ARE NOBLE ROMAN’S FRANCHISE OWNERS FAILIERS?
March 22, 2008 by Sean Kelly
Filed under Business
(FranchisePick.Com)“i say to whiners this – Failiers blame
the winners and winners quastion winners.
to be fair i am a franchisee of noble roman’s.”
Over at Goode Value Investing Blog, stock blogger Michael Goode criticized franchisor Noble Roman’s Paul Mobley for 1) whining publicly about having crappy franchisees, and 2) having crappy franchisees. But it was Michael Goode who looked foolish in the end, as franchisee made Goode’s point twice as convincingly in 1/8th of the words.
Goode slammed the Paul Mobley comments quoted in an article with Daniel Lee of the Indianapolis Star:
In describing the company’s expansion troubles, [Mobley] placed blame for failed franchises fully on the franchisees, claiming that “Some of the franchises we sold didn’t have very much business or being-your-own-boss experience.” His comments make it seem like he was surprised. He should not be surprised: what does he expect when Noble Roman’s has such low requirements for franchisees? People who probably shouldn’t be franchisees (or who would need lots of help and training to succeed) choose Noble Roman’s over other franchisers solely because its fees are lower. Noble Roman’s then fails to provide proper support and training and the franchisees fail.
Where have I heard that, lately? Was it Mark Golob of Butterfly Life? Or Ken Sully of iSold It? Or was it Cold Stone Creamery’s CEO Doug Ducey, right after the brilliant acquisition of Cereality cereal franchise and right before his sudden resignation? Anyway, Goode continued:
With about 1,000 franchisees, one would think that Noble Roman’s has some idea how to select and train franchisees. It is incredibly easy to select only experienced and well-financed franchisees… if Noble Roman’s were to be more selective and were to take the time to train its franchisees, it would not be quite so exciting as a “growth” company. Of course, to anyone who has looked at the company’s financial statements and seen how 24% of the company’s royalties are from one-time initial franchise or area developer fees, it is obvious that Noble Roman’s is not a growth company (number from the most recent 10Q).
Who would come to the rescue of the noblest of all pizza franchises based in Indiana? Comment-leaver Saul Mohd, that’s who!
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sal mohd said,
December 19, 2007 at 9:29 pm
As for your article about noble roman’s ; the fact that an executive admits a
mistake about a bad jugement is something to be commanded for.(is not scapegoat).
the failier of any business most of the time is because of prduct ,service or management and i think most restautants(in any company) fail or they go bad is mainly because of management. i say to whiners this – Failiers blame
the winners and winners quastion winners.
to be fair i am a franchisee of noble roman’s.
How can you argue with that?
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Umm, first let me point out that ‘failures’ is not spelled ‘failiers’. Sal’s post was so badly spelled as to make it hard to read. Anyway, my main argument was that Noble Roman’s should share the blame for its franchisees’ failures. Sal appeared to disagree, so I do not see why you think he made my point more convincingly.
Noble Roman’s management has a history of failure in financial aspects of the business, which is why I did not believe them when they blamed the franchisees for the operational troubles.
For more on the financial aspects, see a previous post I wrote about Noble Roman’s: http://www.goodevalue.com/2007/12/02/noble-romans-strategy-falls-flat/
Umm, first let me point out that ‘failures’ is not spelled ‘failiers’.
Michael: That’s kind of the point.
You aren’t being attacked. Read it again assuming I’m on your side and Sal is the butt of the joke.
I loved your posts.
Oh, wow. I guess your sarcasm/irony went way over my head. BTW, nice blog Sean. Keep up the good reporting on franchises.
Quick glance nature of the Internet. Let’s keep an eye on Noble Roman’s. This is classic “worst practices” in franchising and certainly will result in a lesson in how NOT to build a franchise company.
Don’t lose faith in pizza franchises just yet. I work for Pizza Fusion; an organic and earth friendly pizza franchise, which practices social responsibility in all facets of operations. We have turned down as many potential franchisees as we have accepted. We also put all our franchisees through our very own Pizza Fusion University. We make it our promise to provide guidance and support through every step of the way.
Michelle:
We’ve given a lot of positive exposure to Pizza Fusion on one of our partner sites, http://www.topnewfranchises.com.
There have been a lot of good things said and you’ve gotten a lot of positive press. The key will be picking the right franchise owners, not growing too fast, and staying focused on the unit economics. But it’s exciting to see a seemingly good concept on a growth track.
