Comments on: Top Businesses You Can Manage in your Pajamas

By: zackaster

zackaster — Mon, 05 May 2008 13:03:02 +0000

I said the franchisees are in trouble. If they had the money they would have paid it. HT still markets and sells franchises like they will be a major profit center. They will not. The tanning industry is DEAD. Venuto got out because he knew this was coming. The big question is, does his pizza taste as bad as his tanning booths rattle?

By: sean

sean — Sat, 03 May 2008 17:11:29 +0000

Fom what I read on this site, I think HT must be a paying sponsor or Sean is an employee of HT. Constant praise for a company that misleads people in to buying a franchise in a dead industry.
I love the conspiracy theorists who immediately assume anyone who doesn’t share their view must be on the take.
My story is a link to a WSJ and CNBC story. I suppose Raymund Flandez and the Wall Street Journal are on the HT payroll? As are CNBC and the shill HT franchise owner?
I’ve clearly said I did some consulting with the old owners, and had no contact with the new management. I had a good impression of them, including Bob McQuillen. JJ Sorrenti wasn’t there when I had contact with them.
How is this memo a damning indictment of a troubled franchisor? It seems to me that it’s the new owners trying to clean up a system that previously allowed franchisees to not pay their bills. It’s a lot more accomodating approach than many I’ve seen. I’m sure the franchise agreement allows them to be much tougher, as these franchisees must clearly be in default of their agreements.
Sorrenti states that franchisees owe Hollywood Tans $10 Million for services and equipment they received, and royalties on, millions of dollars in revenue that the franchisees collected.
How does being owed $10 million reflect poorly on the franchisor, except that they’ve been too lax in collecting from deadbeat franchisees? What am I missing?

PS If I were on the HT payroll, how long do you think your comment and Charlie’s rants would appear? I’ve consulted with hundreds of franchise companies and don’t work with ones I think are not fair to their franchisees. Consider thinking before making accusations.

By: zackaster

zackaster — Sat, 03 May 2008 16:28:26 +0000

Bob McQuillen is corporate exec with Hollywood Tans. He may own a franchise, but his bread and butter is with the HT headquaters only a few miles from his home. The computer systen Hollywood Tans uses is available to any tanning salon, it is not their product. It’s called Helios. I think HT is using the Centrix version of Helios. Fom what I read on this site, I think HT must be a paying sponsor or Sean is an employee of HT. Constant praise for a company that misleads people in to buying a franchise in a dead industry.
And here is some proof, an email from HT to it’s franchisee about back money owed to HT. If the franchisee had the money, they’d pay it. It’s quite apparent they are not profitable.

—–Original Message—–
From: Hollywood Tans
To: Hollywoodtans Marketing
Sent: Fri, 29 Feb 2008 2:02 pm
Subject: Letter from J.J. Sorrenti

February 29, 2008

Dear Hollywood Tans Franchisee:

We are fast-approaching our most productive season and we’re putting the final touches on new marketing materials (including new television commercials, print ads, in-store graphics, and more) that we believe will help drive new customers into the salons. All of us are truly excited by what we’ve seen, and we’re sure when you see the information at the upcoming market materials, that you will too.

Unfortunately, because of the staggering size of accounts receivable from franchisees (including royalties, marketing invoices, rents, and equipment payments), we’re not in a position to leverage the new marketing materials. The fact is that certain franchisees owe us nearly $10 million, most of which is past due! And, without that cash in hand, we will not be in a position to market at the level we believe is necessary for a successful—and we think potentially very successful—spring and summer busy season. That will hurt all of us.

The current accounts receivable situation from our franchisees is simply unacceptable, and we are taking action immediately so that we will have the necessary cash to take advantage of our season. Hollywood Tans (and our franchisees who are meeting their obligations with the company) should not and will not allow some franchisees to freeload on our marketing investments. Rest assured, our company is not in any kind of financial jeopardy. Rather, we are fed-up with franchisees who are not paying their obligations to us.

Consequently, please be advised that franchisees that owe past-due amounts to the company must pay the amounts owed to us immediately. We understand that you may not have the cash to do so. If your account is delinquent and you don’t have the cash to pay us immediately, you have one of several options:
1. You may need to meet with your banker to get a short-term loan;
2. You may need to use personal or corporate credit cards to pay your balance due;
3. You may need to contact the third-party lender whose contact information is included with this letter, who may be able to help you with an alternate source of immediate cash; or
4. You may need to use other sources of cash (assets that can be sold or others who may be willing to provide loans or cash).
If your account is past due and we do not receive immediate payment, we will begin to take action. These actions will include:

1. Effective March 1, 2008, franchisees with past due accounts will no longer be able to take advantage of the promotions we offer in our wholesale business (such as $1 off each bottle of lotion purchased, etc.). Franchisees with past due balances will pay full wholesale price for any items purchased;
2. Report your past due amount to the credit bureaus;
3. Turn your account over to a collection agency;
4. Terminate your franchise agreement.
We will take these actions with regret, but also with the confidence that successful franchise systems simply do not permit their accounts receivable to increase in the way that we have.

Finally, as a gesture of goodwill, as a one-time offer, every franchisee whose November, December and January marketing invoices are paid in full by March 7, 2008 (including those whose marketing invoices have already been paid), will receive a $500 credit on his or her your account to be used toward future advertising invoices. Please note that we have no obligation to provide this credit, since the amounts that were billed to you were already spent on marketing.

For those of you with past due accounts, this is a very serious matter. If you have past due amounts, you should consider this as your final warning. If we do not receive payment of your past due amounts, you are putting your credit record and, most importantly, your franchise business at risk.

Sincerely,
J.J. Sorrenti
CEO
Hollywood Tans, LLC
11 Enterprise Court
Sewell, NJ 08080
856.716.2150 T
856.716.2151 F

By: Top Businesses You Can Manage in your Pajamas at PIGASYS

Top Businesses You Can Manage in your Pajamas at PIGASYS — Wed, 27 Jun 2007 18:36:46 +0000

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By: credit card business

credit card business — Tue, 26 Jun 2007 08:14:48 +0000

I am in for franchising and the issue of convenience of distant managing has always been of my concern. I think it’s rather difficult to choose the right and effective managers and watch them working remotely. Thanks for the article all the same, I think I’ll make use of it.