLY OPENED UP ROUGHLY 290. (THAT IS A HUGE DISPARITY)

WHAT ARE YOUR THOUGHTS POTENTIAL FRANCHISEES THAT HAVE MADE THE FEE PAYMENT BUT YET TO OPEN UP?

LETS HERE FROM YOU.
CA franchisee on June 9th, 2009 12:19 amAnyone has any development news on complaint by CALIFORNIA CORPORATIONS COMMISSIONER case? When is the due date?
Not a Victim on June 9th, 2009 6:40 amCheck out http://www.winwinpromos.com/Yuvi.htmDid Yuvi Shmul give Pnt franchisees a copy of his five books, including “How to Achieve Poolside Living By Growing Your Small Business”
Can franchisees borrow the cool Play N Trade boat in the picture? (maybe that’s where someone’s franchise fee went)

He sounds like quite a guy:

“Yuvi is the Co-Founder and CEO of Win Win Promotions LLC, and also the Co-Founder and CEO of San Clemente Capital LLC, a holding company of Play N Trade Franchise Inc and Yakety Yak Holdings Inc.

“In less than two years under Yuvi’s direction, Play N Trade Franchise Inc, a franchisor of videogame stores sold 400 franchise units and grew from 13 to over 100 operating stores. Play N Trade has been recognized in top franchise rankings. He also led another franchise, Yakety Yak Wireless to a 400% increase the number of open stores in two years.”
PNT is History!!! on June 10th, 2009 1:31 pmRon Simpsons deceit is recorded everywhere!http://www.allbusiness.com/north-america/united-states-california-metro-areas/4108737-1.html
“Simpson said he finds prospective owners through “discovery days.” He takes about 15 to 20 people out on a Newport Harbor cruise and makes his pitch. He’ll tell them that two years ago he was bankrupt.

“Now I’m a millionaire,” he said.

Bankrupt?

“I failed miserably and went bankrupt,” Simpson said.

He started another franchise in Sacramento called Milestonz. Similar to 99 cent stores, he sold all jewelry in the store for $99.

“It was a good concept but in franchising you can’t have salesmanship as a big piece,” he said.

Expensive leases and low sales didn’t help either, he said.

“I had to profit $30,000 a month to break even,” Simpson said.

Play N Trade stores are set up to make money on relatively low sales, he said. Opening a store only costs about $100,000, according to Simpson.

He said he doesn’t look for MBAs “and all that baloney.”

Simpson, a game fan himself, said he wants the average person to be able to open a store.”
Joe on June 11th, 2009 10:39 pmI believe thats its pretty well established that Play N Trade has some serious problems with their business model, their sales practices, their franchisee screening process. Did Ron Simpson become a millionaire from his stores? orfrom the sale of the franchise to others? If I were Ron Simpson, Yuvi Shmul, and the others, I would be hiding in a cave somewhere, there is just so many examples that can be found by a simple google search, like the one above, of how they mislead potential franchisees on start up costs, amount of working capital numbers, roi numbers, to name a few.
“Play N Trade stores are set up to make money on relatively low sales, he said. Opening a store only costs about $100,000, according to Simpson.”

If the statement above was true, why then on average are 5-10 Pnt stores closing a month??
ADMIN on June 12th, 2009 9:47 amYour input needed here. Please read and comment:Top 10 Ways to Keep Franchisees Happy? Share your Thoughts
Grant Smith on June 17th, 2009 3:03 amI cant believe anyone out there would be doing business with these guys. Their track record is plain awful and its obvious they have no integrity. But, you know what they say about suckers. There’s one born everyday!! Is there anyone out there that knows if the franchisees that did not open store will be getting their money back? These guys must have gone to the Berney Madoff School of Business.
Grant Smith on June 17th, 2009 3:04 amSeriously, these guys suck ass
Fake Ron Simpson on June 17th, 2009 3:06 amI am sorry what I did, but I could not resist taking the money from such stupid people.
Fake Larry Plotnick on June 17th, 2009 3:10 amRon, what the hell are you doing? I know we have be pretty brazen in screwing these dumb asses, but why let the cat out of the bag now? I think we could have suckered another 50 or so franchise fees if you had just kept your mouth shut. Call me on the private line…
Fake Ron Simpson on June 17th, 2009 3:14 amLarry, I’m so sorry, but I just couldn’t take it anymore. The weight of what we have done is too much to bear. We may never be able to give the money back, but at least we can give the franchisees the truth.
Fake Larry Plotnick on June 17th, 2009 3:16 amRon, what are you doing? call me on the private line right away…
Fake Ron Simpson on June 17th, 2009 3:18 amThis is the real Ron Simpson. I demand to know who is screwing with my sheep.
Rich Hill on June 17th, 2009 6:50 pmAnyone have any more info on Yuvi Shmul? I know he was the CEO of Yakety Yak wireless. Have there been any lawsuits or any other fraud claims against him? Any other links regarding his deceptive “ponzi scheme” like practices?
Joe on June 17th, 2009 9:23 pmI believe that he is named in every lawsuit that has been filed against Yakety Yak Wireless and Play N Trade, he is the founder and CEO of San Clemente Capital, LLC which owns both Play N Trade and Yakety Yak WIreless, T-Street Management, Old Man’s Holdings, LLC and CAAZ MANAGEMENT LLC.
PNT is History!!! on June 18th, 2009 2:50 pmVideo game industry sales sink 23 percent in U.S.http://news.cnet.com/8301-10797_3-10263534-235.html?part=rss&subj=news&tag=2547-1_3-0-5
ADMIN on June 21st, 2009 1:24 pmPlay N Trade franchise conference in Vegas kicks off.http://www.unhappyfranchisee.com/play-n-trade-vegas-franchise-conference-underway/
http://www.bizzia.com/franchisepick/play-n-trade-franchise-conference/

PnT continues to try to sell franchises. Discovery Day franchise sales presentation today.

http://www.unhappyfranchisee.com/play-n-trade-franchise-discovery-days-continue/
PNT is History!!! on June 22nd, 2009 9:43 pm“WHAT HAPPENS IN VEGAS WILL BE BLOGGED ABOUT IMMEDIATELY!”Quoted directly from the Play N Trade Website…
Tic Toc… Tic Toc…

There must not be a lot going on there…

Just my $0.02
PNTee on June 23rd, 2009 2:06 amIs CA case concluded? Anyone know?
what to do now on June 24th, 2009 2:23 amdoes anyone know of a lawyer following the CA case and preparing for lawsuit against PNT? can i get the name?
guest on June 24th, 2009 7:20 pm“WHAT HAPPENS IN VEGAS WILL BE BLOGGED ABOUT IMMEDIATELY!”“Throughout the show, Play N Trade executives and franchisees alike will be meeting with vendors, clients and each other to discuss challenges and successes encountered within the industry. Play N Trade’s website will feature a continually updated blog (internet permitting) of all the exciting things going on over this conference!”
This is it?

http://www.playntrade.com/showblog/INDUSTRY+INSIDER+INFO!
To what to do now on June 25th, 2009 12:35 amThe Lawyer following the CA case and preparing for lawsuit against PNT:The Law Office of James Harrington
820 South Garfield Ave. Suite 303

Alhambra, Ca 91801

(626) 589-6609

jharringtonlaw@sbcglobal.net
Paul on June 25th, 2009 4:53 pmHere is the problem with most of the posters on this site. They are not going to be swayed from their current thought patterns. They feel like they have been scorn, they fully blame the franchisor and it doesn’t matter what has happened or what will happen they will ridicule it and think up any justification they can. Sounds like the franchise show was a success if you read the google groups franchisees are pumped and there are plenty that have already been successful. These new additions should only help bolster their success. Anyhow this is just my opinion but know this is for unhappy people and anyone that post something positive will be chastized and made to feel less intelligent than those that dominate this site. Some make good points that should be explored further…………it does seem like the franchisor has worked hard invested alot of money into the exact things the franchisees wanted.HOWEVER THIS IS JUST MY OPINION
michael on June 25th, 2009 11:57 pmIf so much positive is going on a play n trade how come no one quotes any positive numbers on the blog.When you look at the FDD it looks like the company is broke and the individuals who own the management company have sucked all the money in management fees away from the company. If I was going to sue Play n trade I would go after the Management Company becuase that is where all the money from deferred franchise fees are.
Joe on June 26th, 2009 1:08 amPaulThe website is called Unhappy Franchisee for a reason????? But then again I know, the state of California is full of it, PnT did nothing wrong, all of the 60-70 franchisees that have gone out of business, its not the model, its just them.
I have always stated that im not a PnT franchisee, and will never be one, I also have never chastized anyone who truly believes in PnT. Either your a franchisee, or you work at the corporate office. I have 1 question for you Paul, If there are so many franchisee’s making a profit, and you just said above that there are plenty, why wouldnt corporate release that info to the current franchisee’s to end the argument?? I know that if I was a franchisee that was making money, I would post my P&L’s on the google site just to shut them up, why hide it??????

Based off the info ive gotten from franchisee’s, if I put 50k into a savings account at Wachovia, id make more money off that, then 80% of current PnT franchisees make. My last question for you would be, if all the franchisee’s that have closed were idiots, dolts, morons, crybabies, how and why were they allowed to buy into the franchise in the first place, whos fault is that, let me guess, its their fault also??????????????
below average joe on June 26th, 2009 11:43 amThank you Paul… you are right on with your comments. There is no point to even post on this site if you have something positive to say. I’m just pissed these guys are tearing down our business.Joe
Your only proved Paul’s point… twice. Your attack on Paul and that this site is called unhappyfranchisee for a reason…. so if you are happy don’t waste your time here.

BTW… my bet is that Joe is an bottom feeder attorney (aka James Harrington) or works for unhappy. If not a PNT franchisee… then what the hell are you doing here? Let me guess: Out of the goodness of your heart?
guest on June 26th, 2009 3:15 pmTo Paul & Below Average Joe:Because we are not going to change these particular commenters minds is a good reason to calmly KEEP posting here and balancing out all the negatives with the other side of the argument.
You might not be able to change THEIR minds but at least the many many more people visiting here will see more than their negative viewpoints. They can only tear down the brand if we let them monopolize the conversation unchecked.
My Opinion Only! on June 27th, 2009 6:33 amSince opening my store, I have yet to make a profit and have a net loss around 100,000.00 (100K). I do not know other franchisees or their situations, but I know for me I was sold something completely different and in actuality, the current model is not profitable. It was mostly hype and people really need to do their homework. When I submitted my business plan for “approval” to PNT Corp. they approved it. They said I was very conservative with my sales estimates and would have my SBA loan paid back in about 6 months, not the estimated 3 years I had assumed. I guess you don’t know what you don’t know. Having PNT Corp. approve a business plan is like having the fox guard the hen house. It would be in their best interest to approve business plans so you sign up and open a store.I am a current owner of Play N Trade franchise and have been in business for over two years. Since opening my store, I have yet to make a profit and have lost around 100,000.00 (100K). since opening. I am not speaking for other owners and this is only my experience. I know for me I was sold something completely different and was not given all the business information. If I would have had their numbers prior to opening I may have made a better decision.
I tried all of the Play N Trade suggested marketing ideas, purchased the games suggested, tried to entice buyers with higher trade in value, but nothing seemed to work. The profit margins are so low on new video game related products the average store would need to sell around 750K to turn any type of profit. You also need to sell around 80% Used to 20% new inventory to even have a chance, which is a very difficult number to reach. I usually sell around 55% Used to 45% new even with all the specials. I think the average store sells more new is because the hard core gamers want a new game on the release/street date. True gamers don’t usually buy older games they have mastered. So your used game market or usually had thrift shoppers, collectors and your occasional gamer.

Why are most PNT stores not profitable?

The reasons are many, but mainly due to fixed costs expenses vs. operational costs: New Product, Rent, Utilities, Phone/Internet, Employee Costs and Product Costs. For instance, when GTA IV released I sold around 5K worth of the game on release date. That turns out to be around $450.00 of profit on a 5K purchase of games. The average GTA IV was around $51.50 wholesale and $59.99 Retail. Assuming you receive free shipping from your wholesaler the 50 copies arrive at your store (Hopefully on Release day), but with Play N Trade that was always questionable. To be fair to Play N Trade Corp. they have been working on “forging” relationships with distributors in hopes of locking in major releases for street dates. You say, “I should make around $9.50 per game. But you don’t and here is why:

59.99 – 51.50 = 9.50.

PNT Corporate gets 4% of the $59.99 which is $2.39. Credit card companies get another 3% of the $59.99 which is $1.79. Together it comes to$4.18 off the top.

Profit ~ $9.50 – $4.18 = $5.32 x 50 Copies = $532.00 take away.

So if you have 2 employees making $8.00 per hour selling your game for 10 hours that is $160.00 for the day. $532.00 – $160.00 = $372.00. I hope the employees are not too busy and sell a gamer an accessory or used game, a disc protection, another controller or take in trade transaction.

Now, throw trade in the mix. Of the 5K in sales for GTA IV you receive $2K in trade. You really end up with only 3K of liquid cash to use for your next order or to pay back the 5K worth of games you just purchased from the wholesaler. You as the store owner end up with a lot of great used product that will sit for a couple of weeks until the newness of the current release wears off. In the meantime you must make your lease payment, SBA loan payment, purchase new product, and pay your electrical bills, phone bills, franchise fees and credit card fees. The reason GS and other trade in retailers are successful is due to internal infrastructure.

For example, GS can pull from 1000’s of stores nation wide and ship product between stores all of the US to meet current market demand. So if a store in California gets a ton of Xbox 360 in trade they can ship it to another store that needs that stock. If they have too many PS2 systems at one location and need fulfill demand at another location they ship it there. For a local PNT you can’t get rid of your overstock without losing your shirt. GS also has great contacts within the industry and has the games on release. I lost more customers by having the games show up a day after GS on a regular basis. Moreover, GS received the product from actual distribution companies and PNT stores who could not buy from the distribution companies directly had to purchase their games from a wholesaler. On most non street dated games, wholesalers received the game on release and shipped them to the retailer. That meant PNT franchises were always a day late and dollar short. It only takes one release date miss to piss of true gamer and make him not want to come back to your store.

The people at PNT Corp. are good people and are only selling what they have been trained to sell to potential franchises. I unfortunately, was not disclosed the proper information prior to making my decision. I was told by PNT Corp. that most stores were making 50 Cents to the dollar on every transaction. I called the only stores open at the time. At the time there were not many stores open for a potential franchisee to see the life cycle and model of the franchise.

Also, there is no profit in new systems. Wholesale cost on a current gen system is often about $5.00 less than retail. So I can buy a Wii from a wholesaler, lose money on shipping (UPS $10.00 for 4 Wii’s) it to my store, sell it $249.99 – 4% PNT Franchise Fee and 3% Credit Card Fee. So if I sell all 4 Wii systems for $1000.00 that would $1000.00 – 7% = $930.00 – $10.00 shipping = $920.00: Net Loss $80.00, but at least the customer had a Wii! Hopefully they will return to buy some accessories.

I am not bitter, but I have learned my lesson. I hope more people really take a look at their capital, where the store location will be. You really need to be a million dollar store to make it any you may only walk away with about $60k before Taxes. 60K isn’t a bad yearly salary. 65 hour week 52 weeks a year = 3380 hours. $60,000.00 / 3380 hours = $17.75 per hour. That’s not much per hour when you think about not spending time with your wife or kids.

My Father once told me, “It’s not about how much you sell, it’s about how much you keep after the sale.” Who cares if you sell a million dollars a year and only keep 60K? I would rather sell 200K worth of used video games and keep $100K when it’s all said and done.

I tried all of the Play N Trade suggested marketing ideas, purchased the game suggested, tried to entice buyers with higher trade in value, but nothing seemed to work. The profit margins are so low on new video game related products the average store would need to sell around 750K to turn any type of profit.

The reasons are many, but mainly due to fixed costs: Rent, Utilities, Phone/Internet, Employee Costs and Product Costs. For instance, when GTA IV released I sold around 5K worth of the game on release date. That turns out to be around $450.00 of profit on a 5K purchase of games. The average GTA IV was around $51.50 wholesale and $59.99 Retail. Assuming you receive free shipping from your wholesaler the 50 copies arrive at your store (Hopefully on Release day). You say, “I should make around $9.50 per game. But you don’t and here is why:

59.99 – 51.50 = 9.50.

PNT Corporate gets 4% of the $59.99 which is $2.39. Credit card company gets another 3% of the $59.99 which is $1.79. Together it comes to$4.18 off the top.

Profit ~ $9.50 – $4.18 = $5.32 x 50 Copies = $532.00 take away.

So if you have 2 employees making $8.00 per hour selling your game for 10 hours that is $160.00 for the day. $532.00 – $160.00 = $372.00. I hope the employees are not too busy to try and sell a gamer a new cord, a disc protection, another controller or take in trade.

Now, throw trade in the mix. Of the 5K in sales for GTA IV you receive $2K in trade. You really end up with only 3K of liquid cash to use for your next order or pay pack the 5K worth of games you just purchased from the wholesaler. You as the store owner end up with a lot of great used product that will sit for a couple of weeks until the newness of the current release wears off. In the meantime you must make your lease payment, SBA loan payment, purchase new product, payroll, and pay your electrical bills, phone bills, insurance premiums, security monitoring costs, Point of Sale Software fee, franchise fees and credit card fees. The reason GS and other trade in retailers are successful is due to internal infrastructure and availability to move a large number of used games. PNT Corp. had a buyback policy, but they one day issued a decree stating you could only use buyback up to 1/2 of your royalty payments and then a week later they just said, “No more buyback.” I digress; PNT Buyback is system of sending your overstock used games back to PNT Corp. for 25% more than your trade value. These buyback games could be used to offset the cost of franchise fees.

For example, GS can pull from 1000’s of stores nationwide and ship product between stores within all of the US to meet current market demand. So if a store in California gets a ton of Xbox 360 in trade they can ship it to another store that needs that stock. If they have too many PS2 systems at one location and need fulfill demand at another location they ship it there. Furthermore, they have access to the web and sell games online. PNT Corp. does not allow franchisees to sell the games online because, “It competes with other stores.” For a local PNT you can’t get rid of your overstock without losing your shirt. GS also has great contacts within the industry and has the games on release/street date. I lost more customers by having the games show up a day after GS on a regular basis. Moreover, GS received the product from actual distribution companies/game makers. PNT stores could not buy from the distribution companies/game makers directly and have to purchase their games from a wholesaler. On most non street dated games, wholesalers received the game on release and then shipped them to the retailer. That meant PNT franchises were always a day late and dollar short. On a few occasions I receive big releases on street date, Halo 3, Fallout 3, GTA IV, etc. It only takes one missed release date to upset a true gamer and make him/her not want to come back to your store. Here is the conversation: “Sorry, you can’t play online with your friends until tomorrow, oh, you want your pre-order money back….Sure, sorry I wasn’t shipped the game until today.” “Good luck looking for game at Sprawl-Mart, Target, Game Stop, Shopko, Best Buy, Flanner’s….hope you come back!”

The people at PNT Corp. are good people and are only selling what they have been trained to sell to potential franchisees. Unfortunately, I was not disclosed the proper information prior to making my decision. I was told by an aforementioned PNT Corp. employee, that most stores were making 50 Cents to the dollar on every transaction. I was also provided sales for the one store that was making a killing. I was not provided with any other information from PNT Corp. regarding the sales of any other stores. I called the stores open, most of which were open less than a year, at the time. At the time there were not many stores open for a potential franchisee to see the life cycle and business/profibility model of the franchise.

Also, there is no profit in new systems. Wholesale cost on a current gen system is often about $5.00 less than retail. So I can buy a Wii from a wholesaler, lose money on shipping (UPS $10.00 for 4 Wii’s) it to my store, sell it $249.99 – 4% PNT Franchise Fee and 3% Credit Card Fee. So if I sell all 4 Wii systems for $1000.00 that would $1000.00 – 7% = $930.00 – $10.00 shipping = $920.00: Net Loss $80.00, but at least the customer had a Wii! Hopefully they will return to buy some accessories.

I am not bitter, but I have learned my lesson. I hope more people really take a look at their available capital, where the store location will be. You really need to be a million dollar store to make it any you may only walk away with about $60k after Taxes. 60K isn’t a bad yearly salary. 65 hour week 52 weeks a year = 3380 hours. $60,000.00 / 3380 hours = $17.75 per hour. That’s not much per hour when you think about not spending time with your wife or kids.

My Father once told me, “It’s not about how much you sell, it’s about how much you keep after the sale.” Who cares if you sell a million dollars a year and only keep 60K? I would rather sell 200K worth of used video games and keep $100K when it’s all said and done.

Good Luck and make a decision that is good for you and your family.
michael on June 27th, 2009 4:57 pmIf other franchisees are seeing the same thing the my opinion only is seeing we would love to here from you
Jim Herst on June 28th, 2009 1:11 pmI spend part of my Sunday mornings reading the PnT drama. I see Failure, Denial, Bankruptcy, Mad Folk, Dispair, Chagrin, Lack of a Plan, Sleepless Nights, Bankruptcy and worse, … all mentioned.
T. James on June 29th, 2009 2:39 amIf PNT is guilty of one thing based on what is being said in here, it seems it would be the sort of people they allowed to open franchises in the past, I hear they now don’t just let anyone open a store now, and really pre-qualify who they sale units to. Could it be guys and girls that the state of the economy has something to do with stores closing, etc. That would seem like basic logic. Anyone who shoots down Video games suppliers is just not that smart. With this industry the sky is the limit. I hate GameStop, and I am a PNT shopper. Game stop is like fast food, and PNT is like up-scale quality gaming centers. I hope PNT survives this recession, because I would hate to see no more PNT’s. My 2 cents is they need to advertise better, and just expose what they offer to all the gamers of the world… It seems a lot of undercover lawyers, and people who once tried to open PNT’s who failed are on here, and as for the former PNT guys in here it’s no wonder to me why they failed with their store, by how they come across.
michael on June 29th, 2009 12:32 pmTo:T. James,
If corporate was making such an effort then how come the owners of the company way oversold to get franchise fees and moved the money out of Play N Trade in the form of management fees to a different entity leaving the company so short of cash. Look at the FDD financials and who owns the so called management company and you can see why this company was destined to fail to begin with. Maybe the stores haven’t performed that well, but it is the ones who also paid the 30,000 franchise fee and never opened up a store appears are huge victims as well. If it wasn’t for all the franchise fees up front that the company has yet to open these stores it would have been impossible for this company to succeed. This appears very fishy to me. What are your thoughts or other franchisees thoughts regarding all the franchise fees collected and yet all that cash flow has left the company.
To T. James on June 29th, 2009 12:45 pmIf you read the new disclosure, you will see the management company in gone. All people that work for PNT (at least the officers that are disclosed) work for Play N Trade. Just an FYI.
Latest News on June 29th, 2009 6:15 pmJames Harrington will attend the California Department of Corporations pre hearing confernce if it is open to the public.Anyone who wants a report on the hearing please just e mail him a request.
jharringtonlaw@sbcglobal.net

Case Number: 2009050889 Hearing Type: Pre-Hearing Conference

Agency Number: 993-5595 Agency Name: Department of Corporations

Case Name: Play N Trade Franchise, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 9/11/2009 Start Time: 1:30:00 PM

Judge Assigned to Hearing: Court Reporter:

Assigned Office: Los Angeles
James Harington on June 29th, 2009 6:28 pmCALIFORNIA DEPARTMENT OF CORPORATIONS updateA pre hearing conference is not always open to the public.
I will attend if the conference is open.

Any one who wants my summation of the conference please send me an e mail requesting same.

PS: ITS A FREE SUMMATION……

REGARDS, James Harrington

jharringtonlaw@sbcglobal.net

Case Number: 2009050889 Hearing Type: Pre-Hearing Conference

Agency Number: 993-5595 Agency Name: Department of Corporations

Case Name: Play N Trade Franchise, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 9/11/2009 Start Time: 1:30:00 PM

Judge Assigned to Hearing: Court Reporter:

Assigned Office: Los Angeles
michael on June 29th, 2009 6:28 pmI can see why they are gone. If I just move $10,000,000 of franchise fees out of the play n trade company over the last 2 years and I left the company without any cash and allegations from the state of CA I would get rid of the management company as well. So it is my opinion that the management company is where everyone’s fees are at not in Play n Trade. Once again very fishy.
James Harington on June 29th, 2009 6:36 pmCALIFORNIA DEPARTMENT OF CORPORATIONS UPDATE 2SUBSEQUENT to the pre hearing conference notice in my earlier update 1, the Department will enter into a settlement conference with PnT at the same date and time as the pre hearing conferener. This suggests that a settlement has been reached between the parties. I do not know if the settlement conference will be open to the public, but I will attend if it is.
All parties who e mailed me a request for my summation on the pre hearing conference will also get an summation of any settlement conference.

AND ITS FREE…….

regards, JAMES HARRINGTON,

jharringtonlaw@sbcglobal.net

Case Number: 2009050889 Hearing Type: Settlement Conference

Agency Number: 993-5595 Agency Name: Department of Corporations

Case Name: Play N Trade Franchise, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 9/11/2009 Start Time: 1:30:00 PM

Judge Assigned to Hearing: Court Reporter:

Assigned Office: Los Angeles
James Harington on June 29th, 2009 6:42 pmCALIFORNIA DEPARTMENT OF CORPORATIONS UPDATE 3As noted in my earlier posts, the Ca. Department of Corporations has set a pre hearing conference and a settlement conference in the PnT matter.
If not settlemt is reached the following 3 days have been set aside for a hearing, I have include Yak Yak Wireless hearing dates also.

I will of course attend these hearings, if they are held. And yes, you can get my summation too…….

Jamez Harrington

jharringtonlaw@sbcglobal.net

Case Number: 2009050889 Hearing Type: Hearing

Agency Number: 993-5595 Agency Name: Department of Corporations

Case Name: Play N Trade Franchise, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 10/5/2009 Start Time: 9:00:00 AM

Judge Assigned to Hearing: Court Reporter: Kennedy Court Reporters

Assigned Office: Los Angeles

——————————————————————————–

Case Number: 2009050889 Hearing Type: Hearing

Agency Number: 993-5595 Agency Name: Department of Corporations

Case Name: Play N Trade Franchise, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 10/6/2009 Start Time: 9:00:00 AM

Judge Assigned to Hearing: Court Reporter: Kennedy Court Reporters

Assigned Office: Los Angeles

——————————————————————————–

Case Number: 2009050889 Hearing Type: Hearing

Agency Number: 993-5595 Agency Name: Department of Corporations

Case Name: Play N Trade Franchise, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 10/7/2009 Start Time: 9:00:00 AM

Judge Assigned to Hearing: Court Reporter: Kennedy Court Reporters

Assigned Office: Los Angeles

——————————————————————————–

Case Number: 2009060636 Hearing Type: Hearing

Agency Number: 995-3723 Agency Name: Department of Corporations

Case Name: Yakety Yak Wireless, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 10/8/2009 Start Time: 9:00:00 AM

Judge Assigned to Hearing: Court Reporter: Kennedy Court Reporters

Assigned Office: Los Angeles

——————————————————————————–

Case Number: 2009060636 Hearing Type: Hearing

Agency Number: 995-3723 Agency Name: Department of Corporations

Case Name: Yakety Yak Wireless, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 10/9/2009 Start Time: 9:00:00 AM

Judge Assigned to Hearing: Court Reporter: Kennedy Court Reporters

Assigned Office: Los Angeles

——————————————————————————–

Case Number: 2009060636 Hearing Type: Hearing

Agency Number: 995-3723 Agency Name: Department of Corporations

Case Name: Yakety Yak Wireless, Inc.

Hearing Location: OAH/LA

320 W. FOURTH STREET, SUITE 630,

LOS ANGELES map

Hearing Date: 10/13/2009 Start Time: 9:00:00 AM

Judge Assigned to Hearing: Court Reporter: Kennedy Court Reporters

Assigned Office: Los Angeles
Old PNT Employee on June 30th, 2009 3:23 amI used to work for a very respected and successful PNT store, but that was because the other stores were doing horrible, most of them shut down or are looking to sell at a huge loss, even ready to do a fire sale.I was in a management position and talked daily with my owner, after talking to him he told me it cost him close to 250,000k just to start that not including the fees he had to pay before hand. I came in after about 6 months of the store being open and it had a large customer base but it still wasn’t enough to make a profit. After the Rent nearly 7k, paying 3 employees who had to work everyday, stock, utilities and PNT Fee’s he was in the red constantly the only saving grace was the holidays.
Now PNT would always say they were here to help everyone, but that means as long as we don’t put our own money in we can say anything, following everything to a T didn’t prove to do much it did make more eye pleasing thing but it didn’t help. What made it worse was after they knew stores were losing money because of a recession instead of doing anything helpful, they in turn raised fees causing more problems. We had someone PNT sent who was just hired for working with gamestop and gamecrazy to come in do a check on our sales and customer service, the store did decently well, but what proved to hurt it was lack of consoles. Now let me ask you, when you have to rely on used sales to make profit seeing as new games made $3-6 profit after Fees and CC Fees, and you have to go out and buy everything yourself such as games, consoles and accessories and you buy them for pretty much the same price in the end you lose more money, so really they can shove it there. The owner in turn needed to find a way to make some extra cash seeing as he was already over 400k in debt so worked with someone he knew to start rental service. Well the same day PNT did the check up they saw the idea and of course jacked it without asking or giving any credit for it and now you see almost every PNT do the same thing which was a nice idea from someone else, no surprise there, you’d think they at least say thank you for giving us the idea.

Now I can go on, but ill let you know alot of PNT stores are snakes but not because they want to, but its to survive, trade in prices are cut to give you less even if the game is mint, because they have to. I don’t blame the stores but I do blame corporate for saying so many lies to protect themselves and get more money. In all honesty I wouldn’t be surprised if half the people here who praise it are insiders but not all. Really everyone works hard, if it wasn’t for the jacked up fee’s, the point where PNT only tells you what to do calling it advice, washing there hands of everything and not helping people who are working to get the name more out there is more saddening. All I say is your franchisee’s are people to who need to eat and try to provide, help them in more ways than say you can try this and all, I know you guys need to make money to but you go to far by jacking up fee’s for not doing much other than one phone call a week, sending out useless information.
James Harington on July 1st, 2009 4:14 pmHello:I have had a number of people ask me about the Cal. Dept. of Corporations administrative action. If any Franchisee wants to join the California Dept. of Corporations administrative action you should file a complaint form. Here’s how
1. Go to: http://www.corp.ca.gov

2. this takes you to the Dept. home page

3. on the home page find the popular links on the left side.

4. at the bottom of that col. see consumer complaints. click there.

5. under consumer complaints you find some general information, and at the bottom of the page is the complaint form link, select in MSword or .pdf format.

6. Download, print, fill in, and mail to the Sacramento address. Just make sure you refer to the administrative action titled: THE CALIFIORNIA CORPORATIOINS COMMISSIONER VS. PLAY N TRADE FRANCHISE, INC. CASE NO. 993-5595 AND 993-5596. Its a simple form, just include the basic information.

7. The California Dept. of Corporations can be contacted at (866)275 2677 or in Los Angeles at (213) 576 7500.

Part of the “free” (meaning no money) and ongoing legal service being offerred by James Harrington.

Regards, James
James Harington on July 1st, 2009 4:27 pmHello:A number of franchisees from outside of California have asked me if they can participate in a California action.
This is known as a venue question.

In general, each franchisee should check their franchisee agreement as to venue or dispute resolution / arbitration to see where their respective agreement directs disputes to be resolved, or decided under the laws of a particular State.

Generally, If the venue in your agreement is Kalifornia, welcome to California, no matter where you are located. (PS: about 10 other states have franchise statutes that may dictate venue.)

James Harrington
Kick-backs from Vendor? on July 6th, 2009 1:59 pmRed Lion Interactive officially end’s of its distribution agreement with Play N’ Trade corporate….Saves Franchisee Thousands!!!!
Los Angeles, Calif., (July, 2009) – Red Lion Interactive, the leading distributor of video game accessories, officially announced the end of its distribution agreement with Play N’ Trade corporate. In a statement president Tom LaVoie stated “It has become painfully obvious over the last few months that our agreement with PNT was a detriment to all PNT stores. We could not stand idly by and watch store after store suffer, without Red Lion trying to help as many of them survive and succeed as possible. This is why we chose to end our agreement.”

What this means to Play N’ Trade:

Play N’ Trade – Will save thousands now that we don’t have to pay corporate fee’s!!!
guest on July 6th, 2009 3:52 pmKick-backs from Vendor?:What is the source of your press release, or is this your own fictional version?
I did a search on “Red Lion Interactive” & Play N Trade and couldn’t find reference to this.

I did find this:

Red Lion Interactive Launches Play N Trade Supply Portal

http://www.prlog.org/10150663-red-lion-interactive-launches-play-trade-supply-portal.html

Was your comment meant to be actual? Is there a link to it?
Ben Played on July 6th, 2009 6:28 pmIt is not called kick-backs. It is just ADMINISTRATIVE FEES for PNT Corporate for the introduction of the PNT stores to RED LION.They never accept kick-backs, it is just FEES.
Why RED LION did not disclose this before, because they are out due to the new UBP now. Who knows about the other vendors.

Any one knew how much PNT got from RED LION?!!

There will be a denial ” no money involvedfrom all the vendors”.

Can you believe? Ironicly, lions eat people, whatever is it the color!!!!!!!!!!!
Matt C on July 11th, 2009 10:35 amIf you buy into the Play n Trade franchise you are only setting yourself up for failure. Everything about this franchise is a joke. The stores can’t even get new release games the same day as Gamestop, but a day after. The POS is also a complete joke. I would really love to know how many of these stores have closed. The one person I know that owned a store had to shut down and is know over 400k in debt.
Marcos Moron on July 16th, 2009 9:39 pmHi I’m Marcos Moron your PNT corporate CIO or SVP of Franchise Operations or whatever you want to call me. I am the moron that just recently approved a 1 million dollar project to build a brand new POS system that uses 70% of the old POS system’s functionality. But the interface is really COOL looking, yeah and the GUI has a much sleeker look. Now you may be thinking where did we get the money to pay for this “new” POS system.Well that’s where you franchisees come into play. See by charging each of you an additional $75/month for support on top of your current $125/month cost (Is support of a POS system worth $200/month? ) we essentially can make it look like we here at corporate are paying for this “new” POS. The truth is that we have taken out a loan to pay this ridiculous price (Because we have no experience in technology) and will cover the expense by raising your monthly POS support fees.
Now this new POS system has such a better look to it, you will see, even though we incorporated 70% of the old POS system’s functionality looks are all that counts! but hey 1 million dollars is well worth it…. So long as you franchisees pay for it LOL. This “new” POS system is sure to increase your store sales, I promise.

Now you should know that I ran my parents Blimpie store when I was 17 years old so the fact that I have absolutely no technology experience, have never worked in a technology role, or ever worked for a company in the technology department makes no difference. I am the Chairmen of the boards brother in law so I am more than qualified. Check my LinkedIn profile and see my vast array of technology skills, with zero experience I was handed (through nepotism) the role of CEO of Shorecliff software, then in a matter of months ran the company into the ground. You know I don’t even know how to work my Outlook calendar, but hey, who needs technology experience when you’re the Chairmen’s Brother in Law.

Oh, and it so easy to get “phony” recommendations on LinkedIn, just look at all the recommendations I received all lies just like we lie to all you franchisees. Oh whoops, sorry disregard that last part.

http://www.linkedin.com/in/shorecliffsoftware

Over and Out,

Marcos Moron
PNTSUX on July 23rd, 2009 2:25 amPLease update me on any new findings or any way to get out of their franchise.
PNTSUX on July 23rd, 2009 2:26 amPlease update me on any new findings or any way to get out of their franchise.
R Blaine on July 24th, 2009 4:21 pmWebsite states 240 stores at end of 2008, down from previous numbers of 250. To be the fastest growing, do you not have to actually grow in number of stores and what happened to the over 500 oppurtunities sold to date. Did those people vanish and now are not listed anywhere?The number opened now is more like 230, and in honor of “Shed”. this is just my opinion.

WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Image: FranBest.com Franchise Information

Tags: franchise lawsuits, PLAY N TRADE, Pnt, video game franchises, xBuyer Beware

ACTIONCOACH, BRAD SUGARS:Deleted Discussion

September 8, 2009 by Sean Kelly
Filed under Business

6 Comments

In the past week, the website UnhappyFranchisee.com was hacked and dozens of posts and hundreds of comments critical of some specific franchise companies were deleted. All posts related to Brad Sugars and ActionCOACH (except one positive one) and all of the hundreds of critical comments related to that company were the first deleted.

Here is a nearly complete copy of the UnhappyFranchisee.com post ACTIONCOACH, BRAD SUGARS: Overview & Discussion that was originally published April 14, 2009. Also included below are the 269 comments the post generated through September 2, 2009.

It’s quite long, but serves as a message to those who consider dirty tricks to squash free speech: Hacking sites might provide a temporary relief, but when the content comes back – and it will come back – it will be stronger and more widespread than it was in the first place.

Enjoy.

ACTIONCOACH, BRAD SUGARS: Overview & Discussion

Few franchisors have inspired such angry comments (either in volume or veracity) as the Australian entrepreneur and founder of ActionCoach, Brad Sugars. (Search Rip-offReport.com for “Brad Sugars” and 9 separate reports come up).

But is ActionCoach a great franchise, or is it a scam sold to enthusiastic “coaches,” most of whom will never survive?

On Rip-off Report on ActionCOACH Business Coaching And Brad Sugars, Anonymous wrote:

…I have seen time and again Actioncoach convince people to buy this franchise who are clearly not well suited to do this. Being successful in this takes a very unique personality, level of confidence, work ethic, and background. I just spoke to a gentleman about 2 weeks ago who bought into this franchise then was sold into the idea of buying a ‘firm’- a model that actioncoach has yet to see work profitably on anything resembling a consistent basis. He has now spent $300,000 from his retirement savings and is broke.

The turn over rate for this franchise is alarming. I went to training with about 30 or 40 people and to my knowledge most of them are now gone- not one having successfully resold their franchise, most of them just run out of money…

I will say there are many very, very good and talented people within action who are very, very good at helping business owners grow their companies. I consider myself one of them. But most who fall into this category I believe would be very successful without being part of actioncoach…

…I do regret buying my franchise because of the culture brad promotes and because it is clear brad and the other leaders don’t really care about people- they care about money….

