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SBA's Franchise Registry

7 Comments

SBA Preferred Bank Lenders List and SBA Franchise Registry UPS

Thanks to Mr. Blue Mau Mau for providing information on these Lists as well as the SBA loan Default List on franchises.
We understand how helpful this default list is to the Banks and Lenders who make SBA Loans to small businesses and how it protects the tax payers from the payment of guarantees on bad loans as well as the Banks who make these loans.
However, when the SBA Franchise Registry and the SBA and Fran/Vet cooperate in making loans to veterans/retired military and government workers, etc., and the public, to purchase The UPS Store Franchise, the true failure rate of the frrnchised-business plan is obscured and hidden in Item 20 of the UFOC and thus the very great risk involved in purchasing this franchise is not disclosed. The SBA failure rate of loans to finance the UPS franchised business appears to be small and not out of line, but the actual failure rate of the business plan is unknown to prospective franchises unless they have paid for expert due diligence assistance.

While insiders know that the 1,936 turnover-transfers that were reported in the UFOC's from 2002 to 2005 were mostly business failures with a few washes thrown in, and few, if any, actual gains on the investment in this franchise, unsophisticated prospects might think that these transfers representsd transfers at a profit, etc...and wouldn't realize the implication of the high turnover rate. I'm sure that the government regulators know this and I'm sure that they know that many veteran/retired personnel will purchase high visability franchised business plans with famous names because of their visability ---and will not use scare resourses to consult with attorneys and CPA's and this, of course,k is not a requisite to purchasing a franchised business plan.

It is obvious that it is government policy to regulate franchising without requiring the franchisors to actually reveal the failure rate of the franchised business plans. This permits the obscuring of the failure rate to prospective franchisees and to the government as well who can say that they really don't know what the transfers in the Item 20 transfer columns represent in terms of failure or success of the business plan that they are regulating.

Thus, many of my fellow veterans/retired personnel are misled as to the risk in an investment in The UPS Store. The government won't do anything. The courts can't do anything because they are not aware of the "churning" that is going on ----and most of the victims are silenced in their failure and there is no way to warn prospective franchisees of The UPS Stores except through Blue Mau Mau.

If the Associations who represented the various vetern groups were to warn their membership of the high risk involved, would UPS threaten to sue these Associations or could they sue these Associations if they put out information to their retired membership as to the high risk of this investment. Could the AARP be sued if they put out a disclaimer to their unintentional(?) hype of the UPS Store as a good investment just a few months ago.
Whar are the legal ramifications of such a warning?

Different day same old diatribe

Okay everyone please take note to avoid buying a new UPS Store franchise. You've heard it here time and time and time again from the guest poster who is an ruined ex-franchisee of UPS. But if you do want to buy a resale store and be second or third generation franchisee you may be able to bottom feed on the first generation franchisees like the guest poster and get a good deal.

In a nutshell on UPS Store the word is buy used if you buy at all.

Honest Post about buying Used UPS Store

Thanks for the honest post ----if you want to bottom feed on the first generation franchisee, you can get a good deal. You must be one of those who bought a USED or HOBBLED UPS stores for almost nothing in a sale-transfer distress sale and are making profits.

Thanks for warning everybody not to buy a new UPS Store franchise.
Now! help me to find out how to warn Veterans/Retired Military and Government, etc...

I just noticed this AM on Blue Mau Mau that the General Counsel of MBE-UPS, Richard Kolman, wrote a recommendation for the SBA Franchise Registry and this has stirred up by "diatribe" instincts again.

I think you will agree that there is certainly an appearance of government endorsement of The UPS Store and that veterans should be warned through the VA or their Service Organizations of the very high risk of building a store for UPS. But, will these organizations be afraid of being sued if they warn veteran/retired military/government workers?

General Counsels of Franchisor Corporations -Hatchet Men

Are the General Counsels of the Franchise Corporations generally the "Hatchet Men" who use the terms of the franchise agreements to keep the franchisees in line and to threaten them with the legal terms concerning termination when the franchisees default (in the opinion of the franchisor) on any of the many terms that can invite default under the agreement.
Do Franchisors and their Customer-Service personnel refer any problems immediately to the General Counsels because a letter from the General Counsel threatening termination is much more intimidating than a letter from a Customer-Service person or the local AF.
Are the general counsels of Franchisors generally of a certain type and personality and experts in intimidation through the use of the terms of the contract? Are they paid very well? And, do they always send copies of their intimidating letters to the franchisees to the President of the Corporation to earn their next bonus?

I rarely if ever agree with your rantings

Why don't you help people understand the importance of pre-purchase franchise investigation and due dilignce instead of the poppycock you spew out?

Paul Steinberg's picture

BlueMauMau courtesy

Please post this in an appropriate thread. Try the search engine to see if a discussion has already started. If not, then click on the left hand side under "My Blog" and start a new thread.

It is confusing when discussions veer off-track, and it is discourteous to the people trying to have a discussion on "SBA Franchise Registry" to discuss the role of a franchisor's GC. You have an interesting question, but let's try and post in the relevant thread. ;)

SBA Franchise Registry --and General Counsel Post

Re the Registry and General Counsel for Franchisors. In the testimonials for use of the Registry, I read Richard Kolman's (MBE-UPS) testimonial on behalf of the SBA Franchise Registry. Seeing his name, brought the questions about General Counsels to mind and thus the post.
Where should this question be threaded?

About Mr. Blue MauMau

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Mr. Blue MauMau's my name and speaking on behalf of franchise buyers and owners in this patch of reef is my game. I'm a fish that sports glasses, a bow tie and a serious attitude of wanting to know the truth when it comes to anything about franchises.

You can reach the editor at editor@bluemaumau.org or call +1 (270) 321-1268.