Sean
I read the article: but what happens if the AD’s don’t meet their schedule? Generally, they are in default and lose their futures fees.
I am not sure even what this Sal Mhod guy is saying here.
I was also a Noble Roman’s franchisee, and I have over 10 years of restaurant management experience. My restaurant is closing as we speak. The projections that were given to me from Noble Roman’s where not even close to my actual sales.
Marketing as promised from Noble Roman’s was nearly “NON EXISTENT”. When I did request help from them, i.e.- How do I make my store profitable– they literally could not help me. They would send “trainers” into my store and the trainers would say “there’s no operational problem here”. A few said it was location- I ran a very well run store- we just couldn’t get the traffic in no matter what we did. Main issue- our product- it is not a remarkable, or even really good pizza product- and most of my customers wanted what Noble Roman’s used to be – “Good Pizza”. Now- it literally is a step just above frozen pizza.
It is thawed frozen dough with thawed frozen toppings, that didnt taste that great,
Cody:
Sorry to hear about your restaurant closing.
Sean
I am not sure even what this Sal Mhod guy is saying here.
I think he’s saying that Hooked on Phonics owes him a refund.
First i am sorry for the huge mistake of the spelling of the word failuers.
There is a calculated risk when ever you get into business and the joke on you when you spend your savings on something without doing your homework. And that exactly what happens when you get in the franchise business and if you make it and you see $$$ coming you will never complain; but when you do not do your homewok and you fail then you start looking for someone to blaim. And that makes the franchisee the butt of the joke.
how about mentioning the 999 succesfull franchisees?
First i am sorry for the huge mistake of the spelling of the word failuers.
No prolbem.
when you do not do your homewok and you fail then you start looking for someone to blaim.
That’s like Michael Goode “awarding” franchisees and then blaming them for not being good enough.
how about mentioning the 999 succesfull franchisees?
998. The Noble Roman’s Pizza and Tuscano’s Italian Style Subs that opened last March on Wilmington Pike in Dayton just closed.
However, Noble Roman’s is announcing the signing of multi-unit development deals.
P.T. Barnum was right.
When I read comments like the above, we realize that franchisees are the butt of the joke because they are brought through sales hype and trickery to buy franchises and sign “deadly” contracts because they BELIEVE THAT THAT THEY WILL BE SUCCESSFUL and BELIEVE THAT THEY ARE BUYING A PROVEN CONCEPT with little risk of failure. Prospective franchisees believe they have to sign the adhesory contract with the integration and reliance clauses because this is the only way they can ACCESS the profits and success promised outside of the contract.
Prospective franchisees can’t wait to be AWARDED the franchise and they don’t realize that the franchisor, the seller, hasn’t provided them any unit performance statistics upon which they, the investor buyer, can assess the actual risk and rewards of the investment that are KNOWN to the franchisor.
The failure to make brand franchisors disclose or make available unit performance statistics in the possession of the system franchisors, who own the gross sales of the systems, to new buyers of franchises is the FATAL FLAW OF THE FTC RULE that brings so many franchisees to financial ruin.
This SUBSIDY of the franchise industry should be stopped and government shouldn’t be enabling the P.T. Barnum type predatory franchisors to operate with immunity under our laws.
Let me just point a couple of things out to any of you reading Carol’s rants.
1) She was banned from BlueMauMau for saying the same thing over and over again, and really didn’t add much to the conversation, because she only ranted about the same thing over and over again. Now she criticizes BMM for banning her because he decided to regulate his own board, and it’s only been better conversation since she left.
2). She’s doing the same thing at Franchise Pundit where one of the more neutral posters decided that it just wasn’t worth it to post anymore, because she ruined it for them. Even the pro-franchisees got tired of her and started a poll as to whether she should be banned from the forum.
3) She says that she wants unit performance statistics, yet her husband (who was a UPS store franchisee) never turned in his own financial statements to the corporate office.
4) Even the good posters like Webster and Steinburg on the other websites tried to do her own research and even led her as to what to do, but she won’t do it.
She’s a bitter person that can’t see that her husband got sold a name and never really did any work on the front end, and now she believes everyone in franchising is evil.
jd:
Thanks a lot. Someone finally comes and says complimentary things about me, and you have to burst my bubble by saying she’s been banned from everywhere else. jd just can’t stand to see me happy…
Carol: I don’t think you have to worry about franchisees not getting profitability figures about Noble Roman’s. I believe unit volumes are available from the individual bankruptcy filings. Anyone who buys into this fiasco could not be helped by more disclosure. Many could be helped by Hooked on Phonics, but not more disclosure.