Former Franchisee wrote:

As a former franchisee, I agree with many of the comments of the previous poster….

I estimate that about 2/3 to 3/4 of the coaches I went through initial training with had abandoned their coaching and given up their franchises within 2-3 years. I don’t think they left because they were making too much money and having too much fun. (Be aware that there are ways for franchisors to deal with these failed franchisees so that these don’t show up as unfavorable stats in the UFOC).

So, if you are looking at an Action Coaching franchise, or any franchise for that matter, I would say caveat emptor – accept no statement at face value, don’t buy any sales hype and do take the time and get the help to carry out a thorough and complete due diligence BEFORE you invest.

Not all ActionCoach comments were negative. Franchise Owner stated:

We have never been mislead by anyone at ActionCOACH… Anyone that wants to know about ActionCOACH should contact any of its 1,000 franchises, dozens of Master Licensees or read the UFOC. ActionCOACH has hardly any litigation on record as the UFOC shows.

People who fail as coaches only have to blame themselves for their incompentence. Its called being responsible as opposed to blaming others.

WHAT DO YOU THINK OF ACTIONCOACH & BRAD SUGARS? SHARE YOUR OPINION BELOW.

Written by ADMIN · Filed Under ALL POSTS, ActionCoach, Coaching Franchises

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269 Responses to “ACTIONCOACH, BRAD SUGARS: Overview & Discussion”

Nichole on April 15th, 2009 6:35 pmThis post seems pretty one-sided, inviting discussion yet pushing people towards the negative in one way. Immediate references to rip-off report, saying few have made others more angry. I know the site is unhappyfranchisee.com but good grief!
John on April 16th, 2009 10:58 amThey’re on meetup.com under various guises or aliases offering “free” events to attend supposedly on starting a business or being an entrepreneur. Glad I read your post.
ADMIN on April 17th, 2009 5:58 pmNichole writes: This post seems pretty one-sided, inviting discussion yet pushing people towards the negative in one way. Immediate references to rip-off report, saying few have made others more angry. I know the site is unhappyfranchisee.com but good grief!Nichole: The Internet has plenty of ActionCoach press releases and positively spun stories. We’re admittedly encouraging insights not found everywhere else. But the commenters dictate whether the feedback is positive or negative.
The post contains 2 negative comments and one positive. You are free to even it up with a positive comment about ActionCoach and praise for Brad Sugars. All viewpoints are encouraged. The comments are much more useful here than the posts.

If you have had a positive experience, please share it.
Abe on April 27th, 2009 12:26 pmHi Nichole. If you think it’s negative here I suggest you have a look at the following site: http://www.soulcast.com/post/show/71156/Brad-Sugars-Action-CoachThe thread exists for almost two years and as there are posts from both sides of the argument you can make your own mind…
Abe on April 29th, 2009 2:35 pmHi again Nichole. Someone who doesn’t seem to like the content on:http://www.soulcast.com/post/show/71156/Brad-Sugars-Action-Coach
has just done a load of posts full of little sequences of code which look like they are designed to scrare people off.

I know that a lot of the posts on that site don’t come from raving fans but if you had nothing to hide, why resort to such means to shut down the discussion?
searching on May 1st, 2009 9:45 amI was researching Actioncoach as well and this is my feedback, which I also posted on Soulcast above:1. 99% of online info about Actioncoach is positive, BUT the sources can be traced back directly to action itself, this thread and the blog on soulcast are the few sources of insider info.
2. I said ‘insider info’ because filtering off the negative bitching, there were in fact a lot of details about their inner culture as opposed to their marketing.

3. The fact that they didn’t engage the posters on soulcast in a positive manner, posing as neutral observers, clients and even franchise attorneys does not induce confidence at all.

4. Questions posted on soulcast seem fair enough to me or any prospective franchisees… success rates, earnings average, etc… none were given straight answers. Instead, they started flooding the thread with empty codes, garbage and obscene words…

My conclusion, I will stay away from them. And as I said on soulcast, I am not staying away because of the negativity on soulcast, I am staying away because of the way Actioncoach choose to address the postings… it is a reflection of the management team there.
bobsyeruncle on May 1st, 2009 1:18 pmThey really have a mess on their hands. As noted above the discussion on Soulcast was lively and for the most part; civil. It was an important way for the many powerless who got sucked in to the Actioncoach scheme to get the word out and warn others. The issues started a few days ago when people on the Action side of the argument started posting blank space and gibberish to make the entire thread unreadable and shut down further conversation. This was just a new tactic in a series of attempt to stop the conversation.There is a BIG problem there – everything they espouse about coaching is not followed by their own leaders. If you get involved with these people you’ll surely be sorry. Few people have been successful at it and I now question their ethics from reading soulcast. Most owners fell to the claims and vaporware that is franchise system and lost a bundle.
Actioncoach corporate people are fools and it will come back to haunt them. It supposed to be a franchised system to help people run a business. And these are the tactics they use. It’s incredible that they are taking this tact. As the posted above said, it’s about the way they are addressing the situation. not just the fact that it’s a scam.

Read the Soulcast link as far as you can, there were over 30,000 words written before the antics started
Soulcast on May 2nd, 2009 8:09 amWhat ActionCoach did on SoulCast was as low as you can get and clearly demonstrates the very ugly side of their business model. All the independant evidence shows that the failure rate for ActionCoach franchisees is extremely high with only a small minority of very talented people making something out of their (very high) investment.
Basically Action front loads the costs – license fee, training fee and fixed monthly royalties whether you are making any money or not. Since the franchisee also has to invest in getting the business off the ground – typically hiring either a sales assistant or using an external telemarketer, the franchisee has often blown 150k within a year, often for absolutely nothing.
To give some feel for the churn rate here is a list of the U.S. franchisees who left the system just over the last couple of months – 20 people oit of a total of around 300 ! No wonder they preferred gagging the discussion on Soulcast rather than simply answering the questions.

Name M.L. State
Kathleen Nitti B.Weisman New Jersey
Andre Bourgeacq Craig Hohnberger Kansas
David Benigni Craig Hohnberger Indiana
Steve Mieritz Craig Hohnberger Indiana
David Carter D.Schin Pennsylvania
Tony Daniele D.Schin Pennsylvania
Jim Waters D.Schin Pennsylvania
Teresa Elkholy J.Weisman Arizona
Knut Schroeder J.Weston California
Mike Morin James Malski Connecticut
Marc Peters K.Alft S.Texas
Fred May K.Alft S.Texas
Dominick F Mills, Esq. K.Alft California
Jason Romrell K.Alft Idaho
Lori LeBlanc K.Alft S.Texas
Kyle Mott K.Alft Utat
Patrice Lynn Rafael Maymi Washington
Todd Tambling Steve Brock N.Carolina
Doug Stevenson Steve Brock N.Carolina
Soulcast on May 2nd, 2009 8:22 amSorry, one mistake in the above post which went out before I had time to finish it (must have hit the submit button by mistake..) I missed out on Patsy Foxwood from S.Texas (M.L. K.Alft) who seems to be having a blinder….You wonder what Kevin tells his franchise prospects?
I can prove this without any problem and if you have a little curiousity you can probably find plenty of traces of these people yourselves either on the net and/or on phone directories.
Soulcast on May 2nd, 2009 8:31 amComment to the site administrator. Congratulations on providing this very necessary forum. Too many franchisors get away with presenting a far too rosy picture of their product and in many cases the behaviour is close to blatant fraud. Problem is franchisees are mostly very isolated and don’t know how to make their case known. Maybe with this sort of site people can get together to defend their interests.
Anyway keep up the good work and if people from ActionCoach get up to the same sorts of tricks as they got up to on Soulcast, please show them the door. However, they are welcome to state their case, preferably with hard facts about average earnings, success/failure rates etc..
Craig on May 2nd, 2009 9:48 amJust to show that some of us are for open debate here is a post done on Soulcast by Craig Hohnberger, one of ActionCoach’s longest serving Master Lincensees in the U.S. Following this post Craig did get a few questions which he declined to answer but since these questions refuse to go away maybe he will accept to do it here.“My name is Craig Hohnberger and I own a master franchise with ActionCOACH. I can honestly say that it is the best decision I have ever made in business and has changed my life and the lives of my family for the better, as it has for many of our franchise owners and their clients. I have found the culture, the values, the team and the opportunity to be everything I imagined and more. It has been a very good experience for me. I have found Brad to be fair, a tough business-man to be sure, but very fair. In fact, we currently have 2 local existing clients of our franchise owners (and there are many around the world like this) who loved the coaching programs and results they achieved so much in their current businesses that they wish to invest in their own ActionCOACH franchise. Just yesterday I was at a large client event with a number of our local franchise owners, and the clients were all overjoyed by the experience and what they’ve learned and applied so far. That certainly would not happen if this were a scam. Unfortunately, as in any business or any industry, there will be some people who do not succeed. But, that is not a comment as to Brad Sugars or ActionCOACH or whatever specific business an individual person did not succeed in. The key is to analyze yourself, speak openly with franchisees (and ideally clients) to determine if you are someone who will do well in this type of business or not. If so, this is an incredibly rewarding business that is based on fundamental principals that work and truly help people achieve their goals. But it is business ownership and requires a commitment to personal success. Feel free to contact me personally if you wish. I am in Ohio. Craig Hohnberger 614-833-3211 (b) “
Craig on May 2nd, 2009 9:55 amThese are the type of pretty basic questions that were referred to ActionCoach and that they refused to answer. Since more and more people were asking the questions and the blog was scoring very high on Google for anyone entering the words ActionCoach or Brad Sugars, they preferred to sabotage the blog. To use some of Action’s own terminology, “Isn’t that interesting?”“There are a lot of affirmations on this blog coming from people who present themselves as former Action employees. If this were the case they should have learnt that “The Answers are in the Questions…”
Well for those of you who are considering purchase of an Action franchise, here are a few questions you might like to ask whoever you’re talking to:

1) What percentage of the franchisees make it to the end of their 1st contract?

2) Of this percentage, how many sign on again?

3) What percentage of the M.L.’s team is grossing more than 12k$/month?

4) What percentage is grossing less than 6k$/month?

5) How long has the M.L. been with Action?

6) Over that period how many franchisees has he/she recruited and how many are still operating?

7) Overall, since Action has been operating in the U.S. since the year 2000, how come so many of the franchisees have been in the system for less than 2 years?

If you don’t get straight answers to these questions maybe you should start asking yourself a few questions….

P.S. Guys like Pat Coan, Craig Hohnberger, Kevin Alft, Jeff Weisman, Michael Feinner, Don Schin & Lee Huffman have been around for long enough to really know the story.”
Jason on May 2nd, 2009 10:04 amThis was one of Action Coach’s more comical attempts to deflect the questions being asked on Soucast. It got the sort of reactions it deserved…“As a franchise attorney, I was doing some research on the company for a client who is looking at this franchise and my client wanted my honest opinion of this site and other research I could dig up, and I thought I might as well add a few comments here for anyone who may be looking.
I personally find the owner to be a bit egocentric, however, as some of the posts above suggest, maybe he deserves to be. I do know that there are many an attorney who are more egocentric than he is. And, most if not all of the big-name success experts (Tony Robbins and the like) are as well.

I find the FDD and legal history to actually be rather clean for a franchise like this. I did the research (that is what I am paid to do) and can’t find anything that is not documented as it should be.

The business model appears to be quite sound and I even have some attorney friends in another state who actually received CPE credits for participation in a program they did and they were extremely impressed.

The Canadian situation is dis-heartening as it appears the former ML’s from Canada started a competing business by selling off the future royalty stream to fund that business start-up and got away with not violating their non-competes by starting in the U.S., not Canada. Smart and shrewd on their end, but very unethical to say the least. If I were representing a Canadian franchise owner, I would suggest starting a class-action against their former ML’s.

The accusations of alleged stealing of other people’s information is as some of the posters suggest, not an issue. I’ve reviewed the material thoroughly and yest there is overlap, but it is packaged in his own way with his own unique stuff as well. No different than, again as mentioned by some posters, any of the other great success experts who borrow from each other all the time.

The interesting thing about this system is it actually works. I researched the other coaching organizations and most if not all have little to no infrastructure; many were started by an author who is now trying to build a franchise around it whereas Sugars started as a coach then franchised, and only then became an author. Several current coaching systems are re-started from the ashes of former organizations that already failed. Chances are they will fail too.

It is true that many new franchise systems struggle in the early years and many go out of business. The poster who suggests that before the first unit is sold it should be perfected is living in a dream world. Franchise systems first perfect a unit then they have to perfect the duplicatability of that unit (which means trailing it on thier first franchise owners) and then perfect the recruitment, training and support to be able to support the growth of many many more units over time. That is a tough process and many who have a good business to start with really don’t have something that can be duplicated, especially in a service-based organization like this one. In fact, in a service-based (non-commodity) type business like this one, I would venture to guess it takes hundreds of franchise owners to start getting some true duplicatability. To think that Sugars has buit something that has proven to be able to do that is quite remarkable actually.

The agreements seem to be fairly boilerplate and the support adn training offered is quite a bit more robust than I have seen in other franchise systems. Probably because they’ve learned over the years what it really takes and they obviously have some deep pockets to fund it and the infrastructure to deliver it.

I sum, I find it to be a good system and am raising no big red flags in regards to his pending purchase. I have also advised him that, as in any franchise system, the system cannot guarantee success, it is his own business and he has to use and follwo the prescribed process and work hard. Especially in a service based business like this one.

Good luck to all who are considering this business.

BTW – don’t let people like the few who are trying to spread hatred like above scare you away. Actual due diligence with clients and franchise owners (and former franchise owners) will give you real information and a real sense of the culture which seems very unique in this case. As you do your due diligence determine in your own mind who you are most like, those that have succeeded or those who have failed. If you are most like those who have succeeded, then go ahead and continue with the investment. In my experience, in all successful franchise systems, those that fail either would have failed in any business or just didn’t follow their systems. In newer franchise systems many more will fail early on that would not otherwise have failed later.”
ADMIN on May 2nd, 2009 10:51 am
Prospect on May 2nd, 2009 11:05 amI was a prospective coach who went all the way to the due diligence stage.During due diligence, I stumble upon Soulcast, where there was a poster by the name of “bloglatest”, seemingly neutral and claimed to have friends who were successful coaches. The poster challenged all to contact coaches and speak to them rather than listening to the ‘rubbish’ on soulcast.
I asked this “bloglatest” whether it was possible to let me have the names/contacts of his/her two friends. He/she responded by attacking me for being a phoney and he/she also attacked a lot of other posters and maintained that he/she was neutral and the readers of soulcast were fools for reading that blog. I then shot back I was just responding to his/her post of having friends willing to speak to others. Bloglatest then responded by saying not only can he/she provide the names, he/she can do even better than that… and proceeded to post links to Actioncoach YouTube videos of testimonial which I’ve already seen in Action’s marketing materials!

When I informed bloglatest I shall get back to the Master Licensee concerned and state that I was no longer interested in the franchise because I find the attempt at posing as neutral to coax me and other potential franchisees to be totally disgusting. He/she then backpedalled furiously, belittled me further by saying I was a loser to base my decision on what was written in a blog (he/she completely or deliberately missed the point it wasn’t about the blog, it was about what he/she attempted to do on the blog) and ended the post with perhaps I should speak to Brad Sugars the founder of Actioncoach the next time he is in my area and that was the last post of this ‘neutral’ poster. For a neutral he/she sure spend a lot of energy on an anonymous blog defending Actioncoach to the point of asking me to speak to Brad Sugars.

I was very angry when I found out later from the very ML trying to sign me up that Action do plant ‘independent’ parties to rave about them in forums and networking functions and that ‘perhaps’ I’ve encountered an overzealous one. And she actually told me I shouldn’t let that distract me from the values of the franchise!

In the due diligence process, I was also given a list of 5 questions to ask the franchisees whose numbers I was given and it was positioned as an assignment I have to do in the due diligence process. Coaches I called were reluctant to answer more than those 5 questions and the questions do not really say much about the franchise, for example “What was your greatest challenge in your first 3 months as a coach?”

When I was reading soulcast, I wasn’t even paying much attention to the negativity. I posted because I thought I saw someone who can point me to coaches who are not part of the organized and scripted due diligence.
ADMIN on May 2nd, 2009 11:08 amCraig:
I’m new to this situation and just getting up to speed. Thanks to all for your comments and your participation.
I did want to point out that ActionCoach can’t legally answer some of your questions (at least in a public forum where prospective franchisees can view them). Franchisors are forbidden from providing sales and earnings information (good or bad) outside of the Item 19 Earnings Claim section of the Franchise Disclosure Document (FDD) using one of the accepted formats. Franchisees, however, have no such restriction on sharing earnings info as long as they’re not participating in the sales process.
Legally ActionCoach can’t respond publicly to such questions as “What percentage of the M.L.’s team is grossing more than 12k$/month?” and “What percentage is grossing less than 6k$/month?”
Jodie on May 2nd, 2009 11:14 amAmong the different reponses to Action’s “Franchise Attorney” post, this one was probably the most complete….“Former Employee here again. I just HAD to respond. Of all the posts on here defending the system, there are 2 I find the most amusing. First, the Jackass that used the word “accolades”, and the supposed ” attorney” posting. First, to the Jackass. To start, “accolades” is a word that is RARELY used here in America, if ever, which suggests that you are most likely from Australia, or some region close to that. Which ALSO suggest that you are either an employee, or a franchisee somewhere across the globe defending Brad because he’s one of your buddies. If not, then why dont you buy your own Master Territory? For a mere high 6 figure investment you get a box of air and 100 dollars worth of books that Brad already plagerized. 2nd, To suggest that most franchises have a large number of failures when they get started is not only ignorant, its insulting. The very point of buying a franchise is to buy into a PROVEN system. Not to be a beta test for franchisees to come. And Last, as far as the “accolades” or “awards” as we call them here in the states, Entrepreneur magazine does ZERO research into the success rate of the franchises it represents in it magazine. It merely speaks to the number of franchise units sold within a certain time period. Contrary to the success of the franchisees. They dont investigate the system or training or ANYTHING of actual use to a potential investor. They simply tell you which franchise systems are popular at the time. In fact, they should rename the section ” Current popular franchises”.. Now for the “attorney”.. at the time of your posting its in the middle of the afternoon on a Wednesday afternoon. Which suggest that an attorney has nothing better to do in the middle of the day than to hop online and write a sparkling review of a franchise that one of your “clients” asked you to review. And by the way, why did you post anonymously? If you put your name in there you might get another prospective franchisee to hire you to review the UFOC. That wasnt a smart business move if you ask me. Speaking of which, you claim that you “researched” the company and found the BUSINESS MODEL to be solid. You also state that you “reviewed the material thoroughly” and found no over lap ( that’s a joke )… First of all, A franchise attorney receives ONLY the UFOC and the Franchise Agreement to review. They do NOT provide you with the training materials or any other proprietary information to take to your attorney before you buy. That would be stupid. Then what would be the point of selling you the franchise? You already have everything you need to start your own business BEFORE signing the agreement. You sir, are a liar. Let just ONE person state that their potential franchisor provided them training materials to take to their attorney to review and I will humbly and regrettably withdraw that statement. You did NOT review the material. By the way, in your research, how many franchisees did you speak with? How many FORMER franchisees did you speak with? If you even called ONE then you did TWICE as much work as a normal attorney would do. An attorney’s job is simply to review the legal issues regarding the franchise. Not to do the research. That’s on the potential franchisee to do on their own. It must have taken you about 30 minutes to write this, so according to my math, that’s about 200-300 dollars that could be billed to an actual client that you were working for instead of wasting your time on the internet !!!!! You should feel a great deal of shame, however, as you stated, you are an “attorney” and most of them dont have a soul anyway!!!! This franchise is a scam. I challenge anyone to find even ONE of the original shareholders that is still with the company. Why? Because they were paid off and got out of the system. If you buy this franchise, your an idiot. Excluding of course Mr. “accolades”… as he clearly is an intelligent person who loves the system and has never even once read a single book on business development. This is almost funny, except its not. Peoples lives are at stake. Life savings are at stake. College funds for your children are at stake. This is not a joke, and I’m not just posting this because I hate Brad. I’m trying to prevent even ONE person from buying into the garbage that this company sells. “
Craig on May 2nd, 2009 11:32 amComment to Administrator.
Thanks for your input on some of the legal issues here. This is no doubt are real problem as it opens a huge space for franchisors to provide selective information to franchise prospects. All they need to do is direct prospects towards the few who are doing well which means the prospect doesn’t get to hear of those who are not doing well until it is too late. I happen to know for certain that in Action’s case most franchisees are not doing very well. So, what can franchisees do to get an honest picture of what’s going on?
Craig on May 2nd, 2009 12:04 pmTo the Administrator
Hi again. I have just done a Google search on Item 19 Earnings Claim section of the FFD and found some very good material, including examples, at the following site: http://ufocs.com/articles/earnings_claim.php

Among other things I discovered that the FFD replaced the UFOC in 2008 which explains why I was not familiar with the content. I don’t know what Action does today but if they provide the sort of information that I saw in the examples on the site above, that would already be pretty good. Not sure they’s sell many franchises though…
ADMIN on May 2nd, 2009 12:06 pmFranchisors are legally required to include the names and contact information of ALL franchisees (including those who recently left the system) to prospective franchisees as part of the Franchise Disclosure Document (FDD).For example, here are the ActionCoach Franchisees listed in the FDD dated 7/10/08:
http://www.unhappyfranchisee.com/wp-content/uploads/2009/04/acfranchisees2007.pdf

For example, here are the ActionCoach Ex-Franchisees (who left the system) listed in the FDD dated 7/10/08:
http://www.unhappyfranchisee.com/wp-content/uploads/2009/04/acexfranchisees2007.pdf

Common complaints from franchisees about FDD (formerly UFOC) lists are that they are dated, & sometimes intentionally include outdated or incomplete information. Common complaints from franchisors is that they provide all this information but few prospects use it to do thorough due diligence until after they buy and are disgruntled… and few, in fact, even read the disclosure documents or hire an attorney to read though it with them.
Craig on May 2nd, 2009 12:15 pmJust picked up on this statement while reading the content of the site referenced above;Earnings Claims Availability
Because publication of an earnings claims statement is at the sole discretion of franchisors, only about 15-20% provide this information. In the vast majority of cases, a franchisor will simply leave Item 19 blank.

I also checked the list of the franchisors who had made their Earnings Claims Statements available to the site and…., big surprise, ActionCoach was not among them.

ActionCoach is always boasting about it’s ratings on Entrepreneur.com which are pretty meaningless, at best an indication on how good a sales process Action has. It would be far more telling if they provided the sort of data I saw in the examples on http://ufocs.com/articles/earnings_claim.php
ADMIN on May 2nd, 2009 12:19 pmThe FDD contains a lot of the same info as the UFOC, and Earnings Claims are Item 19 in both.If a franchisor is registered to sell franchises in California, you can use the Corporations California Electronic Access to Securities Information (Cal-EASI) Website, which includes securities and franchise filings. You can access their filing info and current FDD for free using the Caleasi database online.
Go here: http://www.corp.ca.gov/CalEASI/caleasi.asp

I believe the “F-Post-Effective Amendments” dated 07/01/08 contain the latest docs. There’s also a Master Franchise FDD.
Craig on May 2nd, 2009 12:36 pmTo the adminstrator.
Thanks for the excellent input. Very interesting indeed! Can you also get a copy of acexfranchisees2008.pdf ie. a list of those who left in the fiscal year ending June 30, 2008?
Carol Cross on May 2nd, 2009 12:41 pmThe better question is WHY prospective franchisees should have to do their do their due dilligence on references provided from the SELLER instead of being provided proprietary historical UNIT performance statistics by the SELLER himself, who profits from the sale. Under the Uniform Commercial Code and Securities Law, it is the SELLER who has the duty to disclose all material facts to the buyer that would bear on the assessment of the risks and rewards of the purchase.Obviously, any due diligence done with the references has no LEGAL significance and is an artifice to protect the franchisor, the seller, from being required to make any success or profit claims within the written Franchise Disclosure Document and the Contract that are packaged together. The Seller is then protected from claims of fraudulent inducement from franchisees who FAIL to thrive and who believe the franchise was misrepresented in the sales process – protected, because the franchisor has promised no profits or success in writing and the buyer has acknowledged in writing that he/she hasn’t relied on any terms or promises that are not within the written contract.
Must be that Robert Purvin’s assessment in his personal letter to the FTC (Comment #79) in 1997 is correct. Franchising IS regulated under the FTC Rule for the purpose of protecting the franchisors from claims of fraudulent inducement to contract by franchisees who will fail.

Is the FDD just a red herring that obscures the risks and rewards of the franchise and disarms prospective buyers who believe that the contract is NOT negotiable anyway? Is this why so many prospective franchisees don’t read it?
ADMIN on May 2nd, 2009 12:47 pmI was very angry when I found out later from the very ML trying to sign me up that Action do plant ‘independent’ parties to rave about them in forums and networking functions…
Prospect:
There’s a classic cartoon showing a dog sitting at a computer, captioned “On the Internet, no one knows you’re a dog.”
While funny, it’s not true. They know. In my 2.5 years franchise blogging, I’ve seen commenter “shills” of all shapes, sizes and attitudes. They include franchisees, ex-franchisees, ex-employees and competitors. They all share a deep belief in their own cleverness and everyone else’s stupidity. Few of them realize how obvious they are.
The best approach for those being discussed is to join the conversation and to be open and honest, as it seems corporate did at the beginning of the SoulCast thread. The truth is generally in the middle – between too-aggressive salespeople and franchise prospects who were not-aggressive-enough with their due diligence. It’s typically a matter of degree. But those who shill always look like schmucks.
No one should take any anonymous commenter (or Administrator) at face value. The real value here is being able to identify the issues worth looking into, and learning which questions to ask. If you see numerous comments that the stated investment is too low, or that the promised support is non-existent once the check clears, you know that those are issues to take a hard look at.
Getting access to franchisees is not that hard – they’re in the “phone book” as well as the FDD. Ask the hard questions beforehand, because that fat legal document was not written to create a level playing field once you’ve signed.
Nathan on May 2nd, 2009 2:37 pmI constantly receive promotional e-mails from ActionCoach like this one I received beginning April‘On April 14, Brad Sugars the Founder and CEO of ActionCOACH – the world’s leading business coaching firm invites you to join him on a very special webinar. Now, more than ever, his company is looking for driven and passionate business people and leaders to join his team of business coaches. ActionCOACH has been helping businesses thrive in any economic climate for more than 15 years. Thanks to the recession – more and more businesses need the help of a coach.
In this sixty minute Q & A call – Brad will be answering live and in person some of the more commonly posed questions from the hundreds already registered to attend.
Tue, Apr 14, 2009 8:00 am – 9:00 am USA – PST time https://www2.gotomeeting.com/register/298968839

Tue, Apr 14, 2009 4:00 pm – 5:00 pm USA – PST time https://www2.gotomeeting.com/register/665555267

For international time conversion click here …
Every single working business day – someone joins the ActionCOACH team. This is your chance to see whether you have the qualities to be our next successful business coach.
Regards,
Jodie Shaw
Director of Sales & Marketing (Franchising)
ActionCOACH
The World’s #1 Business Coaching Firm
5781 S. Fort Apache Road
Las Vegas, NV 89148
Main: +1 702 795 3188′

Now there is one phrase in this message which really stands out:

“Every single working business day (Interesting concept that…) – someone joins the ActionCOACH team.”

That means about 250 new people join ActionCoach every year.

However, looking at the presentation of this franchise on the site :

http://www.entrepreneur.com/franchises/actioncoach/282069-0.html

you immediately see that franchise numbers from one year to the next don’t increase at anything like this rate -> only 62 new franchisees between 2007 and 2008.

This can only mean one of two things. Either Jodie Shaw is lying in the above message or almost as many people are leaving this franchise as are joining it. Based on other reports I have seen here I guess a lot of people really are leaving at a very high rate and that makes you wonder why?

A comment from Action corporate would be much appreciated.
bobsyeruncle on May 2nd, 2009 3:37 pmADMIN: While I follow most of you argument I’m not sure what your point is. There will be wild accusations on either side of an argument when you can walk away from it. With regards to Action and the Soulcast thread the existence of a forum that allowed complete anonymity drew the powerless people out to speak their minds without fear of retribution. The golden rule in this case is the one with the gold makes the rules. Legal remedies and lawsuit success are a function of who can throw the most cash at a defense or complaint. The truth and justice are often secondary. If you are an isolated franchisee that feels wronged you are virtually powerless unless you can find a way to pool your resources. Brad Sugars is a rich man; made rich by what many are seeing as fraudulent behavior in selling franchises. Isn’t it ironic that the former action franchisees have to fight against their own money?
Now there is a degree of responsibility in due diligence – what’s at fault here is the evidence of success or failure is deliberately being withheld by the franchisor. They know what the success failure rates are but they won’t disclose it. Furthermore disclosure of the licensed systems effectiveness and mere existence is also cause for a case against Actioncoach.
Agreed; anonymous posters need to be taken with a “grain of salt” but given the recent outpouring of what seem to be pent up complaints, that provides a degree of credibility. The lawsuits by Actioncoach have been documented and referred to at Soulcast. In the face of such a perverse opponent, expect anonymity.
In the case of shills for corporate, the evidence on Soulcast and the antics to try and shut down the conversation support your point. They should be representing themselves as model corporate citizens and solve the problem, when instead they choose to “get this thing buried”. Childish fools.
Craig on May 2nd, 2009 6:34 pmI did a little checking on the document you posted above:ActionCoach Ex-Franchisees (who left the system) listed in the FDD dated 7/10/08:
Interesting to note that all those who are listed as transfers (from one territory to another?) have since left the franchise. This is 12 people, so it’s far from neutral in the total count.

When I have a little time I will also check on what has become of all those listed in the other document:: ActionCoach Franchisees listed in the FDD dated 7/10/08:

Actually one of the reasons I am looking at all of this is because I had looked at an Action franchise in the past and got very suspicious when the people I spoke to avoided answering any direct questions on earnings, failure rates and stuff like that.

Since then I get regular e-mails from Action and this one I received beginning April really caught my attention.

‘On April 14, Brad Sugars the Founder and CEO of ActionCOACH – the world’s leading business coaching firm invites you to join him on a very special webinar. Now, more than ever, his company is looking for driven and passionate business people and leaders to join his team of business coaches. ActionCOACH has been helping businesses thrive in any economic climate for more than 15 years. Thanks to the recession – more and more businesses need the help of a coach.
In this sixty minute Q & A call – Brad will be answering live and in person some of the more commonly posed questions from the hundreds already registered to attend.
Tue, Apr 14, 2009 8:00 am – 9:00 am USA– PST time https://www2.gotomeeting.com/register/298968839

Tue, Apr 14, 2009 4:00 pm – 5:00 pm USA – PST time https://www2.gotomeeting.com/register/665555267

For international time conversion click here …
Every single working business day – someone joins the ActionCOACH team. This is your chance to see whether you have the qualities to be our next successful business coach.
Regards,
Jodie Shaw
Director of Sales & Marketing (Franchising)
ActionCOACH
The World’s #1 Business Coaching Firm
5781 S. Fort Apache Road
Las Vegas, NV 89148
Main: +1 702 795 3188′

Now there is one phrase in this message which really stands out: :

“Every single working business day (Interesting concept that…!) – someone joins the ActionCOACH team. “

That means about 250 new people join Action every year.

However , looking at the presentation of the ActionCoach franchise on the site http://www.entrepreneur.com/franchises/actioncoach/282069-0.html) you immediately see that franchise numbers from one year to the next don’t increase at anything like this rate -> only 62 more franchisees between 2007 and 2008. This can only mean one of two things. Either Jodie Shaw is lying in the above message or almost as many people are leaving this franchise as are joining it. Based on other reports I have seen here I guess a lot of people really are leaving and that makes you wonder why.

Maybe someone from Action corporate would like to provide some answers?
Monday blues on May 4th, 2009 8:38 amVery interesting discussion here and I offer my appreciation to the site administrator for providing such a quality forum for exchange.Some of the questions raised about the information provided by franchisors to franchise prospects are really intriguing and I would like your opinion on the following. If you are selling a franchise which has a massive level of failure as appears to be the case with Action and this level of failure is not reflected in your communication to prospects, when does fraud become an issue?
I will add a second question to that. If most of your existing franchisee’s revenues are at a level where they can’t conceivably make a living from the business, this latter point probably explaining the former, and you don’t communicate this to franchise prospects, wouldn’t fraud be an even more obvious issue? Just to make my question even clearer, if a franchisees discovers after joining a franchise that the franchisor knowingly withheld vital business information (on average earnings for example) which would have led any mentally sane person to walk away from the proposition, wouldn’t it be fraud?
ADMIN on May 4th, 2009 9:13 amMonday blues asks If you are selling a franchise which has a massive level of failure… and this level of failure is not reflected in your communication to prospects, when does fraud become an issue?Check out the conversation taking place next door on the Play N Trade thread. PnT’s California registration has been suspended due to (in addition to other things) PnT’s allegedly not including some franchise failures in the Franchise Disclosure Document (FDD) as required.
See: http://www.unhappyfranchisee.com/play-n-trade-ca-revokes-pnt-franchise-registration/

If Play N Trade loses on appeal, they may have to pay fines, refund franchise fees and let the 53 CA franchisees out of their agreements.
ADMIN on May 4th, 2009 9:36 amCraig:
Experienced franchise copywriters choose their words very carefully, and often imply one thing while being able to justify it with the literal meaning if scrutinized in court. Franchise copy is usually reviewed by attorneys prior to release.
For example, yesterday I was reading a franchise press release that said the particular franchisor had “opened 250 stores from coast to coast.” It was odd for them to say they opened instead of have 250 stores. But… if 75 of their stores have closed, the statement is still true – they did OPEN that many.
The statement Every single working business day – someone joins the ActionCOACH team. has that CYA feel. Note that they did not say a new franchisee signs up (though in context it implies it) but that someone “joins the team.”
A coach hired even as an independent contractor – or a new secretary for that matter – technically constitutes someone joining the team. You should go by the numbers stated in the FDD or supplied directly as franchise sales figures in press releases, directory listings, etc.
Carol Cross on May 4th, 2009 11:06 amCraig! Putting it another way. All the franchisor has to do is be in compliance with the mandated State Franchise Disclosure Document which is in compliance with the FTC Rule governing franchising.Unfortunately, unprofitable franchises with high failure rates are being sold under cover of regulation. All the presale hype, written or oral, is erased once the actual contract is signed by the buyer and these statements are not “actionable” in the courts. Remember, it is AGAINST the law of the FTC Rule and the State FDD’s to make “earnings statements” OUTSIDE of the FDD but a franchisor is NOT mandated to make earnings statements, and most frasnchisors promise nothing in the actual contract that is signed by the buyer.
It is possible for franchisors to obscure the unprofitability/failure rate of the units in the system and still be in compliance with the law because Item 19, “earnings” is an OPTION for franchisors, and most franchisors opt NOT to include an “earnings claim” in Item 19. Item 20 is imprecise and doesn’t reflect “profitability” or failure of units that are transferered in a Fire Sale to another franchisee; therefore “churning’ is not visible to the regulators or the new buyers of the franchises.

Generally, the regulators don’t really look at the franchisor’s paper work unless there is a complaint. How would anyone know whether or not the franchisor is including all “terminations” and “transfers” in Item 19, until there is an investigation.

As Sean explains, the FDD and the Contract are carefully worded in order to avoid accusations of misrepresentation and all advertisements and Press Releases OUTSIDE of the contract are considered by the Courts generally to be mere puffery and are not actionable as fraud.

It was said by Robert Purvin of the AAFD, in Public Comment #79 to the FTC in 1997 re the FTC Rule, that franchising “was regulated” for the purpose of protecting franchisors from claims by failed and failing franchisees that they had been fraudulently induced to contract. This appears to be the truth!
Prospect on May 4th, 2009 3:58 pmHi Admin,Thanks for your feedback above, you are right about the ’shills’ part.
And its kinda funny in hindsight how silly the team in Action was. I am not even a disgruntled ex-franchisee or ex-employee, just a prospect evaluating options for myself and totally neutral.

Now I am pissed off and actively participating in forums such as this one.

I wonder how many such cases they’ve created for themselves with the kind of approach they take, I supposed it must be profitable despite all the negativity.
NeilSc on May 6th, 2009 10:46 amInteresting that today, on soulcast, a new thread was started linked to the old one with the following text:“Does anyone have any questions or comments about Action Coach formerly Action International, Brad Sugars its’ CEO, the business coaching industry or coaching franchises in general? As administrator of this thread, I will keep comments on topic and even approach coaches past and present executives and Brad Sugars himself for their answers and comments.”
Reading the last line, it is obvious that it is another effort at killing the previous thread and moving the discussion to one controlled by Action. I mean, c’mon, who can ‘approach coaches past & present & even Brad Sugars himself’ and why as an anonymous blogger.

They still don’t get it, do they? Despite the many attempts at planting ‘neutral’ 3rd parties and the many times they get caught out, they still try, sheesh…
Prospect on May 6th, 2009 11:01 amSpeaking of ’shills’, something interesting going on in soulcast, there’s now a “related thread” underneath the original thread, beneath all the junk action posted. It’s a dead giveaway as “SCBlogger”; the thread starter said the following:“As administrator of this thread, I will keep comments on topic and even approach coaches past and present executives and Brad Sugars himself for their answers and comments.”
Why would anyone have access to the management team of ActionCoach, including the founder, unless he’s part of them?

I suggest everyone take what is posted there with a pinch of salt, I am speaking from experience having dealt with one of their ‘neutral’ poster just recently.

Seems like their tactic now is to bury the original thread and hoodwink readers into believing the new thread is a continuation of the old one… and with them in control of what is being posted.

Now I DEFINITELY AM GLAD I said no to them!!
jodisaw on May 7th, 2009 4:29 amHow low is low? I just saw thread pointed out by NeilSc & Prospect.Its ridiculous how lowly Action think of their target market.
“I will keep comments on topic.”

You mean you will only allow posts from friendly parties? Most comments were on topic in the initial thread anyway, until some jokers, most likely on behalf of Action, started posting html codes, foreign language gibberish and even obscene words to interrupt discussions.

