F.T.C. Public Comment 100

I had spoken to some of the franchisees that had left the system. I now feel certain that they painted a picture that was not close to being the truth based on the gag order that Steve imposed. Had I gotten the truth from these people, my decision certainly would have been different. Every franchisee leaving the system has had a gag order placed on them making it impossible for current or future franchisees to get the facts

FTC.jpg

U.S. Federal Trade Commission
July 29, 1997

Public Comment
Roger C. Haines, franchisee

Request for public comment on possible revisions to The Franchise Rule.

Niblick Golf Corp. - An Independently Owned & Operated Franchise
PO Box 3576 - Vero Beach, FL 32963 - Phone: 561-234-0550 - Fax: 561-234-0355

Comment #100

July 29, 1997

Secretary
Federal Trade Commission
Room #159
Sixth Street and Pennsylvania Avenue, N.W.
Washington, DC 20580

Dear Secretary,

This letter is regarding "16 CFR Part 436."

In November of 1995, I contacted BV Paragon d.b.a. Scorecard Plus (located at 4150 Belden Village Street NW, Suite #303, Canton, Ohio 44718) for information concerning their "unique concept" of marketing a Scorecard/Yardage book to golf courses. I had recently been downsized from Scott Paper Company and wanted to get into a different line of work.

Scorecard Plus sent the literature and before I knew it we were together talking about all of the exciting possibilities available with this "Proven Business System." Since I was an avid golfer, I couldn't think of a better business in which to get involved.

Steve Vandegrift, President/CEO and his group were very convincing and presented
themselves as highly trained and successful in all aspects of the franchise business, as well as the printing and advertising sales side of the scorecard/yardage book concept.

With all this positive direction, how could we go wrong? This is where it starts to unravel. The training session in April consisted primarily of Ed Kalail (VP of Operations) reading out of the manual. I was very disappointed, but with the overall success of the program, how could we go wrong?

In July of 1996, after being in the business for 3 months, we got notice of franchisees who were terminated. Soon after, others followed. We were not allowed to contact these people to find out what happened. Tales were being spun by the home office.

In May of 1997, six Notices to Cure went out to franchisees and I started wondering where
this was going. I called Steve Vandegrift and spoke to him for 2 ½ hours and resolved nothing, other than the franchisees were at fault. I sent a letter recapping our conversation and asking for some specifics and assurances that they would be in business in the near future. I was basically told it was none of my business and to trust him (Steve).

Since the notices, I have found out that out of all the 23 franchisees, none has ever made a profit, including the home office! (Although Steve claimed to be profitable, he refused to send any material to substantiate this statement)

We relocated from Philadelphia to Florida, took a loss on our Phila. house, uprooted our family and paid a mover in hopes of a new, satisfying career. This never happened, nor will it ever due to the misrepresentation and deceit from the principals of BV Paragon.

I feel that the following circumstances either effected our decision to purchase or affected our ability to do business. Steve Vandegrift and BV Paragon knowingly misrepresented the
following to get people to invest in his business::

FINANCES
How much money it would take to successfully operate the business. If you do
everything their way, you need at least $250,000.00, not the $101,000 (including the
$22,500.00 franchise fee) they claim. They have allegedly sold franchises to people with under $30,000!.

Potential earnings. All throughout the training session and before, projections were made as to the amount of income you could generate if successful. This was presented as something that was occurring, and depending on how hard one worked, they might expect the same. Some of these figures have been published. Apparently, these projections were made without any basis in fact.

Steve and BV Paragon have and are still-representing their own territory as profitable,
when in fact he is losing money-

GAG ORDERS
I had spoken to some of the franchisees that had left the system. I now feel certain that they painted a picture that was not close to being the truth based on the gag order that Steve imposed. Had I gotten the truth from these people, my decision certainly would have been different. Every franchisee leaving the system has had a gag order placed on them making it impossible for current or future franchisees to get the facts.

ARBITRATION
If we decide to take legal action, we must arbitrate in the state of Ohio. BV Paragon has
already gotten a good deal of our money. Why, if outright fraud is involved, must we go to Ohio to fight this battle?

DEVALUING ASSETS
The territories I purchased for $31,000.00 are now worth nothing. If the company will not buy back an improved territory… who will? If they have a prospective buyer, who is bound to call franchisees, they will no longer have one after they speak to the franchisees.

RESTRICTING USE OF LOCAL SUPPLIERS
If there is a need to have certain things done through the home office, shouldn't they be
somewhat competitive? In just one cafe, I was able to reduce some costs by as much as 66%! I have heard of profit, and agree everyone is in business to make one, but where is the line drawn between reasonable profit and gouging?

SPECIAL DEALS
Each and every franchisee has a different agreement. Many of the differences are surrounding minimum royalties, some pay, some don't.

Thank you for your time in addressing this matter. If I may be of further assistance, or if you need additional information, please call me at 561-234-0550.

Sincerely,

Roger C. Haines
President/Owner

For Review, see FTC “Table of Commenters”
http://www.ftc.gov/bcp/franchise/comments/tabcomm.htm


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Risks: F.T.C. Public Comments, United States, 1997, Arbitration, secret, Deceit, Disputes heard on franchisor’s home turf, False earnings claims, Fraud, Gouging on supplies, Misrepresentations, Must sell business (eventually) through franchisor, Right of first refusal, Right to associate, Special deals for certain dealers, Termination of franchisee, single, Trust, United States, 19970729 Comment 100

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