SUBWAY Attorney Joins Spy Store Franchise
March 9, 2009 by Sean Kelly
Filed under Business
Attorney Linda Church, formerly of The Scott Kern Law Office in Connecticut, has joined fledgling franchisor The Spy Place Franchising, LLC, as General Counsel.
After attending law school at the Quinnipiac University School of Law, Ms. Church joined the legal department at Doctors Associates Inc. the franchisor for the Subway franchising system. She was a key member of its Dispute Resolution Group, and oversaw the creation of the Subway franchise audit metric which was, according to a company release, “designed to create transparency and accountability to franchisees going through an audit.”
The Spy Place is a Fort Wayne, IN-based franchisor start-up founded by CEO Ray Huck. The Spy Place will first début its franchise opportunity at the International Security Conference West in Las Vegas, from April 1 through April 3, 2009.
According to the company:
The Spy Place www.thespyplace.com, is a retail operation that engineers, sells and installs affordable Remote Viewing Video Surveillance Systems, (CCTV, Covert camera Systems, ‘Nanny Cams’) allowing businesses and homeowners alike, the ability to view their home or business from any internet-connected computer in the world, allowing for 24 hour real time viewing and, at the same time, providing a permanent digital record of all events that happened in their absence. The Spy Place also offers Computer Tracking Software, GPS Tracking Software, Lighting and Access Control Systems, Biometrics, and also provides Bug Detection Services for attorney’s and corporations.
The Spy Place services Homeowners, Business, Municipalities and Law Enforcement Agencies to name a few. The Spy Place also offers a ‘James Bond Type’ Surveillance Retail Store, which adds to the excitement and mystique of The Spy Place brand.
Having an in-house General Counsel may seem like overkill for a franchisor with one store and no franchisees… then again, with a business based on spying it may be justified.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Graphic: The Spy Place
Come on Sean. You’re not fooling anyone here. Everyone knows that an attorney with her knowledge of one-sided franchisor-friendly FDDs and contracts is essential for a successful franchise today! It just proves that Huck (aka Hukster)of the Spy Place is yet another predatory opportunist who knows he must build everything and anything into those contracts to screw the franchisees. The fact that Church was in dispute resolution gives here all the experience needed to eff the franchisees.
The only people one needs today on staff is a dishonest, slick and smooth salesperson, a lawyer with all of the tricks in her bag and a broker to promote such. There’s so much blood in the water you could walk on water just by stepping on the heads of the blokes who are out of work and just waiting to give you franchise hawkers their life savings so you can party on “their” retirement. After all, America is the land of fropportunity!
Good to hear from Bloody Franchise. His words ring TRUE to me.
When franchising was regulated in the US in the late 1970’s, it was a boon for the ABA and a subsidy of franchisors and the ABA, and the brokers, etc..
When the federal government took franchisors out from under the state common law fraud statutes to protect them from common law charges, they, of course, enabled the rampant fraud in franchising that exists today.
If it is true, as has been said by the angry and the rude, that the US Congress is a big whore house, it is absolutely true thast the ABA pimps for the whores.
A lot of these attorneys will have to be held in a “holding company” before they make it to heaven or hell.
http://www.unhappyfranchisee.com/2009/02/carolcross/
You attack a small business person as a “predatory opportunist” simply because he intends to expand through franchising?
You attack and impune a young attorney’s reputation without knowing any more about her other than she worked in “dispute resolution”?
Let me guess: You were a franchisee who feels he/she got screwed over, and since none of it was your fault the only logical conclusion is that all franchisors are evil and all franchisees are victims.
Just what we need… another reasonable voice in the discussion.
Carol:
Of course you think his words ring TRUE… you are two peas in a pod (I was going to say nuts in a shell… but didn’t).
I glanced at the Bloody Franchise website, which has “nutcase” written all over it. River of blood is a subtle touch. Filled with factual errors and rants and all the credibility of an anonymous attacker. This guy calls me naive and says I’m a franchise broker? I’ve never sold franchises, never been a broker, and am a lot of things but naive about franchising ain’t one of them.
There’s a lot that needs to get fixed in franchising. It’s not gonna get fixed, or even improved, by ranters who aren’t capable of having a conversation, and who attack any and all without thinking first.
Never saied that at all, Sean. The only logical conclusion is that all franchisors CAN be evil and all franchisees CAN become victims because of of the status quo of law and regulation today that renders franchisees merely expendable resources for the franchisors.
I know, Sean, that you are honest and not an attorney and that you won’t deny that the parable of the broken window was at work here when franchising was regulated by the government in the late 70s.