Unfortunately, legally there’s nothing that can be done these antics. Potential franchisees only have legal protection in the franchise documents and franchise act. All other antics such as the one we are observing, though it’s pretty obvious, cannot be used against them. Only hope for potential investors is to read through everything carefully and judge for themselves what sort of people they are really dealing with.
Mark on May 30th, 2009 6:41 pmI bought a franchise and attended training in Oct of ‘07 with 16 others. 12 of the 17 have left the system. I spent $115,000 on the franchise, marketing, telemarketing, etc and made $30 k in 8 months, which I put back into the business. Break-even for me was about $5,000 per month and I never made more than $5,500. I was more successful than most of the 12 that dropped out. I worked a tremendous number of hours and spent a lot on marketing, doing “the right things”. My problem was that I was not a master at selling and wasn’t willing to lie. I despised the Action 12 step sales process, which amounts to a lot of manipulation. When you buy an Action franchise, you’re buying a sales job. Unfortunately I was lied to before I bought the franchise, as so many Action franchisees are: I was told that coaching sells itself; I was told that whatever amount I thought I could make, I should add a zero to that amount; I provided a projected P&L to my ML and was told that I wasn’t thinking big enough; I was told the attrition rate is 6%; and was coached to ask vague questions in my due dilligence (I called 12 franchisees). There are over 100 franchisees that are making good money, however, it appears that the vast majority don’t.
John on May 30th, 2009 9:44 pmMark – What go you mean you were “was coached to ask vague questions in my due diligence”? Who coached you?
Mark on May 31st, 2009 5:00 pmJohn, the local Master Licensee (ML) works with prospective coaches to buy the franchise. My ML gave me a list of coaches to call and stated that some are successful and some aren’t. He wanted me to ask them several questions, which he provided. I modified some of the questions, although they were still too vague. You need to ask: What is your gross revenue? What is your net profit after all expenses? How many clients do you have and how many have you had since beginning the business? How long does it take to get a client to sign up? What is the average length of time a client stays with you? What is the ROI on your initial investment? How many hours do you work per week and how has that changed since you bought the franchise? How many franchisees from your training class are still in the system? Were you a master at sales before you bought the franchise and how do you feel about sales now? These questions will be much more effective in understanding what you’re buying than the questions the ML will give you.
John on May 31st, 2009 6:19 pmHow were you misled?
Mark on June 2nd, 2009 10:49 pmJohn, just reference my first e-mail. Here are the comments and statements that were misleading:
In regards to getting clients – “coaching sells itself”
In regards to earnings potential – I was told that whatever amount I thought I could make, I should add a zero to that amount; I provided a projected P&L to my ML and was told that I wasn’t thinking big enough
In regards to how many people leave the system – I was told the attrition rate is 6% – over 3,000 coaches have been trained and there are about 800 in the system. 12 out of 17 of my training class have left the system, therefore, the attrition rate is considerably higher
In regards to due diligence questions – I was coached to ask vague questions in my due dilligence (I called 12 franchisees) – see my post above on what questions to ask.
John on June 3rd, 2009 11:13 amYou may feel misled, you may have bought a crappy franchise or one not suited for you, but that’s about it.
ADMIN on June 4th, 2009 2:50 pmLatest ActionCoach press release:
http://www.pr.com/press-release/156290
The ActionCOACH Franchise is a Great Opportunity for Corporate People Looking for Business Ownership
“Brad Sugars’ ActionCOACH franchise holds an allure for such people from the corporate world who are better suited to a white-collar business and are looking to invest in a well established franchise…Haddon is happy to leave corporate life behind in order to enjoy his new role as an ActionCOACH franchisee.

“With ActionCOACH, there will be no corporate issues, and I will have a real opportunity to reap rewards directly related to my own efforts and input – and, most importantly, get to meet new people and grow my skills and experience in all sorts of interesting new ways” he said.

“ActionCOACH is the world’s number one business coaching and executive coaching firm, with more than 1,000 offices in 26 countries. To learn more, go to actioncoach.com.”
jodisaw on June 6th, 2009 11:22 am“Latest ActionCoach press release: http://www.pr.com/press-release/156290”Since they make a press release for every coach who joined, someone doing research on Actioncoach simply have to check how many coaches’ sites are still active and contactable every 6 months, that will give a clear idea of how many % actually make it.
craig on June 7th, 2009 4:18 amHi Jodisaw.
I followed up on the suggestion made by the adminstrator in his post 2nd May and downloaded the 2006 & 2007 UFOC’s from the site. I also got hold of a copy of the 2008 UFOC so with all of that I guess a pretty clear picture emerges.

June 30th 2006 there were 233 franchisees listed in their UFOC of whom 127 have since left (no longer listed on their sites). That’s a 54% attrition rate in just under 3 years.

June 30th 2007 there were 101 new franchisees listed compared with the June 30th 2006 list and of these 101 new people, 48 are no longer listed today. That’s a 47% attrition rate in just under 2 years.

June 30th 2008 there were 96 new franchisees listed compared with the June 30th 2007 list and of these 96 new people, 28 are no longer listed today. That’s a 29% attrition rate in just under 1 year

Putting all of this together that’s 197 new franchisees in the 2 years between June 30th 2006 and June 30th 2008 and in the 3 years since June 30th 2006 it looks like there have been 203 exits from the system. That would seem to indicate that about a third of the Action franchisees actually make something out of this but that about two thirds fail, most during the first 2 years of activity and smaller numbers after that. That sort of failure rate is very similar to the failure rate observed for independant businesses so it really makes you wonder about the quality of the franchise package. Maybe the Adminstrator who has lots of experiences with franchises would like to comment?

Actions claim that they operate in 26 different countries also looks very strange. Looking at their own sites it is possible to find coachs listed in only the following countries:

Canada
U.S.
Mexico
Brazil
Australia
New Zealand
Indonesia
Malaysia
Singapore
South Africa
Ireland
U.K
France
Spain
Portugal

That’s 15 countries which is a long way from the 26 claimed. There are a couple of other places like the Dominican Republic where they have a Master Licensee but where there are no active coaching franchises. You can only wonder why they feel it necessary to lie about such stuff!
craig on June 9th, 2009 1:42 amThe analysis the ACTIONCOACH UFOC’s for the last 3 years (2006,2007 & 2008) plus a look at the coaches presently listed on their site throws up another detail which is also worth taking note of especially when you take account of the fact that this franchise has been operating in the U.S. since 1999 and that franchise contracts are signed for at least 5 years (7 years in the present contracts).Of the the 303 franchisees presently operating in the U.S.:
79 have been with the franchise for less than 1 year.
68 have been with the franchise for between 1 & 2 years.
53 have been with the franchise for between 2 & 3 years
103 have been with the franchise for 3 years or more.

-> In a franchise business that has been around for 10 years, operating with 5 or 7 year contracts and which already had 233 franchisees listed end June 2006, almost 50% of the franchisees have been in the system for less than 2 years!

It is also worth noting that those who survive a couple of years in the system will have left at least 118k with Action (upfront payment of 75k + 1.8k/month after training) plus their operating expenses which can easily reach 1.5 – 2k/month which means the total loss for the many who do not succeed in this business easily reaches 150k.

I sincerely hope that people looking at this franchise see this sort of data before they make a decision.
ADMIN on June 9th, 2009 9:43 amCraig’s breakdown has been made into a standalone post:
http://www.unhappyfranchisee.com/actioncoach-franchise-unit-breakdown/

Input, comments welcome.

Thanks, Craig
coach2003 on June 9th, 2009 12:23 pmI believe Craig’s figures are actually conservative.I was a coach back in 2002/3, had my training in Australia and like most other former franchisees, my story is pretty similar: in a class of 14, there were only 2 of us left in the system within the first 6 months. So many former coaches are reporting similar figures I suspect it’s much higher, plus my source, a coach who just left the system this year, told me the actual number of coaches remaining in the system today stands at 700++. She was able to tell because Action publishes internal rankings based on income level, which was why she could also work out based on her income level and her ranking, 30-40% of the coaches make less than their admin fees. (Interestingly, Action later discovered the boo-boo and immediately removed the ranking info from their intranet, must be a lot of coaches looked at those numbers and came to the same conclusion.)
To be honest, I did make money from the business and when I left, I was net positive from my investment.

I left because I couldn’t stand the hypocrisy of the culture. The business was sold to ‘corporate refugees’ who end up finding out it was worst then the worst of their corporate jobs… at least you get paid a salary in the corporate world.

The majority of Master Licensees I’ve met during my time, I can only describe as mercenaries who are only after the money and the sales.

I have no idea whether Brad is aware of this, but one thing I can share is Brad absolutely hate what he calls ‘gossip’, which others would call feedback from the ground. He only listen to his MLs and his top money making coaches… those at the bottom are automatically ‘not accountable’ and ‘playing below the line’ and ‘bitching’, he never heard from them… he has a process called a ‘wifle’ where you are supposed to express yourself and then be done with it, don’t bring it up again.

When he does surveys, it’s never anonymous and it is always forwarded to the ML concerned and the coaches already knew upfront he’s going to do that…

I’ll give you an analogy: Imagine you are a salesman in a corporation. Your sales manager takes all your credit and put you down in front of the sales director and warns you will lose your job if you ever try to talk to the director. The director on the other hand trusts the sales manager and doesn’t bother to get feedback from the ground, never mind that turnover of salespeople is huge and no one seems to be happy.

That is but one of the hypocrisy of the culture. I said hypocrisy because as coaches, one of the strategies action advice clients is to employ “mystery shoppers” to find out what is going on in their business and then make the necessary changes.

Brad Sugars, if he’s sincere about creating the culture he preach, can easily practise what he preaches and employ mystery shoppers in every territory to gain feedback on his MLs as to whether they are overselling and misrepresenting the business.

He can as easily do surveys that guarantees anonymity to prevent backlash on his coaches instead of brushing off anonymous feedback as ‘gossip’ and running a ‘no news means good news’ culture.

I can safely say that in my territory, more than ½ the coaches who left the system were actually perfectly capable of sustaining themselves, they left in disgust because no one did anything about the ML.

But then, I am assuming Brad Sugars want the business to be congruent and built on a solid base… maybe he chose those MLs precisely because they fit his actual culture… say whatever it takes to get the sale, deal with the coaches ability to survive later, after all, the franchise is so frontloaded and involve so little capital investment on the ML/Franchisor’s behalf.

Food for thought. I am sure Brad Sugars is monitoring this thread just like he does others. Well, he can either brush it off as anonymous ‘gossip’ or he can take a real hard look at what is being said here.
Mark on June 9th, 2009 10:00 pmI did speak to Brad a couple of weeks ago. I wanted to communicate that: 1. They are targeting people with the wrong skill sets
2. Not ensuring that people have enough capital
3. Action is lieing about the attrition rate
4. The ML’s and former Dir of Franchising implied earnings

Brad wanted to talk about my “Key Performance Indicators” and didn’t seem interested in having a discussion on how to make the franchise stronger. It was a disappointing discussion.
craig on June 10th, 2009 3:43 amHi Coach2003
The figures I gave came from looking at all the coaches listed in the ACTIONCOACH UFOC for the years 2006, 2007 & 2008 and checking on who was still in the system (which took quite a bit of time by the way….) so I guess the analysis provides a pretty accurate picture of the situation.

As it happens, just after doing my last post I realized that there was something of a mismatch between the numbers of franchisees who have left the system and the attrition rate declared by Action in their documents. In the UFOC’s, they announce 44 exits for the year 2006-07 and 48 for the year 2007-2008. However if you count the names of those who departed (provided in a separate document – Exhibit M) the numbers are respectively 47 and 55. The difference, 10, is not huge but is nevertheless significant. Maybe the person who prepared these documents just didn’t know how to count…

However this does not completely explain the mismatch. Looking at the data, name by name, I have found a total of 203 exits from the system since June 30th 2006. ACTIONCOACH declared 92 exits over the period June 30th 2006 and June 30th 2008 which means that there have either been 111 exits of franchisees over the last 12 months or that the numbers were underestimated in the previous years. If this can be confirmed it will raise some very interesting questions and maybe even some opportunities for those who want to get out of a very lopsided contract.

To finish with this subject, Action declared 318 active franchisees on June 30th 2008. Again counting names I found a slightly smaller figure, 311. Far more significant is the fact that last week, I could only find 303. This means there are now more people leaving Action than joining. Given everything I know about this organization, organized by and almost exclusively for Brad Sugars, I can only wonder why it took so long.
ADMIN on June 10th, 2009 5:38 amCraig:
The numbers they submit should jibe. Is it possible that single owners owning multiple franchises could account for the disparity? For example, if a coach buys two additional territories, or buys out a fellow coach’s agreement, then closes all, could it show up as 3 fewer franchises but 1 fewer owner?

Just a thought. You should post any other discoveries on the post with your comment, too. http://www.unhappyfranchisee.com/actioncoach-franchise-unit-breakdown/
coach2007 on June 10th, 2009 11:19 amHi All,I think Coach2003 is referring to Action’s claim of total number of coaches worldwide of 1000+… the figure is nearer to 700+.
Coach2003 was also right about the ranking thing: when I left I was making only USD1.5K and my global ranking was 500++(!!), which shows either there’s very few coaches left in the system or worst, more than half of them were making less than USD1.5K, barely enough to cover their admin fees. Action can call these ‘malicious anonymous lies’ like they always do, but if they are ever investigated; the figures are there for all to see.

I also agree 100% with Coach2003 you cannot just “wifle” away issues with the ML. Here’s my experience with mine:

1. ML who is supposed to help new coaches and instead of helping, work on new coaches’ prospects. My ML ‘kindly’ allow me to use her seminar room when I first came back from training and ‘taught’ me to work on my friends first, bring them to a seminar, she will help me with my prospects she said. Turned out she and her team were working on my friends during breaks to seek coach as well as coaching prospects and they all end up on her mailing list which she only removed after a direct confrontation. She was also trying to sell coaching by telling my friends as the ML she ‘only coach 2 person’ per year.

2. For big corporate accounts, she used her position as ML to dig info on the progress and went in with lower competing quotes.

In both cases, coaches found out because friends and prospects inform them in disgust. We never get to bring it to higher up except to ‘Wifle’ with the ML, who will play victim, claim we misunderstood her and go all emotional & teary… then she do it again the next time to someone else and the whole cycle repeat itself.

In my case, I was immediately warned when I came back from training not to send email or communicate with anyone above the ML without first informing her, or else I will be seen as a rebel and Brad will be very upset with me. That was what I was told.

I was young and naive and enthusiastic, I didn’t realize then as I realize now it’s all corporate politics and gamesmanship on the ML’s side… by the time I was pissed off enough to leave, I realize another thing: there really was no point to bring it up to someone higher even if I had the guys then; since so long as she bring in enough new coaches to cover those who left, all is well in the action world and she is untouchable.

I would also like to touch a bit on Action’s twisted perception of teamwork. Every year, they make it compulsory for a coach to attend a regional conference at USD600 per pax. Since attendance was low, Brad decided to give ‘incentive’ to coaches to attend conferences… the incentive was… get your fellow coaches to attend, if all attend, get a discount, if some don’t attend, those attending were penalized by having to pay full fees as there’s no ‘teamwork’ in the territory.

They fail to realize that each franchisee sign a franchise agreement with the ML to run a practise or firm, there is absolutely no legal basis for Brad to unilaterally decide what another franchisee do in a territory should affect others financially. Brad’s justification was he ran a survey and most agree it was a ‘great’ idea, while only a few ‘negative’ coaches disagreed. Interesting how he got to that conclusion based on the conference attendance after the ‘incentive’ was introduced. If he really wanted to create teamwork, he would know it was stupid to create peer pressure and resentment between those who went and those who didn’t.

They then threatened to send breach letters to coaches who refuse to attend because they are ‘not following the system’ but they couldn’t answer which clause coaches were actually breaching.

True, learning’s are important for coaches but you have to ask them whether they are realistic or care about their coaches’ finances – 50% are barely earning enough to cover admin fees based on the coach ranking system, instead of flying trainers or using the online medium or other methods available to train people, Brad came to the conclusion that to get coaches barely breaking even from all over the world to spend a few extra Ks per year on plane tickets, accommodation & conference fees to fly over to be trained was the best solution. Some common sense will be good here, but common sense is not profitable to Action. Since all speakers are coaches themselves and you pay for your own lodging and dinner, one can wonder at the true intention… whether it was about doing it for the coach or were they profiting from it, from my estimation, they should be making USD350 per pax, do the maths.

The latest agreement had a clause that prevents coaches from participating in class action lawsuits and disallows coaches from testifying in lawsuits against Action or Brad Sugars. I believe it is just scare tactics and there is no way they can stop a person from testifying should they be subpoenaed. Or can they? Admin might be able to advice here.

Thank you.
Insider on June 11th, 2009 10:45 amThe figures provided by Craig go a long way towards confirming what many of us thought for a long time, the ActionCoach franchise is very far from guaranteeing a path to success. Actually the only thing that is guaranteed is that no matter what happens, the franchisor always wins – the initial payments (75k) are gone forever and so are the monthly royalties, 1.8k fixed monthly royalty starting as soon as the franchisees get back from their initial training.
Since the franchise contract also contains the following clause:

17.4 If Master Licensee terminates this Agreement based on your default, you must pay Master Licensee liquidated damages, calculated as follows: (a) the average of your monthly Royalty Fees and Marketing and Advertising Fees due for the last 12 months before termination (not including the months before the Royalty Fee and Marketing and Advertising Fee obligations begin under Sections 4.1 and 4.2); (b) multiplied by the lesser of 24 or the number of months
remaining in the then-current term under Section 2, (c) discounted to present value using the then-current prime rate of interest quoted by Master Licensee’s principal commercial bank; (d) minus the present value (determined using the same period as in (b) and the same discount rate as in (c)) of the expenses of performance avoided by Master Licensee as a result of termination of this Agreement.

where default includes “voluntarily abandon of the franchise relationship” it is clear that you can only walk away from the agreement on the franchisors terms. Among other things, this means that a lot of people probably stay in the franchise for longer than they should based on the losses they are taking month after month.

Looking at all of this you can only wonder why anyone would sign on to start with and that’s where all the marketing hype and the sales process click in.
Actions business concept is intrinsically appealing, “leverage your business experience and our proven systems to help small business owners reach their professional and personal objectives” . Wow, that’s a really gratifying idea for managers who have either been restructured out of their jobs or who are simply fed up with the constraints of corporate life. Because of this Action attracts people who, from the outset, have a really positive attitude. There are also enough people who succeed with Action to insure that franchise prospects doing their due diligence are preferentially directed towards the minority who succeed rather than the majority who clearly don’t. The fact that Action prefers not to publish any figures on average earnings by franchisee makes this pretty easy to get away with.

However, in spite of the so called “proven systems” and the high quality of most of the people who join there are still visibly far more losers than winners in this game. To understand why, here are a few thoughts from a person who knows Action from the inside :

1) The initial training for which you pay 25k lasts 11 days, gives you a good overview of the Action concept and really gets you enthusiastic so that you get back home full of energy. A good comparison is the way you come away from a sales convention or somthing similar. However, as it only skims over the subjects treated, it is not nearly enough to teach you all you need to know to either sell coaching or to coach. This takes a massive on-going effort learning how to teleprospect, learning how to present, how to really ask questions and simply how to coach. Other coaching schools typically take months to train people (for considerably less money) because there is simply a lot to learn. With Action you learn the hard way, by trial and error, and while all of this learning is going on you are paying 1.8k per month to the franchisor to which you must add your own business expenses and your living expenses. At the end of the day, this can add up to a lot more than most people estimated when they set out on the adventure and they run out of cash well before getting where they need to be.

2) I guess the average age of the Action franchisees must be in the 45 – 50 range, possibly even higher, and many if not most of these people come from relatively structured organizations where they have been mostly focused on only part of the business activity whether it be finance, I.T., sales, marketing or operations…All of a sudden these people have to learn how to market, how to sell and acquire a minimum level of knowledge in all aspects business management plus the interpersonal skills necessary to coach. This is a massive challenge and it can come as no surprise that so few people come through successfully even when cash is not their biggest problem.

3) The market is much tougher than most people probably realize. Sure, practically all small business owners would benefit from having a business coach. However getting them to understand that is the first challenge and, since most are only barely surviving, getting them to make a monthly investment of 1.5k or more in a coaching program is the second challenge.

My own conclusion from all of this is that the Action concept is very seductive (I even fell for it myself..), that the franchise provides an interesting framework to operate from (that’s it as far as a proven system goes) I, that it attracts mostly very decent, high caliber people but that it takes far too much money up-front compared to the value it provides and the time it takes most people to master all the different dimensions of the activity.
Also the on-going training provided by Action basically stays at the same level very superficial level as that provided in the initial training which means that to develop the necessary skills you have to look elsewhere. For example the Action system has borrowed a lot of principles from NLP but having heard of a principle like building rapport by “Matching & Mirroring” does not mean you actually have the skills to do that in a real life situation etc. etc.. Against this you are pressured to attend regional conferences as described in the previous post where you are served up the same B.Sugars soup over and over again.

If you have a very good general business background , excellent interpersonal skills, lots of perseverence, a very high level of autonomy, excellent presenting skills, love learning and a budget of at least 120k to start up your business, Action could be right for you. However if you have all of those attributes, maybe you don’t really need Action.

As for anyone who doesn’t have all of these qualities, best option would probably be to look at doing something else.
Mickelson on June 11th, 2009 12:29 pmGood afternoon,I try to stay away from the negative banter that populates many blogs and posts BUT unfortunately can’t sit here and not speak my mind.
ACTION COACH has NEVER published, said or inferred the correct number of franchisees in their system, EVER! Even if you go back to the beginning of the franchise they were lying about franchisee numbers. Not once have I ever seen ANYONE from the Action head office speak the truth on this.

Anyone who has done any research on the numbers or the filing of their UFOC and FDD knows that it has had holes in it from day one. Every single franchise they have sold in the United States could be contested based on the misinformation provided by way of UFOC and FDD.

Simply put… beware. There are some good franchise owners in their system, some good people. That being said, Action will not last, you can’t do things wrong continually and not have it blow up on you one day.

Mr. Sugars, Karma is a wonderful reality and you’ll get yours.

Comments Welcome.
Mickelson on June 11th, 2009 12:37 pmPs. I thank those that are helping other not make the same mistakes we have.Pps. Back in 2005 the bomb squad was called to the Sugars household in Australia. I don’t have the official notification but did speak first hand to a nearby neighbor who viewed their arrival and departure. under no circumstance would I condone any physical harm to Mr. Sugars or his family. Brad should think more about things other than squeezing people for money. Coincidence that he moved out of the country (to the U.S.) not long after? you decide.
another former coach on June 11th, 2009 2:54 pmBack when I was a coach circa 2004, one thing that really pisses me off was Brad Sugars spam everyone in my mailing list with emails directly from bradsugars.com soliciting participants for his 10 day bootcamp.These were done without coaches’ knowledge or permission; and without our clients’ permission as well. Everyone who was subscribing to our newsletter through coaches PRIVATE list managed by action’s intranet was spammed. When this was highlighted, our ML brushed aside our protests as not abundant.
How could we be considered not abundant and Brad Sugars doing the right thing when bradsugars.com is Brad’s private domain and not part of Action International? Like Coach2007 said above about the teamwork pressure, they do not respect their franchise agreements with coaches, hiding everything they do under culture to justify their actions. In the conference pressure case, it was ‘no teamwork’, never mind that it might not be legal as Coach2007 said and in the spamming case, it is ‘not abundant’, never mind that it is unethical. It was unbelievable that my ML then was actually okay with the fact.

A lot of us got blasted by clients when they received those email blasts; they thought we were the ones who put them in Brad Sugars mailing list! How do we explain that Brad Sugars, the founder of Action, spam them without our knowledge? How stupid will we look if we said that?

Today, 3-4 years later, apparently bradsugars.com is active again and is actively spamming up to 3 messages daily, supposedly blog update by Brad Sugars, which are just marketing messages.

One of the more interesting posts was this one:

http://www.bradsugars.com/the-good-the-bad-and-the-internet/

Which I suspect was a reaction to how active soulcast and ripoff was.

Here’s the more “interesting part” of the post which I want to address here.

+++++++++++++++++++
From personal experience, I have had things posted about my family, about me privately, even my home address and phone number, people called me a fraud, a conman, a ripoff guy and so much more … ALL ANONYMOUSLY and I cannot get it taken down …

If you think it gets me mad, it used to … not anymore … because while it seems you cannot fight back, you can …

Here’s what do you do if you are attacked on the Internet … ?

5 things that are vital …

1. Answer EVERY allegation with total transparency but only do it on a site that YOU CONTROL … never answer on their site, put a link from their site to a site you control …

+++++++++++++++

This post was hilarious for several reasons:

1. Of the hundreds of posts on soulcast & the various ripoff reports, there were only 1-2 personal attacks on him which is of a private nature; and HUNDREDS of other posts on his unethical business practises and yet he expertly, as always, play the victim and highlighted the 1-2 posts with righteous indignation to gain sympathy votes instead of addressing the tons of allegations about his practises… probably where ‘the ML who went all teary’ when caught trying to sell her coaches’ prospects learn from. I believe I know which particular ML Coach2007 was referring to, she’s notorious among her coaches yet like Coach2007 said, as long as the number of coaches coming in matches those going out, she meets her KPI and nothing will be done.

2. His advice of how to handle attacks on the internet is totally hypocritical and is totally unlike how he handled soulcast (http://www.soulcast.com/post/show/71156/Brad-Sugars-Action-Coach). Those who visited soulcast will know by now… junk posts, codes, and obscenities, fake ‘neutral parties’, fake clients, franchise attorneys… ANYTHING BUT OPEN AND TRANSPARENT. Look here, soulcast was unmoderated, which means they can respond as strongly wanted to with ‘total transparency’ as preached by Brad above… they chose not to and instead bury the blog with the junk mentioned above. And oh, they did try to ‘put a link from their site to a site they control’ also as Brad advised … but no one fell for it as a few posters here noted (jodisaw & prospect highlighted this) and guess what, the post has been removed.

3. If you check out the comments on the post Brad did on his own blog, you will notice the comments are obviously 100% positive by coaches, ML and probably some clients. Herein lay the other sneaky part about Brad Sugars & Action. Whenever they are attacked about their franchise practises, they will distract the issue with positive feedback from coaching clients. It is sneaky because the issue has always been between Action/Brad Sugars and their franchisees and NOT between Action and their coaching clients. An inexperienced person evaluating their franchise might see all the positive feedback about coaches as endorsement for the franchise system and equate it with positive feedback about how Action is treating their franchisees. I hope for their sakes they can differentiate the two.

To conclude my first and only post on this topic, I would ask any rational individual to consider this:

1. Is a controlled blog operated by the very people wanting to sell you something carrying hundreds of positive reviews about themselves and nothing negative more believable than let’s say a blog like soulcast where everyone including Action could post freely thereby showing their true colors?

2. Would anyone believe everything written on Brad Sugar’s site, given that he has openly declared he control what is being said?

By the way, the reason why I addressed the posting here instead of on bradsugars.com should be obvious
Mark on June 11th, 2009 9:40 pmIn response to Insider, I’d recommend having quite a bit more than $120 k – I put in $145 k to the business, plus living expenses for a year. I’d also add to the necessary skills – you need to be a master sales person and absolutely love it. You’re buying a sales job with Action… you’ll do a lot more selling than coaching!!
ADMIN on June 12th, 2009 9:48 amYour input needed here. Please read and comment:Top 10 Ways to Keep Franchisees Happy? Share your Thoughts
Unhappy Franchisee: 10 Hottest Topics : Franchise Pick – Picking the Perfect Franchise on June 13th, 2009 9:20 am[...] ActionCoach: Brad Sugars is battling his detractors on the search engines. He hates it when people link to negative stuff using his name, Brad Sugars. [...]
jodisaw on June 14th, 2009 2:14 amI went to Brad Sugar’s blog (colour scheme & everything is ActionCOACH standard by the way, it’s not even a personal blog, just an extension of ActionCOACH marketing.) pointed out by Another Former Coach.I saw Brad Sugars mentioned on that same blog, “…ALL ANONYMOUSLY and I cannot get it taken down.”
Something doesn’t jive. I would believe a man with his financial resources, should he have nothing to hide as he and his MLs claimed he could have:

- Contacted the administrator and threaten legal action
- Demand for the list of IPs of posters
- Issue press releases after their lawyers file the case

Truly innocent parties will usually do so even if they knew they are not going to win their case because it allows them to put on record their declaration of innocence.

Could it be that Brad Sugars/ActionCOACH is fully aware that if they go the legal path and really have their day in court, the exposes will become facts rather than ‘negative bitching’ which they can play victim to and brush off?

The more I look at their chosen response to date, the more suspicious it becomes, just to recap on what I’ve seen so far:

- Spam from bradsugars.com
- Link from soulcast to a thread they can control
- Fake neutral parties
- Preach ‘total transparency’ but practise something else
- Search engine optimization to push down ranking of negative blogs
- As someone else mentioned above, make use of client testimonials for coaches to divert attention

It is highly unusual for someone like Brad Sugars who sued others for the most frivolous reasons not to do so in this case; where he decided to go on drowning the noise offensive rather than legal offensive.

Ps: Something else is interesting: Almost every comment on every blog entry, if you check the nicks, it tallies with the name of an ActionCOACH or a staff member. So much for addressing issues openly and transparently.

Enough said.
NZex on June 14th, 2009 3:39 amCoach2003 & Coach 2007 were both right about the internal ranking:When I left I was making NZD3000 – NZD3500 per month. I was consistently ranked from 250 to 300 globally.
There was massive internal hype when the ranking information was first published. A couple of internal emails went out teaching coaches how to check their own and others’ rankings.

Recently it all went quiet abruptly.

Not only that, they also abruptly removed another field from coach profiles which denote the number of years each coach has been in ActionCOACH.

It was done without warning, internal forum postings regarding this topic were deleted as soon as it’s posted.

I gather from what others have posted and my own internal ranking, assuming they really had 1000 coaches at the time I left:

Earning below NZD3000 – NZD3500 per month: about 150 to 200 coaches.

Earning below than USD1500 (or NZD2300) per month: about 500 coaches.

What is appalling is the total lack of transparency in addressing these issues and the massive cover up.

Brad Sugars and ActionCOACH failed to realize coaches internally do see these things happening and can draw their own conclusions.
ADMIN on June 14th, 2009 3:48 pmjodisaw wrote:
It is highly unusual for someone like Brad Sugars who sued others for the most frivolous reasons not to do so in this case; where he decided to go on drowning the noise offensive rather than legal offensive.
It’s not that unusual, especially if he’s getting good advice.
Suing bloggers or going after their commenters is a sure way of amplifying the dispute by about 1000 times. Bloggers are fiercely opposed to anyone trying to subvert the freedom of speech that currently exists and they’d make sure the issue at hand spreads like wildfire as soon as the first shot was fired. Sites like this one, SoulCast and Rip-offreport.com might be annoyances, but smarter advisors would go the “white hat” route and try to battle placement on the search engines, and hope most don’t dig too far on the Internet.
Plus, it’s pretty pointless to try to sue sites like Ripoff report, which are completely geared for it.
NZex on June 15th, 2009 3:10 amjodisaw wrote:
It is highly unusual for someone like Brad Sugars who sued others for the most frivolous reasons not to do so in this case; where he decided to go on drowning the noise offensive rather than legal offensive.

The truth is probably somewhere in between what jodisaw & admin wrote:

Brad Sugars has better advisors now as compared to a few months ago when they went around posting junk & posing as all sorts of characters… so ActionCOACH are more subtle now, blanketing the net with ‘positive news’ & pushing down the rankings of blogs such as this and other “scam alert” sites.

On the other hand, lawsuits might reveal publicly a large portion of what is written is actually true.

Let me add on a few more points as an ex insider:

1. I can truly say ActionCOACH is not a scam no matter how much I dislike Brad Sugars and his mercenary tag team.

2. It is only suitable for certain personalities. In my own training in Australia, there were clearly unsuitable individuals. in fact, I overheard Martin, one of the trainer, let slip during a meal break in his conversation with another trainer how he doubt a few trainees in the room will ever sign a client. Which goes to show that they are capable of filtering these individuals out during the selection phase if they had really wanted to. They simply do not care so long as the person can pay.

3. You will hardly hear any complaints about ActionCOACH from clients, which shows that Coaches are dedicated to their craft and getting results for clients. Unfortunately, as someone noted above, ActionCOACH use this to sidetrack the issue with regards to the integrity of the franchise where franchisor-franchisee relationship is concerned.
ADMIN on June 15th, 2009 12:15 pmIs there more to this story? ActionCoach CEO headed back to Australia:
http://www.unhappyfranchisee.com/actioncoach-ceo-vic-ciuffetelli-steps-down/
OhReally on June 16th, 2009 5:38 pm“You will hardly hear any complaints about ActionCOACH from clients, which shows that Coaches are dedicated to their craft and getting results for clients.”
A franchisee coached a printing business into the ground to buy it out at rock-bottom, so he could be considered as a preferred supplier for action coach.
jodisaw on June 17th, 2009 8:02 am“A franchisee coached a printing business into the ground to buy it out at rock-bottom, so he could be considered as a preferred supplier for action coach.”Hi OhReally,
Hate Action & Brad Sugars all you like, most here do, but your claim is simply unbelivable because coaching agreement is not like franchise agreement, it can be terminated anytime. Its ridiculous for someone in business to be stupid enough to be coached to the ground to be bought over by the person coaching him/her. I have yet to meet any sane person allowing himself/herself being coached in that manner, no matter who the coach is or which organization he/she come from.
OhReally on June 18th, 2009 12:59 pmThey will be happy to read that comment, surely, since they know the “claim” is true. Believe what you like.
NZex on June 20th, 2009 9:56 amLOL… OhReally… Oh, really?Why not ask them to post here and describe how is it that they allow a coach to work with them long enough to drive their business under without taking action to terminate the contract and when they realize it was done with the intention of Action getting a cheap printer… LOL… either the coach is Godlike in stature or he pointed a loaded gun at their heads and threaten to pull the trigger or Jodisaw was right or you are simply…
ps: Notice the responses you are getting…. in a forum where Brad Sugars/ActionCoach have few fans…
author on June 20th, 2009 5:34 pmI’m sure I’ll get branded as a shill for asking these questions, but I’m just asking what many are thinking. After all, Actioncoach & Brad Sugars keep selling franchises despite your protestations, so many must be dismissing the negativity. So:If Brad Sugars is so bad, why does he keep getting nominated and winning so many awards? He’s frontrunner for a coveted Chairman’s Award by people who have nothing to gain and lots of people are cheering for him to win:
http://www.bradsugars.com/chairman-of-the-year-finalist-wow/

Bruce Frame wrote “Congratulations Brad, interesting that there are no other franchises represented! I guess it’s still true that most franchisees HATE the franchisor – it’s good to be in a company whewre the opposite is true.”

If ActionCoach is such a scam, why does is keep getting awards & accolades? Is this an International conspiracy?

http://www.actioncoach.com/press-room/awards/index.php

#1 Business Coaching Franchise in the World
Entrepreneur Magazine, 2008-2005

#76 Franchise in the World
Entrepreneur Magazine, 2008 (Ranked #96 in 2007)

Best Overall Company in North America
Stevie Winner 2007-2006

Best of the Best-Top Franchise Award
Indonesia Info Franchise Magazine 2008

Rank #1 Top Franchise Award
Indonesia Info Franchise Magazine 2008

Franchise 500 rank:
#76 (2008); #96 (2007); #80 (2006); #98 (2005); #69 (2004);

Fastest-Growing Franchises:
#46 (2008); #55 (2006); #16 (2004);

Top Home Based Franchises:
#17 (2008); #25 (2007); #15 (2006); #18 (2005); #13 (2004);

America’s Top Global Franchises:
#49 (2008); #43 (2007); #49 (2006); #53 (2005); #39 (2004);

Are people just to take your word for it because you say so?
All the people griping seem to be anonymous. You could be competitors, for all we know. It just seems like what legitimate sources are saying does not support your anonymous gripes.
coach2007 on June 21st, 2009 1:54 amHi Author,No you are not a shill and your questions are valid.
Here is my response:

1. Check the criterias for those rankings you’ve mentioned, EVERY SINGLE ONE measure the units of franchise sales, NOT attrition rate, NOT average earnings per franchisee, NOT the culture of the franchise… you get the idea. I think the one thing everyone here agree on is how ‘good’ their marketing is.

2. NO ONE here dispute ActionCoach’s ability to sell their franchises… you would notice if you read them carefully, it’s about the almost 2/3 attrition, it’s about the fact that they have 700+ franchisees today as opposed to the 1000+ they always claimed, it is about the fact that 60-70% of their franchisees barely cover their admin fees and operating expenses.

3. A for the chairman of the year finalist, do take the time to read the fineprint about how to get nominated… enough said.

4. The ‘griping’ here, if you read carefully, again, are quite clear that people do make it and what sort of people will make it… they give a choice to potential franchisees to walk in with their eyes open. As opposed to Actioncoach’s marketing which claimed no matter who you are, what your background is, etc, you will make it. You’ve also seen the reaction here when someone make claims about Actioncoach they perceive as ridiculous even though they are not too happy about their own experience with the franchise. (See reactions to ohreally.) So believe what you will.

5. Bruce Frame is a Master Licensee, so are most of the internal ‘coaches’ praising and congratulating Brad Sugars… Even the most unhappy Master Licensee if there is one, will NOT say something negative in public about Brad Sugars, as that is like spitting in their own faces and affecting their own franchise sales… again, it is up to you what to believe, as someone else said above whether they find more credibility in an anonymous, unmoderated forum… or on a moderated, franchisor controlled marketing releases.

6. No people should not take what is written here just because ‘we’ say so, neither should they take Actioncoach’s word just because a bunch of SALES rankings say so… they can make up their own minds… for instance, you can always get a franchise and tell us your experience 6 months from now, if you last that long.

So Author, it is up to you, I am sure you are not a shill because what shill would take the time to do research, cut & paste Action marketing info & links here, just like what franchise attorney would write pages long articles on anonymous forums… you probably have the info at your fingertips already…
NZex on June 21st, 2009 6:09 amIf Brad Sugars is so bad, why does he keep getting nominated and winning so many awards? He’s frontrunner for a coveted Chairman’s Award by people who have nothing to gain and lots of people are cheering for him to win:Author:
1. Search for Bruce Frame and others on bradsugars.com on the link you provided… coaches, MLs… in what way do these people ‘have nothing to gain’?

