January 5, 2007

38 Comments »

1. Thats a pretty sweeping statement Robert,why didn’t you name the company in the header rather than just a sweeping headline on Franchises.
   Wearing my www.cubictelecom.com CEO hat today.

   Comment by Pat Phelan — January 5, 2007 @ 3:09 pm

2. Pat: I can’t say why. Sorry.

   Either way, after seeing what my brother went through I wouldn’t give money to ANY franchise without getting something up front.

   Comment by Robert Scoble — January 5, 2007 @ 3:19 pm

3. I think that the best thing your brother could do is to try to get his state attorney general’s office to initiate a lawsuit against the alleged swindler under the Deceptive Trade Practices Act. That would save him the legal expense of trying, and possibly failing, to get relief on his own. Often the threat of state action is effective in itself.

   Comment by Podesta — January 5, 2007 @ 3:34 pm

4. Podesta: the problem is it’s like bleeding a stone. There are already criminal charges against the folks who run Java Jo’z and there’s more coming. But that won’t really help him get his money back.

   Comment by Robert Scoble — January 5, 2007 @ 3:38 pm

5. Are there any franchises that don’t want money up front? McDonald’s, Starbucks, and just about any retail store you walk into, not to mention hotels, motels, gas stations… is a franchise operation. I think the advice should be to avoid the small ones that you’ve never heard of until they have established a reputation.

   After all, the main advantage of a franchise coffee business (in this case) over just starting your own one of a kind operation is name recognition, and I’ve never heard of either of these.

   I hope your brother comes out OK, but beware of throwing good money after bad. For as much as government like to medal in legitimate businesses, they seem to often be powerless against the ones that are clearly run by crooks.

   Comment by macbeach — January 5, 2007 @ 3:44 pm

6. I’ve been doing a lot of researching on franchisors and I believe a $30,000 franchise fee is pretty standard. Did he have a lawyer prior to signing the contract? I sure would like to hear more details since I’m thinking about a franchise, not coffee though. I hope he gets his money back.

   Comment by Rick — January 5, 2007 @ 3:52 pm

7. Robert, maybe this will allow you to associate the two more openly:

   Trademark search for “cuppy[s]”

   -Bryn

   Comment by Bryn — January 5, 2007 @ 4:01 pm

8. Robert, in white collar crime situations, civil actions are often more effective. So, if I represented your brother, I would encourage him to pursue that avenue as well as any criminal charges possible. Going through the AG, as I said before, is a way for an individual to have the state government bear the expense.

   Macbeach, you are wrong as usual. Starbucks is not a franchiser. Nor are most retail operations.

   Comment by Podesta — January 5, 2007 @ 4:09 pm

9. I hope he gets his money before this guy ends up in the slammer

   http://www.famousreviews.com/site_reviews/Business_Opportunities/Java_Joz.html

   “We now have confirmation that Roy Snowden has pled guilty to 5 counts of Evasion of Payment of Income Taxes and one count of Conspiracy to Defraud the IRS, and he could face up to a maximum of 30 years in prison. Snowden is scheduled to be sentenced on January 23rd, 2007″

   Comment by Ross — January 5, 2007 @ 4:10 pm

10. Sounds like if your brother did his due diligence he might not have lost his money.

    BlinnPR
    http://www.blinnpr.com/blog

    Comment by Steven Blinn — January 5, 2007 @ 4:43 pm

11. Sorry to hear about your brothers situation. I too did some research on starting a franchise business and most of them left a bad taste in my mouth. I think even though it might be harder initially it’s better to just go at it on your own. Plus the trail and error will be a priceless learning experience. Anyways, good luck to your bro, hope he gets his money back or at least puts them out of business.

    Comment by ET — January 5, 2007 @ 5:05 pm

12. Sorry to hear about your brother. Hope he had an attorney review the agreement first and hopefully now, it will work in his favor.