This young lady probably wasn’t practicing law when the FTC Rule was promulgated and we know that all lawyers have the duty to use the law in defense of their clients, whether they be franchisees or franchisors. It’s just that the law appears to have been written by the franchisors.
http://www.unhappyfranchisee.com/2009/02/carolcross/
…all franchisors CAN be evil and all franchisees CAN become victims because of of the status quo of law and regulation…
Yes. And yet they don’t. And my intention here is to 1) help prospective franchisees discern which franchisors abuse that situation and which are dedicated to creating true win-win situations with their franchisees and vendors, and 2) encourage those in the former group to join those in the latter group by seeing the long and short term benefits of fair, equitable franchise relationships.
You and Bloody are simply anti-franchising. Period. You each had a bad experience with a single company and believe you were victims and therefore want to believe all franchise companies are bad and all franchisees are victims.
It’s both sad and irresponsible that you would attempt to disparage two people who have done nothing wrong simply so you can make your same overly simplistic, 1-dimensional point. Frankly, it’s a bit boring as well and better suited for a site with the sophistication and depth of BloodyFranchise.com where you two can be free to rant and rave without the burden of actual visitors and, god forbid, readers.
Right on, Sean! Those that can–do, those that can’t, teach. Carol is obviously a “teacher”. She could not make her own biz work, so she blames everyone, but herself and is not even a franchise owner. Franchises can be very rewarding and lucrative.
Rita:
There ARE some really bad franchise companies out there, and plenty of franchisees who have legitimate complaints. Carol’s family bought a MBE franchise. MBE was acquired by UPS which, from many of the accounts here, appears to have exploited the franchise relationships for the parent company’s sole advantage. By many accounts they used many people’s life savings to create free drop-off locations while they unfairly competed directly with their own franchisees.
She probably took the worst entrance door into franchising imagineable (with a few exceptions) because even proper due diligence couldn’t have warned against what happened, and hard work couldn’t overcome what UPS did.
However, folks like Bloody Franchise aren’t doing prospective franchisees any favors by condemning every franchise and damaging their own credibility.
People are still going to buy franchises – and since Carol & Bloody are unwilling to acknowledge that ANY are good, readers will just dismiss even the valid points they make. Franchise salesmen will easily deflect their arguments as rants… ravings of those who couldn’t cut it themselves.
In this way, folks like Bloody defeat their own arguments. But often, they are more about venting than helping to educate others anyway.
Sean! and Rita!
I have said many times that I have NO objection to franchising if the risks and rewards, as known to the franchisor, are disclosed to the new buyer. My main objection to franchising, as is now practiced under law and regulation, is that it taints our courts.
Both Robert Purvin of the AAFD and Susan Kezios of the AFA have indicated to the FTC that the fatal flaw of franchise regulation is the failure of the government to mandate ANY historical unit performance statistics to be disclosed to new buyers of franchises. These experts in franchising advise that this is misleading by omission.
Obviously, all of those who make their living in and around franchising are extremely grateful for this fatal flaw in regulation that serves the interests of so many.
Additionally, because the FTC Rule, in effect, protects franchisors in arbitration and the courts from charges of fraudulent inducement/concealment in the sales process, and this was the intent of the Rule, says Robert Purvin, it appears that the predatory franchisors and their owners are free to commit fraud with impunity under the law.
Obviously, the courts who are forced to uphold the contracts that franchisees are “tricked” into signing because of the packaging together of the government disclosure, the FDD, and the killer contracts hoped that things would not get out of hand, and now they have a mess on their
hands.
It appears that the courts, especially since rulings by the Supreme Court in 2006, intends to relegate all franchising disputes to arbitration under the FAA, which the court says trumps federal and state law.
If we could see inside arbitration for rhe last 30 years, would we see any arbitrations where a franchisor has been found guilty of fraudulent inducement/concealment in the sale of a franchise?
http://www.unhappyfranchisee.com/2009/02/carolcross/
Carol Cross writes: I have said many times that I have NO objection to franchising if the risks and rewards, as known to the franchisor, are disclosed to the new buyer.
Well, Carol, because you say it does not make it truthful. You criticize every franchise whether they make earnings claims or not. Your recent criticism of the dry cleaning franchise didn’t change one bit once you learned the DID provide earnings claims, nor did it change when it was clear the franchisee had not read or understood the disclosure document and had not hired an attorney to review the document for him.