2. Check out the selection criteria for Stevie award and the rest…

All the people griping seem to be anonymous. You could be competitors, for all we know.

Not a shill….? All those praising ActionCoach like yourself is anonymous too… hmm… isn’t that interesting?

I always wonder why ActionCOACH believe their target audience is devoid of common sense and rational thinking ability. I believe potential franchisees will be more put off by these attempts at insulting their intelligence much more than by the negativity of anonymous posters. Ask anyone who read soulcast. Now they are going to repeat exactly the same mistake here. Interesting. I believe it will be the same here as in soulcast. People will be more disgusted by the ‘clever attempts’ to counter the negativity, rather than the actual negativity itself.
Not-a-Shill on June 21st, 2009 10:36 amGee Author,but I’m just asking what many are thinking.
You could be competitors, for all we know.

Who are the ‘many are thinking’ and who are the ‘we’ you are referring to?

So franchise attorney failed, neutral party failed, independant 3rd party failed, bogus client failed, junk codes failed, obscenities failed, fake forum administrator failed…. here comes the latest incarnation: righteous indignition!

Of all the quotes on bradsugars.com, trust you to pick Bruce Frame, ActionCoach team member to illustrate your point of plenty of support from people who have nothing to do with Action :-p

By the way, providing those links and statistics the way you did? You’ve just moved this page up google rankings. Congratulations. Another own goal scored. Another reflection of how Action view their prospects & target market. Another sign of how much they believe in their own cleverness.

I read with amusement in soulcast how one of your ‘neutral’ shill desperately backpedalled when he/she realized he/she was dealing with a genuine prospect who went back to the ML and gave her a piece of his mind about the unprofessional way they tried to get him to sign up. They just never learn.
author on June 21st, 2009 11:23 amcoach2007:
Thanks for your excellent response. Lots of good points to consider.

1. Good point. And Entrepreneur rankings are certainly designed to gain ad sales. Though there are no awards that I know based on unit economics.

2. Being good at selling franchises is not necessarily a negative, especially when your Master franchisees rely on you to teach them. I wonder how much of the overselling is by Master franchisees?

3. Point taken. I’d add that with nominees like Nu-Skin and others it seems like it may be a bid for top pirate. Definitely suspect.

4. “The ‘griping’ here, if you read carefully, again, are quite clear that people do make it and what sort of people will make it…”
I agree that the discussions of the negatives and sites like this are useful in balancing the corporate hype. I also realize that some of the “gripers” may have legit points, followed the system & still struggled/failed. At the same time, some of the “gripers” are looking for someone to blame & would have failed with any system. The existence of the latter doesn’t negate the former. It’s just tough finding the truth.

5. Comments like Frame’s are obvious kiss-ass comments. But your point about Master’s is interesting. Doesn’t it go both ways? Can the franchisor really reign in Master’s who oversell the opportunity… since they need to recoup their investments? How much of this is due to the Master structure?

6. I think this is an excellent point. The “gripers” point out the issues that prospectives should pay attention to and look for red flags. The biggest seems to be that ActionCoach is billed as something anyone can succeed with, when it may be that only super-sales types in the right market can make a go of it.
author on June 21st, 2009 11:24 amNZex & Not-a-Shill: I don’t give a damn if I drive up the search engine rankings. Notice I don’t avoid using keywords like ActionCOACH & Brad Sugars. You look kind of foolish by making a claim when it’s blatantly wrong. I have no doubt Brad Sugars is a raving egomaniac living the good life off the many franchise fees and royalties ya’ll have sent his way. Still sound like a shill?If you want to get your point across, do what coach2007 did. Even if you suspect a shill, answer coherently and rationally. You’re not just speaking to the other commenter, but to the thousands of prospective zees reading this thread. Attacking others makes you look petty and like whiners out to blame others.
Not-a-Shill on June 21st, 2009 12:23 pmLOL Author, what did I say about “righteous indignation” being the latest incarnation?NZex made 2 posts, both were factual. One about internal rankings and the other was about ActionCoach is NOT a scam in his opinion, just not meant for everyone. So… in what way was he ‘petty and whiners out to blame others’ unless you really are a representative of ActionCoach and made a freudian slip when you get upset about what he said about YOU
You are right there could be thousands reading this so they can judge.

ps: Interesting how you praised Coach2007 and at the same time not-so-subtly deflect the blame from Brad Sugars to Master Licensees.
Crocodile Dundee on June 21st, 2009 1:44 pmExcellent blog running here and great to see people who seem to know Action from the inside letting people aware of what it really takes to succeed with this very demanding concept;
I did my induction training with ActionCoach in fall 2005 and there were 23 in total on my course. Of those 23, only 10 are now left including two guys who are M.L.’s
Like NZex, I don’t know if you can really say the ActionCoach franchise is a scam but it is definitely far harder to succeed in this business than you are lead to believe during the sales process and I totally agree with those who say that you really have to be a great salesman to make it.
I can also still remember being very surprised by some of the people I trained with, their youth, their obvious lack of business experience and even their lack of basic schooling. Unsurprisingly, none of these people are still franchisees and you can only wonder about the ethics of those who allowed them sign on in the first place.
Overall, I have done OK but believe Action recruits far too many people who have little or no chance of making it with such a complex concept.
author on June 21st, 2009 2:09 pm“Interesting how you praised Coach2007 and at the same time not-so-subtly deflect the blame from Brad Sugars to Master Licensees.”I’m not deflecting blame. To the contrary. Increasingly, I suspect that Master Franchising itself is a big con. The Master buys the right to sell franchises. Like Coach2007 said, once he’s in, criticizing the franchisor is suicide, even if he realizes the concept doesn’t work and the franchisor is a scumbag. The Master has to either bite the bullet and get out, or sell his soul and become a co-scumbag to try to sell his way out of the trap he got himself into.
Two wolves inviting a sheep to dinner are still two wolves.

Does anyone know a Master Franchise system that actually works for all involved?

And what are these Masters paying up front?
M.L. Viewpoint on June 22nd, 2009 10:04 amInteresting to see people asking questions about the M.L.’s role in the ActionCoach set-up. Since it is mostly they who recruit franchisees they are obviously key players however they are also franchisees themselves. The message below, sent out to all the M.L.’s about a year ago by Actions legal counsel shows that Action openly forbids it’s M.L.’s from giving M.L. prospects any information which would allow these guys to know if they would be operating under the same rules as those who joined before them. BTW, does anyone know if this is actually legal?In practice Action constantly tries to shift the economic terms to its advantage even if it means putting a new M.L. in a financial position where he can only succeed by cutting corners on the quality of the people he recruits. For example the performance targets mentioned below require M.L.’s to recruit a certain number of franchisees every year and pay a minimum monthly royalty which increases over time. Even if they fail to meet this target they still have to pay the corresponding monthly royalty to Action. Since the coaches are also on fixed monthly royalties this system really does start to look like a pretty classical pyramid scheme.
In all cases Action gets most of its money upfront, both from the new M.L. and from the franchisees recruited by the M.L. The M.L. also has to deal with the fall-out from all of this but it is either that or he/she has to walk away from what is generally a very big investment. Big dilemma for the people concerned which was very well summarized by Author in the previous post.

Dear All,

It has recently come to our attention that prospects for our Master License opportunity (particularly throughout Europe) are engaging some of you on discussions regarding the confidential terms of your Master License Agreement. We take this opportunity to remind you that the terms including, but not limited to, Master License Fee, Royalty Splits, Marketing Fund contributions, Renewal periods, vendor finance terms (if any), Performance Requirement, Renewal fee, or any other economic or non-economic terms (“Terms”) of your Master license Agreements are confidential. That is, the Terms, are strictly between ActionCOACH and you. We do not consent to Master Licensees discussing the Terms of their Master License Agreement with third parties (other than your lawyers and financial/ business advisors).

Please be mindful that the Terms of your Master License Agreement are commercially sensitive. If we discover any breaches of the confidentiality provisions related to unauthorized disclosure of the Terms (including between Master Licensees) we will have no other alternative than to seek the appropriate remedies for the breach. We suggest that if a prospect or another Master Licensee (regardless of which country the Master Licensee or prospect resides) requests you to disclose confidential information related to your agreement that you simply inform them that such Terms are confidential and that you would be required to obtain written consent from the Franchisor to disclose that information and let us know that a request has been made for you to disclose confidential and commercially sensitive information.

If you have any questions in relation to the above, please call me to discuss.

NB. Also posted in this week’s ML Update on Members.

Jason M. Cooksey
General Counsel-Global
ActionCOACH
The World’s #1 Business Coaching Firm
5781 S. Fort Apache Rd.
Las Vegas, NV 89148
Phone: (702) 795-3188
Fax: (702) 795-3183
Cell: 702-374 4554
guest on June 22nd, 2009 11:49 amIt would be interesting to ask Mr. Cooksey how legal documents and business deals that are made publicly available are also deemed confidential? Don’t those franchise listings in Entrepreneur and elsewhere contain the fees and terms? You can purchase documents on UFOC.com or getthem for free at CaleasiSearch ActionCoach here: http://134.186.208.228/caleasi/pub/exsearch.htm
It seems unlikely that it would be “actionable” if they sent the same documents out to many franchise prospects. It also seems to be an attempt to circumvent the FTC regulations, which require access to current franchisees by franchise prospects. Perhaps a franchise attorney can clarify if it’s legal to restrict this info as a trade secret… someone other than Cooksey.
Coach2007 on June 22nd, 2009 12:42 pmInteresting that even MLs are coming out of the woodwork to share their side of the story.I can’t share the ML side of the story since I was a Coach but judging from the ML communication shared above, I can take a stab at what they are trying to avoid.
In Coaches agreement, they included a clause that says we cannot testify in lawsuits against them… when I asked them (ML and her attorney) what if I get subpoenaed, they refuse to answer me and just repeatedly warn me I will be breaching the agreement.

The internal communication above seems to be another attempt to ‘divide and rule’ and prevent both coaches and MLs from comparing notes with each other.

My lawyer told me in the country I was operating in; franchise agreements need to be standard across the board, if any coach get hold of proof (I.e., another Coach’s agreement) that shows clauses are not the same, I can get the entire agreement repudiated due to misrepresentation. That is probably what they are fearful of. Just my theory.

Personally, I got out during the renewal process as the new agreement was much more lopsided than the old one. One of the new clauses specified that in case something happens to me, my estate needs to take over payment of admin fees while alternative arrangements are made. I found it ridiculous as I owned a Primary Practise Coach License which clearly specifies I am the only person authorized to coach unless I nominate someone else, subject to Action’s approval (& additional payment to get the person trained), at which point I can no longer be involved in coaching.

My lawyer advised usually franchises such as Action where there are no assets and the person owning the business is running a private practise, the license simply cease to exist upon franchisee’s demise. Not Action apparently. I can’t imagine if something were to happen to me in the next 7 years, my unemployed wife and kids will be saddled with paying Action admin fees!
M.L. Viewpoint on June 23rd, 2009 8:11 amCoach2007. I have recent copy of the U.S. franchise contract and this is what it says regarding what happens if you die;” If you die (or any owner dies, if this Agreement has been transferred to an entity), the executor may terminate this Agreement without paying a termination fee by signing a termination agreement and release satisfactory to Master Licensee and Franchisor.
Upon executing and submitting the appropriate termination documents, the estate and its representatives will have no further obligation under this Agreement except for any matters that exist as of the date of such termination.”

If you have something different would you like to do a copy paste of the relevant clause in one of your posts. Could you also provide a copy of the clause where it says you can’t testify in lawsuits.

The contract I have does exclude class action – “Arbitration will be conducted solely on an individual, not a class-wide basis, unless all parties so agree.” but I haven’t picked up on any clause where it forbids you from testifying.

Regarding the comments from Guest, there is indeed a generic M.L. contract which is posted on the site you mentioned but the figures for minimum monthly royalties are not filled in. This allows Action a lot of scope for adjustment on a case by case basis.
The Art of Transparency on June 23rd, 2009 10:02 amOn his blog http://www.bradsugars.com/the-good-the-bad-and-the-internet
Brad Sugars provides some advice on making the best use of the internet, specifically what to do if you start getting adverse publicity:

“Here’s what do you do if you are attacked on the Internet … ?

5 things that are vital …

1. Answer EVERY allegation with total transparency but only do it on a site that YOU CONTROL … never answer on their site, put a link from their site to a site you control …”

Now most of the negative allegations about ActionCoach concern concealment of attrition rates, average earnings per coach and other such subjects but I have yet to see Action practice what Brad preaches above in these particular areas. On the contraryn, all of the Action controlled sites contain nothing but praise for Brad, Action etc..and the above blog was no exception with lots of Action groupies providing ringing endorsements. The fact that they received an e-mail from Head Office on the 22nd May explaining that it might be a good idea to go and make a post obviously had nothing to do with it. This was simply a spontaneous outpouring of praise at a level which would make pretty well any of the worlds remaining autocrats green with envy. Neil Sinclair was yet again in the front line with this contribution

Neil Sinclair says: 2009/05/25 at 14:20

I have been with ActionCOACH since 2001. This has been a fantastic business for me and an absolutely amazing experience – long may it continue. The ActionCOACH Business, the people in it, the culture, the clients and the suppliers and supporters of ActionCOACH has been phenominal. Through the ActionCOACH business I have stepped onto the Entreprenuerial Ladder, I have coached dozens and dozens business owners, changing their lives for the better, as part of this I have massively grown both professionally and personally and an even more amazing side-effect of being part of ActionCOACH is the transformation of my whole family, including my wife and my two daughters. All of my immediate family have worked in the ActionCOACH business at some stage and they all have been exposed to the success principles we adopt and teach – what more could a husband and father offer his family…the knowledge and wisdom how to succeed in life.
In addition to these experiences, the Global travel that we have been exposed to as part of our own training and development to regional and global conferences have been real family adventures that we have all loved.
We love this business – Thank You to Brad Sugars for starting the company and ‘Thank You’ to all the people in the ActionCOACH Business on a Global level whom collectively make this business the amazing journey it is.

Neil, who has been with Action since 2001, is an M.L. in the U.K. which means he is very much a stakeholder in all of this. He presently has a team of 34 franchisees which includes 6 firm owners for which no earnings data is available. For the others the breakdown in earnings performance at the end of May was :

Bronze level – 16 (Gross monthly earnings < 6000)
Silver level – 9 (6000 < Gross monthly earnings < 12000)
Gold – 3 (12000 < Gross monthly earnings < 25000 )

Neil has lost 7 franchisees since the beginning of the year and has recruited 3 new people..

Getting closer to home here is the story for Kevin Alft, another veteran ActionCoach M.L. At the end of May he had a team of 25 coachs and 7 Firm owners based in California, New Mexico, Utah, Southern Texas, Idaho & Hawaii.

23 of the 25 coaches listed were Bronze level which means they were grossing less than 6k per month out of which they have to pay a 1.8k monthly royalty, a 5% marketing fee and their business expenses. The remaining two were silver level which is pretty well the minimum necessary for survival.

Confirming the comments already posted here, this means that the vast majority of these guys (and gals) are losing money every month they stay with Action. Incidentally Kevin has lost 6 franchisees from his team since the beginning of the year but as he must be an excellent salesman he has found 7 new people, mostly in California, to replace those he lost elsewhere.

This sort of data is what I call transparency and supposing there are people from Action reading these posts I would like to ask them a couple of questions.

1) How many prospects would sign on if they were aware of these figures up front?

2) Are these guys rogue M.L.’s or is this just business as usual?

Last thing, any Action franchisee reading this can get this performance data by going onto ActionMembers.com going to Homerun/Directory and looking up the M.L. they are interested in. To get a feel for the attrition rate you just need to do it from time to time.
Coach2007 on June 23rd, 2009 10:32 amHi ML Viewpoint,I am sorry I am not willing to post it here because I am not from the States and if I do, I can probably be traced if the clauses are country specific. Sorry. (Which again raise interesting questions because one of the thing I was told was the agreement was drafted by HQ in Europe, it is non-negotiable because it is standard, even clauses that don’t apply where we are still cannot be removed because of the possibility of ‘future enforcability’.)
The clause I have in terms of demise is DEFINITELY different from what you’ve posted here, I would have considered renewing the agreement otherwise! And I did not misinterpret it, it was confirmed by both my attorney and the ML’s attorney.

Ditto for the clause on not being allowed to testify in lawsuits against Action.

Unfortunately, I do not think my ex-colleagues would be able to use the information you provided to repudiate their agreements since you are also posting anom
Coach2007 on June 23rd, 2009 11:36 pm“Incidentally Kevin has lost 6 franchisees from his team since the beginning of the year but as he must be an excellent salesman he has found 7 new people,”He’d be making as much as a silver coach just from the initial license fees from 7 sales if they are primary coaches… therein lies the problem that a lot has posted here… MLs can afford to be mercenaries so long as they replace what they lose, nevermind success rate.
NZeX on June 24th, 2009 11:57 pmHe’d be making as much as a silver coach just from the initial license feesI believe you meant he will be making what a silver coach make in a YEAR from just the initial fees of the 7 sales. That is why support is secondary. My ML double as “Coaches’ Coach” supposedly to help us be accountable and grow… ask any coach in my territory whether the ML has even read any of Brad Sugar’s 14 books and understand what “the system” is. Unfortunately, no audit on MLs except on sales and as mentioned here countless times by many others and myself, so long as incoming coaches equal or exceed outgoing ones, it is ok as far as Brad Sugars is concerned because of how much they make from initial sales.
The Art of Transparency on June 27th, 2009 8:08 amAnother amusing little thing I have just noticed in Brad Sugars internet strategy is the use of key words like scam and fraud in his own sites. These words figure “innocently” in articles he writes and are even included in the tags on his own blog. That way someone who does a Google search using the words Brad Sugars or ActionCoach Scam/Fraud will almost certainly run into one of his own sites. Since Action already goes out of it’s way to saturate the web with it’s own material this further attempt to prevent anyone ever finding anything in any way critical of ActionCoach simply further highlights the efforts this organisation puts into preventing any sort of transparency about its operations and business practises.
Coming on top of all the restrictions on disclosure imposed on existing members of the franchise discussed in previous posts this starts to look very very ugly and one can only wonder how much more these people have to hide.
Well … on June 27th, 2009 5:21 pmDoesn’t it make sense for them to ignore or not discuss topics that their agitators focus on? Even if they gave you the answers, wouldn’t their detractors just spin it into more of a negative – fairly or unfairly?
yeah on June 28th, 2009 3:14 am“Doesn’t it make sense for them to ignore or not discuss topics that their agitators focus on? Even if they gave you the answers, wouldn’t their detractors just spin it into more of a negative – fairly or unfairly?”Yeah you are right, ignoring is much better than what they did on soulcast, so is subtle questioning
As for spinning… let the rational public decide.
The Art of Transparency on June 28th, 2009 6:48 amTo the extent that Action wishes to avoid any honest/open discussion on the subjects the “agitators” focus on like attrition rates and average earnings by coach yes it probably does make sense to try drown all of this out. However if they had nothing to hide, wouldn’t it be far simpler for Action to publish figures that would shut the “agitators” up for once and for all?
The obvious conclusion here is that ActionCoach probably does have a lot to hide and since their franchise model seems to be fatally flawed, at least for a very large majority of the people who sign on, a massive amount of this organisations effort goes into insuring that there is nowhere people can go to get some objective input.
Fortunately sites like this exist but unfortunately most people probably don’t see them until it is too late.
Craig on June 28th, 2009 10:31 am“Doesn’t it make sense for them to ignore or not discuss topics that their agitators focus on? ”Love the use of the word “agitators” in the above post. While you are at it you could also use the word “terrorists” . For your information , an agitator is defined as ” a person who tries to stir up people in support of a cause, often used in an unfavorable sense”.
So those of use who are trying to let unsuspecting people have some objective information on what they are geting themselves into before the commit tens of thousands of dollars to a business venture in which there is a very high proabability that they will get badly burned are “agitators”? Wow, what planet do you come from poster?

Rather than calling us agitators maybe you would like to comment on some of the facts that has been posted here, for example the information derived from Actions own FDD (my post dated 7th June) or the post dated June 23rd with some info on average earnings.

BTW, I am now pretty certain that Action also seriously misrepresented the attrition rate between 2006 and 2008 in the 2008 FDD. A little more verification to do and I’ll be back with more info on this subject.
ML Viewpoint on June 28th, 2009 2:28 pmBy using this link you can download a copy of the ActionCoach franchise contract as it stood in January 2007http://134.186.208.228/caleasi/PDFDocs/004727065.PDF
If you go to page 27 of the document you will find the following list of payments which franchisees had to make at that point in time.

ATTACHMENT 1
TO
BUSINESS COACH FRANCHISE AGREEMENT
(January 2007)

1. Master Licensee’s Territory: [Describe Territory]

2. Franchise Fee: $50,000.00

3. Royalty Fee: $1,500/mo

The Royalty Fee is due on the 1st day of each calendar month, except that no Royalty Fee is due for the month in which you complete the initial training program or for the following two months.

4. Marketing and Advertising Fee: 5% of preceding month’s Gross Revenues.

The Marketing and Advertising Fee is due on the 5th day of each calendar month, except that no Marketing and Advertising Fee is due with respect to Gross Revenues in the month in which you complete the induction training program or the following month.

5. Training Fee: $25,000

6. Renewal Fee: $5,000

7. Transfer Fee: $5,000

8. Relocation Fee: $10, 000

9. Termination Fee: $10,000

10. Technology Fee: $1,250

In a more recent version of the contract (09/08) these payments have evolved a bit. The monthly royalty has been increased from 1.5k to 1.8k/month (that’s a 20% increase), the monthly royalty is due immediately after training rather than in the 3rd month following training and a 1.25k “Technolgy Fee” has also been added without any obvious extra service for the franchisees compared to the prior situation. Result, almost another 5k in up-front payments for the franchisees.

No doubt some people will think, “OK what’s the problem with that if the Action can get away with it?” Well I guess the real issue is how these changes were brought in. The franchisor, ActionCoach is the only beneficiary from the changes which were initially justified on the basis that these new fees would finance a new 3 day “Refresher Course” offered to franchisees between 3 and 6 months after their initial training. These (very expensive) refresher courses did take place for about 12 months but since very few people attended (because no one saw much benefit in going) they have since been abandoned. However the new fees remain.

Brad Sugars unconditional admires will no doubt yet again approve the mans brilliant business acumen, after all he did get his M.L.’s to accept this new scam. He gets a lot more money up front for every new franchisee signed on, no one else gets anything!

Those of us who have long understood that this mans only objective is to get as much money as possible as quickly as possible out of those unfortunate enough to trust him will see just another example of his unlimited greed. Since most people don’t get anywhere near the end of their contracts, constantly finding new ways to increase the initial payments is a key element of the ActionCoach business model.

ATTACHMENT 1
TO
BUSINESS COACH FRANCHISE AGREEMENT
(September 2008)

1. Master Licensee’s Territory: [Describe Territory]

2. Franchise Fee: $50,000.00

3. Royalty Fee: $1,800/mo

The Royalty Fee is due on the 1st day of each calendar month, except that no Royalty Fee is due for the month in which you complete the induction training program.

4. Marketing and Advertising Fee: 5% of preceding month’s Gross Revenues.

The Marketing and Advertising Fee is due on the 5th day of each calendar month, except that no Marketing and Advertising Fee is due with respect to Gross Revenues in the month in which you complete the induction training program or the following month.

5. Training Fee: $25,000

6. Renewal Fee: $2,500

7. Transfer Fee: $2,500

8. Relocation Fee: $5,000

9. Termination Fee: $10,000

10. Technology Fee: $1,250
ML Viewpoint on June 28th, 2009 2:31 pmSmall error in the post above. There was no technolgy fee (item 10) in the Jan 2007 contract.
Well … on June 29th, 2009 2:12 amI don’t have the ability to answer the questions you have posed about the attrition rates and average earnings by actioncoach coaches, just doing some reading on this site. It seems to me that most of the complaints are about things that would just turn into more problems if actioncoach addressed them at all. Wouldn’t it be worse if they did post this information? Wouldn’t it just get picked apart? How could they send warnings to franchisors/MLs about discussing those topics and then do the same thing?
Cialdini on June 29th, 2009 2:17 pmAnyone wondering how Brad Sugars and ActionCoach can hoodwink so many intelligent people would be well advised to take note of the Bernard Madoff story and this quote attributed to Josef Goebbels :“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
Brad Sugars and ActionCoach obviously don’t have the same powers to repress dissent as Hitler and Goebbels did but they try pretty hard using all the means that have been discussed in many of the previous posts including very restrictive confidentiality clauses, denial of the right to participate in a class action suit and total saturation of the internet with their own materials.

They have probably also read Robert Cialdinis book “Influence – The Psychology of Persuasion” particularly chapter 2, “Commitment & Consistency”. The key ideas in this chapter are presented below and I think these concepts go a long way towards explaining how a system that objectively creates so many losers still finds people to defend it. I would recommend that anyone thinking about buying an ActionCoach franchise read this book before signing on and those who are still being milked would probably also have a few BFO’s if they took the time to read it, no matter how painful the experience…

Commitment and Consistency
People have a desire to look consistent through their words, beliefs, attitudes and deeds and this tendency is supported or fed from three sources:

1. Good personal consistency is highly valued by society.
2. Consistent conduct provides a beneficial approach to daily life.
3. A consistent orientation affords a valuable shortcut through the complexity of modern existence. That is– by being consistent with earlier decisions we can reduce the need to process all the relevant information in future similar situations. Instead, one merely needs to recall the earlier decision and respond consistently.

The key to using the principles of Commitment and Consistency to manipulate people is held within the initial commitment. That is–after making a commitment, taking a stand or position, people are more willing to agree to requests that are consistent with their prior commitment. Many compliance professionals will try to induce others to take an initial position that is consistent with a behavior they will later request.

Commitments are most effective when they are active, public, effortful, and viewed as internally motivated and not coerced. Once a stand is taken, there is a natural tendency to behave in ways that are stubbornly consistent with the stand. The drive to be and look consistent constitutes a highly potent tool of social influence, often causing people to act in ways that are clearly contrary to their own best interests.

Commitment decisions, even erroneous ones, have a tendency to be self-perpetuating–they often “grow their own legs.” That is–those involved may add new reasons and justifications to support the wisdom of commitments they have already made. As a consequence, some commitments remain in effect long after the conditions that spurred them have changed. This phenomenon explains the effectiveness of certain deceptive compliance practices.

To recognize and resist the undue influence of consistency pressures upon our compliance decisions–we can listen for signals coming from two places within us–our stomach or “gut reaction” and our heart.

• A bad feeling in the pit of the stomach may appear when we realize that we are being pushed by commitment and consistency pressures to agree to requests we know we don’t want to perform.

• Our heart may bother us when it is not clear that an initial commitment was right.

At such points it is meaningful to ask a crucial question, “Knowing what I know now, if I could go back, would I have made the same commitment?”
NZeX on June 30th, 2009 12:08 amIt seems to me that most of the complaints are about things that would just turn into more problems if actioncoach addressed them at all. Wouldn’t it be worse if they did post this information? Wouldn’t it just get picked apart?If the actual figures are as impressive as the figures they are trying to hoodwink the public with, no one will pick it apart and discussions like this would not exist. It will be worst ONLY IF they have something to hide.
Former Prospect on June 30th, 2009 11:19 amHi ML Viewpoint,Thank you for sharing the agreement.
When I was evaluating the franchise, something the ML told me came across as odd to me, perhaps you can shed some light…

I was informed if I sign a client on for a year contract, even if the client drop out of the coaching program, 5% M&S is still due for the entire contract. I told the ML that didn’t seem fair to the coaches. She told me it was a system designed to ensure coaches are able to deliver and only sign quality clients.

Any comments?
coach2007 on July 1st, 2009 11:58 amHi Former Prospect,I can answer on behalf of ML Viewpoint: what the ML told you are absolute BS and another example of Brad Sugars either not aware (or pretending he’s not) of what his MLs are doing to extract extra cash from unsuspecting franchisees. You only pay marketing fund for collected revenue, not projected revenue.
There are good MLs in the network. No doubt. But do thorough due diligence before you sign on the dotted line. See what Coach2003 wrote above regarding his ML. His story is not unique. Many others have expressed similar stories regarding their MLs in my time there.

Also very important for corporate ‘refugees’ who think Action is an escape from corporate politics into entrepreneurship as ActionCoach’s marketing materials are fond of promotion. You are NOT getting away from corporate politics; instead, you are probably getting into something much worst. Brad Sugars love hyperboles. Anyone, especially MLs, who speak the lingo and write the lingo in the internal forums, can get away with murder regardless how they behave outside of the ‘official’ functions and forums.
NewCoach on July 2nd, 2009 10:10 amI agree 110% with what Coach2007 wrote. I am still an active coach, doing okay for the past 1+ year but money aside; I find it difficult to accept some of the hypocrisy and cover-up going on in the system.For example, it is true what coach 2007 said, that regardless of how ‘nasty’ an ML is to his/her coaches or his/her team, it doesn’t matter so long as he/she make the right noises when around Brad at conferences and in the forums. Brad just wants to hear what he wants to hear, everything else is below the line. For example, if an ML abuse his/her position to get business at the expense of his/her coach, we are supposed to ‘wifle’ it out, i.e., talk it out in a meeting and leave things there, considered settled once everyone has expressed their views, regardless of the actual damage done to a coach.
In more professional organizations, they resolve such disputes through Domestic Inquiry where evidence and witnesses are looked at and guilty parties are punished or even terminated. NO CHANCE of that ever happening to an ML no matter what they do since the ’system’ says resolve through ‘wifle’ and leave things in the room when the wifle is over. Plus, the ML chairs the wifle. Can you see how ridiculous the situation is for a coach?

I can also confirm what others wrote here regarding the internal rankings, it did reveal how unhealthy the franchise is in terms of franchisee income and people are talking internally. They realized the mistake and pulled the ranking info abruptly without warning when an ML innocently asked in the forum how come his new coach without any sales to his name was ranked 700+ when we were supposed to have 1000+ coaches. That was a couple of months ago.

Recently, after pretending it never happened, they sent an amusing message to explain the ranking removal: supposedly there were mistakes in the KPI system which lead to wrong rankings therefore they had to pull it out while rectifying it. This is interesting because every single coach know their own KPI and know there was no mistake and furthermore, coach levels (Gold, Silver Bronze, etc) which is based on the same KPI is still actively displayed… knowing the coach level does not allow one to see where one stand in the system unlike the global ranking which shows exactly how much a coach earn and where he/she stands, which made it easy to gauge the health of the franchise. Instead of acknowledging and rectifying, Brad and his management team tell one lie after another to cover up previous lies.
NewCoach on July 2nd, 2009 10:20 amMLViewpoint:The agreement you attached was the one I had. I did have a big argument with my ML at that time on the Conference Attendance Clause where it specifies conferences are compulsory and there will be a fee imposed. I felt (and still feel) the clause is way too general and the fee could be anything, Action doesn’t have to justify at all how much they charge for conferences and yet coaches are forced to attend or risk breaching their agreements.
Coach2007:

I just read what you wrote above how Brad forces coaches to attend conferences via peer pressure prior to the 2007 agreement. Peer pressure didn’t work I suppose…
Coach on July 3rd, 2009 11:54 pmML Viewpoint:I believe the new “technology fee” is imposed for 2 purposes, one is to make more money upfront but the other is also to prevent refunding coaches who paid for the CRM earlier.
If you remember, Brad Sugars unilaterally imposed a new in-house developed CRM on coaches on subscription basis and a lot, under pressure, paid the initial registration fee and a couple of months of subscription fees before the pressure got to Brad Sugars and they have to stop the project. By right, they should be refunding coaches. Instead, Brad Sugars brilliantly thought of a scheme to avoid doing so, in an email to congratulate those who paid as having paid for future technology investment in advance. He got away with it as usual. Supposedly those who choose not to use the new crm can continue using what they have, but no refunds were due to them.

NewCoach:

Speaking of unilateral decision making and conferences, I am sure you have received an email recently informing coaches about a new 50% cancellation fees for global conference, which will be charged to your credit card even if you haven’t paid. So long as you have indicated your intention to go earlier, you will be charged. There was never such a condition at the point of registration. It came now just before the actual event, which I am sure due to the global meltdown, many coaches are still recovering and chose to conserve their cash. They just got a nasty shock from Brad Sugars: “Hey, just to let you guys know I am charging you 50% fee regardless of your attendance, never mind that I didn’t tell you this before, never mind that it might not be legal if you fight it, never mind that you have not paid a single cent to date, never mind that I didn’t even tell you what the fee is, I have your credit card details and you can’t stop me.”
Crocodile Dundee on July 4th, 2009 1:52 pmTo NewCoach
The terms and conditions for Global Conf included a 50% cancellation fee for any cancellation made between 60 and 30 days of the event. I guess people need to read this sort of stuff before signing up….
See below -

Accept Terms & Conditions

The terms are as follows:

1. ML Conference-(Reception+ 5 Days+ Cultural Event+ Awards) AUD $1,745

2 .FIRM Conference-(Reception + 4 Days + Cultural Event + Awards) AUD$1,595

3. Coach Conference-(Reception + 3 Days + Cultural Event + Awards) AUD $1,395

4. Spouse/Guest Conference-(All above) AUD $1,395

5. Awards Dinner ONLY – Spouse/Guest/Family Member (Adult) AUD $ 125

6. Awards Dinner ONLY – (Child) AUD $ 75

7. Spouse/Guest Social – (Reception + Cultural Event + Awards) AUD $ 300

There is no separate pricing for just the Reception or just the Cultural Event – these must be part of package.

If your spouse / guest would like to attend the presentations of our guest speakers, they must purchase a conference package.

Payments:
All payments are in Australian Dollars. GST will be applied where applicable.

Refunds:
100% 60 days prior to event*
50% 60 – 30 days prior to event*
0% within 30 days of event*

*ALL REFUNDS are subject to a $50 cancellation fee that will be deducted from the total refunded.
*50% cancellation fee within 30 days of event.
Request for refund must be submitted by email to: conferences@actioncoach.com
ML Viewpoint on July 4th, 2009 2:29 pmGreat to see so much sharing of information going on here. Does not necessarily do much to improve the situation of those who already realise they have made a mistake but at minimum it should help people who are looking at this franchise to ask better questions before signing on.Again looking at some contractual stuff here is what is stated in the M.L. contracts regarding reporting.
F. Reporting. Master Licensee must submit the following reports:
1) Action Plan. A report entitled, “Action Plan,” which outlines the goals, strategies, and actions to be set by Master Licensee for his/her franchise development. This report shall be completed and delivered to Franchisor within 10 business days of Franchisor’s request.

2) Key Performance Indicators. A report entitled, “Key Performance Indicators,” which summarizes the activities of Master Licensee and its Licensed Coaches for the previous calendar month. This report shall be completed for each month of active operation and delivered to Franchisor by 5:00 pm Pacific Time on the 7th of each month.

3) Financial Statements. Annual financial statements must be completed and delivered to Franchisor within 90 business days after the end of Master Licensee’s fiscal year.

4) Other Reports. Such other weekly, monthly, and general reports as Franchisor may specify from time to time in the Manuals.

Master Licensee acknowledges and agrees that the completion of the abovementioned reports is mandatory and a primary responsibility of Master Licensee. Franchisor may, at its discretion, change the form and substance of the reports at any time.

Looks innocent enough but in Nov 2008 Brad Sugars decided that this is what he wanted in practise.

ActionCOACH ML Reporting Requirements …

ActionCOACH ML Reporting Requirements …

DAILY REPORTS
Who What When
Bronze & Silver ML’s Activity Tracker COB Daily
Bronze and Silver ML’s Daily Action Lists COB Daily

WEEKLY REPORTS
Gold and Above ML’s Activity Tracker COB Friday
All Webinar Homework COB Monday

MONTHLY REPORTS
All Online KPI’s 15th Follow Month
All Sales & Marketing COB Monthly
All Team Newsletter COB Monthly
All KPI’s rankings etc to Coaches 15th Follow Month
All New Coach Reference Checks COB Monthly
All Coach R,A,G Report COB Monthly
ML’s with Orphan Coaches Activity and Growth Report COB Monthly
All Non-Compete Breach Suspects COB Monthly
All Copyright Breach Suspects COB Monthly
All Coaches only using approved suppliers

QUARTERLY REPORTS
All 90 Day Plan 15 Day pre EOQ
All Marketing Plan 15 Day pre EOQ
All Marketing Budget 15 Day pre EOQ
All Firm and Completion Rates 15 Day Post EOQ
All Copies of all Marketing 15 Day Post EOQ
All List of BOTM Sent out 15 Day Post EOQ
All Coach Contact Listings 15 Day Post EOQ
All Disclosure/FDD Receipts 15 Day Post EOQ
All P&L and Balance Sheet 15 Day Post EOQ
All Business Bank A/c Statement 15 Day Post EOQ
All Marketing Bank A/c Statements 15 Day Post EOQ
All Marketing Fund Report 15 Day Post EOQ
All Exit Release Agreements 15 Day Post EOQ

HALF YEARLY Reports
All Team Lists and Captains 15 Days Post EOHY
All Coach Audits 15 Days Post EOHY
All ML Audit 15 Days Post EOHY

ANNUAL REPORTS
All Business License / Registration Annual Renewal
All Insurance Certificates Annual Renewal
All Phone Change Paperwork January
All Vision & Mission January
All Business Plan January
All Territory Map Updated January
All 1, 3 and 5 year goals Updated January
All Coach Support Agreements Updated January
All Team Common Goal Updated January
All Office Pictures Updated January
All Organization Chart Updated January
All Legal Agreement Templates Annual Renewal
All P&L and BS for Year Annual Renewal
All Debtors and Ceditors Annual Renewal
All Annual Budget Annual Renewal
All Taxation Returns Annual Renewal
All Royalty Audit Updated January
All FDD / Disclosure Documents Sept 30th

ONCE OFF REPORTS
All Certificate of Incorporation Once off and if updated
All Share Certificate Once off (If approved for change)
All ML and Senior Team DiSC Once off and if updated
All ML and Senior Team VAK Once off and if updated
All ML and Senior Team CV Once off and if updated
All Franchise Agreements Once off and if updated

Moral of the story. Once you are in the system ,Brad Sugars and ActionCoach consider that they can change the rules of the game any time they like….
NZex on July 4th, 2009 3:15 pmHi Crocodile Dundee,Me think u confused “Coach” with “New Coach”.
“Coach” raised the refund issue.