    I would like to suggest that you don’t make sweeping statements about franchises. I don’t see guys that own over 100 Dunkin’ Donuts or several Outback restaurants crying too much. Even small ones like Sal’s Pizza in Massachusetts and New Hampshire can be good, heck, even great!

    The best solution in this case if for your brother to get his site, get his equipment and run it with, using a poor term, a vengence.

    Good luck Bob!

    Comment by Jack Stack — January 5, 2007 @ 5:23 pm

13. Hey Bob I appreciate your support and I am sorry I got you into this mess. I have owned two other franchises and they never asked me for a dime up front. Why I gave it to Java Jo’z is beyond me. A lawyer did look at our contract and said it was all standard. I did check out the company before investing and did not find anything negative except for mountain mudd vs. Java Jo’z. That did not bother me though … one law suit against a company is not out of the ordinary. Just check out how many suits were filed against MacDonalds. It is nice to know that I am not alone in this.

    Comment by Ben Scoble — January 5, 2007 @ 5:31 pm

14. Robert, I know it does little to console your brother, but I feel for him. The only safe franchises are the larger ones like Subway, Pizza Hut, etc. They are established and you know who you’re dealing with.

    I think it would make more sense to just open one’s own coffee shop and only sell coffees and teas that are shade-grown, bird-friendly and organic. I watched a show last night on TV on coffee and teas and they mentioned that the environmentally-friendly coffee growers actually get paid more than the fields owned by the major coffee producers.

    Organic coffees and teas are looked upon much more favorably now and people are beginning to become more aware of just what it means.

    Open up a small, mom and pop organic and coffee/tea shack and I guarantee you’d make money if you put it somewhere like Miami, Melbourne, etc.

    Just my 2 pesos.

    Comment by Juan — January 5, 2007 @ 6:57 pm

15. Actually, if the information about Snowden taking a deal on tax evasion charges is true, your situation just got worse, Ben. You and other would-be franchisees are now behind the IRS in collecting from Snowden. Plus, he has a mountain of legal bills by now. It doesn’t look good for you guys.

    Comment by Podesta — January 5, 2007 @ 7:44 pm

16. Don’t do business with ANY FRANCHISE that wants $30,000 up front? Really? ANY FRANCHISE? Are you sure? Cuz I gotta tell ya, I know quite a few people that have done pretty well opening up Subway, KFC, Taco Bell franchises and had to pay much more than $30,000. Are you sure you want to stick to that advice?

    Comment by LayZ — January 5, 2007 @ 9:41 pm

17. Hey LayZ … are you one of my brothers? Cause it seems like you argue with everything. Robert thanks for the support 1500 hits on my blog today!!!

    Comment by Ben Scoble — January 5, 2007 @ 9:44 pm

18. … and LayZ did your friends ever have problems trying to find a sit for a TACO BEL???

    Comment by Ben Scoble — January 5, 2007 @ 9:46 pm

19. I mean BELL??? Sorry for spitting

    Comment by Ben Scoble — January 5, 2007 @ 9:47 pm

20. To be fair, a franchise fee is totally standard. I’ve come to be really impressed with the franchise world through our franchise blog (www.franchisepick.com).

    That’s not to say there aren’t seedy elements, and I in no way blame Ben for what happened.

    Just that sweeping statements like not giving money to franchises are more than a little over-the-top.

    End of the day, you’re entering into a major business relationship and there are never any guarantees it’ll work out (even with big ones like Subway, Quizno’s, Tim Horton’s, etc).

    Ben: Hope everything works out for you somehow mate

    Comment by Jeremy Wright — January 6, 2007 @ 10:15 am

21. I’m sorry to hear about your brother’s misfortune, and would like to speak with him about his situation. I can perhaps help direct him to some people who can help.

