CHILDREN’S ORCHARD: A Failing Marriage?
June 10, 2009 by Sean Kelly
Filed under Business
Tell her you love her each day / You’ll make her happy that way.
A simple “I love you” means more than money,
And with a kiss or two her life is sunny. Frank Sinatra
Franchisors: Have you hugged your franchisee today?
The franchisor-franchisee relationship is often compared to marriage. Like a marriage, the courtship shouldn’t end once the deal is consummated. Franchisors who allow themselves to lapse into complacency or indifference do so at their own risk. Franchisors who are abusive or who get caught cheating on their franchisees (with new concepts or unrelated profit centers) may learn that hell hath no fury like a franchisee scorned.
Children’s Orchard: One-time lovers become orch-enemies
Have you been following the reality-show-like domestic drama of Children’s Orchard over at UnhappyFranchisee.com? The CO franchisees are definitely not feeling the love. They claim their spouse (CEO Taylor Bond) never says “I love you” and is imposing unreasonable demands and restrictions. He’s distant, cold, doesn’t care about their feelings. What’s worse: they claim he’s been unfaithful, chasing the pretty skirts of younger, flashy franchise ventures while the franchisees are stuck home with the kids (kid’s clothing, actually).
According to WakeUp’s comment on a post on Taylor Bond:
Here’s what I see: The Children’s Orchard franchisees love their chain, love their brand, and some (TOC) are willing to fight for it. Taylor Bond has consistently shown he is not committed to the brand or the growth of the system. Since he bought CO, his focus is always elsewhere and he has wasted massive time, energy and resources on wild goose chases.
Bond bought the chain in 2004 “Under Mr. Bond’s leadership, the number of stores has declined steadily from 86 in 2004, to 77 in 2007, to 71 in 2008, and to 61 in 2009.”
Press releases on Bison tell the story. http://www.bison.com/press_egismoz_01122006, http://www.bison.com/press_egismoz_03092006
In 2005 Taylor diverted his energy into the lamebrain egismoz franchise concept. He hired an upper level exec, ad agencies, pr firms, did commercials. He launched egismoz in 2006. It was an embarrassing failure and the investment was squandered. Meanwhile CO franchisees failed.
Instead of putting energy and resources into CO, he acquired Newcomer’s Welcome Service and plowed energy and resources into that. According to a press release at http://www.bison.com/press_NewcomersWelcomeService_04182007:
“Since purchasing Newcomers Welcome Service late last year, Bond’s corporate team has been busy refining and documenting Newcomers business systems, creating marketing and support programs, and developing a suite of customized, web-based business software that allows franchisees to manage leads, schedule home visits, support representatives, and invoice sponsors.”
He launched the Newcomer’s Welcome Service in 2007. Nothing happened but silence and more squandered investment. More CO stores closed.The franchisees have always been focused solely on Children’s Orchard. It seems Bond is always focused elsewhere and just trying to use CO as a springboard for ill-conceived, wasteful diversions.
Yore cheatin’ heart will tell on you…
The franchisees have tried to get hubby to go to counseling (the American Association of Franchisees & Dealers) or even to talk about their relationship, but he’s (supposedly) having none of it. They claim Taylor Bond is “the indifferent spouse who won’t change and refuses to go to counseling.”
Not knowing what else to do, they’ve planted a sign in their front yard (TOC website) that says: “My hubby’s a bozo.”
A cautionary tale for franchisors
Is it too late for the Children’s Orchard marriage to be salvaged? I don’t believe so. I doubt the franchisees would be vying for hubby’s attention so aggressively if they didn’t think the relationship could be salvaged.
Will the marriage be salvaged? Looks doubtful. Hubby has refused to respond in a meaningful way, and will not meet with the franchisee group. I called the home office, but never got a return call.
Looks like Hubby’s reaction is to close the den door and turn up the TV.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
image: Zuma Press
Also read: Franbest franchise information
Obviously, Mr. Bond is going to stand on his contractual rights not to talk to his franchisees as a collective.
The TOC has power only if he gives TOC power by recognizing them and talking to the franchisees as a group, or talking to the AAFD about the contract. Even, under the new FTC Rule where Independent Franchise Associations have to be listed in the FDD, the franchisor doesn’t have to recognize and talk to the the IFA or the AAFD.
Collective bargaining has been a “no no” in franchising which depends upon dealing with franchisees on a one-on-one basis —especially in the courts. I’m sure Mr. Bond’s sttorneys have told him not to react in any way to the TOC website.
However, the TOC website will strengthen the relationship between the franchisees who can legally share their unit performance statistics with the public, and does act as a warning to prospective franchisees of CHildren’s Orchard who may find this website in their due diligence endeavors.
The negatives will not impact the individual owners, the franchisees, because customers are not reading the website. Any further lack of growth of the system because of the website can be a problem for the franchisees now under contract in terms of selling or renewing their contracts but apparently Mr. Bond doesn’t think this is a problem for him, as the owner of the system, because he does nothing about the contraction of the system. But, eventually he will have to react or fade away.
A divorce is out of the question for the parties because of the contract that unites them. Maybe, Mr. Bond will sell their contracts to a more successful franchisor of this concept.
It’s a standoff! But I congratulate the TOC for their efforts to bargain with their franchisor and for their efforts to warn those who might be thinking about joining this system.
Franchisee websites like TOC that deal in objective statistics and facts must be legally protected by our First Amendment Rights and will perhaps, in the end, change franchising to a more collaborative effort to the benefit of both the franchisor and the franchisee. The Internet and Google Search has brought CHANGE already to franchising because of sites like Franchise Pick and Unhappy Franchisee and other franchise talk websites.