You agree with Bloody Franchise and say that his attacks on two individuals and a business he knows nothing about “ring true.” Do you know whether The Spy Shop furnishes an earnings claim? Do you know what measures they are going to to warn prospective franchisees of the potential risks? Do you care? Of course not. Franchisor = Bad, Franchisee = Helpless Victim
You’re ready to condemn them simply because they’re franchising and nothing they say or do will keep you from criticizing them for it. It gets a little old when I can’t even post a simple item like this without having the subjects mauled for no logical reason.
Sean: I’ve never known you to be unfair. You know that the AVERAGES based on the 1-800-Dry Clean franchise were based on a sampling of their franchisees and didn’t reflect the true picture. You know that “averages” in themselves are misleading and not very helpful as explains NOLO, in their “Ten Good Reasons Not to Buy a franchise.” You sure jumped James!
My goal is different than your goal. My goal is to try to educate franchisees to the fact that under law and regulation, they are merely resources for the franchisors who are protected by law and regulation for any misrepresentations or hype, etc.. that they indulge in outside of the FDD and the actual franchise agreement.
Obviously, if the majority of franchisors were producing franchises that delivered profits for the franchisees, they would make earnings claims in the FDD —but the majority make no earnings claims within the FDD because it is optional and they want to remain in their safe harbor against
fraud.
Bloody franchise expressed his displeasure with the Corporate Attorneys who use the adhesory franchise contracts that greatly advantage the franchisor like a a weapon “to eff the franchisees.” Since this was my experience with corporate legal, I, perhaps, jumped the gun in endorsing “Bloody Franchise’s” sentiments. I, of course, know nothing about The Spy Place and their corporate attorney. I do hope they are fully disclosing the risk and the rewards of the investment to new buyers.
So you know anything about me Sean? For all you know, I’m one of your past clients and you gave me bad advice.
You might want to learn about franchising from the other side before you insert your size 12 boots in your big pie hole…
Bloody
I, of course, know nothing about The Spy Place and their corporate attorney. I do hope they are fully disclosing the risk and the rewards of the investment to new buyers.
Yet you are quick to jump on Bloody’s bandwagon and bash The Spy Place before they have even launched their franchise program. Solely because the founder – a small business person – is franchising. It seems to me that if you are being honest, Carol, you will admit that you are simply across-the-board against franchising.
If you’re not anti-franchising, please give some examples of franchise companies you think are doing it right – who are earnestly interested in building win-win relationships and are up-front about the risks involved. Can you name 5 “best practice” franchisors you are urging others to emulate? 3? 1?
So you know anything about me Sean?
No, since you choose to make personal attacks on others in the cowardly safety of anonymity I don’t. My guess is you won’t reveal too much about yourself because that might mean taking responsibility for your own words and actions, which is not what you’re all about. You appear to be more interested in ad hominem attacks and self-righteous venting than real dialogue or exploration of ideas… All I really know is that you’re the kind of person that will make personal attacks on someone, then comment on his blog hoping to get a link back. Classy.
For all you know, I’m one of your past clients and you gave me bad advice.
I sincerely doubt it. I’m very selective about who I give my bad advice to.
Clarification on my last comment.
The I, of course, know nothing about… comment I responded to was by Carol Cross.
The So you know anything about me Sean? and the For all you know… comments were from my new bud, the subtle and introspective “Bloody Franchise.”
Sean! I have been researching on the Internet for a couple of years now and I have never seen a testimonial from a Happy Franchisee who will identify themselves and relate their happy experience. Perhaps, it is because they are so happy running their businesses that they just don’t have the time, etc… I have, however, read hundreds of testimonials from unhappy franchisees who were tricked by the constructive fraud of the package of the franchise disclosure document and the adhesory, non-negotiable contract into buying unprofitable franchises.
Even Rita Wilson hasn’t come on and identified her six units and how happy and profitable she is. I do notice how the franchisors use the Internet for Press Releases and other PR to make “constructive” earnings claims to prospective franchisees. I do notice how the business press does more pro-franchise stories than anti-franchise stories. I do understand that the FTC and the SBA and Fran Data push franchising as beneficial to the economy, etc..
It would be against the law, however, for franchisors, themselves, to post on these sites in defense of their franchisors, and tell us how profitable and successful they are, except, of course, they are free to post their FDD’s and use them as a sales tool. The FDD acts to legitimize the franchisor and to indicate that he/she is selling something of value to that portion of the public who is looking for a means of producing a job and income.