    I’m an 18 year veteran of the franchise industry, President of franchise marketing firm IdeaFarm (ideafarm.net) and have helped launch and grow more than 100 franchise companies. The real problem is not with franchising itself, or necessarily with collecting fees upfront, but with the lack of honest information available to prospective franchisees, and rampant myths and outright lies that are tolerated by the industry. For example, dozens of franchise websites cite franchise survival statistics the entire industry knows are completely bogus (See “Lies, Damn Lies & Franchise Statistics” at FranBest.com)

    The press tells lots of happy, happy success stories about successful franchises, but little reporting on the failures, the scammers, or the hot new concepts that go cold and disappear (often with the life savings of both franchisor and franchisees) every year. Quiznos, for example, has multiple class action lawsuits from unhappy franchisees. This past November, a distraught Quiznos franchisee committed suicide in a store bathroom, leaving a note detailing how the franchisor ruined him. The corporation responded by terminating the franchise agreements for the 17 stores owned by the board members of the franchisee group that posted the note on their blog. Meanwhile, unknowing franchise prospects are still lining up at slick Quiznos franchise seminars, eager to be part of the loving Quiznos family.

    There are good franchise opportunities, mediocre opportunities and grab-your-wallet-and-run-like-hell franchise opportunities. I started several new blogs to help people identify which is which. FranBest.com is an informational site with articles exposing the myths and lies, FranchisePick.com (a b5media blog) highlights legit opportunities, documents failure and provides warnings, and FranWorst.com is a satirical & sarcastic indictment of franchise & business opportunity scammers.

    Ironically, your brother’s misfortune could help keep others from suffering the same fate. I believe that blogging is going to be the medium that will expose the misconceptions and the charlatans. Keep the spotlight on this issue!

    Sean Kelly
    SeanKelly[at]ideafarm[dot]net

    Comment by Sean Kelly — January 7, 2007 @ 8:36 am

22. […] A recent post by Robert Scoble on his Scobelizer blog highlight the problems his brother Ben, encountered after signing a franchise agreement for a Java Jo’z coffee franchise. According to Ben’s account, posted on his website, Ben and a partner gave the company a $30,000 refundable downpayment, contingent upon their being able to locate a suitable location in Richmond, VA. According to Ben, they could not find a site and requested their $30,000 back. That’s when the fun began. […]

    Pingback by Franchise Pick - Franchise Watch: Java Jo’z, Cuppy’s Coffee — January 7, 2007 @ 11:42 am

23. Here’s a little moral support for Ben:

    http://franchisepick.com/?p=132

    Comment by Sean Kelly — January 7, 2007 @ 11:57 am

24. BLUE CHIP FRANCHISE BUSINESS

    Please feel free to give me tips and suggestions on sources regarding the franchise topic. With the help of our business contact and studying and learning the field, I am positive that our venture will become successful. Steve’s post, Franchising Def…

    Trackback by EGO — January 7, 2007 @ 8:42 pm

25. […] Scobleizer.com: Prominent tech Blogger Robert Scoble claims his brother Ben Scoble was ripped off by Java Jo’z to the tune of $30,000. […]

    Pingback by Java Jo’z, Cuppy’s Coffee, Emerald Coast Mfgr., Roy Snowden at — January 8, 2007 @ 9:10 am

26. As a Self Employment Specialist one of the problems I see is when individuals are doing their own unguided search into finding a franchise. They tend to limit their depth of the search.

    Not to sound like an advertisement, but I work with clients to first help them to figure out what it is that they are really trying to achieve with this transition. And it’s not just to get out of corporate. Secondly, a lot can be gain through thoroughly researching several different business models in different industries. This usually takes people out of their comfort zone, so few are willing to do this on their own. Thirdly, as a resource I become a sounding board, conduct brainstorming sessions, while challenging any pre-established notions and push my clients to dig deeper into prospective franchise models.

    If you have done your research correctly on a particular franchise that has more than just a handful of new franchisees, you should be able to develop a spreadsheet of cost verses revenue with average ramp-up time periods, along with the numbers that reflect best case to worst case scenarios. You should have a good picture of the possibilities and how “it fits into your life”. You can even dig a little deeper and learn why some franchisees are performing at the best level, while others are producing on the worst case level.