“New Coach” wrote about conference attendance clause in his/her franchise agreement as posted by ML Viewpoint, where the clause say “compulsory & fee applicable” which in his/her opinion was too open a clause.

ps: In my time there, global conf reg is offered during regional conference with ’special incentive’ for on-the-spot-way-in-advance reg, where NO terms & conditions were given at that point of reg… perhaps “Coach” was referring to that (assuming the practise remain the same, where t&c plus agenda is released way later after the early reg offer)…?
Well … on July 4th, 2009 5:46 pmHow is everyone doing those bold quotes? Anyhow …“… a new 50% cancellation fees for global conference, which will be charged to your credit card even if you haven’t paid. So long as you have indicated your intention to go earlier, you will be charged. ”
That’s amazing!!

“An inexperienced person evaluating their franchise might see all the positive feedback about coaches as endorsement for the franchise system and equate it with positive feedback about how Action is treating their franchisees. I hope for their sakes they can differentiate the two.”

Well, some coaches have endorsed the franchise system. There are many videos on you tube to this effect. Even if the channel is managed by action coach, that many people must have said something positive for a reason.
Coach on July 5th, 2009 1:21 amThere are many videos on you tube to this effect.Hi Well… u can use tags…
Anyway, regarding those YouTube videos… started at one conference then became standard in franchise training… it was positioned to the coaches as new ‘innovation’ for coaches to promote themselves(i.e., coaches, not the franchise, sneaky sneaky…) online and done during the conference or training when everyone is still high… they start by asking questions on why a prospect should choose them as their coaches and dovetail into questions on why they are part of the franchise and why others should join the franchise… as I said, sneaky and not a true reflection of what an experienced franchisee felt… it is a reflection of how a franchisee felt in the midst of his/her training or the midst of an ongoing conference.

So… ya really wanna talk about those videos… call up coaches on those videos will ya or see how many are actually still around for ya to call

Just like NZeX’s response to Croc Dundee, there’s always 2 sides to every story… one side unfortunately is seldom seen until the existence of such threads.

many people must have said something positive for a reason. ?

’nuff said mate!
Coach on July 5th, 2009 1:25 amps: The YouTube filming was done as one interview and then split into two to look like one testmonial video for ActionCoach and one intro video for the Coach…
Researcher on July 6th, 2009 12:59 pmG’day mates,Coach prospect here doing due dilligence on ActionCoach. The ML warned me I would find a small group of disturbed people online who are disgruntled employees trying to sabotage their business. I was shown a personal letter written by Brad Sugars claiming his family is attacked, his dignity is attacked and yet he will remain calm as the truth will prevail. He said those who believe what they read online are losers and he is sure winners will ignore them.
Honestly, I was actually keen on the franchise until they brought up the subject and shown me the personal letter. It made me curious, so I did a search online.

I found soulcast first, read as much as I can before what looked like clear attempts to stop the thread made it too tedious to scroll further. But I personally conclude that it is more than a few disgruntled employees and ActionCoach has a lot to hide otherwise they did not need to stop the thread using underhanded tactics. It was easy to draw that conclusion.

Then I found the ripoff reports. One in particular was highly suspicious to me, the poster was initially negative but balanced. Subsequently, he retracted his own post, but this time it was completely opposite and ‘apologetic’ of his earlier post. It is suspicious because it came across like the poster is under legal pressure to retract what he wrote. I can’t remember the url but those interested can do a seach on ripoff.com.

Then finally I found a copy of the franchise agreement on this thread and this help me made up my mind; better be safe than sorry.

Sorry ActionCoach, you are just too slick and manipulative for my taste.
Researcher on July 6th, 2009 1:05 pmWent back to ripoff to get the report link:http://www.ripoffreport.com/reports/0/383/RipOff0383890.htm
notice the ‘before’ and ‘after’ tone…
guest on July 6th, 2009 4:12 pmResearcher:
That’s common on Rip-offReport.com. Some poor bloke vents his spleen on there, then gets a threatening letter from an attorney and finds out he can’t get it taken down. He posts a retraction saying he was wrong and the company is wonderful.

The other thing that happens there is some companies pay off ROR to “review” the situation and ROR comes back saying all is wonderful with the company everyone maligned. It allegedly costs tens of thousands to buy the pos rating, and a monthly “monitoring” fee to keep from getting slammed in the future.

Quite a racket on both sides.
Well … on July 6th, 2009 10:59 pmWhy would a business coaching firm, that presumably teaches about proper business and team building, have so many “disgruntled employees”?
Just Wondering on July 7th, 2009 7:38 pmI would like to know if anyone has any inside information on the lawsuit Actioncoach filed against their previous sales manager Richard Bernstein. I would like to also know if a good part of these complaints were generated out of his conduct and the fact that Brad Sugars was in another country leaving Rich Bernstein to run things
Mark on July 7th, 2009 10:45 pmI do not know anything about the lawsuit. Rich was one of the people that lied to me, although I was also lied to by my Master Licensee. I don’t believe that this has anything to do with Brad’s location at the time.
Coach2003 on July 8th, 2009 4:55 amHi Just Wondering,I was in Action a couple of years before they move to the US under a ‘rebranding’ exercise.
The troubles discussed here and elsewhere regarding MLs, number of coaches dropping & not making profit, etc, started long before Brad Sugars enter the US market.
Coach2003 on July 8th, 2009 4:57 amps: Brad’s troubles with Richard Bernstein gave him a convenient excuse to lay it all on someone else. Trust me, as a coach, I’ve never heard of Richard Bernstein until I read about him on soulcast, he wasn’t around long enough to make any impact.
AskBradSugars on July 9th, 2009 5:19 pmHas anyone tried askbradsugars.com to get their questions answered?
Mark on July 9th, 2009 8:14 pmIn response to Well, perhaps for the same reason that Bernie Madoff has so many disgruntled investors… sometimes things are well hidden enough that it takes years for the truth to be revealed.
Mark on July 9th, 2009 8:17 pmI tried to foward this link several times to an ActionCOACH yesterday, and it would not go into her Action e-mail box. As soon as I sent it to her personal in-box, it went through right away. Looks like Brad is now filtering e-mails that the coaches receive. Isn’t that interesting?
Crocodile Dundee on July 10th, 2009 7:37 amMark.
You should read the first part of Cialdinis recent post above or even read what Brad himself says on his blog http://www.bradsugars.com/the-good-the-bad-and-the-internet

His whole system is based on doing everthing possible to insure that people can only see information he has total control over and given all the other tricks he gets up to, it should come as no surprise that he is also filtering his franchisees e-mail.

The poor souls need to be protected from agitators and other such people who raise awkward questions that might just challenge him a bit.

nteresting indeed!
Response from Global Office on July 10th, 2009 4:46 pmBrad has a Q&A type blog http://www.askbradsugars.com dedicated to answering questions you may have.In fact he has already addressed many of the issues raised here.
Anyone who has a question for Brad – please feel free to contact him yourself, he is openly answering any and all questions.
clark on July 10th, 2009 9:51 pmThere is a new post started on soulcast:http://www.soulcast.com/post/show/221264/Actioncoach-is-a-Scam
Let’s see how these assholes react to having another soulcast page take off like wildfire.
Response from Global Office on July 11th, 2009 1:02 amPS: All you people get a life
Craig on July 11th, 2009 10:28 amI don’t know if the posts from « Global Office » really do represent ActionCoach but I did have a look at the http://www.askbradsugars.com site and only found one Q/A which was directly related to the subjects on this forum. I have copied the question and the answer below but since there is no date I can’t be sure if this question was posted before or after my own posts in early June.These posts were based on information available in Actions own UFOC/FDD’s from June 2006, June 2007 and June 2008 and present a very different picture to the one presented by Brad Sugars on his own site. Contrary to what Mr Sugars says, what the data says is the real reason so many of the franchisees have been in the system for less than 2 years is because so many leave well before they reach the end of their 1st contract. This also explains why, after an initial period of rapid growth, between 2004 and 2007, the overall numbers of franchisees are now stagnating or even declining.
Also, while ActionCoach declared 92 departures from their network between June 2006 and June 2008, it looks like the real figure is somewhat higher. The following table gives the names of people who were either listed in the ActionCoach June 2006 or June 2007 FDD or who were listed in other places in between these dates. However in June 2008 the names of these people appeared neither in the list of active Franchisees nor in the list of those of had left the system. There are 25 names in this list that should apparently be added to the 92 departures officially declared by ActionCoach for the period between June 30th 2006 and June 30th 2008.

Maybe “Global Office” would like to provide some clarifications…?

Name Territory 1st Date listed
Ted Clifton Central & SW Florida June 2006
Mike Kohler Kansas June 2006
Michael Cody Michigan June 2006
Ben Fahndrich Pennsylvania June 2006
Donald Kennedy Ohio June 2006
Tod Millard Texas June 2006
Terrence Devlin New Jersey Sept 2006
Alan Abrams Pennsylvania Sept 2006
Phil Raub Pennsylvania Sept 2006
David Krecklow Colorado June 2007
Dan Lugar Illinois March 2007
Terriann Hansen Nevada March 2007
Amir Avitzar New York March 2007
Michael Crouse Pennsylvania June 2007
Chris Mazzei Texas March 2007
Aimee LePage Washington June 2007
Dawn Heartwell Georgia June 2007
Jerry Rogers Idaho June 2007
Paul Lindenberg Idaho June 2007
Ted Dellas Ohio June 2007
James Skinner Georgia August 2007
Joanne Brenckle New Jersey August 2007
Tim Henderson Nebraska August 2007
Michael Redy Massachusetts August 2007
Rodney Schutt Tennessee August 2007
Craig on July 11th, 2009 10:30 amHere is the Q/A from Brad Sugars site.Q. Overall, since Action has been operating in the US since the year 2000, how come so many of the franchisees have been in the system for less than 2 years?
A. Part of our system of training is build around the idea of “critical mass,” and I think the numbers are more a result of us reaching a stage of critical mass in our business versus anything else.

Look, when we first came to the U.S., we had zero brand recognition, versus a 12% brand recognition number among business owners in Australia. We were really able to brand ourselves in Oz because we could buy a three network ad campaign and cover the entire country (with a population of about 20 million).
If we were to do that here, we would be buying L.A. or Orange County to reach the same amount of people, so we had to build the U.S. literally from zero.

If you look at what was essentially a “start-up” in terms of numbers of coaches and clients, I think we’ve done pretty well, especially in the last two and three years. The idea of coaching is not so foreign and is more widely accepted as an alternative to consulting, more white collar executives and professionals are looking at us as an option versus a retail or quick service franchise, and we’ve done a much better job in recruiting well-qualified people to be part of our franchise.

That all takes time. That we were able to do it over a period of six years in a country the size of the U.S, in what some would term as an economy that is more mature than developing – I see as a positive, not a negative.
ACTIONCOACH: Brad Sugars Answers Criticism | Unhappy Franchisee on July 11th, 2009 11:30 am[...] the target of much criticism on the web (see 100+ comments on ACTIONCOACH, BRAD SUGARS: Overview & Discussion), so ActionCoach founder & CEO Brad Sugars is promoting his Q&A format blog “Ask [...]
ADMIN on July 11th, 2009 11:31 amACTIONCOACH: Brad Sugars Answers Criticism
http://www.unhappyfranchisee.com/actioncoach-brad-sugars-answers-criticism/
AskBrad on July 11th, 2009 11:54 amGlobal office posted at 4:46pm and 1.:02am and yet telling off others to get a life? Huh?I have read the ‘responses’ in askbradsugars.com, as someone who’s been a coach as well as an outsider, let me add a few words to Brad’s responses:
1. On moving to US from Australia, yup agreed. Brad was not under threat from anyone, it was a planned rebranding move, those who were around since Action International days will know.

2. Change of name from Action International to ActionCoach. Yup, it wasn’t because Brad need to ‘clean up’ Action and start afresh, it was also part of the rebranding move, there were lots of dispute among the coaches community about the names we wanted.

3. How happy were his franchisees overall?

He said based on Franchise Business Review, an ‘independent body’, ActionCoach ranking is higher now as a justification for his franchisees being happy… impressive… but notice this about Franchise Business Review(http://www.franchisebusinessreview.com/tour/why.php):

i ) Their tagline is “We measure success by the return of investment we deliver to our clients.” clients being the franchisors using their service.

ii) They say “Everything that we do is focused on driving bottom line results for your company. That means growing franchisee satisfaction and unit performance. That means building customer satisfaction and loyalty to drive same-store sales and overall system revenues. That means improving candidate satisfaction and helping you successfully award more franchises to the right people. We measure our success by the return on investment we deliver for our clients.”

So in what way can FBR’s so called independant satisfaction survey be taken at face value since they have stated outright their business objectives and whose interest they are serving?

4. Brad’s response to why so many franchisees & ex-employees started competing firm.

“Look, we operate in a spirit of “co-opetition” with those who believe they are in competition with us, so I wish those people the best.”

Ha ha! He sue people for even claiming to be a coach after leaving Action.

5. On how come so many franchisees since 2000 has been with Action less than 2 years?

Brad’s answer was he was working towards “critical mass” , which is totally misleading and I really hope those who read what he wrote will read what others have written here as well. Brad is trying to distort the truth and deliberately mislead the reader as the real question was “how come so many franchisees couldn’t survive more than 2 years?”

6. Is Action’s materials a complete rip-off of other people’s stuff?

Answer is no, I agree with Brad here.

7. Brad must have pissed off a lot of people to have these nasty things written about him online?

His answer was as expected, he took the moral highground by claiming it is because of jealousy. Well, there could be some who were actually jealous but I suspect the majority of ex-franchisees were not jealous of him, rather they were pissed off by how the franchise promised the sky and delivered so little. How the ‘rules of the game’ keep changing in his favor.

8. On whether it’s beneficial for everyone to have a Business Coach, Brad’s answer is interesting:

“There’s one other place where coaching isn’t really beneficial – and that’s an organization that is ruled by politics and patronage. Typically, that kind of culture is un-coachable, simply because people are so entrenched in cliques and internal politics they are unwilling to give up their power or control to make any changes for a more effective, team-oriented and merit-based system. ”

But that literally describe a lot of the MLs in the system. A lot have been written above by others. Let me add one more: how is it that an ML is allowed to do strategic alliance with a coach in his/her territory to market for coaching clients? How can Brad expect other coaches within that territory to accept the ML as impartial when he/she clearly will favor the one he/she is in business with? Why is it allowed and is Brad even aware of it happening? Doesn’t this fit “entrenched in cliques and internal politics’.

askbradsugars.com is just a continuation of Action’s marketing juggernaut.
guest on July 11th, 2009 12:44 pmThis Unhappy Franchisee blog was posted on April 14, 2009 and started gathering some steam in May, 2009.In May, a slew of domains with “Brad Sugars” name were privately registered:
ASKBRADSUGARS.COM registered 06-may-2009
ABOUTBRADSUGARS.COM 15-may-2009
BRADSUGARSFRANCHISING.COM 15-may-2009
BRADSUGARSFRANCHISEE.COM 15-may-2009
BRADSUGARSFRANCHISE.COM 15-may-2009
BRADSUGARS.NET 25-may-2009

In June, more were registered:
BRADSUGARSSTORE.COM registered 03-jun-2009
BRADSUGARSSITE.COM 03-jun-2009
BRADSUGARSSHOP.COM 03-jun-2009
BRADSUGARSONLINE.COM 03-jun-2009

For someone who claims he doesn’t care about criticism, it sure looks like he’s trying to flood the Internet and search engines with positive sites that use his name.

PS When did the comment spam on Soulcast start? There were also a slew of domains registered in January, 2009. Think that was the beginning of the race to control the name “Brad Sugars” in the search engines?

BRADSUGARSVIDEO.COM registered 22-jan-2009
BRADSUGARSTOURING.COM 22-jan-2009
BRADSUGARSCOACHING.COM 22-jan-2009
BRADSUGARSBLOG.COM 22-jan-2009
BRADSUGARSARTICLES.COM 22-jan-2009
BRADSUGARSACTIONCOACH.COM 22-jan-2009
Response from Global Office on July 11th, 2009 9:02 pmIf they are privately registered, how would you know?
guest on July 11th, 2009 9:23 pmGlobal Office wrote: “If they are privately registered, how would you know?”
Registration info is still available, just some of the details were blocked on some of the domains thru private registration. Why? You tell us.
Domain Name: BRADSUGARS.NET
Registrar: GODADDY.COM, INC.
Whois Server: whois.godaddy.com
Referral URL: http://registrar.godaddy.com
Name Server: NS1.BLUEHOST.COM
Name Server: NS2.BLUEHOST.COM
Status: ok
Updated Date: 27-may-2009
Creation Date: 25-may-2009
Expiration Date: 25-may-2010

Registrant:
Domains by Proxy, Inc.
DomainsByProxy.com
15111 N. Hayden Rd., Ste 160, PMB 353
Scottsdale, Arizona 85260
United States
guest on July 11th, 2009 9:28 pmThe ActionCoach FFD for 2006 and 2007 can be downloaded directly from http://www.corp.ca.gov/CalEASI/caleasi.asp However as the 2008 FFD issued 30th June 2008 has not yet been made available you can download it using the following link………..
This is a complete document including a recent version of the ActionCoach franchise contract.
It’s a big .pdf file so it may take a minute or two to open:

ActionCOACH 2008 FDD (.pdf)
ADMIN on July 11th, 2009 9:38 pmHelp support us by visiting our sponsors:
Coach2003 on July 12th, 2009 12:38 amAskBrad is right about ‘Global Office’, posting here at 4:46 pm, 1:02 am and 9:02 pm, ie, round-the-clock but he/she saw it fit to tell others to get a life… didn’t know Action’s global office staff are supposed to work round the clock It actually remind me of a poster on soulcast goes by ‘bloglatest’, who claimed no relation to Action but posted round-the-clock in defence of Action and finally pissed off a genuine prospect by posting link to Action Corporate Videos who were supposed to be his friends.
So if you really are from Global Office, then a word of advice for you – the way you are going about posting here is no different from what you and your team did on soulcast, it is going to reflect badly on Action and the people who read this thread will judge Action based on what you wrote as much as from what others wrote.

“If they are privately registered, how would you know?”

As I understand it from insiders, Action sent an internal mail out a couple of months ago, where they told all their coaches and staff not to visit links like these in order not to give it a ranking boost. It also said Action will pull all marketing resources from other activities for 6 months to do nothing but counter these threads and the list of strategies include buying up brad sugars domain, setting up askbradsugars.com and paying massively for ranking and links from friendly parties in order to bury these threads. It also said instead of ActionCoach, they will now go back to promoting Brad Sugars instead which they’ve stopped earlier to give prominence to ActionCoach.

Which is interesting and Brad admirers will marvel at how he is taking advantage of this. Previously, back when they were Action International and I was a Coach, a major complain was that Coaches like us were just tools to help build the Brad Sugars brand. For example, prospects on our private emailing list hosted on actionmembers receive regular mailers from bradsugars.com WITHOUT our knowledge and consent. It is usually to promote Brad Sugars own entreprenuer bootcamp. Coaches only realize it when clients and even prospects start to inform they receive emails from Brad directly. A big hoo-haa plus dissatisfaction over this and the prominence given to Brad Sugars rather than Action International caused some positive changes in favor of coaches… seems like now it’s reversed again.

I would advise existing coaches still in the system to monitor their mailing lists and perhaps register themselves on their list to see whether they are getting spammed by Brad from outside domains.

ps: I would also advise coaches to be cautious about their emails, they are probably monitored, I remember I used to get mysterious calls asking probing questions from my ML; each time within days after communicating via email with a new big prospect… I always wonder how she did that when the prospects were approached via my own marketing activities and in my own list and the prospects did not know the ML. And yet, I get calls like “Do you know [Company X]? Have you been in touch with them recently? Do you plan to do anything with them”
Craig on July 12th, 2009 4:47 pmI am really intrigued by an item I picked up on today. I had a look at ActionCoach’s latest listing on Entrepreneur.com and they claim the number of franchisees in the U.S. has increased from 377 in 2008 to a massive 496 in 2009!Now I have spent quite a bit of time looking at both the data in their FDD and looking at the coaches listed on their sites and I really don’t know how they arrive at a figure of 496.
In the June 2008 FDD they claimed 318 Franchisees and 38 Master Franchisees for a total of 356 which is already lower than the figure posted on Entrepreneur.com

Where it gets really interesting is that of the 313 identifiable Franchisees in list attached to the FDD , 113 are no longer listed on their sites. That means that only 200 out of 313 listed a year ago are still in the system which means that to get to a figure of 496 they would need to have recruited 296 new people over the last 12 months.

No doubt this is possible but when I count the Franchisees listed on their sites today, I arrive at a total of less than 300.

The next FDD should make for interesting reading or maybe Global Office can explain the difference?
Well … on July 13th, 2009 12:54 amI would also advise coaches to be cautious about their emails, they are probably monitored,Wasn’t that also the implication of the following:
I tried to foward this link several times to an ActionCOACH yesterday, and it would not go into her Action e-mail box. As soon as I sent it to her personal in-box, it went through right away. Looks like Brad is now filtering e-mails that the coaches receive. Isn’t that interesting?
insider on July 13th, 2009 2:50 amNo doubt this is possible but when I count the Franchisees listed on their sites today, I arrive at a total of less than 300.Unfortunately Craig, today even insiders cannot tell you much. As of the final month where global rankings were still published internally, we are aware we have 700+ coaches and more than 2/3 make less than USD2000 per month.
Today, not only global rankings are removed, the “Coach since” column was also removed, ie, you can’t even see how long you’ve been a coach AND they also no longer send out “welcome emails” to the coaches community after each training with the names/photos/territory of each new coach.

So much for transparency. NONE except Brad himself and his few insiders will know the actual figures. MLs will only know figures in their own territories. Coaches are totally off the loop.
Coach2007 on July 13th, 2009 7:56 amBrad Sugars/ActionCoach intent to take money from you even when you are dead.This was ML Viewpoint’s reply to me on the topic of what happen in case of franchisee death:
Coach2007. I have recent copy of the U.S. franchise contract and this is what it says regarding what happens if you die;

” If you die (or any owner dies, if this Agreement has been transferred to an entity), the executor may terminate this Agreement without paying a termination fee by signing a termination agreement and release satisfactory to Master Licensee and Franchisor.
Upon executing and submitting the appropriate termination documents, the estate and its representatives will have no further obligation under this Agreement except for any matters that exist as of the date of such termination.”

However, upon reading the actual franchise agreement for 2007 which ML Viewpoint posted after replying me and the FDD for 2008 posted by Guest 2 days ago, the actual clause is consistent with what I had in my agreement which my attorney is correct in his interpretation, which is:

Even in the case of a Practise License and an Associate License, i.e., licenses which become valueless when the holder dies, the estate or executor of the deceased is required to pay USD10K to terminate the license and/or to continue paying Admin Fees. That is the actual clause.

This particular clause, according to my attorney, is fair for Firm licenses but not fair for individual practise licenses as no one else is permitted to operate the business except for the licensee.

So how can they morally and legally demand a termination fee from the next-of-kin who have nothing to do with the business?

Not only is this greedy, it goes totally against the so called values and culture of “abundance” which Brad Sugars love to preach.

Actioncoach’s attorney agreed that was the correct interpretation of the term and it was non-negotiable, which was why I decided not to renew my agreement even though I was doing okay. I cannot imagine something happening to me and my next-of-kin get burdened with demand for money from ActionCoach’s attorner just to get out of a business agreement which I signed and which has nothing whatsoever to do with them!

So potential franchisees looking at the practise model or associate coach model, beware.

ps: The ML where I was always encouraged her coaches and coach prospects to use her attorney as she said her attorney is ‘familiar with the terms and can explain better’ and also offer a bulk discount to her coaches. I wonder how many actually fell for that. I hope everyone will get their own attorney when dealing with agreements like these and not get tempted by offer of discounts. The legal fees are nothing as compared to what you are investing in the franchise.
Well … on July 13th, 2009 11:08 amIf any of you could fix action coach, how would you want it to run?
guest on July 13th, 2009 1:33 pm“If any of you could fix action coach, how would you want it to run?”Excellent question.
For starters, be honest and upfront about the success rate of Actioncoach franchises.
If only supersalesmen are successful, just say that.
If only super markets support successful Actioncoach franchises, say that too.
Actioncoach has been doing this long enough to have a good idea what types of people and what types of markets are needed to be successful.
Lots of businesses fail and maybe Actioncoach is no different. It seems like most of the angry complaints is that the expectations of success & support were oversold when the franchise agreement was signed.
Would Actioncoach still be able to sell franchises if the true success rate was known? That’s the critical question, in my opinion.
ACTIONCOACH: Brad Sugars Battles Bloggers : Franchise Pick – Picking the Perfect Franchise on July 13th, 2009 5:01 pm[...] “Con Man extrordinaire” or “extraordinary business man and visionary”? ActionCOACH franchise: “Scam,” “Rip-off,” “Fraud” or a franchise opportunity that [...]
ADMIN on July 13th, 2009 7:13 pmBlog post on FranchisePick.com:ACTIONCOACH: Brad Sugars Battles Bloggers
Blog post on UnhappyFranchisee.com:
BRAD SUGARS, ActionCOACH: The Battle of the Blogs
Johnny on July 20th, 2009 3:19 am“If any of you could fix action coach, how would you want it to run?”Read this latest very interesting exchange between someone claiming to be a current ML and someone claiming to be an ex-coach in soulcast’s new thread, that will give you an idea of what to fix.
Current ML

I normally don’t post online as I’m not real computer savvy, but I just can’t believe what I am reading. I am an ML for ActionCOACH, and I have nothing but good things to say about this company. I’ve gotten great support from global, I see great performance from the coaches and the ActionCOACH systems work great. Plus the businesses our coaches are helping are performing better than ever. I think it’s disgusting that all these people who just couldn’t cut it are on here giving Action a bad name. Despite all the negativity here on soulcast, I have continued to see growth. If all these rumors were true, this company wouldn’t be around. The few coaches that can’t make it fail only because they can’t perform. In the beginning stages, it requires a lot of work and effort to be a coach. I know because I started off as a coach. From my experiences, it’s easy to make it as a coach if you just follow the systems. On top of all that, I think Brad Sugars is a great man. He might seem a little full of himself, but you have to remember that he’s using his own success as a selling point and for motivation for franchisees to generate their own success. You have to consider the fact that Mr. Sugars just won a Stevie award for ActionCOACH being best international business. Please explain how these rumors could be true… And in response to the illegal activities, I know that at one point there was a scandal (as some people have already mentioned in another post on this site) which has long been addressed, and the people involved were sued and fired. Every large company has to worry about people stealing from them. But Action went on and put it behind them. I think that the growth says enough about the company. While every other company is losing money and filing bankruptcy, ActionCOACH continues to grow. And as ActionCOACH grows (with their help), other businesses grow as well.

ex-coach

So ml-who-used-to-be-a-coach, as an ml,

•How many in your batch remained? Mine, I am the only one, 11 of us, two years later. Many other batches the same.
•So am I to understand that I am a ‘winner’ and everyone else in my batch are ‘losers’ who didn’t make the cut and didn’t follow the system, based on your logic above? Is that what you are calling your batch mates?
•Do you tell the absolute truth to all your franchise prospects or do you stretch it or leave out certain info and hope they don’t find out till they are in? Let’s face it, you’ve been around long enough to be able to tell who will not make the cut at the point of selling and can always err on the side of caution. Do you? Doubt it, money speaks, especially frontloaded the way it is.
•’Great performances’ equals to a coach making barely USD1.2K ranked between 450 to 500 out of supposedly 1000+ coaches? This is the prior to the global ranking info being pulled. This figure is factual which can’t be spinned.
•’Growing’ means 700+ coaches left in the system as opposed to 1000+ being promoted in the marketing materials? Again, this is factual as of April/May this year, the time they pulled the global ranking info. But then, you already know that, don’t you?
•People sued and fired? How about the many lawsuits against Action for misrepresentation where Action loses every single case or settle every single case out of court? People you are referring to are NOT coaches. People those posting here are referring to are coaches being oversold.
Quote facts and figures, don’t spin like a politician.

Current ML

You asked me how many were in my batch. I was in training initially with 15 other people. Of those 16 only 2 remained. The two that remained were the only two that followed the systems – myself and one other person.

Do I tell the truth to prospects? Of course I do. Are you implying that YOU don’t? Most of the people who fail come into the business excited, then when it comes time generate leads, market yourself and sell, they don’t follow the systems. You of all people should know that it’s not easy being a coach. Just like any business, if you sit back and do nothing, your business will fail.

You said “money speaks” as if you have never tried to make a sale. Its business, and making money is the name of the game.

The lawsuits you’re referring to were from nuts who either stalked Mr. Sugars or made ridiculous claims against the kind folks at global office.

Lastly, I think that if you are really an ML as you claim to be, you wouldn’t be on here posting negative comments about Action that would effect your franchise! Surely you’re not that stupid because that would hurt your own sales! So come on and get a life, and stop pretending to be an ML. The fact is that I have been with Action for a long time, and I think it’s a great company, and it was the best investment I’ve ever made. Everyone who says bad things about Action are either lazy and can’t run their own business, or they are jealous of those who can. If you don’t want to purchase a franchise, then don’t. It’s simple, and stop spreading lies and trying to hurt our business.

Ex-Coach

So ml-who-used-to-be-a-coach, as an ml,

Firstly, I never said in the post I was an ML I was a coach.

You said “money speaks” as if you have never tried to make a sale. Its business, and making money is the name of the game.

Yup, that is exactly the attitude I was refering to, Brad would be proud of you, sell and make money, if people don’t make it too bad, screw them. You are doing a fine job of confirming what others said here without any help, keep it up.

Brad Sugars, the Marketing Team(Lead by Jodie Shaw) and the ML Team are fond of blaming coaches for not playing above the line and not doing what it takes to be successful.

In actual fact, anyone of them, with a bit of experience and especially those who became MLs after being a coach would be able to tell at the point of selection whether a prospect is going to make it as a coach. They will be LYING if they said they don’t. So the question is: why do they still take them in?

They should stop living in denial about their own greed and stop using jargons and rhetorics to justify greed.

If they are reading this, they will know what I am talking about. Stop taking people in, take their money and justify them dropping out after you’ve taken all their money. Action’s team selection process works, I know because when I was a coach, I taught that to my clients. It was the same system that we use for our own recruitment. The only explanation for it not to work for Action is greed.

Furthermore, we always teach clients the ’stink starts from the top’, fix the business owner and the business fix itself… when it comes to practise however, whithin Action, the fault always lies with coaches no matter how high the turnover is. That is what we call inconsistent and not practising what is preached.

Do I tell the truth to prospects? Of course I do…. Most of the people who fail come into the business excited, then when it comes time generate leads, market yourself and sell, they don’t follow the systems. You of all people should know that it’s not easy being a coach.

Really? So you told everyone “it’s not easy being a coach” as you mentioned above? You tell them about the lead generation process and the amount of activity required to get there? If you do, congratulations, you sure are a rare ML in Action and deserve your success. In the territory where I was a coach, I was told the ‘market is ready’, the ‘coaches before you laid great foundation and the market is about to explode’, ‘getting appointments is a piece of cake’… you get the drift.

Interesting that some if not most of the ‘nuts who stalked Brad Sugars’ mostly win their cases of misrepresentation or settle out of court.

So earlier you said coaches who fail are losers who don’t follow the system, now they are nuts. At the same time, you admit 14 out of 16 in your batch fail but you cannot see any misrepresentation or overselling, you see them all as losers which in other words, the stink of the organization didn’t start from the top unlike what you coach clients to take ownership. And after admitting that 14 out of 16 are gone, your previous post spin Action as ‘growing’.

Gee….

Enuf said.
How To Fight Back on July 20th, 2009 3:45 amActionCOACH CEO Brad Sugars explains how to turn around unhappy customers
actioncoach.com/bradsugars/actioncoach-ceo-brad-sugars-explains-how-to-turn-around-unhappy-customers.php

Putting out the Fires in the Web 2.0 World: How to Combat Negative Comments about your Company

actioncoach.com/bradsugars/how-to-combat-negative-comments-about-your-company.php

“Remember that if you post to site that is ran by the person who is upset, you are putting your voice in to their control. What they post becomes their choice instead of yours. An alternate way to address the concerns may be to send a private e-mail asking if you or one of your customer service representatives could contact the person by phone to address their concerns …You shouldn’t engage people who are obviously venting or have a proverbial “ax to grind,” or who are logging truly illegitimate complaints, because all your logical arguments and responses have little effect on purely emotional public outbursts … Knowing when and how respond can be the difference between deepening the wound or resolution.”
ML Defense on July 20th, 2009 12:11 pmAs a successful ML of ActionCoach, I am disgusted by the negative bitching I see here and on soulcast, let me address some of the issues raised:MLs are allowed to coach clients and to sign on coaching clients. That is in the agreement. Those that bitch about their MLs stealing clients from them should ask themselves why their own friends choose others over them instead of complaining. We are also allowed and encouraged to work on our own unique positioning, so there’s absolutely nothing wrong with an ML telling a prospect “I only coach 5 clients per year and I can only reserve a slot for you if you are serious.” Coaches should get a life or leave Action if they do not agree with this. They signed an agreement!
MLs are supposed to sell Coach Licenses for a profit; I don’t know what the coaches here are bitching about. Are we supposed to run charities while coaches make profit? Get real, business is about profit as another ML above noted. If you choose not to do what it takes, don’t blame the ML for misleading you. It is your choice. I sell according to the system and the marketing materials provided to me. The statistics are provided by HQ and I have no reason to doubt their authenticity as I have met Brad, Jodie and the rest; the team is awesome. It is sad a few losers are making so much fuss out of it.

As for MLs having businesses with certain coaches within their territory, there’s no clause in ML or Coach Agreement which says they are not allowed to do that. Those who bitch that an ML will be less partial just because they have business arrangements are simply jealous that they are not given the opportunity to be part of the alliance. Instead of making allegations, they should instead reflect on themselves why they are not included… could it be that they are not good enough to be included?

Coaches are given 12 weeks academy and all kind of support by HQ and they have their Coaches’ Coach yet everyone here point their fingers at their MLs as though MLs are the source of their misery.

It is sad that, as the ML above noted, a few sore losers are trying their best to destroy the good name of Brad Sugars and ActionCoach simply because they were not good enough; and they run MLs who are doing well down as though we are not entitled to do well and make money just because they didn’t make the grade!
Coach 2003 on July 20th, 2009 12:26 pmThe “Current ML” posting on soulcast will be in a lot of trouble with Brad if he ever found out who he is How he responded to the ex-coach totally expose the mercenary mindset of the MLs Brad recruited. They are totally unrepentant and unapologetic about the fact that they couldn’t care less about who they sell licenses to.
Mark on July 20th, 2009 10:33 pmPerhaps Action should change their recruiting methods and training, in order to help coaches “make the grade”. With drop out rates as high as they are in Action, this is clearly a franchise that is broken. My Oct ‘07 training class had 17 coaches in it, with 5 left in the system. My ML had 9 coaches and now he has 2!
Amazing! on July 21st, 2009 12:43 amMark said: Perhaps Action should change their recruiting methods and training, in order to help coaches “make the grade”. Someone above made an interesting observation regarding this point:
Brad Sugars, the Marketing Team(Lead by Jodie Shaw) and the ML Team are fond of blaming coaches for not playing above the line and not doing what it takes to be successful.

In actual fact, anyone of them, with a bit of experience and especially those who became MLs after being a coach would be able to tell at the point of selection whether a prospect is going to make it as a coach. They will be LYING if they said they don’t. So the question is: why do they still take them in?
Speechless on July 21st, 2009 4:38 amI am…. speechless….
You said “money speaks” as if you have never tried to make a sale. Its business, and making money is the name of the game.

The lawsuits you’re referring to were from nuts who either stalked Mr. Sugars or made ridiculous claims against the kind folks at global office.

Everyone who says bad things about Action are either lazy and can’t run their own business, or they are jealous of those who can. If you don’t want to purchase a franchise, then don’t. It’s simple, and stop spreading lies and trying to hurt our business.

Coaches should get a life or leave Action if they do not agree with this.
Just Wondering on July 21st, 2009 12:51 pmThe lawsuits filed against Brad Sugars and Actioncoach are for fraud, racketeering, failing to pay bills, and sexual harassment just to name a few. Several he has lost, or paid off to go away. These lawsuits many nowhere to be found in his disclosure documents are public record. I don’t think these lawsuits were filed by nuts or people stalking Brad Sugars as said above. They were obviously filed by hard working honest individuals that were not intimidated by Brad Sugars or his legal goons and stood up for their rights. I’m no marketing guru but I can tell you Brad’s new strategy to shut down the truth by using money he has stolen to flood the internet with hog wash will only back fire. His victims have now realized they are not alone and are so much more powerful and are coming out in droves.
Hmmm on July 21st, 2009 10:59 pmWhat’s interesting is that defense of Actioncoach seems to follow this pattern: if someone had a problem within action, then the only real problem is that person. Conversely, if Actioncoach has problems (like the complaints about it spanning several sites), the logic reverses as if the problem couldn’t be actioncoach. How can that possibly work?
ML Defense 2 on July 22nd, 2009 12:02 am[Editor's note: There is some question as to the authenticity of this apology and retraction. The commenter is invited to contact me at unhappyfranchisee(at)gmail.com to authenticate]
Dear All,

I would like to apologize for my earlier emotional rantings, I have since seen the errors of my views and would like to retract my statements:

1. As MLs, we help and support our coaches in getting clients. It is highly unethical for us to attempt to approach our coaches’ prospect list, especially new coaches who depend on us to learn the ropes. I have personally not done so before but I know my fellow MLs are frustrated by all the accusations against them for what we see as a fair business practise.

2. MLs are supposed to sell licenses for a profit, that part is true as in any business. However, our roles are to tell the truth at all times and ensure potential franchisees make an informed decision. Subsequently upon them signing an agreement, they become our ‘babies’ to nurture and support until they become successful. I apologize if I gave the wrong perception. MLs are not mercenaries.

