One of our fellow franchisees sent this letter. Sums up sentiments from many of us.
I am obligated to inform you of the exit efforts that I have experienced thus far.in April, I went to APMI to discuss an exit strategy with Ian because even with 150 dogs per month, I was no where near profitability and couldn't afford to continue. He told me that I could sell my franchises individually or as a whole in my area or to anyone who wants to conduct business in an unsold territory. When I found someone in an unsold territory, Ian and I discussed how it would work and that I would cover the commissions of the franchise consultants. A day later he had David Louie call me to tell me that APMI would only allow me to sell the franchise as a whole to someone operating in my territory. The franchise agreement has absolutely no requirement like this. Also, for 50% of the sales price, Mr. Louie would be happy to sell it for me. You can guess what I told them.
I found three other franchisees who were willing to buy my trailers. Ian told them that the protocol is for me to sell my trailers to APMI for $7500 and he would refurbish them and sell them to the franchisee for $18,500. Sounds like he is getting me coming and going.
I quit operations realizing that this model doesn't work, as has been proven by everybody with more than one unit, and a couple of weeks later I receive a letter demanding that I reopen or I lose my franchise territory. Out of money, I lost my franchise territory (not that it was worth anything anyway).
I listed my trailers on eBay and am negotiating a price with several interested parties. Ian, through his attorney, has threatened to sue if I don't cancel the auction. A few days later, after he realizes the price that the trailers are generating, his attorney says that if I sell, I have to return the "Proprietary Tub" to APMI (proprietary tub? You're kidding, right). I instruct my attorney to inform Ian that I would be glad to return the tub if I can shove it up his ass.
I have heard from at least 20 franchisees since the start of the auction saying they are tired of losing money, receiving no help from APMI, and asking what can they do to get out. Is there a satisfied multi unit franchisee out there?
In addition to that, I have heard from at several former franchisees who have paid for trailers that Ian won't deliver and won't refund (I have one undelivered). I know in other cases the APMI sold franchises to individuals who couldn't get funding for the trailers. Ian kept their franchise fee and said goodbye. FRAUD!
If your are in denial about whether this model works and whether Ian is going to help you, wake up. Several top ten franchisees have failed already. No multi unit franchisee is profitable that I have heard of. There is no support (not even a yellow page ad) from APMI. There is no exit to this business as demonstrated by many. You lose your investment, which for many, means bankruptcy.
How about the Franchisor's business model. What is 8% of $200,000? Maybe enough to pay rent in Dana Point? Is the total franchisee revenue declining because so many top ten franchisees have failed? The APMI model only works on franchise sales which is a recipe for disaster (or fraud) in the franchise industry. I asked Ian on discovery day what his exit strategy was. He didn't have an answer and I should have read into it, "Take the money and run." How do you keep selling franchises when so many have gone out of business or would do anything to get out (ten failures that I know of and I know there are dozens on the bubble and many more I don't know about)? You don't, eventually. I think your only option for seeing something out of your investment is to bankrupt the franchisor. Once you put the franchisor out of business, you keep 12% (or much more), you get a local phone number for your business and no call center droping customers, you quit paying ridiculous insurance costs, and you have the option of exiting the business on your terms.
What leverage do you have to get APMI out of your pocket? No positive references! If the franchise is not referencable and APMI can't count on franchise sales to generate revenue, you cut off their essential revenue stream. I had a call today from someone in my state who was about to send their signed agreement through for a three unit franchise system! She heard about my auction, and quickly changed her mind during our conversation. How did she get to that point of sending in a signed agreement? Who did she talk to? If you are unhappy, why would you give a positive reference? Everyone I talk to regrets the day they signed that agreement. It is your duty to not let this happen to anyone else.
To date, my experience has resulted in a disruption of their relationship with franchise consultants (an absolute necessity to stay in business), circumvented venture capital funding, and been a major factor in their severed relationship with their main SBA lender for franchisees. I strongly feel that the only way any of you will receive any return on your investment is to shut down APMI, a franchisor that is doing nothing for you anyway.
At the conference this week, demand your undelivered trailers. It may be your last chance.
I feel badly for all the franchisees who gave up their life savings and future borrowing power for a franchise that didn't work. Maybe it could have, but as I told the venture capital group, not with this management team.intimidation, deception, lies and greed are no way to run a franchise business. The franchisee's profits were never planned for. It had no chance.
I want the name and contact information of every franchisee who has exited the "system." Please email me your issues as well as anyone you know of that has been defrauded of their investment. As with this email, I will keep the identities of all parties confidential. I don't want to hurt you, I want you to not go through what I have. Collectively, we can create value in our investment and stop this from happening to others. I urge you to act and not hide.
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