    Best of luck…. Joe Tarshis, 800-585-2349

    Comment by Joe Tarshis — January 9, 2007 @ 10:15 am

27. Okay, so enough is enough already. Has anyone done any real research beyond “looking” at just the website before you start blasting and possibly ruining the lives and businesses of those that have not had this problem? I am not going to sit here and try to defend either side of the lost money issue. If you lost and were screwed out of $30k, I feel for you….I really do. I would be upset and doing everything possible to get my money back if there was a legal road to walk down. But, on the same token, as others have said, if you gave money without having your documents reviewed…shame on you.

    So, here is a little skinny from a former Java Jo’z (license) owner now Cuppy’s store owner (franchisee). And by the way, a few months ago, I purchased my 2nd Cuppy’s franchise. I am tired of seeing all of this bad information floating around with the possibility that most of you actually have never walked into the corporate office of Cuppy’s Coffee. First off…..Java Jo’z was NEVER intended to be a franchise…they never sold franchise’s. One would think that with all of the “legal eagles” we have out here ranting….this would have been one of the first things discovered. I bought a license from Java Jo’z just like everyone else did. There is a huge difference between how a franchise works and how a licensee company works. Let’s get that straight right from the start. Next, if anyone would have taken the time and had done some real research this is what they would have found: This past year Robert Morgan bought all of the assets of Java Jo’z Coffee & More Inc. from Roy & Kim Snowden (owners of Java Jo’z). He did not buy “the company” (as a matter of fact, the company Java Jo’z Coffee & More Inc. still exists). New companies were formed off of that concept….Cuppy’s Coffee& Elite Manufacturing as well as other companies. As for, Cuppy’s being in the same offices, that’s what happens when a new company assumes the lease. I believe by purchasing the assets he had the option to use the same computers, utilize the same personnel, the same phone system, etc. Call me silly, but if you have an awesome concept and a great vision….why re-invent the wheel? Now, as I understand it, part of this agreement was that the Java Jo’z store owners that were out across the nation would still have someone behind them with some corporate purchasing power. (Being a new company…did they need to do that…I don’t think so?) That is why you see mirror images of the specialtycoffeecoop.com website and other parts of the website.

    Now getting onto the subject of the awesome personal website that Mike Wallace setup for himself in Texas, sure he probably is not “really” supposed to have that site up now that we are franchised….but he is lucky enough to have it. Oh yeah, it sure is nice of everyone out there to point that out for him. I bet he really appreciates that. If he opened as a Java Jo’z store and then converted to a Cuppy’s store…. at his level as a store owner what is so wrong with saying that he was “formerly Java Jo’z”? I don’t get it? I am “formerly” Java Jo’z.

    Like I said in the beginning…if you are legally owed money….by all means, get it. But, get it from those who owe it to you! I don’t understand why you can so easily bash a franchise company you have not dealt with? Maybe you should actually go down to Fort Walton Beach, walk into the Cuppy’s corporate office where there are now over 100 dedicated and hardworking people with families. Look them in the eyes and explain why you feel it’s necessary to pull them into something that they have had nothing to do with. Explain to them how they are responsible for something that happened to you while you were contracting with a different company.

    At one time in this process YOU saw the opportunity this concept has, or you would not have given a down payment right? Well, we…..are still out here……OUR stores ARE open!! Maybe you should think about that before you start typing next time. Why are you so willing to crush the dreams of those of us that are out here who believe in the company we “FRANCHISED” with CUPPY’S COFFEE!

    Oh by the way…now that I have done some “due diligence” research on my end concerning the company you are attacking…..my franchisor. To those of you asking for your money back….. Did you do everything you were supposed to do in the contract you signed? Or are you just giving up and jumping on the “give me my money back” bandwagon?

    Comment by Cafeeen — January 14, 2007 @ 7:13 pm

28. Cafeen: when a business buys another business (and gets most of its employees) it also buys its bad reputation, unless the new business takes care of old problems.