3. While our agreements do not bar us from having business alliances with our coaches, I now realize it is very unethical for us to have alliance with coaches in the coaching business as we not only need to act fair but need to be seen to be fair. I will now stop practising joint promotions with coaches unless I can include all coaches in my territory. I also realize it is against our franchise agreement to set up a 3rd party company with coaches to act as a collection firm.

4. While HQ provide the 12 weeks academy and a lot of support material, coaches’ primary point of contact and support is their ML. I am sorry if I sound like I was trying to avoid my responsibility as an ML to my coaches.

I hope coaches who are here and on other forums to consider giving us your feedback directly instead of posting on external forums.

We promise we will listen and act on your feedback from now on.

Thank you.
Repent… on July 22nd, 2009 12:05 pmWow ML Defense,Did you just repent within 48 hours… or were you forced to retract your earlier rantings…?
Hmmm on July 22nd, 2009 3:15 pmI think it may be neither? Any person on this forum can use the name of anyone else on here and leave a comment. Names aren’t exclusive to individual e-mail addresses or IPs.
ADMIN on July 22nd, 2009 6:11 pmHmmm wrote: I think it may be neither? Any person on this forum can use the name of anyone else on here and leave a comment. Names aren’t exclusive to individual e-mail addresses or IPs.It looks like Hmmm may be correct. There is some question as to the authenticity of this apology and retraction. The commenter is invited to contact me at unhappyfranchisee(at)gmail.com to authenticate by giving the 2 different email addresses used for the original comment and the retraction. Until then, the suspected imposter will be “ML Defense 2″
Folks: You don’t have to use your own identities, but please don’t hijack the identities of others. Thanks.

The Management
Coach2003 on July 22nd, 2009 9:45 pmAdmin wrote: Until then, the suspected imposter will be “ML Defense 2″So… are we to assume there’s more ’shills’ around and it is part of the new internet strategy to conquer cyberspace?
DN on July 23rd, 2009 4:36 pmCoach2003, I think you have to assume that no one here is who they say they are. That’s kind of the point of anonymity.
Researcher on July 25th, 2009 11:23 amGidday Mates,After reading the ML posts here, I am doubly glad I didn’t take up the license. Bad as Brad Sugars is supposed to be, most of the time I’ll be dealing with MLs and these MLs… what I read here (Whether ML Defense 1 or 2, quite obvious 2 is connected to ActionCoach in some way even if they are not the same person.) … holy…
I think nothing much more need to be said or discussed here… hope every prospective coach researching Action will find this thread.

I also downloaded the agreements here and ask a lawyer friend for an opinion. Her opinion is consistent with the rest here regarding death. She said franchises which cease to provide an income to the franchisee should cease to charge fees immediately upon franchisees’ death (Which applies to their practise license model.).

One last thing before I move on to other stuff, I am just curious: as I mentioned above, the ML I spoke to warn me there’s a small group of disturbed individuals creating all these threads and posts, she also said from ActionCoach’s analysis, there’s a maximum of 5-6 individuals creating all the posts. Over at soulcast’s latest post, one poster mentioned there’s about 20+ ex-coaches and employees that he know of doing so. Hmm… how do they come out with the figures since everything is anonymous…
Hmmm on July 25th, 2009 11:59 pmMaybe they just know who the most pissed off people are. Not hard to figure out. Nevertheless “the one with the most opinions often has the fewest facts.”
DN on July 27th, 2009 1:48 pmTrue! And that coupled with anonymity makes accountability nearly impossible.
guest on July 27th, 2009 2:07 pmHmmm wrote “Maybe they just know who the most pissed off people are. Not hard to figure out.”Really? Over 1000 Actioncoaches worldwide and it’s not hard to figure out?
This is an example of another sad tactic that won’t work. Brad Sugars latest tactic is to try to imply that he can tell who is posting comments by using his “forensic internet experts” He claims many of the comments are coming from the same house and many others from the same building as his competitors.

In my humble opinion, this tactic indicates 1) how little BS knows about the Internet and 2) how little he values honesty.

First, unless his “forensic internet experts” are using illegal tactics such as hacking or planting phishing viruses, they cannot gain access to user information on 3rd party sites like this one unless they have the owner’s cooperation or they have subpoened server logs. So, odds are, this is a bluff to try to intimidate people from sharing opposing views.

Second, his statement that his “internet experts” can identify which house or building people are commenting from is laughable. That’s not how it works. Even if he had access to the IP addresses of the commenters, it would give very limited and general information such as the general area of the ISP, at best a city or a region.

Perhaps Brad has watched too many Law & Order episodes where law enforcement experts can track the actual computer IP address to a house. That requires very sophisticated and restricted access that’s far beyond the abilities of a motivational speaker and his blogging lackies. And, if you notice, it requires access to the server logs of 3rd parties, which even Jack McCoy needs a subpoena to get.

Nice try, though, mates. But be careful. If Brad ever reads “Internet Privacy for Dummies” you’re gonna be out of a job.
guest on July 27th, 2009 2:10 pmHmmm writes “Nevertheless ‘the one with the most opinions often has the fewest facts.’”Who are you quoting with this bit of genius? Brad Sugars?
He would know!
BrokeBlokes on July 27th, 2009 2:43 pmThink you’ll make money as an action coach? The franchisees can’t afford to buy clothes, apparently.Newsletter Week of July 13th 2009 :
Global Conference…
Gentlemen of ActionCOACH!!!
Suit Rental for the Awards dinner will again be available for you.
Chorley’s Menswear and Formal Hire is our supplier.
Fittings will be conducted at the hotel on Monday, 3rd August.
Pricing is at AUD$170 (including cufflinks and other accessories)
Hmmm on July 27th, 2009 2:44 pmWhere did the threat about forensic internet experts come from? Blog?
CSI on July 27th, 2009 3:23 pmI am curious where Brad Sugars or his team made the comments abt internet forensic, etc… is it on his intranet to coaches or on his blog?Well, for Mr BS’s info, someone so inclined can spoof his own MAC address & IP, run through proxies, vpns, etc…
Ex-Coach on July 27th, 2009 3:24 pmMy 5 years in Action have been less than ordinary … as it has been for well over 50% of the people involved in my ML during that period (in my opinion of course … however the churn from the group .. ie: people’s actions says it all) … but it won the “firm of the year” two years running, laughable.The ML has not once in 5 years actually asked me how I was going, not once, never called and asked, never emailed, never taken 5 mins before/after an ML meeting, never. And he is in the Action Hall of Fame – well at least money talks if he doesn’t. Action falls well short of what the market expects and the diversity of coaches lets it down and damages the brand, anyone with a wallet and a pulse is not the way to build a brand, goodwill and reputation.
From what I have experienced, very few people seem to want to step up to the plate and actually put the effort in … one percenters just don’t exist.
CSI on July 27th, 2009 3:28 pmBrokeblokes,The rental is a prime example of Brad’s idea of Average Dollar Sale strategy on his captive client base, ie, MLs and Coaches. He prolly make USD100 out of every rental and the supplier USD70 in return for “bragging rights” as ActionCoach’s supplier.
If there are too few takers, the following year he will amend the agreement to make rental compulsory, just like he tried with his Online CRM (Monthly charges were paid to an outside company owned by Brad Sugars, compulsory, until a massive revolt took place).

I am not joking.
guest on July 27th, 2009 4:05 pmOn the blog post linked to below, Brad Sugars claims “Our forensic internet specialists have tracked the IP addresses and it’s amazing how many of these “different” people all live in the same house.”In my opinion, this shows that Brad Sugars and/or his Internet lackeys either don’t have a clue about how Internet tracking works and are straight out liars, or they are using illegal and/or highly unethical means to gain information about their detractors. My money is 100% on the former (clueless and lying).
Brad, I am looking to become a business coach with ActionCOACH … I stumbled on some negative postings about you and your business and some real attacks on you personally. Can you go through and explain yourself against all of these allegations?

Brad’s reply (excerpt:)
“…Finally, I think it’s important to gauge any negative comments in context, you can see that the majority of these comments are being made by a very small – but vocal – minority.

“Ask yourself: Is it possible that the conversation happening in a blog could be between a few people with different “user names” in an attempt to ruin our reputation? Our forensic internet specialists have tracked the IP addresses and it’s amazing how many of these “different” people all live in the same house. Or ask yourself if it could be a competitor faced with harder economic times trying to turn people away from our franchise? Again, our forensic people have helped us find amazingly that someone attacking us has an office in the same building as a competitor.”

First, how would Brad Sugars “forensic internet specialists” have access to IP addresses logged on 3rd party sites? Secondly, did Brad’s specialists explain to Mr. Sugars that those IP addresses reveal general info about the ISP and don’t indicate a house or building?

Either Brad’s making this up as he goes or his forensic internet specialists are named Moe, Larry & Curly.
Coach2003 on July 27th, 2009 9:40 pmHi Guest,Thanks for the link. I think Brad Sugars is not trying to intimidate anyone, he’s a profit minded business person.
My guess is he know very well what he’s writing is BS and his intention is to impress prospects and discredit blogs such as this… and hope prospects don’t dig too deep on the internet.

The entire bunch of Q&A on his blog are carefully scripted, BOTH the questions and the answers.

He’s probably getting better advise today than from the likes of Jodie Shaw & Nathan Smith
Another ex coach.. on July 29th, 2009 5:07 amHow does 819 coaches…including ML’s and Firms in the system currently sound? A bit off from over 1000…..with 50% of them making bronze or less. Anyone want to prove me wrong step on up with proof. Would love to know why and how they can keep saying 1000+ …that must include the coaches and their families?!
Transparency on July 29th, 2009 7:55 amAs already mentioned in a few of the previous posts, Brad Sugars recently posted on one of his own sites http://www.askbradsugars.com a long rebuttal of the information presented here. Along with a lot of other stuff, he said that the figures on franchisee attrition rates posted here were wrong and said that the real figures could be found in Actions FDD and on http://www.entrepreneur.com He even said all of this data was audited which sure is mightily impressive. To complete the picture he might just have told us who was doing the auditing. Hope it wasn’t the same guys as those who audited Bernard Madoffs business. Here is what Brad Sugars says:“Coach attrition
Some of the negative comments seem to be oriented around claims of coach attrition and success of our franchisees. Like any organization, we have many franchisees stay and some leave. This is no different to other companies.
When I look at some of the allegations cited and the numbers of people they say are leaving etc., I am amazed … as all the numbers for ActionCOACH as a franchise are audited once a year by outside, independent and objective auditors who have no skin in our game, so to speak, and those numbers are reported to only two outside entities for our franchise disclosure documents and to Entrepreneur.com.
In addition, those reported figures are audited every 12-months during the middle of the year.
All of the other guesstimates by some anonymous person about the total number of our franchisees/coaches leaving the system are just not true.
In fact, my financial team is going through the audit process right now, and any new and/or revised numbers will be part of our next FDD that will be available in the next several months.
By the way, there is no argument around these numbers as they are independently verified and objectively audited numbers that are available from the auditors – so there is no argument.
I have also seen and read some interesting “proof” out there that certain coaches have simply disappeared from our system, as if they have been abducted by UFOs or aliens.”

I don’t have the time or the inclination to redo the sort of analysis that was presented in some of the other posts on this site but apparently this analysis was done using the information presented in Actions FDD’s from 2006 through to 2008. Since everyone can now download these FDD’s I guess anyone who wants to go to the trouble can have a look at the figures themselves.

I did however have a look at the figures on http://www.entrepreneur.com and, on this site that Brad Sugars cites as a reference, Action claims it presently has 496 franchisees in the U.S., up from 377 in 2008.

I then went to http://www.actioncoach.com and using the “Find a Coach” link I looked up all the coaches listed by state. The results are provided below, but to keep it simple, the total comes to 296. So the post is not too long I have just provided the numbers but the names are available on the site.

To make it complete you probably need to add somewhere between 30 and 40 other names for the M.L.’s (depends on how you count couples ) which all adds up to a total somewhere around the 330 mark. That’s a very long way from the 496 cited on http://www.entrepreneur.com and really does invite a question about where the missing 160+ franchisees are. Abducted by UFOs or aliens maybe?

Arkansas – 1
California – 30
Colorado – 13
Connecticut – 9
Florida – 11
Georgia – 23
Hawaii – 1
Idaho – 3
Illinois – 3
Indiana – 5
Iowa – 8
Kansas – 1
Kentucky – 4
Louisiana – 4
Maine – 1
Maryland – 6
Massachusetts – 5
Michigan – 2
Minnesota – 11
Mississippi – 1
Montana – 1
N.Carolina – 11
Nebraska – 2
Nevada – 4
New Mexico – 3
New-Jersey – 15
New-York – 6
Ohio – 23
Oklahoma – 1
Oregon – 7
Pennsylvania – 23
Tennessee – 6
Texas – 23
Utah – 5
Virginia – 7
Washington – 7
Wisconsin – 10

TOTAL 296
CSI on July 29th, 2009 2:26 pmI think Brad Sugar’s “rebuttal” on his blog is having a negative effect on his own coaches even as he attempt to stop prospects from turning away, he’s really caught between a rock and a hard place and he fully deserve it.No matter how Brad twist the facts around coaches attrition, the FACT remains that ALL insiders will know:
1. They abruptly removed global ranking figures from the intranet, now no one really know where they stand so they can no longer gauge how many earn more/less than them.

2. They abruptly stopped welcoming new coaches in internal newsletter which used to give a short profile of each new coach; which allow everyone in the system to know how many new coaches are coming in each training.

3. EVERY coach know how many in their batch remain in the system after 1-2 years.

So it is pretty obvious they have something to hide even from their own Coaches and MLs.

Since Brad Sugars also spam his own coaches everytime he make a new entry in his blog, they will all be reading his rebuttals… imagine how they feel about the bullshit he’s writing on his blog and his very public display of utter disrespect for them that instead of fixing the system and acknowledging the issues, he is more concerned about getting new people in and letting his existing coaches rot.

He must have done his maths and reach the conclusion that it is more profitable to have people continuously joining rather than building his current coaches; that is probably why he doesn’t give a damm that those on the inside reading his blog know how much of his writing are pure BS.

I am interested and looking forward to him rebutting what has been written here regarding agreement clauses… I am sure someone can post scans of various versions of the agreement.
Amusing on July 31st, 2009 3:09 amWhen you buy actioncoach, you’re buying for “brand recognition,” right? You’re buying the rights of being associated with a “world-renowned” entrepreneur and his “number one business coaching firm.” Look at the reasons both were removed from Wikipedia: http://en.wikipedia.org/wiki/Wikipedia:Articles_for_deletion/Brad_Sugars What was the reason (other than blatant self-promotion)? Count how many times people said he or the company was not noteworthy! Also note http://en.wikipedia.org/wiki/ActionCOACH.By the way coaches, you paid hundreds of dollars for an elance writer to create those pieces, to no avail. You’re buying a franchise to learn about business and marketing, yet everything they do backfires on them. Now people who previously never heard of actioncoach have a negative impression of him and the company that you’re paying for.
Hilarious gems from the delete page:

“Everything about the article looks liked a biased advertisement by his P.R. firm—all the way down to that splendid 14.1 megapixel Brad Sugars.jpg portrait of him (you can count the whiskers in his mustache that could have been shaved closer), which was “kindly” released under a Creative Commons license. Be sure to delete the photo along with the article. And ban any articles on this guy for the next three years, even if they are unbiased; he’s simply not notable enough … Move to an article titled Brad Sugars – Wikipedia controversy and revise accordingly so that it properly conveys a notable story about a “business coach” running afoul with Wikipedia and its policies about treating an online encyclopedia like it is a personal print shop. Now that would be interesting reading. But a story only about yet another guy who builds trust and bonding amongst managers by having them fall backwards into his peers’ arms, or chant “I’m unique, and—gosh darn it—I add value to my team”, or whatever else this guy does, is not encyclopedic in the least. Greg L (talk) 03:13, 16 June 2009 (UTC)”

“Delete, although “I’ve not heard of him” is not a valid reason”

” It’s now being reported that the “Stevies” are paid for as well. Suggest that we get rid of this mess entirely, since it is still based on COI reporting. 14 June 2009 (UTC)”

“If some of the other awards are legitimately valuable and not “some magazine’s own award scheme that shows little more than that magazine’s opinion”, then I would say ActionCoach would probably be notable as a business. “
Amusing on July 31st, 2009 3:19 amWhen you talk to someone about buying a franchise, part of their script is to say they don’t just accept someone with “a check and a heartbeat.” They say they “attract” some of the best minds in business. Really?Take a look at what the new business coaching experts did before joining actioncoach. Hint: it may be part of why they fail.
Former Georgia theme park manager
http://www.youtube.com/watch?v=zjY2mX8vCQg

Former clinical nurse turned business coach
http://www.youtube.com/watch?v=UUncpycv7ow

Former teacher makes it big in business:
http://www.youtube.com/watch?v=3ZIMntCv-ok

Former publishing industry insider
http://www.youtube.com/watch?v=aDPFChttQNU

Former naval officer
http://www.youtube.com/watch?v=GimwvAqwZ-Q
Man-in-Action on July 31st, 2009 12:49 pmHow many Coaches are there in ActionCOACH…?Although laborious, this can be calculated from their own web-site’s “Find-a-Coach” function. You would have to add up every territory in every country – but I am sure one of the posters in this Blog will have the time to do so – if only for the USA.
When I check my own territory is it exactly up to date with one exception – which I can’t reveal without giving away where I work. It has to be correct – new coaches expect to be there on the list, and if you leave you are erased from Action’s systems straightaway. So – are there more than 1000 Coaches worldwide or not….?

If everyone who had ever signed up as a coach in my territory was still with the Franchise there would be 3 times as many Coaches as there are now ! And All this churn is within a 2 year period. The Business Coaching marketplace in my territory can probably support half the current numbers in the harsh economic climate we are now in.
CSI on July 31st, 2009 1:24 pmHi Amusing,Some of these individuals do make it if they follow everything Action teach AND add on much more on their own initiatives… and they ARE such individuals with the background you mentioned. So while you have a point, I think it is not fair for you to belittle these individuals and their backgrounds as part of your criticism of ActionCoach’s marketing by linking them here.
The wikipedia link though, that is a classic… it is not anonymous and it is a very credible site which Brad Sugars cannot brush off the way he did ripoff and soulcast. The best part is, he can blame no one but himself. He and his team of internet gurus really thought they can take on and beat the ‘net in 6 months
Amusing on July 31st, 2009 4:32 pmHi CSI,I’m not belittling the coaches. I’m noting that they’re taking people who have no business experience and charging them tons of fees to be part of a system in which they go teach other people how to run a business. The practice is what I find amusing, not the coaches themselves.
Also, there is no team of internet gurus. The marketing director has taken a group of people who knew nothing about Google search and given them a list of tasks that actioncoach expects to work, from what I’ve been told. They’re all guessing as they go.

From what I’ve been told, that’s pretty much how things work there: Take a kid who knows close to nothing about graphic design, tell him to design the whole brand for executive coaching then complain about how ugly it is while still selling the related materials to your coaches at a premium. Take a guy with no professional programming experience – just a home hobbyist – and have him start building a bunch of things. Then only use half of the projects, complain about all of them internally, all the while hyping them to coaches as the next big important tool.
Amusing on July 31st, 2009 4:46 pmhttp://www.elance.com/jobs/wikipedia_article/web_content_online_writing/16933583
“We would like a quote to create a wikipedia article about our CEO Brad Sugars – similar to the following …”
Amusing on July 31st, 2009 4:51 pmAs of yesterday, they’re hiring for a link building project. You can see how much money they’re spending on these pointless projects (and what they are), here: http://www.elance.com/php/profile/main/eolbuyerprofile.php?view_person=ActionCoachFunny thing about them outsourcing this is that the marketing director preaches to know all from her article that states “Okay if you want to be an SEO expert – here are the keys to the magical kingdom” in her link building article to coaches (http://www.actioncoach.com/newsletters/weekly/fullpage_preview.php?weekly_id=117#2)
I guess coaches should be wary of the advice if action does not trust it, themselves??
Another ex coach.. on July 31st, 2009 7:50 pmTo “Man-in-Action” …there are approx 824ish coaches currently in the system..
Transparency on August 2nd, 2009 12:01 pmFirst, many thanks to “Amusing” for a very amusing contribution. The post about Brad’s efforts to get himself listed on Wilkepedia was brilliant.Apart from that, amazing to see how the questions asked on http://www.askbradsugars.com are always phrased in Action speak with no indication of who asked the question. A cynic might just think that Brad Sugars was asking himself questions so that he could set things up nicely for a reply. Naah…. we all know he would never do anything as sly as that..:-)
In spite of that, in his long rebuttal of the allegations posted here and other places -

http://askbradsugars.com/answers-from-brad-sugars/i-stumbled-on-some-negative-postings-about-brad-sugars-and-your-business-can-you-explain-yourself-against-these-allegations/

he really answers nothing. We’re all still waiting to see how he explains the difference between the franchisee numbers published on http://www.entrepreneur.com and the numbers available on http://www.actioncoach.com and while we’re waiting let’s have a look at what he has to say about franchisee earnings.

“Earnings

It seems that some of the statements are about the income of our franchisees. First and foremost, what our franchisees make is private information and is never disclosed by us at any point in time to anyone.
Second of all, we simply do not and more to the point, cannot legally make a global earnings claim. We are a franchise and all franchise laws are entirely different in different countries and here in the USA, even different in different states. It seems someone who cannot know the truth is spreading mis-information about earnings of our franchisees, which again has to be a guess as this information is just simply not published outside this building.
Third, the bottom-line here is that we don’t operate by a cash register, and rely on our system of coaches entering their KPI information (Key Performance Indicator information) every month.
Thus even we have trouble getting them to enter all the data, I have no idea how someone else believes they have it completely.”

Several of the affirmations in this section are pure BS. Whatever about global figures, absolutely nothing prohibits Action from making an earnings claim for its U.S. franchisees. It just has to be done in the FDD, item 19 to be precise. There were several posts here on this subject early May, and examples of the sort of information provided by other franchisors can be found using this link:
http://ufocs.com/articles/earnings_claim.php

Regarding coach KPI data, we all know that this is the basis for invoicing the monthly marketing fee and because of this most coaches do update their data even if it this sometimes requires a little reminder from their M.L.

What’s interesting is that until recently, anyone could see when the data was last updated, for example in Monte Wyatts user profile copied below you see World Ranking (Coach) for Mar 2009: 62 and he was also classed 63 in the Top 100 Coaches for that month so in spite of the small difference that looks pretty coherent and the story is the same for all the other franchisees listed in the top 100. There was pretty well a perfect correspondence between the data in their user profile and their ranking in the Top 100 Coaches of the month table.

So, if this is true for the Top 100 ranking why should any of us believe it was any less true for everyone else?

However when you look at Montes user profile now the date and ranking have disappeared. He was however ranked 40th in the June Top 100 Coaches table, presumably due to his Platinum performance level.

One can only wonder about Actions motives for making this very important change. Obviously there was the issue of avoiding the sort of awkward questions many have already asked here like “What conclusion should I draw from the fact that I am a Bronze level coach, only barely surviving, and I am ranked 400th in a company which boasts more than a 1000 franchisees ?

It is also quite likely that Action simply wants to make sure that nobody can put together an accurate picture of the average earnings performance by coach . Without a date it is easy for Action to say that the data hasn’t been updated etc, etc…

Yet another example of Brad Sugars dedication to transparency?

In any case he should not believe he is fooling too many people. If he thinks about it a bit I think even he can find the solution to the following enigma he raised in his rebuttal.

“Yet, when an anonymous person with no rules about reporting the truth gives their opinion online, people seem to think it’s true, just because it’s negative.”

One little hint to make it easier for him. It’s not just because it’s negative that people think that much of the stuff posted here is true.

User profile

Monte Wyatt
Coach
Territories: Iowa

Highest achieved level: Platinum
Current level: Platinum

World Ranking (Coach) for
Mar 2009: 62

ML: David Drewelow

Contact information

Business address
4117 Walnut Street
West Des Moines
Iowa
50265
United States

Phone numbers
Office: 515-222-9193
Fax: 888-331-0485
Cell/Mobile: 515-480-0288

E-Mail: montewyatt@actioncoach.com
Skype: coachmonte

Latest update of Montes profile.

User profile

Monte Wyatt
Coach
Territories: Iowa

Highest achieved level: Platinum
Current level: Platinum

ML: David Drewelow

Contact information
Business address
4117 Walnut Street
West Des Moines
Iowa
50265
United States

Phone numbers
Office: 515-222-9193
Fax: 888-331-0485
Cell/Mobile: 515-480-0288

E-Mail: montewyatt@actioncoach.com
Skype: coachmonte
CSI on August 2nd, 2009 2:06 pmaskbradsugars.com is actually a liability to Brad Sugars and ActionCoach.Imagine you are a coach on the inside comparing what you know and what Brad is trying to spin…
Enough said.
Coach2003 on August 4th, 2009 4:39 amAgree with you 100% CSI.Some of his ‘defence’ is extremely laughable and downright patronizing to those already on the inside.
While he claim not to be bothered, he’s quoting details like time of posting, user name, etc in his posts, which shows he’s paying much more attention that he claimed.

His defence is mostly FUD. And he even claim now his team did not bury soulcast but can offer no explanation as to why that is the only thread buried in the entire site.

He also claim posters use variations of his team’s name, as if Neil Sinclair and the rest never really posted and they are all imposters

One thing I do notice though, he is still up to his old tricks – lumping happy clients together with coaches and trying to muddle things in the process. “Speak to our clients.” is one of his favourite defence.

Let me say it once again even though it has already been said before:

Clients happy with coaches’ services has got NOTHING WHATSOEVER to do with whether coaches are happy being a franchisee of ActionCoach.

It is like saying if the public love eating McDonald’s stuff or love Starbuck’s coffee, by extension every McDonald & Starbuck franchisee must be happy with their franchisor.

Utter rubbish & twisted. Typical Brad Sugars spin.
Guest on August 4th, 2009 10:31 amBack in May, 2009 Brad allegedly provided a letter to MLs that they could send to clients who had read some of the negative things about him and/or ActionCoach.
In the letter (from him) BS stated clearly and forcefully (using his pseudo-folksy Mom & Dad quotes he thinks makes him sound like a regular guy) that his philosophy was to ignore all negative comments. He had come to this conclusion with input from his advisors, and that those who were on his team (and were “cut from the same cloth” as him) would agree with him and do nothing.

IN THE SAME POSTING Brad Sugars allegedly told his MLs that he was launching an aggressive campaign against online criticism, that he “will be on the offensive with this trash from now on, and in a few weeks I will ask you, your team and your clients to join me in protecting, promoting and speaking up for who we are and what we do … our brand …”

While he simultaneously is telling some that he’s following Daddy’s advice not to become a snake to not get bitten by one, he laid out his 13-point strategy. He allegedly told his MLs “For the remainder of the quarter the entire Marketing and IT team have been pulled from all projects and travels to work on this, that is how seriously we are treating it, one lost sale from information that you and I know is not accurate is too many …”

What message does Brad Sugars think he has sent to all his MLs and coaches by blatantly speaking out of both sides of his mouth in a single posting? How much regard for truth does he display? After this, does he really believe any of his team takes what he says without a huge grain of salt and skeptical eye?

It seems Action speaks louder than words in Brad’s case.
CSI on August 5th, 2009 11:26 amHas anybody seen a copy of alleged letter?Its existence will prove a lot of things,including the suspicion that MLs are in on it.
Man-in-Action on August 5th, 2009 11:54 amWhy are we all Anonymous on this website…I know I am one of you at the moment – but what is it that prevents all of the negative posters on this from declaring who they are? The ML’s I can understand – they are between a rock and a hard place – but what about the rest of you? What are you afraid of ? Even ex-coaches seem to be reluctant to stand up and be counted.
The annual ActionCOACH Global conference is happening as I write – if anyone who reads this blog is attending maybe you can let us know what new Tablets of Stone are being handed down…. OK Brad – you might as well let us know yourself – since I know you read this !
Subscriber on August 5th, 2009 12:23 pmWOW! I’m a potential franchisee of this or another coaching or consulting franchise. I am trying to figure out what you all think is wrong with the ActionCOACH business model. Please help me understand your (collective) problem with ActionCOACH.The bottomline is that you seem to be saying that not everyone has what it takes to be a business coach, period, and AC will sell to anyone, right?. Obviously, you’ve got to be a strong salesperson who can build a continuous business relationship with paying clients.
If someone has those skills and is adequately capitalized, would this be a profitable franchise to own?
Man-in-Action on August 5th, 2009 1:07 pmIn answer to SubscriberAssuming you are genuine – the best balanced answer to your question was posted by “Insider” in June – copied here for ease of viewing:
■Insider on June 11th, 2009 10:45 am
The figures provided by Craig go a long way towards confirming what many of us thought for a long time, the ActionCoach franchise is very far from guaranteeing a path to success. Actually the only thing that is guaranteed is that no matter what happens, the franchisor always wins – the initial payments (75k) are gone forever and so are the monthly royalties, 1.8k fixed monthly royalty starting as soon as the franchisees get back from their initial training.
Since the franchise contract also contains the following clause:

17.4 If Master Licensee terminates this Agreement based on your default, you must pay Master Licensee liquidated damages, calculated as follows: (a) the average of your monthly Royalty Fees and Marketing and Advertising Fees due for the last 12 months before termination (not including the months before the Royalty Fee and Marketing and Advertising Fee obligations begin under Sections 4.1 and 4.2); (b) multiplied by the lesser of 24 or the number of months
remaining in the then-current term under Section 2, (c) discounted to present value using the then-current prime rate of interest quoted by Master Licensee’s principal commercial bank; (d) minus the present value (determined using the same period as in (b) and the same discount rate as in (c)) of the expenses of performance avoided by Master Licensee as a result of termination of this Agreement.

where default includes “voluntarily abandon of the franchise relationship” it is clear that you can only walk away from the agreement on the franchisors terms. Among other things, this means that a lot of people probably stay in the franchise for longer than they should based on the losses they are taking month after month.

Looking at all of this you can only wonder why anyone would sign on to start with and that’s where all the marketing hype and the sales process click in.
Actions business concept is intrinsically appealing, “leverage your business experience and our proven systems to help small business owners reach their professional and personal objectives” . Wow, that’s a really gratifying idea for managers who have either been restructured out of their jobs or who are simply fed up with the constraints of corporate life. Because of this Action attracts people who, from the outset, have a really positive attitude. There are also enough people who succeed with Action to insure that franchise prospects doing their due diligence are preferentially directed towards the minority who succeed rather than the majority who clearly don’t. The fact that Action prefers not to publish any figures on average earnings by franchisee makes this pretty easy to get away with.

However, in spite of the so called “proven systems” and the high quality of most of the people who join there are still visibly far more losers than winners in this game. To understand why, here are a few thoughts from a person who knows Action from the inside :

1) The initial training for which you pay 25k lasts 11 days, gives you a good overview of the Action concept and really gets you enthusiastic so that you get back home full of energy. A good comparison is the way you come away from a sales convention or somthing similar. However, as it only skims over the subjects treated, it is not nearly enough to teach you all you need to know to either sell coaching or to coach. This takes a massive on-going effort learning how to teleprospect, learning how to present, how to really ask questions and simply how to coach. Other coaching schools typically take months to train people (for considerably less money) because there is simply a lot to learn. With Action you learn the hard way, by trial and error, and while all of this learning is going on you are paying 1.8k per month to the franchisor to which you must add your own business expenses and your living expenses. At the end of the day, this can add up to a lot more than most people estimated when they set out on the adventure and they run out of cash well before getting where they need to be.

2) I guess the average age of the Action franchisees must be in the 45 – 50 range, possibly even higher, and many if not most of these people come from relatively structured organizations where they have been mostly focused on only part of the business activity whether it be finance, I.T., sales, marketing or operations…All of a sudden these people have to learn how to market, how to sell and acquire a minimum level of knowledge in all aspects business management plus the interpersonal skills necessary to coach. This is a massive challenge and it can come as no surprise that so few people come through successfully even when cash is not their biggest problem.

3) The market is much tougher than most people probably realize. Sure, practically all small business owners would benefit from having a business coach. However getting them to understand that is the first challenge and, since most are only barely surviving, getting them to make a monthly investment of 1.5k or more in a coaching program is the second challenge.

My own conclusion from all of this is that the Action concept is very seductive (I even fell for it myself..), that the franchise provides an interesting framework to operate from (that’s it as far as a proven system goes) I, that it attracts mostly very decent, high caliber people but that it takes far too much money up-front compared to the value it provides and the time it takes most people to master all the different dimensions of the activity.
Also the on-going training provided by Action basically stays at the same level very superficial level as that provided in the initial training which means that to develop the necessary skills you have to look elsewhere. For example the Action system has borrowed a lot of principles from NLP but having heard of a principle like building rapport by “Matching & Mirroring” does not mean you actually have the skills to do that in a real life situation etc. etc.. Against this you are pressured to attend regional conferences as described in the previous post where you are served up the same B.Sugars soup over and over again.

If you have a very good general business background , excellent interpersonal skills, lots of perseverence, a very high level of autonomy, excellent presenting skills, love learning and a budget of at least 120k to start up your business, Action could be right for you. However if you have all of those attributes, maybe you don’t really need Action.

As for anyone who doesn’t have all of these qualities, best option would probably be to look at doing something else.
==============================

My own painful experience has been that unless you are a natural and experienced Salesperson – of highly intangible professional services – you will fail and lose over $150,000 in the process along with all your self-esteem.

I have started a new Blog on Soulcast to publish my ongoing saga with them:

http://www.soulcast.com/post/show/245798/ActionCOACH-Blog—First-Posting—Day-1

And see Twitter – look for user BrokeCOACH.

CAVEAT EMPTOR !!!
Guest on August 5th, 2009 5:41 pmYes, subscriber, definitely, listen to “Insider”! BTW, what happened to “Insider”?He wrote on Soulcast: “Watch this space as the story unfolds over the next 40 days.
“Day 1: I now have zero clients and zero money and I owe ActionCOACH just under $2000 – this month’s franchise fees.

“I will also post a summary of this diary on Twitter: search for “BrokeCoach”

“If you are a prospective coach going thorugh “due diligence” – wait until Day 40….and you find out what happens to me.”

Guess what happened his first 40 days? NOTHING. He never got past that first post on Soulcast. He never got a single follower on Twitter nor posted a Tweet.

Wonder why his coaching biz failed? Hmmm… Think follow-thru may have been an issue?

How stupid do you have to be to quote a guy who set out with the goal of chronicling his own failure? Seriously!

At least when Brad Sugars launches a blog, he follows through and actually posts to it. At least Brad Sugars set out to be successful… and achieved it.

Maybe you should reconsider who you should be bashing and who you should be praising. Subscriber, if your goal is to fail and be able to blame others for it on the Internet, you’re definitely in the right place! Man-in-Action and Insider can give you the guidance you need!
Man-in-Action on August 5th, 2009 6:00 pmResponse to “Guest”I accept that maybe I should have been clearer in the way I laid out the above post – but the last few paragraphs after the line….
===========================

were posted by me today – not “Insider” in June….. (apologies to he or she), so this is still only Day 1 and believe me, I will be “following thru” over the next 39 days. So if I were you I would keep watching Twitter and the Soulcast Blog.

And who are you “Guest” – and what qualifies you to hold any views on ActionCOACH and their relationship with their franchisees ?
Guest on August 5th, 2009 6:18 pmMan-in-Action:What qualifications are required to poke fun at someone who proudly boasts that he is going to chronicle his own failure and descent into debt over the next 40 days?
What credentials do I need to be worthy of discussing business coaching with a failed business coach? Is there a negative net worth requirement for me to be deemed “qualified” to speak in your presence?

Please enlighten me. I must be missing something, because to me you just seem like a guy who is eager to spend lots of time and effort documenting his own failure when he could be applying the same effort into building a successful practice.
Man-in-Action on August 5th, 2009 6:41 pmResponse to “Guest”I’m already in debt – as far as I intend to go – and the primary purpose of this “chronicle” as you call it is intended to prevent others ill-equiped to be successful in the ActionCOACH system from joinng this franchise – or at least to think very very hard before investing $150,000 of their usually hard earned cash.
If you are indeed a ActionCOACH coach (and I assume a successsful one in your view) then start posting under your own name.

Most of the (few) successful ActionCOACH’s I have encountered probably already had what it takes to make it anyway – a point made by “Insider” – and would have little time or inclination to be contributing to Blogs like this. So why do you?
Guest on August 5th, 2009 7:07 pmMan-in-Action:If you had yourself as a coaching client, what would be your advice?
Would you say “Let’s see… you spent countless hours deciding and training to be a business coach… you have signed a binding franchise agreement… you are deep in debt… I think your priority should be starting a 40 day diary chronicling your demise! Add to that a minimum of 3 hours of negative blogging per day. Your 120 hours will be much better spent this way rather than, say, generating income.”

Sorry, but I just don’t get it.