I believe that franchising as a business model is as pure rip-off when there are NO profits for the franchisee, who is stuck in a long-term, indenturing contract regardless of whether or not there are ever any profits. I believe that the franchisor practice of taking the profits off of the gross sales instead of the bottom line profits from the first minute the unit is open is really a rip off and a handicap that is difficult for franchisees to overcome.
I believe that franchising most is self-employment that results in the transfer of wealth of the self-employed to the bigger corporate sector who can then avoid the expense and responsibility of being employers while exploiting the self-employed, and the employees of the self-employed.
I believe that it is a “crock” that a franchise is a business of one’s own. It is not. A franchise is a wasting asset that often has no value at the end of the contract term.
It seems you are right! I am anti-franchising. I do recognize, Sean, that you are a generous and good man who believes in free speech and who provides a voice for unhappy franchisees. Thank you!
http://unhappyfranchisee.com/2009/02/carolcross
Carol:
First- I own Jenny Craig Weight Loss Centres. I am not ashamed, or “secretive” about this fact. It’s funny to me that you want full disclosures from franchisors and people like me posting, but you will still never answer the questions if you (personally) have actually ever owned a franchise yourself. I would like to understand your credability. Do you work for someone, or not at all? Is all your background just based on internet research? Research is only as good as the sources and what the researcher is looking for. If you go to the internet with the intention of finding negativity about franchising, you will be able to find it. But there are a LOT of success stories out there.
Secondly, three of my locations gross over 1M annually with a Margin of 20%. I am able to write off lots of expenses such as my car, cell, travel, wardrobe/uniforms and enjoy a host of luxuries pre-tax which drives my personal income even higher. How are we so profitable? We follow the operations system just as written. We hit the streets with flyers, we call inactive clients, we sell just as they tell us to sell, we hire just as they have told us to hire- That why we purchased a system.
Many of the poeple complaining on this site, never followed the system correctly and the franchisor cannot be blamed for that. They give the tools, but the franchisee must bring the individual unit alive.
Third- You do own your business when franchising, you just do not own the “brand” and the copyrights. I can sell at anytime and in fact have sold operating units for up to 10X gross sales. When someone buys your franchise from you, another term is issued (or at least in the case of JC) by the franchisor. Just like if someone were to buy a Courtyard by Marriott- They are not going to deflag the hotel property because of a change in ownership, it would be too expensive capital wise.
There are TONS of good PR and testimonials about franchising. To me, bitter people focus on only the negative….would you find yourself in this category? Hundreds of people have become Millionaires being franchisees of McDonalds, Hampton Inns, Denny’s, nad even service related businesses like Hair Salons.
I am glad that you love to post and give debatable material– but I still question if you have any “real world” experience behind you or are you just envious of the dream that others are accomplishing?
Rita
Thanks Rita! for sharing your success story and I am happy for your success —Really! And, I think this diet must work because the system has been around for awhile. Americans ARE definitly too fat and you can probably thank the QSR franchise sector for this and for providing a demand for your services into the future. Even our children are too fat.
But, I explained my views on franchising, above, and if you would bother to resd, http://www.unhappyfranchise.com/2009/02/carolcross/ you would know where I come from.
As I told you, one of my biggest complaints about franchising is that the franchisors and the special interests who support franchising have bought law and process and this taints our courts.
There are bigger issues here than your “happiness” and my “bitterness” —–as you describe my efforts to educate prospective and failed franchisees.
Rita is correct. If you focus solely on the abuses in the industry you will come to the incorrect conclusion that you have… that all franchisors are evil succeeding at the expense of its franchisees. Some of the issues that you raise are important, however you defeat your credibility by failing to research and understand the entire franchise industry.
I have been involved with the launch of many, many new franchise programs as a consultant. I can tell you that franchisee profitability was always our primary concern, and reputable people in the industry won’t proceed if the franchisees can’t make money under normal conditions. I would never have stayed in the industry you describe, nor worked with the kinds of franchisors you portray. And I worked with a good percentage of the franchise industry at one point or another.
Somewhere in the process of growing or acquisitions, etc. many franchise companies stop valuing their franchisee’s welfare, opinions and profitability and a divide develops. I think there needs to be a lot of discussion and intelligent dialogue that deals with the reality of this complex relationship, instead of promoting an anti-franchise message that’s as simplistic as the franchise fairy tale mags like Entrepreneur paint.
Can’t we both be right, Sean!