    So, Cuppy’s bought the remaining assets of Java Jo’s. Interesting that you didn’t do the due dilegence to realize you’d also be buying all of Java Jo’s problems too.

    Comment by Robert Scoble — January 15, 2007 @ 12:12 am

29. Rob,

    That’s not the point….All of these blogs keep trying to show that Cuppy’s is trying to decieve and hide. That they are somehow still Java Jo’z.

    I thought it was important that people realized that we are not the same company that your brother had problems with. That’s all.

    Comment by Cafeeen — January 15, 2007 @ 6:40 am

30. Hi! Very nice site! Thanks you very much! nnNySJTiJdjOxW

    Comment by 18KoH3a42R — January 15, 2007 @ 4:44 pm

31. Official Statement from Cuppy’s Coffee & More

    In May 2006, Medina Enterprises, a Nevada based company, purchased the assets of Java Jo’z Coffee & More, LLC, and Emerald Coast Manufacturing Inc. From this transaction, the principle owner of Medina formed an association with another individual, and Cuppy’s Coffee & More, an international coffee franchise, emerged.

    Through this transaction, Cuppy’s Coffee obtained the rights to the logos, assumed the leases and acquired a majority of the equipment. A majority of the former employees of Java Jo’z were offered positions and are now employed at Cuppy’s.

    Java Jo’z still exists as a licensing company and is owned by Kim Snowden. Roy and Kim Snowden have no financial, operational, or legal association with Cuppy’s Coffee.

    Although Cuppy’s Coffee holds no legal obligation to provide marketing, operational, or product support to the Java Jo’z customers, Cuppy’s has chosen to offer these services to the Java Jo’z owners.

    Since August 2006, Cuppy’s Coffee has been inviting any coffee business (including Java Jo’z customers) the opportunity to convert into a Cuppy’s franchise. For conversion details please contact Rudy Harper at rudy@medinamgt.com

    Comment by cuppys — January 15, 2007 @ 5:06 pm

32. […] Comment by cuppys — January 15, 2007 @ 5:06 pm […]

    Pingback by Don’t get ripped off by franchises « Scobleizer - Tech Geek Blogger « Thinkings of an Old Baby Boomer — January 15, 2007 @ 7:14 pm

33. I am a former employee for CUPPY’S Coffee- It is true, they send calls all over the company, we were told not to talk to people, we were told to lie to people, and we were told to ignore when asking for a refund. If someone asks for their refund we were to refer them to an email address, and not take their calls beyond that. It is a big lie, all of it. The staff is full of under-educated, young kids and old crooks. The reason why they hire such a young staff is so they can give them a speech about how great Cuppys is once a week and motivate them to tell more lies and take more money!!
    Stay away from Robert Morgan and his band of CROOKS!

    Comment by HBean — January 17, 2007 @ 6:36 pm

34. […] There has been a lot of negative blogger buzz with shark ferocity surrounding Cuppy’s Coffee and Java Jo’z because of exposure on blogs and online forums. Apparently, Cuppy’s Coffee (formed in May 2006) purchased the assets of Java Jo’z Coffee & More, LLC. Big deal? Well, allegedly some employees of Cuppy’s and Java Jo’z are the same, but most importantly Java Jo’z had dozens of angry people wanting their $20-30,000 franchisee fee returned. The Java Jo’z franchisor owner was hauled off to jail on a tax evasion charge, so where can the franchisees get relief? The Franchise Agreement does not provide for a refund of franchise fee, but allegedly oral promises were made to franchisees by Java Jo’z and its CEO, Roy Snowden. One could imagine a possible scenario where principals decided to start a new company (Cuppy’s Coffee), buy the assets of the old company (Java Jo’s), and leave behind the franchise fee return liabilities. Did that happen? I don’t know, but the asset sale under impending bankruptcy is suspicious. I have a few questions: […]

    Pingback by the Franchise Pundit — January 19, 2007 @ 12:08 am

35. Cafeen:
    Your comments are incorrect on a number of counts. First, you should understand that “licensing” and “franchising” are not too mutually exclusive things. A franchise is a form of license agreement. If a company collects a fee, allows their “licensees” to operate under a common name and directs how the business is to be operated, you can call it a ham sandwich if you want, but it’s a franchise and must comply with all laws regarding the sale of franchises (I’m not claiming Java Jo’z met these legal criteria of a franchise - they may or may not have).