You’d be better off working at McDonald’s for 40 days. At least you’d get a paycheck and a few delicious meals.
Another ex coach.. on August 5th, 2009 7:28 pmCSI …I have the letter in .pdf that they sent out ..an ML sent it to me when i was researching becoming a firm. Here’s the contents of that letter.actioncoach.com
5781 S. Fort Apache Rd
Las Vegas, NV 89148
phone: 702-795-3188
fax: 702-795-3183
toll-free 888-483-2828
ActionCOACH USA Inc.
From: ActionCOACH Founder and CEO, Brad Sugars
For the past 15 years, I have built my company into a world leading brand. One thing I have learned is being number one has many pluses and – unfortunately – a few minuses. My nature, and the nature of my company’s culture, is not to be negative or partake in any type of pessimism or negativity. But being number one also means you blaze the trail for others to follow. Unfortunately, a very small percentage of people in our category believe the best way to gain a superior
position for themselves is to publish anonymous posts about me, my family and my company which are extremely negative and totally untrue. Here is my dilemma. I have a company with a strongly ingrained culture of being both passionate and positive in business. All of my focus – and that of my team of more than 1,000 Business Coaches around the world – is on
affirmative business change and helping others make real and impactful long-term differences in their companies and their lives. Yet, I have this distraction – one which you have also stumbled across. So here’s a question: If it were you who had lies printed about you by an anonymous person or persons
(ex-employees you fired for theft or your competitors)– who sometimes stooped so low as to involve your own family – what would you do?
Take a moment to think about this before you read on – and let’s see whether or not we are cut from the same cloth. If your immediate answer is: “Do Nothing” – then I want you on my team right now …
… and it is unnecessary for you to read the rest of this letter – welcome onboard!
But if you had another answer, don’t worry. It took me some time, a lot of money and some good coaching for me to arrive at the right answer – which is ultimately – “Do Nothing.” Here’s why: Firstly, it’s impossible to interpret why people do what they do, and I do not propose to give meaning to – or to interpret – negative and “below the line” communication, especially when it’s
anonymous and faceless. However, like most people in my position (and some tend to forget, I am still human, especially when hurtful things are said about my loved ones) – a father’s natural reaction is to fight. Indeed, that is what I initially set out to do. So I hired the best attorneys money could buy (as well as
the best investigators and IT consultants I could find) to track down whoever was responsible for these hurtful posts. I quickly discovered that perhaps this path was not the right road for me to take – especially after I consulted with my own mentors (yes, as the pioneer Business Coach in the world’s number one business coaching team, I do have my own coaches and mentors – for the better I may add!) – and here is what they asked me … Would you want to do business with anyone who believes in an anonymous internet post? Are the lies better than the thousands of positive testimonials you have received over the years – including many from the highest profile and most renowned thought and business leaders in the world? Is investing any more of your time and money to identify anonymous lies the best use of your time? In the end, my answer to each of these questions was a simple “No.” By the way, if you answered “Yes” to any of the questions above, I suggest you do some more research and come back to see us when you can confidently answer “No” for yourself. But if you now agree that the best option is simply “Do Nothing” – then I also welcome you whole-heartedly to our team.
All the best,
Brad Sugars
P.S. My dad used to teach me that you don’t need to “become a snake to not get bitten by one.” I’ll take the tens of thousands of people who do like me and my team and what we do each day over the handful of people who don’t.
Another ex coach.. on August 5th, 2009 7:30 pmThere’s the proof of the letter that was sent to ML’s for them to give to prospects if they come across the internet reviews. Also…like i said before ..there is only 820 coaches worldwide. But Brad Still advertises over 1000.
Guest on August 5th, 2009 8:23 pmWhat’s so bad about this letter? This doesn’t seem like a smoking gun to me… just a guy trying to spin criticism and protect his franchisees. You wouldn’t?What’s the big deal with the # of coaches? So what? You would have bought the franchise if there were 1000 but not if there were 820? A salesman who overstates the size of his company is news?
I’m still searching for the big deal here. You act like this guy’s a scam artist but your actual complaints are pretty petty.

Where’s the beef?
Mark on August 5th, 2009 8:35 pmIf you haven’t read all of the previous posts, I would recommend that. I believe you will see some significant themes. For me, the “big deal” is that 12 out of 17 of my training class (Oct ‘07) have left the system, due to the inability to make money at a rate anywhere close to what was implied for earnings. I was lied to on a number of issues. I spent $115 k on the business during the year I was in the system, as well as putting the $30 k I made back into my business. This does not count for the money I spent for living expenses. In my first year, my loss was $200 k with a return of $30 k – not a good investment! During a typical month of making $5 k, I was ranked around 380 out of ~ 800 coaches. There are a handful of coaches that make money in this business. A successful franchise will typically have less than a 10% drop out rate, which is radically less than Action’s drop out rate.
coach2003 on August 6th, 2009 12:00 amIs there 2 “Guest” around just like there were 2 “ML Insider” around?I assume “ML Insider 2″ has not responded to Admin thus far?
It doesn’t bother me which side of the fence you sit on regarding BS & ActionCoach, let readers decide…

To Man-in-Action, though I did lose all my money with ActionCoach and is bitter about the whole experience, particularly my ML who became a completely different person from the one who sold me the franchise the moment I came back from training… I can’t help but agree with “guest” in this case.

Rather than setting your RAS to failure and re-affirming it daily, do something more productive. Take legal action if you feel you have a case, especially of misrepresentation or alternatively, do what is necessary to be successful.

You ask why a lot of ex-coaches do not post using their real names, again, seems funny coming from you who is also anonymous. But I can tell you why some others are anonymous. Most out-of-court settlement requires signing strict confidentiality agreements. As soon as someone said something in the open, ActionCoach has the right to pursue further action which no longer has anything to do with the coaching business. I am one of those. Then there are those who are silent because they simply do not have the financial muscle to respond to legal intimidation.

So maybe there is a third alternative for you. If you can find an attorney who is confident about winning a class action suit and willing to go on contingent basis. Then enrol others.

Goodluck.
Another ex coach.. on August 6th, 2009 12:06 amThe exit rate is about equal to the incoming coach rate..for example..110 coaches have exited the system from nov. 08 to july 09…and another example for you of the failure rate is…June 2008 ..in the USA there were 296 total coaches.. then you skip to June 2009 there are 295 total coaches in the USA. Globally …June 08 there was 800 total….june 09..828… so it looks like they come and go at the same rate.
Another ex coach.. on August 6th, 2009 12:13 amI know in the U.S. approx 82% are silver and less… which highest you can be silver is making 12k a month.. which isn’t a lot after the 1.8k royalty, 5% marketing fee, and other business expenses, Not including if you hire a telemarketer, rent an office space and other misc. marketing advertising expenses. Add up what you’re yearly take home will be. Oh..don’t forget the 50k up front for training. It’s tough to make it with action. Definitely not a good investment unless you can really sell.
Another ex coach.. on August 6th, 2009 12:14 amOh yeah..the big deal about the letter is about him being a hypocrite about the internet postings…claiming he’ll just do nothing..but yet diverts 6 months of everyones marketing fund to try and squash the posts.
Observer on August 6th, 2009 5:28 am“claiming he’ll just do nothing..but yet diverts 6 months of everyones marketing fund to try and squash the posts.”For someone who seems obsessed with his public image, that does seem to be a pretty blatantly phony. Wonder why he makes it so easy for his critics.
Coach2003 on August 6th, 2009 10:23 amLet’s address some of the “question & answer” from askbradsugars.com…Question:
There are some serious allegations that you tried to hide comments on blog sites by spamming (uploading lots of irrelevant content) to dissuade people from reading negative posts?

Brad said:

“I run a global business and keep internet browsing history reports at global headquarters. Apparently – the times these spam attacks were posted were during business hours.

Some of the people fingered as being the instigators of this attack were actually at work that day – so I think my IT team would know if this was the case.

Another post swore they had inside information it was another member of my executive team. Funny because they were actually on a leg of an international plane trip tens of thousands of feet in the air at the very same time they were supposedly making these posts.”

My response:

Let’s see… the ‘allegation’ was Brad Sugars got his team to spam negative post sites… and his reply is it can’t be true because it happened during office hours.

Huh? Why not especially since you pull them back from all travel and marketing activities just to sit in office to counter negative posts.

Brad said:

“Then there is the time of posting. Lots of activity on certain days by “multiple bloggers” with names strangely the same as people who work with me – within minutes of each other. Also the posters were claiming to be from all four corners of the globe.

Now, if you checked out the visits for the page within the site – it would mean all these supposed unhappy people convened at one moment of time to post a conversation using the same naming conventions.”

My response:

Hey Brad/Jodie Shaw/Nathan,

Since you guys are ‘internet gurus’ surely you are aware that people can subscribe to this site and others? And they can come in and response when they receive an interesting update?

Duh??

Brad Said:

“I hope this sheds some light on things. To be truthful, many big corporations get this type of unwanted attention from time to time. Myself or my team are not shying away from these issues. We just choose to answer these allegations on our site.

At the end of the day, the business speaks for itself. Like I mentioned, the amazing positives about our brand drowns out any manifested negatives and frankly that is what I prefer to focus on.

I am confident that if you interact with our coaches and their clients – you will see that, too.”

My response:

Many big corporations? Why don’t you name some of them to prove your point? Afraid of lawsuits?

Amazing positives? Like your miserable attempt to get on Wikipedia? Where most said you are a hack, insignificant and trying desperately to market yourself with a bloody 14.1MB jpeg of your face? Btw, I believe you can’t lump the feedback on wikipedia as ‘negative posters’ can you? Let’s see how you spin this By the way, a search of “actioncoach” on google lead to pages and pages of marketing spin with hardly any independent review unless it is a negative one.

“Coaches and clients.” Again an attempt to link client satisfaction with coaches as coaches satisfaction with you. Same spin. Same reply. Just because consumers love McDonald doesn’t mean the franchisees love their franchisor. Give up.
Another ex coach.. on August 10th, 2009 11:37 pmTest.
Year of 2000 on August 11th, 2009 12:46 pmI joined Action International back in 2000 and within 18 months out of 12 trainees here were 5 left. I was the only one to survive the 5 years and at times it was tough and at times it was a breeze.A poster early on said something like nobody ever sells their licence. Well I did and for 10K more than I bought it for.
I have alot of inside information which does back up statements put on this site. Nobody has mentioned how many coaches have NEVER paid for a licence. Yes, there are some out there – and they pay NO monthly royalty. Some of the GURUs in Action strut their stuff at conferences and coach other coaches and DO NOT pay monthly fees or marketing levies. They coach others and show empathy when the going gets tough knowing they are alright jack as they don’ t have any outgoings other than phone, broadband connection and petrol.

They know who they are – and if they read this no doubt we’ll see some responses.

I know of many coaches who had to declare themselves bankrupt. Some MLs are good and others are ruthless. Money is all they care about.

As for the latest Global Conference – How can the ML of the Year globally get that award when they themselves have breach notices from Brad? Interesting as they say in Action.

Action does work for some – and only for those who are prepared to work hard for 2 years, are good at selling themselves, have cashflow behind them, have a partner whose wages covers all the bills and yes it will work for them. There are some who join thinking it is a lifestyle business – stupid. It’s a business and in startup mode – so be prepared to work hard. I had a great time in Action, and I worked hard and achieved alot. However, I saw loads fall off the cliff. And they haven’t mentioned the poor guy who ended his life due to the debt. You won’t see that anywhere either.

MLs will protect the brand – and so they should they paid loads to start their busiiness.

Client testimonialls – loads of clients are happy with their coach. There are great coaches in Action , there system works and they work with their clients to help them achieve otherwise the client will get rid of their coach.

I think some people forget pain quickly. Craig Hohnberger and his wife Annette were on the bones of their arse and wanted out of action some years ago. They have faith and stuck to their plan, gave up alot and seem to be doing okay now. Good on them it was a close shave.

Do what is right for you. Join and work damn hard or walk away and do something else. Nobody will make you sign a contract – and if you got into a high when in due diligence well you can only blame yourself really.
Mark on August 11th, 2009 10:44 pmUnfortunately part of that high comes from pure lies delivered by my former ML and Rich Bernstein. I guess I was foolish enough to believe the things I was told!Buyer beware – the drop out statistics speak for themselves.
coach2003 on August 12th, 2009 12:26 am“Nobody has mentioned how many coaches have NEVER paid for a licence.”I know for a fact the Coaches’ Coach in my territory pays NOTHING as you said, he only paid to attend training. In return for coaching coaches, he get a free ride. And he’s the most arrogant SOB I’ve ever met. He actually went around telling coaches “tapes of the month” etc are for coaches, not for coaches’ coach, that is why it is ok for him not to listen to them. In seminars, we do our best to prevent his attendance (supposedly to ‘monitor’ our quality) when in fact he was working the room to get clients for himself. We know because our attendees told us!
So I am aware of the Coaches’ Coach arrangement, if there are even more coaches not paying loyalties, that I am not aware.

Is anybody aware of how to go about reporting this to authorities to initiate an investigation into their business practises? I hope we can do something concrete instead of ranting here.

It is about bloody time Brad Sugars and his bunch of crooks get taken down!

“MLs will protect the brand – and so they should they paid loads to start their busiiness.”

Not all MLs paid loads. Some territories which Brad is desperate to get into, the MLs are practically just his representative on work-for-hire scheme. Of course, that is not what they say in their marketing. Again, I know this to be true for my ML.
coach2003 on August 12th, 2009 12:29 amps: perhaps that is why the an earlier ML poster mentioned the strict non-disclosure imposed on MLs with regards to talking to other MLs or ML prospects regarding their financial arrangements?
coach2003 on August 12th, 2009 12:35 am“There are some who join thinking it is a lifestyle business – stupid.”I agree with most things you said but the above… it is what they are SOLD, the entire franchise selection process is geared towards giving that impression.
When prospects do their due dilligence calls, I always tell them they have to work their butts off regardless of what they were told and if they are willing to, this will be a great business to be involved in. Strangely, I stop getting due dilligence calls in my last 2 years in Action, so did the rest who told the prospects this.

Now IF they actually do their “Test & Measure” the way they were supposed to, they would realize that pospects who spoke to us and still join were the ones who survive the longest
Another Ex Coach on August 12th, 2009 2:33 amUndoubtedly, the sale of any franchise usually means that the prospective purchaser has many questions about the businesses viability. This usually includes performing Due Diligence by the buyer and seeking documentation and assurances about the franchise opportunity they are considering. The danger is that the franchise seller will try to seal the deal by making assertions related to the business and its potential earnings. This often results in franchise seller overstating earnings potential. This is not allowed by franchise regulatory law and is often the basis for franchise litigation claims.The danger is great since the UFOC Guidelines do not clearly define what an earnings statement may be. Even the most innocuous statements may be considered an earning claim for which a franchisor may be subjected to liability. Even the following:
* “Our stores generally produce a 7% return on your investment within two years.”
* “Gross profits may be expected exceed 25% of your sales.”
* ’We have never had a store produce less than a $50,000 a year profit.”
* “You should be able to break within the first two years.”
* ”
The numbers you are considering sound realistic to me.”

Because of this potential liability, it is important that in selling a franchise, the franchisor and its agents should avoid advertisements, promotional literature or statements that are communicated to potential buyers regarding the earning potential of the new franchise.

If earnings statements are made, they must be based on a supported earnings claim. In other words, the representations must have a reasonable basis in fact. That may mean providing documentation in the form of average gross sales for the existing locations in the system and/or profit and loss statements. Any financial statements provided to a prospective franchise buyer should be include with supporting documentation in the Uniform Franchise Offering Circular (UFOC).

Any earnings statement must be based on other similarly situated franchise units. They must be reasonably similar with regard to the size and nature of the store being sold. The earnings statement must also reflect the current financial production. In other words the documentation should be based on production in a proximate time period and not based on production that predate the proposed purchase by a number of years.
Franchise Lawyer on August 12th, 2009 2:36 amOverstating franchise numbers during the sales process is illegal..For example:
stating over 1000 coaches when in fact there are roughly 820.

I highly suggest all you ex-coaches who have lost a lot file a complaint with the Federal Trade Commission. If not for anything else, then at least about their franchise numbers misrepresentation. Also look into how you were sold the franchise, esp if actioncoach gave told you how much you could be making.

To file your complaint please visit:

https://www.ftccomplaintassistant.gov/

It only takes around 5 minutes.
Franchise Lawyer on August 12th, 2009 2:39 amAlso, for more info about this you should check out an interesting, yet true post made by “anotherEXcoach” at soulcast:http://www.soulcast.com/post/show/221264/Actioncoach-is-a-Scam
Action speaks louder than words on August 12th, 2009 7:46 amTo Coach2003 and others.
At minimum all the “ranting” here serves to warn others that an ActionCoach franchise is far more likely to leave them with at least 150k less in their pockets than the lifestyle of their dreams presented during the sales process. That alone makes all the contributions here worthwhile and all of this might even lead Action to clean up their act a bit.
Brad Sugars recent posts on http://www.askbradsugars.com point to this being unlikely but I expect that both he and the M.L’s will have to deal with much tougher questions from any franchise prospects who see this site before making a decision. It is also very satisfying to see that all of Brad Sugars efforts to swamp the web with his own material have so far completely failed. The Google ranking of this and other sites which tell the other side of the story continue to improve day after day.
For those already trapped in an ActionCoach franchise who are looking for a way out before they lose everything the info here should also be useful. There is more than enough stuff here to present a good case for misrepresentation and all it wil take to set the ball rolling is for someone to contact an attorney, ask him to have a look and take it from there. Actually I believe some of the stuff Brad says on http://www.askbradsugars.com makes this even easier. By taking a stand on so many issues with such obvious disregard for the truth he has really strengthened the case of those who believe he is driving force behind a very deliberate policy of misrepresentation.
However because of the restrictions in the franchise contract a class action suit looks very difficult. Again an opinion from an attorney would be well worth getting.
NZEx on August 12th, 2009 8:39 amThank you for the link, Franchise Lawyer, unfortunately, I am in NZ (where the ML blatantly breach agreement by letting his wife conduct action seminars without owning a licence), hope all those in the States will lodge a complaint, whether you are current or former coach.
Year of 2000 on August 12th, 2009 4:27 pmIn reply to Coach 2003You’re right some MLs have not paid loads for the territory/ies. It’s value is based on population – supposedly.
I’m pleased these forums are in place as those who know how to do proper due diligence and have a lawyer who checks the internet can then make their own minds up from what they read. Yep, lots of us sound negative, but it’s all about saying what you think and feel. So good on those who’ve contributed and if like me you’ve just read these on and off over the last few years and it’s made you feel better – good too.

On the Coaches Coach statements I understand that a ML can have one as part of their team and they don’t have to own a licence it’s part of the ML Agreement. They are limited to only a small amount of clients and are paid a fee by their ML. I know some do sell, sell, sell at coaches at conferences – they are not the sort of coach I’d want to have. The good ones get results for the people in their own territory and are happy with that. Some are self centred. The world is full of INTERESTING people.

Keep up the rants guys and gals – helps those in DD with sorting out what they want to believe and if they have read these and other sites info and join Action they can’t complain later that they weren’t informed.
coach2003 on August 13th, 2009 1:08 am“It’s value is based on population – supposedly.Nope, it’s based on what they can get away with, hence the secrecy Some I believe are financed by Action with a back-to-back agreement not reflected in the franchise agreement to protect the value of the ML license.
They are limited to only a small amount of clients and are paid a fee by their ML.

That is exactly why no one can work with their Coaches’ Coach in my territory. We expect a Coaches’ Coach to be someone who’s “been there, done that”. But no, what we get is a stream of individuals who couldn’t afford the coach license being offered to become the Coaches’ Coach. Can you see the irony in that? We know for a fact that these individuals, if they are a coach like us, with the same financial commitments, probably would not make it. Instead, they were given a fee and a ‘big title’ and lord over the coaches. Every single one in my territory doesn’t last 6 months, in the end, they give up. And the most scary thing is, they set the Coaches’ Coach loose on new coaches just back from training who didn’t know any better that the person put to ’support’ them does not know the system, does not read any of the system materials and is after their prospect list!

I am sure Brad and his team are monitoring this site and others. Rather than scripting patronizing aad FAKE Q&A on askbradsugars.com which no one will believe (and sound stupid to anyone on the inside), let’s hope they take this as customer feedback and do something about it.
ADMIN on August 13th, 2009 6:49 amcoach2003 wrote: That is exactly why no one can work with their Coaches’ Coach in my territory. We expect a Coaches’ Coach to be someone who’s “been there, done that”. But no, what we get is a stream of individuals who couldn’t afford the coach license being offered to become the Coaches’ Coach.What’s a “Coaches’ Coach”?
What’s their relationship to the MLs?
How are they paid? How’s it supposed to work?

Are these just informal mentors, or more? Isn’t that the MLs role?
coach2003 on August 13th, 2009 8:18 amWhat’s a “Coaches’ Coach”?Coaches’ Coach is the person who is supposed to mentor coaches. In smaller territories, the ML is also the Coaches’ Coach.
How are they related to the MLs? How are they paid? How’s it supposed to work?

Many different arrangements.

In some territories, as mentioned above, ML offer prospects who couldn’t afford to pay for the license to join his team as the Coaches’ Coach. Imagine, as said above, the politics resulting from such a move. This person is no better than any other coach in terms of knowledge and experience but he join with the impression he is above coaches. At the same time, he’s also paid a fee, he doesn’t need to pay admin fee and is also allowed to compete with coaches for clients, though in limited numbers. So in some territory, for example, mine, the coaches’ coach goes around positioning himself as ‘better than a coach’ to the very people he’s supposed to help the coach with.

Recently, I heard coaches who reached a certain level are allowed to offer their services coaching other coaches in the system who’re lower ranked, for a fee, Maybe those still in the business can share. Based on what Year of 2000 shared, I suspect nothing much have changed.

So imagine yourself as a coach now. You are assigned a Coaches’ Coach whom you know is not more experienced than you, who does not put effort into learning the system, who has his basic expenses covered unlike a coach and who is also openly positioning himself as better than you in public… and you are supposed to be “held accountable” by this person to get results else you are “playing below the line” and if you fail in the business, it’s your fault.

Having said that, there ARE great coaches’ coach in Action, just like there are great MLs. You need to do your DD carefully and not be taken in by the hype. Always call a few more coaches than the names you are recommended to call and don’t fall for the ‘assignment’ trick they used to practise. Ie, they position your due dilligence as an assignment to find out how you can make it as a great coach and give you a list of tailored questions… read above posts.
ADMIN on August 13th, 2009 9:22 amcoach2003:
Thanks
OC on August 13th, 2009 11:03 amFor those of you with insider information:Can you imagine how would ActionCOACH brand value be impacted if Brad Sugars was to forgo control of the company for whatever reason? E.g. he sells his share in it and goes into retirement or a piano falls on his head or whatever?
Thank you for your comments. As a prospective coach it looks to me very much as a one-show man company, thereby my concern…
Wow OC on August 14th, 2009 12:56 amWow OC,If that is your main concern after doing yr due dilligence and nothing else fazes you, I suggest you join
As for me as a current active coach, Brad’s notorious reputation is more of a concern. Especially in Australia, half the people I spoke to which remember Brad from his property seminar days say ‘no’ immediately…
Stan the Man on August 14th, 2009 9:18 pmI thank “Franchise Lawyer” for posting that hyperlink. I just filed a complaint and I strongly recommend that everyone on here file a complaint with them. I also posted this on soulcast.https://www.ftccomplaintassistant.gov/
Wow OC on August 14th, 2009 11:58 pmADMIN: How are they related to the MLs? How are they paid? How’s it supposed to work?I remember one of these so-called Coaches’ Coach was laughed off my territory never to return. He was paid like Coach2003 said. What Coach2003 and the poster before him missed was that Coaches’ Coach share coaching revenue 50-50 with the ML in their territory.
His first ’session’ with the coaches was “IF you are accountable, YOU will call me every week at the time I give you, if you don’t call, you are not accountable and not serious about your business, you can jump off a cliff for all I care. I will report back to the ML that you avoided your coaching session and you better not complain about lack of support after that. Any questions?”

Seems like he can’t even afford his phone bills On top of that, new coaches are required by the ML to pass him a list of prospects to call and do ‘reference check’ on.

Knowing that the Coaches’ Coach split 50-50 coaching revenue with the ML, do you think that he only do reference check?

Which is why in some territories with locally employed coaches’ coach, the turnover of coaches are even higher, the ML and Coaches’ Coach run a pretty profitable scheme together at the expense of coaches, especially newer ones.

As many posters said in much earlier posts, coaches frustrations around these areas NEVER reach the corporate office for obvious reasons.

What I find most interesting is from reading askbradsugars.com, Brad Sugars is obviously getting updates on the posts here. But he seem more interested in addressing the so-called personal attacks against him rather than the many other valid posts here regarding the way the business is operated. The entire focus is on ‘clearing’ his name, using the 5% marketing fund that coaches contribute every month. Maybe someone should remind Brad Sugars he should clear his name using his own funds and use ActionCoach’s funds and resources for ActionCoach.
Wow OC on August 15th, 2009 12:33 amWell said: If any of you could fix action coach, how would you want it to run?For a start, I will eliminate MLs from the system and immediately reduce admin fees by 30-50% (which, by the way, still allow Global to make more since MLs get more than 50%). That will reduce operational costs for coaches massively while taking away very little from their businesses in terms of support. Most MLs are nothing more than glorified administrators and salespeople anyway. So just hire a sales rep in each country to report direct to global, where the rep does not deal with coaches.
Use the additional profits from not having MLs to invest in technology to provide support for coaches. As of now, most real ’support’ already take place in the forum and through webinars and conference calls. Again, MLs are nothing more than “email forwarders” for these stuff, hardly justify what they are earning.

How about it, Brad Sugars? Coaches AND you will both make more money in the process by cutting off the redundant, interfering and political middle-men in the form of MLs.
So true… on August 15th, 2009 9:02 amAgain, MLs are nothing more than “email forwarders” for these stuff, hardly justify what they are earning.I couldn’t agree more with you, Woc OC. I frequently receive forwarded emails from my ML, with the entire message intact, including the “Please inform your coaches…” part. Why the f#ck am I paying so much to the ML? Why not just include everyone in the original emails since the ML adds absolutely nothing to the communication besides “FYI” ?!
The ML is just a redundant postman. A corporate sales rep operating from a serviced office to sell licenses will do.

Those who are active coaches do support Wow OC’s suggestion the next round we get an internal survey.

Besides lowering costs for us and increasing income for both coaches (and Brad of course), it also take away the frustration of having to deal with MLs abusing their position to compete unfairly for business.
nonotme on August 16th, 2009 8:34 amAlmost any neutral reader will agree ActionCoach launched a very childish “Denial of Service” attack on his detractors by flooding soulcast with junk posts and even vulgar statements. Insider sources and former employees claimed it was lead by Ms Jodie Shaw, who even bragged about it in their office.However, predictably Brad denied it by posting on askbradsugars.com the following:
Some of the people fingered as being the instigators of this attack were actually at work that day – so I think my IT team would know if this was the case.

Another post swore they had inside information it was another member of my executive team. Funny because they were actually on a leg of an international plane trip tens of thousands of feet in the air at the very same time they were supposedly making these posts.”

Now Brad Sugars, I have a suggestion for you. To prove that you are better than your detractors, why don’t you post (On your website, not here, it is okay.) scans the plane ticket stubs AND the date/time of the junk postings on soulcast. I am curious what destination require you to be on a plane nonstop for 6-7 days.

C’mon Brad, you claim others spin but you are not much better are you? As one poster above noted, what can you prove by “the posts are done during office hours” or “they are on a flight”? Unless… you are trying to distant YOURSELF from your team’s actions and more interested in protecting YOURSELF than Actioncoach and your team… you are trying to say “Even if my team did what you claim, I am not aware and I didn’t instruct them.”

Jodie and gang, can you read between the lines… or are you just birds of the same feathers?
Another pissed off ex-coach on August 16th, 2009 3:42 pmI really don’t know what Brad Sugars sees in Jodie Shaw… it’s very interesting, in that either he is a complete idiot and truly believes that she was once a creative director and that she is doing her best for his company, or he knows everything that’s going on and has helped her lie about her past, supports her spamming these forums and pushing them to number one on google, and supports her policies of breaching every coach she can for the smallest things she can so that he can maximise the failure rates of his franchises. But, why are we surprised? We’re talking about the same man who said that “business is about taking advantage of those in less fortunate situations.” This is the same man who bragged about his Lamborghini and his Rolls in internal company newsletters just to rub in the fact that the employees will never be able to afford one. We’re talking about the same man who parties at the Hefner suite at the Palms hotel in Las Vegas [Deletion] while his wife is at home with the kids and without inviting one member of his employees. So why are we surprised at any of these allegations? I’m posting a complaint, and I’m reposting the link:https://www.ftccomplaintassistant.gov/
I highly recommend that everyone on here posts a complaint as well. Maybe we can send these assholes back to Australia, so they can stop ripping off hard working Americans.
ADMIN on August 16th, 2009 5:39 pmFor everyone’s sake (especially the commenter’s) and for the credibility of your argument, please focus your comments on the pros & cons of the ACTIONCoach franchise program & refrain from personal attacks, especially on employees. Thanks.
Wow OC on August 16th, 2009 11:02 pmAdmin wrote: “For everyone’s sake (especially the commenter’s) and for the credibility of your argument, please focus your comments on the pros & cons of the ACTIONCoach franchise program & refrain from personal attacks, especially on employees. Thanks.”Hi Admin,
While I understand your point, I also understand the points raised by the rest.

Yes, I believe everyone should refrain from personal attacks such as “So & so is a womanizer..”, etc which has got nothing to do with the franchise and take away the commenter’s credibility.

On the other hand, the credibility of the leaders make or break a franchise. In ActionCOACH’s case, being a franchise which more than most other franchises require tons of interactions across the board, it is equally if not more important for prospective franchisees to understand the people behind the franchise.

I believe readers are smart enough to seperate personal attacks from genuine feedback on the conduct of the team.

For example, in the last few posts, I would probably see

“I really don’t know what Brad Sugars sees in Jodie Shaw” and the rest of the comments as personal attack. So as a reader, I will see that commenter hate the team and it might or might not be relevant to me as a prospective licensee.

On the other hand, the post above addressing Brad’s retorts on askbradsugars.com, sarcasm of the commenter aside, I see it as a valid illustration of inconsistency on ActionCoach’s part in addressing issues, which will be a reflection of how they deal with issues if I am part of the team. This is definitely relevant to me as a prospective licensee.
guest on August 17th, 2009 1:40 pmI agree with Admin in that the personal stuff gets ugly and isn’t even necessary.There’s plenty in the professional hype that could be scrutinized. Take a look, for instance, at some of the widespread claims Brad Sugars makes on his websites that he is a “A best-selling author of 14 highly acclaimed business books”
Are all 14 highly acclaimed?

I assume “best-selling” means that he’s made a major bestseller list, such as the NYT. Is this true? Which of his books have made legitimate best-seller lists?

I assume that by “author” that means that he writes books. Yet his website so much as states that his books are written for him by someone else:

“Brad Sugars has been criticized for having his books written by ghost writers. You just have to read Brad’s blog and social Media sites to see that the books are written very true to Brad’s style. Whether ghost written or not, many well known and popular writers employ the services of ghost writers to help edit, do research or fill in gaps in the copy. Brad Sugars did not create the ghost writing industry!” (from the AboutBradSugars dot com website)

He didn’t create the ghost writing industry? Is that code for “I use franchisee advertising money to pay people to write books I can claim that I wrote?”

Search “Brad Sugars best-selling author”on Google to see how widespread his claim is. It’s even in the title of one website.
Wow OC on August 18th, 2009 7:17 amFact is, Brad is right about ghost writing. It is work-for-hire and acceptable.
guest on August 18th, 2009 8:00 am“Fact is, Brad is right about ghost writing. It is work-for-hire and acceptable.”Just because it’s work-for-hire or even common practice doesn’t make it (in my opinion) acceptable. It’s considered OK for celebrity biographies, but ghostwriting isn’t acceptable in academic circles. It’s considered entirely unethical in medical publishing. I doubt people would consider it acceptable if Stephen King admitted he didn’t write his books but just paid people to do it.
It’s one thing if an actress or even a CEO has a book written when their fame rests on being an actress or CEO and not an author. However, if someone’s claim to fame is being a bestselling author and he is not authoring nor are his ghostwritten books best-selling, this is acceptable?

Revealing, maybe.
Wow OC on August 18th, 2009 11:31 amIf you can grab hold of a copy of Brad Sugar’s original editions/self-published versions of his books and McGrawHill’s, you’ll notive a hell lot of cleaning up in terms of language, spelling & grammar… which probably prove that Brad wrote the books himself
guest on August 18th, 2009 12:16 pmHis website says “the books are written very true to Brad’s style.” I don’t think that it’s in doubt that at the very least the later books were ghostwritten. Not copyedited, but ghostwritten with his name stamped on it.Paid for by company advertising funds, most likely, wouldn’t you say?
What about the statement ““A best-selling author of 14 highly acclaimed business books”

Which of these were bestsellers? Did any appear on a recognized bestseller list?

Are all 14 highly acclaimed?
Mark on August 18th, 2009 9:38 pmWhat’s really funny is that the ML’s are allowed to put book covers on The Business Coach, stating that they are co-authors with Brad. Imagine how impressed I was during due diligence, when I found out that my future ML was an author, only to find out that they had nothing to do with the book. This came to light during my training, when we were encouraged to do the same thing! Nick Rucker, Director of Training at the time, suggested that we copy his testimonials and put them on our websites! Wow, where does that fall into the 14 points of culture?
Wow OC on August 19th, 2009 12:39 amWow Mark, in other words, they said“We conned you but nevermind, now we will teach you how to con others the same way.”
Amazing!

guest, I am not really bothered whether his books are ghost written, but your points are valid. What I am more bothered with is that all the 5 stars review on amazon.com is written by their coaches, including 2 feedbacks on the same book by one Jodie Shaw.

Which is why, earlier I said, I agree with admin to a certain extend regarding personal attacks… but the fact is, even if a franchise system look perfect on paper, if it is run by a bunch of unethical people, it will still be a lousy business to get involved in, so it is very difficult not to highlight the antics of the people involved.

Another hilarious example on Brad gave on askbradsugars.com to paint the comments here as done by a “few disturbed individuals” is by claiming the posts are all done within the same short timeframe, therefore, according to him, it should be the work of one or a few individuals making multiple posts. As someone who runs a blog himself, he should notice there’s a little button at the bottom of the page which says “Notify me of followup comments via e-mail.”

Even if this sound like a personal attack by some, it should still be highlighted because it is a very devious attempt to hoodwink those with less experience on the web and a reflection of someone bankrupt of ideas on how to tackle serious credibility issues in a credible manner.
nonotme on August 19th, 2009 4:08 amWow Oc said: “sarcasm of the commenter aside”Let me clarify my ’sarcasm’ in my post above.
Most of us know Brad Sugars and his team will NEVER address the issues of coach attrition, misrepresentation and earnings claim openly, whether here or on their own blogs and sites. To do so is to invite a class action suit.

However, in terms of refuting allegations such as drowning soulcast with spam, he can easily provide solid proof if he has any since it does not in any way invite lawsuits as above since there’s really no law against his team posting junk on soulcast.

Therefore if he has to spin to cover their tracks rather than provide irrefutable proof such as ticket stubs, etc to back his claim, then one can infer from it he is spinning and by extension, if he has to spin on something ‘minor’ like this, what else could he be spinning?

Interesting question to ponder for potential investors in the franchise…
guest on August 19th, 2009 9:24 amWow OC wrote “I am not really bothered whether his books are ghost written…”
By itself, it’s not a huge deal. In this particular case, it’s just one of many examples of the corporate attitude toward the concept of honesty – that it’s expendable and that truth is just something to dance around when spinning whatever yarn is being spun at the moment.
Mark’s examples of the book covers and testimonials are great examples.
Brad’s ludicrous claim that his Internet flunkies can track IP addresses to houses when they neither have the IP addresses nor the ability to track beyond a general ISP is still live on his site – despite the fact it’s been disproven here – shows a blatant disregard for even seeming to be plausible.

nonot me is probably right that the serious issues will never be candidly addressed as Truth is just something to be stretched and pulled like taffy. And there’s probably always going to be people who disregard warning sites like this and buy anyway.
Mark on August 19th, 2009 10:19 pmCoaches were asked to comment on Brad’s books, but to also comment on other books, so it didn’t look so staged!!! Sad, but true!
Wow OC on August 20th, 2009 12:22 am“And there’s probably always going to be people who disregard warning sites like this and buy anyway.”Sad but true. I hope readers will at least ask tougher questions and observe carefully the manner in which those questions are answered in their interactions with the franchise sales team and MLs.
People do make it in the franchise and make good money but the success rate is much lower than claimed. They should ask all the questions raised here, take note of what is being said about the MLs by many former coaches here and go in with their eyes fully opened.
Guest on August 20th, 2009 8:27 amWhat about other coaching franchises? Are there others that are better?
Subscriber on August 20th, 2009 12:38 pmGrowthCoach is a top 100 franchise. ActionCoach is not.
http://www.100topfranchises.com/companies/growth-coach.html
Stan the Man on August 20th, 2009 9:26 pmI hate this company, but I have to say that site is not accredited; and a google search for top 100 franchises yields different results for each site claiming to list the “top 100″ franchises.Unfortunately, Entrepreneur Magazine does place them within the top 100, but they base their numbers off the fraudulent numbers provided by ActionCoach themselves.
I think the larger issue should be their franchise numbers (which are fraudulently reported) and their claim, that as a coach, you can make $XXX amount. In the US, franchised companies are not allowed to lay claim to any dollar amount that you COULD be making; especially in conjunction with fake franchise numbers and blatantly mis-represented growth and turn around rates.

I do wonder why they haven’t been in trouble with the law yet… Maybe we should all file complaints with the Federal Trade Commission (thanks again “Franchise Lawyer” for pointing that out).

Once again, click the link:
https://www.ftccomplaintassistant.gov/

Let’s see how many complaints we can file. The more people who file complaints, the more likely we are to save some poor old sap from ruining his life and spending his life savings so Brad Sugars can buy another ridiculous car with it.
Wow OC on August 20th, 2009 11:49 pmNone of the so-called “Top Franchise” rating sites/magazines ever do an exhaustive list of every franchise available. So it is hard to get the real facts.
coach2003 on August 21st, 2009 1:58 amHere is my suggestion to all those evaluating the franchise in ‘de-selecting’ a Master Licensee:1. If you already own another business, sign up for coaching for 3 months with the Master Licensee, evaluate the quality of the coaching. This person is supposed to be your mentor when you are a coach. This will remove the hype and over-promises.
2. If you do not have a business, sign up for coaching anyway, say you want to startup a business. Same as above.