Carol:
Unlike those fascists and know-it-all attorneys over at Blue Mau Mau, Franchise Pick is not an enemy of the First Amendment of the Constitution.
At Franchise Pick, we simply hate, detest, loathe, despise, and abhor those who criticize redundancy.
A famous person once wisely warned:
First, they came for our redundancies… then they came for our oxymorons… they then came for our similies, metaphors, and superfluous details… And finally, they came for our redundancies…
I propose this: Write your views about earnings claims and the FTC Rule into a single, finely tuned article and I will post it as your bylined article. You can then link to it as many times as you would like, and these guys can’t say a thing about it. I’ll give you the link, and you can put it in the URL field any time you leave a comment.
Sean,
She always says complimentary things to the forum ‘leaders’ until you disagree with her or ban her and then say that you have to keep the zors happy for advertising money like she was saying about Don in multiple posts on pundit. She even stated on BMM that she’d happily leave if asked and then once she was banned decided to bash him.
The problem is, she’ll post on every comment board the same thing, even though she doesn’t get that without offering a solution to the problem no one will listen to her.
Don does strike me as a potential communiss. His last names Sniegowski (Russian for sneaky) he speaks Chinese, and what’s up with that sneaky looking fish with the beady eyes and the Lennin glasses? The fish is painted orange but you can tell he’s red through and through, because the orange wore off by the tail. And what kind of subversive name is Blue Mau Mau anyway?
JD keeps chasing me around and trying to silence me and my UNPOPULAR MESSAGE that it is: government regulation has enabled the selling of unviable franchises to the public because government has subsidized the franchisors with the FTC Rule that has brought us the UFOC/FDD that in practice acts as a red herring in terms of hiding the risk of the investment itself in the franchise that is being sold by the franchisor to the unsuspecting public.
While franchisees are investing in the franchisor in one sense, they are primarily investing in what the franchisor is selling to them and the FATAL FLAW of regulation is that there is almost NO information concerning the franchise itself that is required to be disclosed under regulatory policies. The new targets of franchisors are the VETS and their families who can get “quickie” loans through the SBA Franchise Register and use the Patriot Express Loan Initiative introduced in 2007 to do so. VETS and their families are not going to get true disclosure of the risk of the investments they are encouraged to make when these slick salesmen who wear flag pins in their lapels offer them the FRAN/ VET discount on the franchise.
I know everyone has given up on trying to change the regulation of franchising and the ugly status quo of the FTC rule and Federal Regulatory policy that IN PRACTICE AND REALITY does permit franchisors to SELL their franchises to the public without disclosing the risks and the rewards of the investment in terms of profitability and survivability as KNOWN to the franchisor — and with apparent immunity under the law and regulatory policy for franchisors.
I thought Blue Mau Mau and Don Siegnowski was interested in making franchising better for franchisees (he indicates that this is why he started Blue Mau Mau?) but I, personally, don’t think franchising can be made better for franchisees unless the FTC decides that “earnings claims” should be mandatory and that franchisees should, at least, have access to the unit performance statistics that are in the possession of the proprietor of the Brand, the seller of the franchise. Don of Blue Mau Mau apparently disagrees with me and I agree that he and the others who operate websites have the right to ban my comments if my comments displease them. In the beginning, I think Don was happy to have my comments because the controversy did bring readers to the Site and those on the “inside” in franchising tuned in to see if there were negative comments and even came into his site to defend themselves. He has done excellent “investigative” work and provided interviews that haven’t been available anyplace else in the franchise world. He is to be congratulated.
I especially thank Sean for his offer and I will take him up on it. I thank Ryan Knoll, also, of Franchise Pundit who believes in free speech. Both he and Sean never defend indefensible positions with untruths although they have accepted that after almost 30 years, ten of which were spent on the NEW Rule, there will be no changes to federal regulation and that the IFA and the FTC with the help of the ABA will remain safely in bed with each other.
I don’t critizize Don of Blue Mau Mau for banning me but I critizize him for cutting off my computer so that I can’t even read the stuff I wrote on Blue Mau Mau that is referenced in Google Searches. He could have stopped me ONLY from posting but he stopped me from BOTH posting and reading with NO WARNING and no opportunity to CURE the situation and I think this was unfair and unAmerican.
