You're Toast!

Franchise owners thought they'd make a fortune serving the toasted sandwiches created by Quiznos. Instead, they got burned.

It's been a tough battle.

I have been dragged through the legal system for over 18 months by the immensely superior financial might of the franchisor, which will continue to keep justice from coming to me, and to the hundreds and thousands of franchisees who are trapped similarly in the system and are slaving for the franchisor, and those who have bought into the franchise agreement, and not yet become store operators.

I have spent and sacrificed my time, money, family life. I thought of an option to leave the system quietly and fade away, but now I choose not to do that, and instead let the struggle go on.

Toasted bread wasn't enough to keep Ratty Baber, Chris Bray and Bob Baber from struggling with their franchises.
Toasted bread wasn't enough to keep Ratty Baber, Chris Bray and Bob Baber from struggling with their franchises.
Attorney Ted Bendelow represented Quiznos franchisees.
Anthony Camera
Attorney Ted Bendelow represented Quiznos franchisees.

My struggle will continue after my sacrifice...

Quiznos has killed me. Destroyed my life. Destroyed my family life for the past seven years...

They retaliated against me for trying to create a voice for the franchisees in the system...

How can a common individual like me and those like me in similar circumstances, there are thousands, with limited resources get justice?

I believe there will be justice. But it will be too late for me.

There are a large and growing number of us who believe, unreservedly, that the handful of people who own and/or otherwise control the Quiznos Corporation should spend the rest of their lives in prison. The Quiznos Corporation is just one of the most egregious in what they do, but the entirety of franchising in America is open to this kind of abuse.... STAY FAR, FAR AWAY FROM THE QUIZNOS CORPORATION. THEY ARE CRIMINAL IN WHAT THEY DO. And treat any Franchise System with deep suspicion.

No one has proved Baber's accusations to be true. No criminal investigation or charges resulted from his note. Yet his words still haunt Quiznos. At the hearing on the TSFA boardmembers' terminations, the company's executive vice president for development, Michael Daigle, testified before Judge John Kane that selling stores has been difficult since the note was posted on the website. Morale is low. People are using the suicide as a reason to back out of purchasing franchises. Landlords are tough to deal with. Lenders are getting tough to deal with.

"I get a lot of comments from landlords and lenders about having seen the TSFA website," he said. "One potential franchisee was going to buy an existing franchise and backed out, citing the suicide note as a reason."

Susan Kezios, president of the American Franchisee Association, helped create the TSFA. She feels that there is a lot at stake for franchisees in Bray's case. "Certain franchisors like their franchisees to be kept stupid. Divide and conquer. Keep them in the dark. Some franchisors do threaten franchisees who form associations. There is no level playing field, so right from the beginning, a franchisee is at a disadvantage. There's a very spotty, limited protection for franchisees. And that is why an association is so important.

"It's a freedom-of-speech issue, and it will be interesting to see what side the court comes down on -- if [Quiznos] can shut down negative public comment. And it wasn't even negative public comment. Bob Baber wrote that suicide note. He wanted journalists to pick this up."

New Jersey attorney Justin Klein sits down for a beer after a day in Judge Kane's Denver courtroom, remarking that almost every business along the 16th Street Mall is a franchise. He's sued a few of them. He and his partner represent disgruntled franchisees, and have taken on 7-Eleven, Cold Stone Creamery, Dunkin' Donuts and Snap-on Tools, to name a few. He suspects he'd have a lot fewer clients if people had a better understanding of franchising before they entered into agreements.

The system started in this country after the Civil War as a way for Singer Sewing Machines to get its product to market. It spread in the early 1900s with car manufacturers franchising to dealers and soft drink companies to bottlers. Today there are at least 650,000 individual franchise businesses in the United States in seventy industries. What began as a simple method of distribution -- attractive to franchise owners because they got to sell an already proven product, and attractive to companies because franchise owners shouldered the risk in getting that product out to new customers -- has grown far more complex.

Ironclad contracts dictate every detail of how a franchise business is to be run, and franchisees give up the freedom to make decisions about their business in exchange for the training, support and marketing that they purchase with an initial franchise fee and continued payment of royalties. In theory, buying into an established chain is supposed to be less risky than starting a business from scratch. However, a comprehensive independent analysis done by Timothy Bates of Wayne State University found that ten years ago, when the study was performed, 38 percent of franchise units failed in four years compared to 32 percent of independent start-ups.

Janet Sparks -- a columnist based in Highlands Ranch who writes for Franchise Times and -- has been following the sector for fifteen years. She sees the risks for franchisees becoming greater, with more abuses and less regulation now than ever. "I truly think it's getting worse," she says. "Franchisors are getting away with too much. They are not regulated. The FTC turns a blind eye to fraud. Something needs to be done now. So many people are losing so much."

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