Sign up for the lowest package for 1-to-1 coaching, at most you will lose 4-5K in any currency, better than paying 100+ plus and get stuck in an agreement.
Coachman on August 22nd, 2009 1:07 pmAs a new coach, I see that there could be quite a bit of potential with ActionCOACH under the right conditions. I am on here, however, because I am frustrated about two things. Which are:1. The 5% marketing fee. That’s right, as a coach we have to pay an additional amount for marketing. So we buy the franchise for the branding, and once us coaches spend a lot of money on buying a franchise, we are required to pay 5% of our earnings for “marketing?” What the hell! The whole point of purchasing this franchise is for the marketing. Hell, looking back I realise that it would have been better to simply start my own business since 99% of business owners have never heard of ActionCOACH, they steal 5% of all my profits, and I have to pay for leads. I could have bought leads and payed someone to give me marketing material without ActionCOACH, which leads me wondering “what did I pay for?”
2. Leads…. So you have to pay to get leads, which most of them aren’t really leads. So they think that we are spamming them. I had one guy threaten to report me to the police for sending him an email! It makes me wonder where ActionCOACH got these “leads.” So despite buying leads from ActionCOACH, I have to go out and generate my own leads, which would be fine if I would have known that the “leads” you buy are not really leads at all. The real problem is that after many hours of hard work marketing my business to attract new leads, my ML keeps stealing my real leads from me! I am currently coaching at Bronze level as a new coach, and I have collected quite a few leads on my own. And somehow ALL of my top potential clients have just recently signed deals with my ML! And when I complained to Global Office, I was told that they are allowed to do that, and that I would be in breach of contract if I did not make my leads available for him to steal. What the hell!

“Franchise Lawyer,” what do you have to say about that?
Coach2003 on August 22nd, 2009 1:36 pmHi Coachman,MLs stealing leads and coaches being forced to hand over leads on the pretext of reference checks have been an ongoing scam since the time I was a coach.
Also be careful if you have a local coaches’ coach. This individual is most likely someone who didn’t have money to pay for a license but is now given a marketing advantage over you by virtue of the title given to him. He also share coaching revenues 50-50 with his ML and is usually the person assigned to do reference checks on the leads you are forced to handover.

These are all ‘legal’ according to Jodie Shaw and you are the one who are in breached if you don’t comply.

In my old territory, coaches get together and threaten to collectively take legal action.
anonymous on August 22nd, 2009 1:39 pmCoachman writes “The whole point of purchasing this franchise is for the marketing.”Unfortunately your 5% marketing fee is being used to protect and promote Brad Sugars name and reputation on the Internet. Does he really think no one notices that he is promoting his own name, not ActionCOACH? That he’s making himself the hero, not his coach’s?
Does he really think we’re so stupid we don’t notice that we’re paying to promote his (and probably create) his books, his seminars, etc. but we share in $0 of the revenue. Why is he even battling for his own name with 20 blogs and all the franchisee’s resources. Our clients are buying the ActionCOACH brand and service – not Brad Sugars.

I just read an interesting debate on FranchisePick.com about the same issue:
http://www.bizzia.com/franchisepick/actioncoach-brad-sugars/comment-page-1/#comment-29387

Somebody remind Brad that franchisees are paying to promote ActionCOACH coaching services, not Brad Sugars.
Coach2003 on August 22nd, 2009 1:43 pmHere is something else you can try, coachman.If you can’t gather coaches in your territory together, the next option open to you is to continuously post it on the intranet forums for other coaches to give their opinions on, ie, checks and balances, especially if you have solid proof.
Be careful NOT to submit your proof to Jodie Shaw or anyone else in corporate, keep the originals. One coach that I knew unfortunately trusted them to ‘review’ the evidence, which was swiftly forwarded to the ML for the ML to take action… against the coach!!!

As for the M&S contribution, unfortunately the agreement said you cannot question how it is used, so my old ML actually used her 3% to pay for her admin costs. We have proof but again, the corporate team said we cannot question it!
Franchise Lawyer on August 22nd, 2009 7:14 pm“Coachman” – That’s interesting about having to turn over your leads to your ML to review. I would recommend that you review your contract and make sure this is a requirement. This seems like a good way for the ML or Coaches Coach to steal leads. If it is in the contract , maybe get a lawyer to come up with a contract agreement to give to the ML’s or whoever has to review your leads. Have the contract say something along the lines that they can review the leads but are not allowed to sign deals with any of the leads as they are your prospective clients.
Franchise Lawyer on August 22nd, 2009 7:46 pmBy the way. Do you Give them the leads, or do the ML’s get them via. access to your emails and whatnot? What’s the process of turning over the leads?
coach2003 on August 23rd, 2009 2:27 amCoachman, have you read this thread?http://www.unhappyfranchisee.com/actioncoach-ml-says-detractors-are-losers/
Coachman on August 23rd, 2009 6:11 pmI have read that thread, and that is the very same attitude they have at Global Office…
AngryMan! on August 24th, 2009 1:26 amActionCOACH and Soulcast have formed an alignment. Apparently ActionCOACH paid soulcast to remove the high-ranking google thread from their site. It looks like what they’ve done is removed the old thread to kill its google ranking, then re-posted the entire thread within a new thread so that it will no longer show up in a google search. This is the same one that Jodie Shaw from their corporate office spammed.The old link (which is posted way way up above) no longer works.
http://www.soulcast.com/post/show/71156/Brad-Sugars-Action-Coach

The new link is as follows.
http://www.soulcast.com/post/show/248750/Brad-Action-Coach

As you can see the post number is greatly increased, and what they’ve done is removed the word “Sugars” from the address. They removed all the spam as well. It seems pretty shady that they would resort to something like this. Another failed attempt for them to quash the truth.
Franchise Lawyer on August 24th, 2009 1:37 amThe old soulcast thread has been deleted… hm. Isn’t that interesting, as Action would say.
http://www.soulcast.com/post/show/71156/Brad-Sugars-Action-Coach

It appears that actioncoach had soulcast deleted the old one because it was ranked so high.

Then, soulcast just copied the contents to a new thread which can be found here
http://www.soulcast.com/post/show/248750/Brad-Action-Coach

Same contents…new thread….got rid of “Sugars” in the title…and the new thread has zero traffic so therefor no ranking.

see the thread number.. 248750 vs. the old which shows its a brand new thread. I can’t wait to see how this develops.
coach2003 on August 24th, 2009 6:59 amTo be fair, it seems like the admin is just responding to requests to remove the junk postings…If the admin is in collusion with Action, he/she can simply remove the thread rather than reposting it, with the tags intact. The thrad number could simply be a reflection of the number of new threads created since the original thread started 2-3 years ago.
Brad Sugars is mentioned literally hundreds of times in the postings, removing sugars from the title doesn’t change much in terms of ranking.

Maybe the discussion should continue on the new thread instead to push the rankings up…
coach2003 on August 24th, 2009 7:03 amMy opinion on soulcast will be different if the ’shills’ postings like “Franchise Attorney”, “bloglatest” and the rest are removed along with the junk…
Ryan G Malcom on August 25th, 2009 1:17 pmI have closely worked with Action Franchisees in Australia. My role was to generate leads via phone. In the begining, I found this job interesting thinking I am helping business owners who really need help. I was extremely happy to get my incentive when my first lead got convered into a client.After three months I called up the business owner to find how were things and if our coach could add value to his business. To my suprise, business owner was furious and threatened to sure Action. I apologised and hung up. I shared this with my telemarketing team and found, they had many business owners who felt cheated and are ready for a legal Action but this industry is not regulated.
I left the job as we were never paid on time and joined another market research company. GUES WHAT??? I found two coaches who were with Action were in my team and was appointed their team leader. One of them immediately left when he saw me and other shared his experience of how be got carried away and invested $ 100K and was working 14 hrs a day to pay the loan.

I really feel bad for him as he sold his car and lost his confidence. I think Brad should only sell franchisee to deserving and elligible NOT EVERYONE.

Majority of Action Franchisee are unhappy but scared to come forward. I don’t want to bad mouth Action but thought I should share my experience.

Ryan
Marcus Maclean on August 29th, 2009 4:05 amInstead of wasting time and energy being negative against Brad Sugars and ActionCOACH, why not just leave them to their endeavours and pursue something else?If ActionCOACH isn’t for you, here’s something that might be: the Art Hamel Business Buying System.
The Art Hamel Business Buying System can teach you, regardless of your background or net worth, how to buy a multi-million dollar company that runs without you with none of your own money and without using traditional financing methods.

Art Hamel has been buying businesses for over 50 years, without using banks or any of his own money. Art Hamel is very successful and has owned over 200 companies. He teaches that you should NOT buy small or medium businesses or “turnarounds” and then grow and flip them as many other gurus (including Brad) do, but to buy well established , multi-million dollar manufacturing businesses, since they are easier to run, have less competition, are more consistent, already have management in place and have more than enough assets to finance 100%.

Anybody can buy a large business using Art’s system. In the 30+ years Art and his associates have been marketing and selling this system, they’ve received 0 complaints from students, have never been sued, and have never ripped anybody off.

Instead of wasting time and energy berating Brad Sugars and ActionCOACH, do yourself a favour and buy this system. It will most likely change your life.

You can get Art’s business buying system at Michael Senoff’s Hard To Find Seminars.com. Just Google search it.

And no, I am not an affiliate who is going to be paid a commission for promoting the system. I am simply a happy, successful student – one of many thousands – tired of seeing people failing in business.

Marcus Maclean
Auckland
New Zealand
Coach2003 on August 29th, 2009 8:33 amMarcus,If you want to pimp your products, go ask admin to start a new thread for you.
“I am not an affliate” is a dead giveaway. I can point to tons of info of internet marketers proudly proclaiming how their marketing system help market thousands of copies of Art Hamel system.

Putting your “full name” doesn’t make you more legit than anyone else, after all, I can call myself Charles X Xavier, Timbuktu, does that make me more legit in an anom forum?

If you have bothered reading anything here, you will find both positive and negative discussion about ActionCoach but no one tried to pimp something here until now.
The Title on August 29th, 2009 8:39 amHi Marcus,In case you didn’t notice, the title of this thread is
“ActionCoach, Brad Sugars: Overview & Discussion”

Which means you can be positive and negative about ActionCoach.

I don’t see anyway in the title saying “Promote other products” or “Alternative to Actioncoach”… did you?
Unbelievable on August 29th, 2009 2:43 pmWhat a CLOWN you are Marcus.How many other business opportunity threads, forums or blogs have you invaded with your template sales pitch?
Btw folks, Coach2003 is right. The ’system’ he is referring to is one of those “info products”, where they sell the product as well as the pitch to sell the product… a much bigger and worst con than ActionCoach.

However, the right forum to discuss it is on an Unhappy Internet Scams Victims forum, not an Unhappy Franchisee forum.
Marcus Maclean on August 29th, 2009 8:57 pmWow, I didn’t expect that response!The fact that I said I am not an affiliate is 100% the truth. I guess there’s no way to prove it either way so it’s my word against yours. But, as I understand it, affiliates get paid commissions when somebody clicks a link provided by the affiliate and then buys a product or mentioning an affiliate when purchasing a product. I did not provide a link or ask anybody to mention me when purchasing the system, so how could I be an affiliate? I asked interested people to Google search the system…how on earth would I receive an affiliate commission that way?
I did bother to read the majority of the comments, and my comment wasn’t directed to the positive’s…obviously. I was just amazed that so many people have negative things to say about Brad and ActionCOACH, so my comment was simply intended to draw a positive from the negatives by offering an alternative.

No, I did not see “Promote other products” or “Alternative to Actioncoach”… I guess I went out on a limb to promote an info product that works very well in the hopes that the poor, unfortunate people who have not succeeded in their ActionCOACH franchises can succeed using another system.

Guess I made a mistake.

And I agree that info products are generally speaking cons…but not the Art Hamel Business Buying System. If you speak to ANYONE who has bought the system (you may be able to find past students through Michael’s site), you will find 0 complaints, 0 lawsuits, 0 unhappy people, but many, many success stories.

All the best. If I have offended anyone by promoting a system proven to work and with many success stories and 0 complaints and 0 lawsuits with a 30 year history I am truly sorry. I realise it wasn’t the smartest thing to do, but I genuinely felt sorry for all the people who had been ripped off.

Marcus
Unbelievable on August 30th, 2009 12:59 amRighteous indignation. How predictable and expected. Contribute to the discussion on Actioncoach, positive or negative. There’s many ways one can get paid without listing links as affliliates, for example, if they own most of the top domains in goggle as most internet marketers selling info products do (or if ‘Marcus’ = ‘Michael’) but you know that already don’t you…
Amazing! on August 30th, 2009 8:23 amIt is amazing that so much of the discussion here debated the merits of Brad Sugars/Actioncoach fighting their detractors online… and the many amusing ’strategies’ which backfired…… then all of a sudden comes someone peddling his infoware in the midst of it all…
Marcus’s next posting will probably say “serves all you losers right, yadda, yadda, yadda, you don’t know good stuff when you see it, I am sorry I spend my time here with you losers, yadda. yadda, yadda…” standard infoware marketing script where they…

- Start with “I am sorry to hear what happened to you, here, let me show you something better[peddle infoware]…”

- If get objection, get all righteous, play victim and say “but really, I am doing it all for you, no hidden agenda, I am sorry to hear you don’t believe me…”

- If still get objection, cut lost & get even more righteous “I will leave you losers alone and let you rot, I am already rich & successful I don’t need to waste time with you losers.”

They then flood the net with positive news about themselves and put multiple ‘testimonials’ from satisfied clients using their infoware. Most of the time these clients are dubious at best since infowares are mostly online downloads, it can be easily faked. There was one internet marketing bootcamp where they got everyone to come out with their products/websites during the bootcamp and go around shooting photos/writing testimonials for each other on-the-spot! So everyone gets 30-40 instant testimonials about their products/services.

Be especially careful when they are as eager to sell the infoware as they are to peddle the marketing strategy behind it. Ie, they are selling 2 sets of infowares. For those who actually do what the gentleman here ask and do a search on the product he mentioned, you will find sites boasting “we sold XXX numbers of [product] using our strategy and we can teach you to do the same.”

What has this to do with ActionCoach? They seem to have adopted some of these strategies, especially in terms of flooding the net with their sites. You will find pages after pages of positive reviews and sites which are self-generated and the very few independant sites not drowned out usually are negative.
Frachisee in SA on August 31st, 2009 9:43 amIf you log on to actioncoach.com , select South Australia, you’ll find nine franchisee. The truth is; only four franchisees (Mark Carn, George K.oritsa, Avonna Bennet and Shayne Jaenish)are physically present in SA. Others are in Queensland and Victoria.Many franchisee in SA could not pay their montly fee and had to give up their license. ML’s (Bruce Doyle and Stan Jordan) have put their name to make Actioncoach web page of SA look good.
Web says their are nine coaches but in reality there are only four……………….

Is this marketing or misleading people??? There are many names which are repeated in different states.
Coach2003 on September 1st, 2009 2:41 amHi Franchisee in SA,In my region, they kept active websites of coaches who’ve already left the system and redirect the inquiries to the ML. When questioned on misrepresentation, they defended themselves with the story that the websites are Actioncoach property, just like emails are and it is their right to use as they see fit.
Unfortunately, coaches in my region are easily intimidated and do not have the guts to get together to take legal action. I supposed the threats do work.
A prospect that got away! on September 1st, 2009 4:08 amhi this a great forum for those interested in ActionCoach. I too looked at ActionCoach, but luckly walked away from it. The main reason is that I could not get me head around people paying $1500 a month, every month for telephone advice. I also read all of Brad’s books and it is just fluff and puff information he puts it together with a folky style but it has no substance to back up what he says. I also got sucked in to thinking if 1000 people around the world are doing it then surely they have all done their research and came to the conculsion that it was a good business and perhaps with those numbers its a safe bet. What got me in the end was when I met with the ML all he wanted to do was talk about how good he was and how much money he made via action. he then put the hard word on me to sign then and there, I said no I wanted to think about it, After that the meeting finished very quickly as he did not have a sale, I also thought I was going to meet other coaches and havea good look at the IP. he did show it to me, but it was so quick he might as well have not bothered. the other thing that made me stop and think was the on going fees, and also the fact that not one person in my state signed on for another five years. so I thought this is not worth the money in the end. I feel for those who have bought in, I think I would have been like the others, I would have blown my life savings of $150K and then would have thought how do I get out of this mess?
Keep up the good work on this and other blogs, I hope those who are not happy can band together and get there money back or at least break the 5 year agreement.
Eldar – Telemarketer – Bruce Doyle (ML) VIC, Australia—- TERRIBLE EXPERIENCE AT ACTIONCOACH!! on September 1st, 2009 11:48 pmMy name is Eldar. I worked for Bruce Doyle re his phone room re his seminars which were targeted at businesses. The whole idea was to get as many businesses to attend as possible in order to stroke Bruce’s massive ego.I was always shocked and taken back when I knew first hand that the 99% of the coaches in Bruce’s employ did not have the ability or credentials to actually coach businesses even if they wanted to. The only factor that a coach needed to become a coach was to be able to have the money upfront.
I found the whole framework very dated and backward. I was expected to run a successful telemarketing room with staff who were never given rewards for good work. There was no functioning data base and there was no way that the data could be handled in accordance with privacy laws on in any way that was in accordance with any sort of organization.

Bruce would tell businesses that they needed to have a customer data base when he did not have one himself.

My job was to overhaul a telemarketing room and bring it up to the times but was not given the tools to be able to do it. I was promised things but they never ever eventuated.

The overall way with which a so called coaching company was run was in short a joke. There were staff on the books who were semi literate who in fact were not capable of producing any sort of quality work. Many of the coaches were also semi literate and when I pointed it out to the then ceo of the company that these people are representing a company that is supposed to at least look professional he replied, ”blokes don’t need to know how to spell”.

During my stay at Action there were many instance of sexual harassment, the ceo referred to the younger telemarketing staff as ”eye candy” and thought nothing of inappropriate touching. Female staff including myself were called, ‘’sweetie”, ”honey” and ”darling”. I was told that any objection to that was ridiculous. The ceo also talked about how he was a ”tactile person”. This information was brought to the attention of the owner of the company but he chose to ignore it.

I was expected to hold about 8 seminars a month with about 6 telemarketers, no real data except from what could be garnered from phone books etc. and one admin assistant. Bruce expected about 40 decent business owners to attend these seminars which started at 7am and finished at 10 am. Anything less was considered not good enough.

Many businesses realized they were not getting value for money when they signed up for coaching. I spoke to several businesses who could ill afford coaching fees, $2, 000 for nothing and they were expected to pay regardless of the lack of quality of coaching.

I have read the false resumes of some of the coaches. I read with interest that one coach puts himself down as having worked as an IT consultant when he in fact worked for Amway. I know that a lot of the claims some of the coaches are putting on their coaching resumes are false.

The sad truth I found out about Bruce Doyle’s coaching company was that he was taught by Brad Sugars and they understand one thing and one thing only, money. Ethics, professionalism and any understanding of process etc. is lost on them. The frameworks that Action use are cobbled from the 1970’s and earlier and not relevant in today’s climate but that is not relevant re the way the company is modeled.

I personally am not proud that I was part of such a company. I feel very sorry for people who have paid money to Action Coach or Action International as both coaches or as clients who are not getting what they paid for.

To this day I find it interesting that the likes of Brad Sugars profile themselves as being success stories. If my millions were dependent on the suffering and misery of many people then all I can think is that he is a morally bankrupt individual who will eventually fall.
Misleading info on Bruce, I can relate to Eldar on September 2nd, 2009 12:23 amHi Eldar,I know what you mean. I own a marketing and promotions business in Australia, VIC. I met Bruce Doyle couple of years back. The only reason I agreed was to find out – How good they are at pressurising people to buy on the spot. One of my friend has burnt his fingers with Action Coach so I did not sign up.
Now I have started receiving e-invitation to attend Bruce Doyle’s seminars on how to use your website to generate leads. His new business name is bloomtools.com . If you log on to the web http://www.bloomtools.com/process/franchisee/details-page.html?sellerId=59&wtf=franchisee

It states Bruce has run more that 30 businesses but in the e-invitation I got (below) it states Bruce has run more than 20 businesses. THIS IS A CLEAR EXAMPLE OF A ML MISLEADING BUSINESS OWNERS. I sent the above e-mail to Samantha and haven’t recd any reply yet…..

Bruce Doyle is one of Australia’s most successful businessmen and is renowned around the world for his business systems and achievements. Bruce has owned and operated 30 DIFFERENT BUSINESSES, including the largest ActionCOACH business coaching team in the world.

??? What should we believe your web or e-mail? I guess both are misleading……
Coach2003 on September 2nd, 2009 9:55 amHi Eldar,Many here have issues with ActionCoach as former or current licensees due to misrepresentation and flaws with the system.
But you seem to have something very personal against Bruce Doyle and have been posting everywhere, including soulcast & ripoff. I also saw that your claim of sexual harassment which seems to me like it’s just a case of sensitivity on your part, or extreme dislike of Bruce… if they touch or use more sexually suggestive terms, then you have a case.

To get as many attendees as possible has got nothing to do with stroking ego, it is about getting as much business as possible. Any business hiring salespeople will expect the same. Bruce Doyle might have been an extreme case and a clone of Brad Sugars where making money is concerned. But that still is an issue of unrealistic sales target or lack of support, not ego…

… And I am saying this as a person who has no love for Brad Sugars & ActionCoach as my many posts here show.

Are you really telling the whole story about the source of your anger with Bruce Doyle because you sound much bitterer than all coaches who’ve lost their live savings… in fact, you sound like you just want to get back at Bruce Doyle so much so that you don’t care much about putting everyone else involved with Actioncoach down, like there’s not a single decent soul in the organization…

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Tags: ACTIONCOACH, Brad Sugars, coaching franchise

Marino, Goydos Share Lead at The Barclays

August 29, 2009 by Jeff Greenwell
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It may have taken awhile, but Steve Marino finally made his move at The Barclays on Saturday, reeling off three straight birdies late in the third round to catch leader Paul Goydos. Both men posted matching 3-under 68’s to lead the pack at 9-under. If Marino can pull it out, it would be his first victory on the PGA tour.

Steve Marino (Image: Zuma Press)

While Marino was making his move into the lead late, Goydos did the opposite, draining his three straight birdies early in the round. Second round leader Webb Simpson shot a 1-over 72 to lose ground on the leaders, and now finds himself two strokes back of Goydos and Marino. Even Tiger Woods finds himself with an outside chance at stealing a win, after shooting a 4-under 67, a score that could have been even lower had Tiger been able to make a few more putts. Woods missed six putts inside 12 feet, including one for eagle, something that you don’t normally see from the world’s number one player. Tiger finds himself sharing his spot at 4-under with rival Padraig Harrington and former Masters champ Zach Johnson.

The tournament will finish up tomorrow, weather permitting.

Tags: Golf, Paul Goydos, steve-marino, the barclays, Tiger Woods

10 Stunning Collapses in Major Tournaments

August 20, 2009 by Jeff Greenwell
Filed under Golf

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In the wake of Y.E. Yang’s improbable and stunning upset of Tiger Woods at the recent PGA Championship, there are more than a few golf fans who believe that Yang’s victory was a direct result of something Tiger rarely does…choke. Whether you’re one of those who buy that (he did give back 2-strokes on the front nine, and needed 33 putts for the round), or you believe that it was Yang’s unflappable play against the world number one player (Woods shot 75 on Sunday, not 80) that accounted for the upset, either way, it’s over. So, in order to ease Tiger’s pain, here’s ten of the worst collapses, or “chokes” if you will, in major tournament history.

10. Retief Goosen, 2005 U.S. Open

Goosen held a three stroke lead heading into the final round at the 2005 U.S. Open. It was a position he should have been familiar with, having won the tournament in 2001 and 2004. Alas, the 2005 U.S. Open was not in the cards for the smooth swinging South African. His final round started off horribly with a double bogey on the second hole, and went downhill from there. When it was all said and done, Goosen had shot an 81, and Michael Campbell had won his first major.

9. Sergio Garcia, 2008 PGA Championship

To be fair to Garcia, the golfer now carrying the unwanted mantle of “best golfer never to have won a major,” he did start the final round trailing Ben Curtis, and ended up catching and passing Curtis with some incredibly fierce and spectacular play. Some would even say that Garcia didn’t so much collapse, but rather that Harrington just outplayed the young Spaniard, especially on the back nine, where tournaments are won and lost. But how else can you explain Sergio’s 9-iron into the water on the 16th, followed by a miss of a 5-footer for birdie, essentially gift wrapping the win for Padraig Harrington. One word…choke.

8. Thomas Bjorn, 2003 British Open

Thomas Bjorn (Image: Zuma Press)

Bjorn, Denmark’s most successful golfer, had the 2003 British Open in the bag. Ahead by three strokes, with just four to play, the Claret Jug was within Bjorn’s reach. But a bogey on number 15 was a harbinger of things to come. On the next hole, Bjorn found himself beached in a pot bunker. It took the hapless pro three shots to clear himself of the bunker, en route to a double bogey. Another bogey on the 17th and the tournament belonged to Ben Curtis.

7. Ken Venturi, 1956 Masters

Most people remember Venturi as the velvet-voiced golf broadcaster, but back in the day he was a pretty good golfer. As an amateur at the 1956 Masters, Venturi shot out of the gates to take the first round lead, and three days later, found himself with a 4-stroke lead going into the final round. But on that fateful closing day at the Masters, the famed Augusta National would bite back. Venturi faltered badly, three-putting six times on his way to an 80, and ended up losing the tournament by a stroke to Jack Burke Jr. All in all, not a bad showing for an amateur.

6. Kenny Perry, 2009 Masters

The 2009 Masters wasn’t the first time Kenny Perry suffered a “major” collapse. His decision not to practice on the driving range, instead honoring an interview request, ultimately led to a playoff loss to fellow American Mark Brooks at the 1996 PGA Championship.

Kenny Perry (Image: Zuma Press)

But even Perry had to admit that he had blown yet another chance at a major win, following an epic three-hole collapse at Augusta. Two holes to play, two-strokes ahead, two bogeys, and a three-way playoff. Perry’s undoing in the playoff was a poor approach shot on the second playoff hole. Angel Cabrera ended up donning the green jacket, and Perry was left to ponder what might have been.

5. Ed Sneed, 1979 Masters

Little-know Ed Sneed’s major meltdown is comparable to Kenny Perry’s, except that instead of a two-stroke advantage, Sneed had a three-stroke lead with three holes remaining. He had actually started the day with a 5-stroke lead, but lost two-strokes before his epic meltdown. Bogeying the final three holes thrust Sneed into a playoff with Tom Watson and Fuzzy Zoeller. Sneed lost the Masters to Zoeller on the second hole of the sudden-death playoff, then faded off into obscurity.

4. Greg Norman, 1996 Masters

Greg Norman (Image: Zuma Press)

The enduring image above says it all. Greg Norman, the poster-boy for majors meltdowns, falling to his knees after his eagle chip lipped out. Never mind that Norman had all but handed the tournament to Nick Faldo. Norman entered the final round 6-strokes ahead of Faldo, and a round of even par would’ve been enough to capture victory. Unfortunately for Norman, he gaffed and choked his way to a 78, while Faldo cruised with a spectacular 67, en route to his third Masters victory.

3. Scott Hoch, 1989 Masters

Scott Hoch is one of those golfers who, throughout their career, has been good, but not great, but still able to win on tour eleven times. But Hoch has never won a major. Ever.

Scott Hoch (Image: Zuma Press)

Not that he didn’t come close though. In 1989, Hoch went into a playoff at the Masters with the previously mentioned Nick Faldo. On the first hole, Hoch was facing a two-foot par putt for the win, which he inexplicably missed. Faldo drained a 25-footer for birdie on the next hole. Hoch will forever be remembered for that putt, a moment I’m sure he relives in his mind every day of his life.

2. Phil Mickelson, 2006 U.S. Open

Phil Mickelson (Image: Zuma Press)

You had to know that Mickelson would be on this list somewhere. His infamous flame-out at the 2006 U.S. Open at Winged Foot was such an incredible display of idiocy on the golf course that it almost could have made top spot. Mickelson is an enigma. He’s got all the talent in the world, and his short game could be the best on tour. But “Lefty’s” fatal flaw is often his decision making. Despite a final round where Mickelson’s driver was so bad (only 2 of 14 fairways hit) he should have thrown it into the nearest trash can, Mickelson went back to the driver on the final hole. He was up by a stroke, but his drive on the 18th ricocheted off a hospitality tent and came to rest on a grass path. The wise thing to do at this point would be a short chip to the fairway, then try for an up-and-down for par. Heck, even a bogey would’ve guaranteed a playoff. But Phil’s common sense decided to take a holiday, and he tried cut-slicing a 3-iron 200 yards in an attempt to get it on the green. Mickelson got green alright…the green he hit belonged to the leaves of the tree that the ball ran right smack into, finally coming to rest a whopping 25 yards closer to the hole. The rest as they say, is history.

Mickelson himself summed up what most people were thinking after witnessing such a monumental collapse.

“I am such an idiot,” Mickelson said. And he was right.

1. Jean Van de Velde, 1999 British Open

If only Jean Van de Velde’s name were a bit shorter, and easier to pronounce, his name could have replaced the “choke” word in the urban dictionary (eg. “Tiger really Van de Velded on Sunday, didn’t he?”). As bad as Phil Mickelson screwed up in the previous example, Monsieur Van de Velde trumps that, and then some. The year was 1999, and the Open Championship was held at Carnoustie where Van de Velde was trying to become the first Frenchman to win the British Open since 1907. Needing only a double-bogey six (that’s right, six) for the win, self-imposed disaster struck. For some odd reason, Van de Velde pulled out the driver and yanked his tee shot right, just beside the burn. Like Phil, Jean chose to go for the green instead of the safe, smart, and winning option of laying up. The second shot hit the grandstands, coming to rest in knee-deep rough. His third shot landed in Barry Burn, and after fliriting with the idea of attempting a shot out of the burn, instead took a drop. Van de Velde’s fifth shot found a bunker, whereby he was able to blast out of the sand to within six feet of the cup. He made the putt for his triple-bogey seven, then lost the three-way playoff to Paul Lawrie. And he hasn’t been heard from since.

Tags: Greg Norman, jean van de velde, phil-mickelson, retief goosen, scott hoch, sergio garcia

WEBINAR: 8 Steps To A Career Transition

July 22, 2009 by Darlene McDaniel
Filed under Jobs

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FREE Webinar from Reach Personal Branding Teleseminar

Date: Thursday, July 23, 2009; 9:00 AM Los Angeles, 12:00 PM New York, 5:00 PM London, 6:00 PM Paris

There are only 150 spaces for the live call. No need to register, just dial-in early to secure your spot:

CONFERENCE LINE: 1 (218) 486-1616; hard-work ACCESS CODE: 726017#

Eight Steps to a Career Transition and Reinventing Yourself

The “vocationing process” is a proven, action-oriented and step-by-step process for making career and life transitions. Used by thousands of people across the US and internationally since 2004, when Brian founded VocationVacations.com, this process helps people define what their “great” job is; learn how to deal with their fear; create an action plan; find a mentor; “test drive” their dream job; create their professional brand; utilize networking opportunities, and establish a tolerance threshold. Brian believes that happiness and passion can and should be an integral part of your job.

In this interview with Brian you can explore this further. You will learn:

What you can do to discover what truly would make you happy and fulfilled,
How you can address your fears,
What you can do to get moving in the right direction in pursuit of a career or lifestyle transition,
How you can go about finding a mentor,
Why a hands-on, “test-drive” experience of a potential career is beneficial,
What you can do to reinvent yourself beyond rewriting your resume,
How to identify how much risk, uncertainty and challenge you can live with in pursuit of a new career or life style.

BIO: Brian Kurth is a former “Dilbert” who worked for the phone company in Chicago. After realizing there was more to life than telecom calling plans, Brian founded VocationVacations in 2004. He is the author of Test-Drive Your Dream Job – A Step-By-Step Guide to Finding and Creating the Work You Love (Hachette, 2008).

Brian was born and raised in Madison, Wisconsin, and graduated with degrees in political science, history and international relations from the University of Wisconsin before moving to Chicago to earn a masters degree in political science from Loyola University. He spent more than a decade in the corporate world, working his way up in product marketing within the telecommunications industry with AT&T and Ameritech, finally becoming the director of business development for a dot-com startup. During that time, he lived and worked in St. Louis; Chicago; Tallinn, Estonia; and Budapest, Hungary.

In late 2001, Brian was laid off from the dot-com company and took a six-month road trip across the United States and parts of Canada. At the end of his trip, he moved from Chicago to Portland, Oregon, where he founded Brian Kurth + Company and VocationVacations.

Today, Brian is a sought-after career transition and development expert, strategist and speaker. He has appeared on CNBC, CNN, FOX News, MSNBC, NBC’s TODAY Show and National Public Radio (NPR), and his career advice has been featured in articles in Fortune Magazine; Men’s Journal; The New York Times; O, The Oprah Magazine and The Wall Street Journal, just to name a few. He has spoken to a diverse group of companies and groups including AARP, Ameriprise, Disney, Intel, Microsoft and many universities and alumni associations.

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Janzen, Stiles Share Lead at John Deere

July 9, 2009 by Jeff Greenwell
Filed under Golf

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With the first round of the John Deere Classic in the books, a surprising name can be found atop the leaderboard. Two-time U.S. Open champion Lee Janzen fired an opening round 7-under 64 to share the lead with Darron Stiles. The 44-year-old Janzen hasn’t won on tour since since 1998, when he captured his second U.S. Open. But after doing some major retooling to his swing, Janzen finds himself in the catbird seat, hoping to recapture past glory.

Lee Janzen has the early lead at the John Deere Classic. (Image: Zuma Press)

Other notable scores from the day include defending champ Kenny Perry shooting a 3-under 68, current U.S. Open winner Lucas Glover and former Masters champion Zach Johnson carding identical scores of 69, and David Duval, one of the feel good stories of the U.S. Open, starting his tournament with a horrendous 4+over 75.

With the tournament taking place the week before the British Open, many of the top players chose to skip the John Deere in order to focus on next week’s major. Even with a field lacking big name talent, based on the first round of play, the John Deere Classic is shaping up to be a very entertaining golf tournament.

Tags: Darron Stiles, Golf, john deere classic, kenny perry, Lee Janzen

Woods, Romo Play AT&T National Pro-Am

July 1, 2009 by Jeff Greenwell
Filed under Golf

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You can never say Tony Romo suffers from lack of confidence. The Dallas Cowboys quarterback did something most amateur golfers would never dare do–play Tiger Woods for money. Then again, most amateurs aren’t one-handicappers, and if they are, most assuredly they don’t have the lovely Jessica Simpson cheering them on. Playing in the pro-am the day before the AT&T National begins, the tournament Woods is hosting, Romo held his own against Tiger (although Tiger did spot Romo two strokes), but in the end Tiger prevailed, leaving Romo’s wallet a bit lighter. Many other pro athletes attended the event, including Washington Redskins players Jason Campbell Antwaan Randle El, and Washington Capitals coach Bruce Boudreau, who paired up with PGA pro Mike Weir.

Tiger Woods (Image: Zuma Press)

But like most other tournament he enters, the media focus is squarely on Woods. Always the cordial host, Tiger hopes that the 120 man field has a great week, but he wants to be the last one standing come Sunday. Always on his mind though is Jack Nicklaus, and his record 18 majors. Woods finished sixth at both the Masters and U.S. Open, but is looking for better results at Turnberry in two weeks time.

Other notables playing this weekend at the Congressional Country Club include U.S. Open champ Lucas Glover, Jim Furyk and Vijay Singh.

Tags: at&t national, congressional country club, Golf, Tiger Woods, tony romo

Record Setting Win for Perry at Travelers

June 28, 2009 by Jeff Greenwell
Filed under Golf

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After relinquishing the tournament lead to Paul Goydos on Saturday at the Travelers Championship, Kenny Perry sizzled in the final round, shooting a 7-under 63 for the win, and setting a tournament scoring record in the process. Third round leader Paul Goydos and David Toms finished in a tie for second, three strokes back of Perry, who also gained a share of the course record at the TPC River Highlands this weekend with a brilliant first round of 61.

Kenny Perry lining up a putt at the Travelers Championship. (Image: Zuma Press)

For Perry there would be no repeat of the Masters collapse from earlier this year, when he bogeyed the final two holes to blow his chance at the green jacket. Perry acknowledged that this was in the back of his mind as he played the back nine today, as he kept reminding himself to play aggressive. And aggressive he was. After a birdie on No.15, Perry’s approach shot on the 17th left him with an 8 foot putt for birdie. With that birdie putt in the cup, the tournament was his.

The victory on Sunday gives Perry his fifth win in just over a year’s time, the most of any player on tour. He also takes home just over $1 million in winnings, a nice feather in the cap for Perry’s record setting weekend.

Tags: David Toms, Golf, kenny perry, Paul Goydos, travelers championship

No Rest for Glover After Winning U.S. Open

June 25, 2009 by Jeff Greenwell
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You would think after winning a tournament as prestigious as the U.S. Open that Lucas Glover might get a little time off to savour his victory. Especially since the tourney extended into Monday, and Glover’s Tuesday was spent accompanying his Open trophy to the top of the Empire State Building after hanging with Regis and doing the Top 10 List on Letterman.

Lucas Glover and the U.S. Open championship trophy atop the Empire State Building. (Image: Zuma Press)

But Glover had committed to playing in this week’s tour stop, the Travelers Championship at the TPC River Highlands in Cromwell, Connecticut. And he did just that, playing in the tournament’s pro-am on Wednesday, before teeing it up on Thursday.

“I feel that’s the right thing to do,” Glover said. “Just because I won a golf tournament, doesn’t change anything. I was committed, and I’m going to honor that commitment.”

The tournaments falling before and after a major sometimes suffer from the lack of big-name players who opt out to focus on the major alone. It’s usually the tournament following a major, in this case the Travelers Championship, which tends to suffer the most. Many of the marquee players prefer to play the tourney falling before a major tournament to keep their game sharp, rather than the weekend after, when most pros take a well deserved break.

But the Travelers lucked out this year as far as quality talent goes. In addition to Glover, U.S. Open runner-up Ricky Barnes is in the field of 156, along with Sergio Garcia, Vijay Singh and 2007 Masters champion Zach Johnson.

Tags: Golf, Lucas Glover, PGA, travelers championship, US Open

Paul Casey Loses Twice, Out in Spain

PLAY N TRADE: The BIG Franchise Discussion

PLAY N TRADE: CA Suspends PnT Franchise Registration

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ACTIONCOACH, BRAD SUGARS:Deleted Discussion

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ActionCOACH 2008 FDD (.pdf)

Marino, Goydos Share Lead at The Barclays

10 Stunning Collapses in Major Tournaments

WEBINAR: 8 Steps To A Career Transition

Janzen, Stiles Share Lead at John Deere

Woods, Romo Play AT&T National Pro-Am

Record Setting Win for Perry at Travelers

No Rest for Glover After Winning U.S. Open

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