    Regarding franchisee Mike Wallace’s site you are also incorrect. He referred to the Cuppy’s chain as “Formerly Java Jo’z,” not his individual location. Of course, after that issue was raised, the page immediately disappeared.

    If you are truly a Cuppy’s franchisee as you claim, I hope that you are right and that the ties and business practices of Java Jo’z are ancient history… for your sake and the others who are investing in Cuppy’s franchises. I wish you well.

    Comment by Sean Kelly — January 20, 2007 @ 5:06 pm

36. Sean,

    Yes, I am truly a franchisee….and once again, just by putting the “perception” that I am not puts yet another not needed grey cloud above our heads(thanks!)…I know that there are bad people out there in the world that are probably willing to lie, cheat and steal to get somewhere. It truly amazes me that in a forum like this … that parts of this community automatically jump to that perception, why? So if that’s true, how are we to do anything to stand up for ourselves if everything is twisted? Even something as simple as saying “Hey I am an owner of whatever company and this is how I feel”. That can’t even be done without someone questioning it…..it’s like you are SO against the franchise system that it can’t be possible someone is actually happy with the decision they made?

    Hey, thanks for the well wishes….it’s nice to see someone say something positive for those of us that are out here trying to make this happen. (if you are honestly wishing us well?)

    As it has been said it previous posts….Java Jo’z did not direct how the business was to be operated. Yes, we did use their logo but that was all. It was up to us where/what products we purchased, sold, etc. I have not claimed to be a lawyer or a pro at franchise law. But when I did my research to go into a franchise or not to go into one. I found all kinds of info on “Licensee or Franchisee” which is the best for you. How many ways can you twist that my license was a Franchise? I did not pay a franchise fee, no royalty and was not under any direction? I know you said “( I’m not claiming Java Jo’z met these legal criteria of a franchise - they may or may not have).” Then why bring it up………… AGAIN?

    As for Mike Wallace’s site…what I was “trying” to say (of course it was twisted again…once again, it couldn’t really just be a mistake, right? There’s got to be a conspiracy behind it somewhere.) Is that by a store owner making a statement, how is the corporate office liable or why does it have to seem that they are trying to decieve their way out of something?

    I really hope you meant your well wishes, it would be nice for someone that hasn’t personally been to the office to actually open their mind a little out here.

    Comment by Cafeeen — January 22, 2007 @ 9:51 pm

37. Cafeen: blog communities generally distrust anyone who doesn’t use a real name, doesn’t link to a blog that he/she keeps, and who doesn’t post an email address.

    It’s not a thing about franchises, either. If you hang out here for a while you’ll see that anyone who makes claims about anything without being a real, reachable, person will get treated that way (my cell phone is on my blog for just that reason so that, if necessary, people can get ahold of me and meet me and learn more about me).

    People who try to keep their anonymity in this world make me question everything they are claiming because I have no idea where they are coming from, who they are, what positions they hold, their biases, etc.

    Also, many companies use online as PR warfare. I’ve seen companies “astroturf” communities and “spin” their point of view. Mostly done with anonymous posters who can’t be tracked and can’t be questioned face-to-face.

    Comment by Robert Scoble — January 23, 2007 @ 12:40 am

38. Robert,

    That makes sense…. I wish it didn’t have to be that way…but what you said makes sense. Thanks for clearing that up a little.

    Comment by Cafeeen — January 23, 2007 @ 5:11 am

RSS feed for comments on this post. TrackBack URI

Leave a comment