As long as the franchise industry won’t clean up its act, and as long as the FTC Rule allows some franchisors to be bad actors, the only solution for prospective franchisees is for ex-franchisees and those who surround franchising to try to educate and advocate for effective regulation by putting pressure on the Congress and the FTC. You, Sean, do your part because you have provided a “voice” for unhappy franchisees and you don’t bar my comments from your website.
It seems like the “good” franchisors that you and Rita are talking about wouldn’t and shouldn’t object to effective regulation and true disclosure of the risks and the rewards of the investment, as known to the franchisors. It seems like good franchisors would lobby for effective regulation that would drive the bad franchisors, the churners and the turners, out of the business.
If, however, franchising can’t stand in free market economies on its merits and compete for the cheap venture capital and cheap labor of franchisees, and with full disclosure of the risks and rewards, as is KNOWN to the franchisor, why should franchising survive in its present state.
The price of churning unsustainable business operations through the act of churning will have a price eventually —maybe sooner than we think –unless the special interests get 90% guarantees out of the IFA and government decides to rescue the franchisors and the cycle starts all over again.
The relationship between the franchisee-franchisor is a hybrid legal scheme that does permit the franchisor to completely control the relationship and he he needs this autocratic control because the franchisor doesn’t own the tangible assets of the system that that he is trying to grow on the backs of the franchisees’ hard-earned savings and cheap labor. Always, the fact that the franchisor can succeed with profits even when the franchisee is only breaking even is a factor that invites abuse. When franchisors do not share in the risk of building the physical units and can grow their chain systems with other people’s money, the window for opportunism is wide open.
It does nothing for brand integrity and brand image for franchises to continually open and close in this “churning” environment you are painting. Do I think some franchisors choose this road? YES. Do I think it is the majority? NO. Brands such as McDonalds– how many of these do you see opening and closing because of lack of profitablity? Some of these homebased dream maker franchises make promise the sun and only deliver the moon, but shame on the Zee for not investigating the opportunity and having an attorney and lawyer look at the Disclosure Docs. It works both ways. Franchisors sometimes need certain Zees to leave the company to improve quality and sales and brand image. Think of a hotel operator that never re-invests in capital needed like bedding and new chairs…The Sor would need to terminate that relationship and sometimes selling to a new Zee with higher operating standards would be neccessary. The outs in the contract are just as much created to protect the brand as it is from shielding either the Zee or Zor from legal issues.
Rita says “The outs in the contract are just as much created to protect the brand, as it is from shielding either the Zee or Zor from legal issues.”
Firstly, it is understood that the standards of the “brand” must be upheld through compliance of the operation of franchisee’s branded business under the supervision and control of the franchisor. The brand and the public must be protected and the product/service must live up to its advertised value, etc.. The franchisor reserves the right to terminate the franchisees who don’t comply with their standards after they are given a certain time in which to cure the default, etc…however, they often misuse their terminastion rights, as witness the Quiznos drama over an ounce of meet.
However, your example, Rita, is an example of where you come from. You, apparently, are earning great profits and would be in the position of upgrading as required by your franchisor, and would apparently still remain solvent.
Those frasnchisees, however, who are standing at breakeven and perhaps still servicing debt on the startup etc… and who have NEVER made a dime in profits and who are up to debt to their neck can’t afford to take on more debt that could possibly sink them.
I’m sure Warren Buffet, when he bought Dairy Queen (his first experience with a franchise) was surprised when so many franchisees resisted upgrading and went to court. He is a good human being and he probably thought all of DQ’s were operating at a profit and could easily take on more debt to upgrade with merely the hope that the upgrade would mean more business for them that would, in the end, result in profits for the franchisees. Many of the older DQ units that were barely making a living in older neighborhoods where the populations have moved up the road couldn’t see the value in destroying themselves to comply with the upgrade orders.
However, this is not what we are talking about. We are talking about the FAILURE of the franchisor to disclose the unprofitability on a unit basis of the system, as is known to the franchisor, to new buyers of the franchises.
Franchisors together with government are complicit in hiding these MATERIAL facts of “profitability” and failure of first-owners and subsequent generational owners of the units from the buying public, and also from investors in their systems. There is a difference in franchise systems where 60% or more of their units are realizing profits than those systems where 60% or more are just barely breaking even with no profits.
You will agree, I’m sure Rita! that if the franchisors were sharing in the risk of building the physical units and had an investment in the tangible assets that support the units that things would be different.
Agreed.
So huh, check out the website, http://www.thespyplace.com, feel and enjoy the energy that this company generates, try to understand the diversity and direction being offered, direction that is available in no other franchise opportunity in any industry in the world. The Spy Place is true ground floor opportunity.