While I agree with much of your comment, I disagree with the statement “The TOC has power only if he gives TOC power by recognizing them and talking to the franchisees as a group, or talking to the AAFD about the contract.”
Les Stewart had a good post on BMM stating that independent franchisee associations should not seek permission or approval of the franchisor for their existence or viability, and it’s a good point. If the IndFa is dependent on approval of the franchisor, they’re not independent, are they? That’s one of the weaknesses of the AAFD approach – wonderful that Curves gives $200K to the IndFa, but what’s the benefit if the franchisor now owns the “independent” franchisee association.
TOC shows that franchisees have tremendous power whether Bond acknowledges them or not. Franchisors need positive, upbeat franchisees if they want to sell franchises. Bond has basically hogtied his sales efforts, and until he can kiss and make up with his franchisees I doubt he’s going to be depositing many franchise fees.
This won’t help heal the marriage. They’re suing a Children’s Orchard franchisee who closed afterless thn a year.
Just a year ago FR and FEE were expressing their love: http://www.lvbusinesspress.com/articles/2008/04/15/news/iq_20685892.txt
Now it’s gotten ugly:
http://dockets.justia.com/docket/court-miedce/case_no-2:2009cv12166/case_id-239874/
Plaintiff: Children’s Orchard, Incorporated
Defendant: Children’s Orchard Store #210, Stephanie Fournier and Matthew Fournier
Case Number: 2:2009cv12166
Filed: June 3, 2009
Court: Michigan Eastern District Court
Office: Detroit Office [ Court Info ]
County: Washtenaw
Presiding Judge: Zatkoff
Referring Judge: Whalen
Nature of Suit: Contract – Franchise
Cause: 28:1332 Diversity-Contract Dispute
Jurisdiction: Diversity
Jury Demanded By: None
Amount Demanded: $130,000.00
I agree Sean that TOC shows that franchisees have the “potential” for tremendous power whether Bond acknowledges them or not but I guess I didn’t make that point very well in my post.
Are you suggesting that an IFA who employs and actually works with a trade organization like the AAFD actually loses its independent status because the intermediary, the AAFD, composed of attorneys, necessarily has to cooperate with the franchisors who hold the balance of power by reason of the adhesory contracts that are upheld in the courts —and this always compromises the interests of the franchisees?
I’ve been reading Les Stewart’s comments on Franchise Fool about Independent Franchise Associations but I believe that franchisees don’t always feel kinship with their fellow franchisees, some of whom are competetors, UNTIl there is trouble in the network; i.e. some kind of systemic abuse that is impacting a growing number of franchisees. Unless there is a leader among them who is willing to take the responsibility to organize the IFA without using an attorney, I’m not sure what Les is saying. I believe he has said that it is better, if you have to use an attorney to use an attorney who doesn’t identify himself as a “franchise attorney” or to use him.
Franchisees aren’t looking for trouble —they are looking for survival and profits!
I think it’s different, case-by-case. I don’t think AAFD involvement negates the benefit of the IndFA necessarily, I just think – from what I’ve seen – their approach works when the franchisor is cooperative, but not when the franchisor isn’t.
TOC is an AAFD chapter but since the FR wouldn’t recognize them, Purvin had no plan B and they had to take the next step on their own (though AAFD did the contract grading, which was helpful). Butterfly Life laughed at Purvin when he tried to get them to discuss franchisee grievances, so he was shut down on that one, too. I just think the AAFD’s orientation is to get paid by the FR they get too cozy. Like Cuppy’s… they defended the FR til Dale stopped paying them, then they got indignant.
But I’m no expert on their IndFa track record… I just see what comes across my blog.
Companies are being forced to listen to their customers or they’ll face the backlash on the Internet. Smart companies embrace this new dynamic and change themselves for the better… and will succeed. Others will fight it and inevitably lose. The same thing is happening in franchising – franchisors need to start seeing franchisees as their customers, too.
Some simply can’t adapt. Your adversary on UnhappyFranchisee.Com, commenter “John,” keeps trying the same bullying tactic toward the Children’s Orchard franchisees that might have worked a decade ago. He finally got frustrated and left. Some will never be able to accept empowered franchisees; others will embrace the change and thrive.
The lawsuit is a show of power and the “finger” for the franchisees.
Why shouldn’t the franchisees being sued put their performance statistics out on the Internet for all to see on the website in order to expose the FAILURE FEE that is obscured in all franchise agreements and the ugly reality of contract law that upholds these failure fees?
Sean, I think that you are right about Les’s point.
“Les Stewart had a good post on BMM stating that independent franchisee associations should not seek permission or approval of the franchisor for their existence or viability, and it’s a good point. If the IndFa is dependent on approval of the franchisor, they’re not independent, are they?”
But I think that the point is deeper: an IndFA should have an independent business reason for existence; not merely a beef with the franchisor.
Michael:
Have you posted on this topic? Or is there a good post or article on this issue you’ve got a link to?
Absolutely, this franchisor spends A LOT of time in court (or his brother the attorney does, I should say). The franchisees that they are suing have lost EVERYTHING, and now more trouble for them.
“Franchisees aren’t looking for trouble —they are looking for survival and profits!” as stated above by Carol. This is such a true statment. As franchisees we just want to be successful and maybe make a profit down the road. This franchisor doesn’t care and survival is the the name of the game.