I can’t even read my Memorial Article written on Blue Mau Mau on the first aniversary of Bob Baber’s death (QUIZNOS victim) to see if my understanding of governments complicity is even greater today. Don told me that I could write this article and that he would publish it and he even registered me under the name of “Carman” to write this article and I will admit that I misled him to believe that this would be the end of my posting.
Yeh! And what kind of subversive name is Blue Mau Mau anyway? Wasn’t there a song called —Blue Mamoo ——00
No point in reading past that first line, I actually started posting on here earlier this year, and i believe i was posting on bmm and pundit before you as well, so please tell me how I’m am chasing you around. I’m just informing people as to who you are and that you are hypocritical in your speech, when your husband didn’t even turn in financial statements to UPS. I guess UPS Store is supposed to ‘guess’ at unit performance statistics when people don’t turn in their financials.
You are the fraud here.
Mau Mau was a terrorist group who fought the British in Kenya.
Obama is half Kenyan, and in 2009 will take over the government (including, ahem…the FTC!).
Obama is one of them A-Rab names, and Sniegowski is a Russki-Polock name.
A-Rabs and Russkis write in that funny writing that no one can understand. FDDs are written in funny words that no one can understand.
Obama spends a lot of time in Washington. Sniegowski recently visited Washington. Matt Shay is in Washington.
There is a vast franchisor conspiracy at work here. The banning from the Internet is a sign of the depth and breadth of this conspiracy.
Thank God that at least Sean allows me to post and does not prevent me from telling you the great hidden secret of the Franchisor Cabal. Just between us, the truth is that
Always good to hear from Paul Steinberg, the author of the very scholarly study of the franchise relationship, and the capture of the Regulator, the FTC, by the “powers that be” who have a special interest in franchising and in maintaining the great imbalance of power in the ZOR-ZEE relationship that is upheld by the courts.
I often read Paul Steinberg’s excellent and scholarly book “Beguiling Heresy” published by the Dickinson School of Law of Penn State in 2004 (and available in the Peace Library) and always learn something new from its pages. It was written, I believe, for law students and the legal community but Paul indicates that he gives it to prospective clients, as well —which may work against his own interests to earn a living much of the time.
Paul is very scholarly and complex and often scolded me on Blue Mau Mau for my faulty interpretations of the law which he expected, I believe, because I have not been schooled in the law. He tried to teach me that the law is about the law and that fairness and morality is not always the goal of the law but nevertheless the “rule of law” rules the day.
“Beguiling Heresy” is truly “full disclosure” of the often abusive relationship that is enabled by the boilerplate and standard self-serving contract that accompanies the government disclosure document and its process, as well as a look into case law that surrounds franchising and which generally protects franchisors and their adhesory contracts in the courts.
I would hope that the sitting judges as well as the law students and the academics in law and economics would all read this book. I think that it was in this book, Beguiling Heresy, that Paul mentioned that after a seminar on franchising for law students, the law students agreed on one thing they had learned, i.e. this was “to never buy a franchise.” Maybe this is one of the reasons Paul Steinberg and his co-author wrote “Beguiling Heresy” because Paul Steinberg was a franchisee of Subway and wrote “Beguiling Heresy” from his point of view as a franchisee and an attorney. And, it was an attorney also who wrote NOLO’s TEN GOOD REASONS NOT TO BUY A FRANCHISE that appeared in Forbes.com.
The Franchise Times reviewed “Beguiling Heresy” somewhat unenthusiasticly which is no surprise and I’m sure Paul wasn’t honored by the IFA and the ABA for his contribution to an understanding of the franchise relationship and the law surrounding franchising.
I respect Paul Steinberg and I have always liked him, even when he chastised me on Blue Mau Mau. He never lied to me and he was one of my teachers.
I respect Don Siegnowski and Sean Kelly and Ryan Knoll who all try to bring readers to understand that there are good reasons to buy a franchise and good franchisors. I admit it is too late for my family but not to late to WARN others that there is cooperation (a conspiracy?) and a status quo to hide the high rate of failure of franchises from the public who buy them. This status quo is rationalized by government as serving the “greater good.”
Paul,
As I recall, there was another terrorist group that fought the British, circa 1775 up to 1783 or so.
What were they called again?
We here in the Northern Dominion forget so many things.