Q&A with Sean Kelly, Franchise Blogger

FBLA: How did you get started in franchising, and how did you end up as the franchise blogging guru?

Kelly: Twenty years ago, I took a job writing franchise brochures at a booming franchise consulting firm. After my first day, I asked myself: “Is this franchise industry a total scam?” Twenty years and some hundreds [of] franchise companies later, I am still asking the same question.

FBLA: You're no closer to an answer?

Kelly: Actually, the answer is the same as it was 20 years ago: yes and no. On the one hand, there are many, many franchise organizations that are truly dedicated to creating win-win-win relationships between franchisor, franchisees, and vendors. Therein lies the real power of franchising ' the Yes. However, there are many, many other bogus, flawed and/or high-risk concepts being promoted to an unsuspecting public by cloud merchants and serial scammers. They would be the No.

The problem has been that the franchise industry has done a superb job of stifling negative publicity, both individually and collectively, both justified or not. Your talented readers have effectively protected their franchisor clients with gag orders and non-disclosure clauses. Entrepreneurial publications have protected their franchisor advertisers by creating a wondrous franchise world where everyone is in business for themselves, not by themselves, and virtually no franchise ever fails. But it's a fictional world.

Collectively, this is stifling the growth of the franchise industry because franchise prospects do not have the means to distinguish between the solid companies and “concepts and cloud merchants.”

FBLA: Do you think the Internet ' and, specifically, blogging ' is changing that dynamic?

Kelly: I started my first real blog, FranchisePick.com, in November 2006 primarily as a promotional vehicle for my franchise clients. The tagline was “Picking the Perfect Franchise.” My approach is always straightforward and no B.S. ' but I didn't set out to be the “60 Minutes” or Ralph Nader of franchising. I owe that style to the franchise attorneys who scrutinized every word of my brochure copy when I started. They forced me to develop the unlikely marketing habit of telling the truth. I never resort to promises, veiled earnings claims, or hyperbole in my copy.

My reputation as blogging troublemaker began in January 2007. I wrote a post about tech blogger Robert Scoble's claim that his brother was getting cheated by an outfit called Java Jo'z. I immediately received an email from Java Jo'z legal department, threatening to sue me for libel and slander if I didn't take down the post immediately. Wrong approach to take with a stubborn Irishman with a popular blog. I immediately responded by digging in to the story and blogging on their growing improprieties ' and continued to do so for the next year and a half.

Dozens of Java Jo'z “depositers” left messages on FranchisePick.com telling how the company had taken their refundable deposits and basically told them “tough luck” when they asked for it back. The outcry on my and other blogs ranked high in search engines and impaired the “new” owners' ability to sell franchises. CEO “Morg” Morgan claimed that my little blog was costing him $3 million per month in lost franchise sales. It forced him to dip into the payments due to the former owner (who was in jail) to repay the franchisees their money. From my perspective, it forced him to do the right thing.

When the “new” company, Cuppy's Coffee, continued the same practices of their predecessor, the comments returned to FranchisePick.com to warn Cuppy's prospects. Some of those prospects are out $30K to $40K each.

FBLA: In the ongoing Cuppy's controversy, you're also taking on a group that is trying to be a “white hat” in the industry, the American Association of Franchisees and Dealers.

Kelly: In trying to offset the negative press, Cuppy's Coffee schmoozed the American Association of Franchisees and Dealers (“AAFD”) and eared AAFD's “contract accreditation,” which Cuppy's then used to show what good guys they were. It enabled the company's construction arm to take more deposits (which they didn't escrow) ' in some cases without disclosing the prospects or furnishing the celebrated contract.

Yes, I have been harshly critical of the AAFD and its CEO Bob Purvin on this issue. I truly respect Bob and all he's done, but I think the AAFD got played like a violin. And that's the beauty of the Internet: I'm able to challenge Bob's point-of-view, he's able to challenge mine, and the readers can decide for themselves that I'm right.

FBLA: Any other interesting skirmishes in your short existence?

Kelly: In 2007, iSold It was being touted as Entrepreneur magazine's No. 1 Top New Franchise and was being heavily hyped in the press. At the same time, my readers were reporting that more than 60 franchisees had failed, homes were being lost, and the company was on the verge of bankruptcy. After I posted proof of this on FranchisePick.com, iSold It ceased franchise sales. Shortly thereafter, Entrepreneur removed them from their listings. To this day, if you look online for Entrepreneur's 2007 Top New Franchises list, it starts with No. 2.

Entrepreneur is in the business of selling ads. It's not a non-profit organization. I don't blame them for hyping their advertisers. But there needs to be some balance. Who's providing it? The Small Business Administration now distributes a franchise guide written by a franchise brokerage. There's a shortage of truth ' so I'm meeting the demand.

FBLA: Is that where UnhappyFranchisee.com fits in?

Kelly: Exactly. I want to provide both sides of the story. I have positive sites that only allow positive comments, such as FranBest.com, and a parody site called Franworst.com. I have HappyFranchisee.com that posts positive franchise profiles, and UnhappyFranchisee.com where struggling franchisees can share their stories. The point is not to tear down franchise companies, but to reward best practices and get the worst out in the open so they can be discussed, understood and addressed.

FBLA: That's quite a franchise media collection. How large is your empire?

Kelly: I have about 20 active Web sites and more than 50,000 unique visitors per month. My goal is to reach more than 500,000 unique page views per month by the end of the year. While Entrepreneur's got nothing to worry about, my readership is as high or higher than many well-known trade magazines.

FBLA: While UnhappyFranchisee.com seems to be mostly for individuals who are franchisees, is the franchise legal community participating?

Kelly: Definitely. A number of attorneys contribute to our sites. There are franchisees who are using the sites to educate themselves and, in some cases, organize. It's a valuable interface between franchisor attorneys, franchisee attorneys, and their prospective clients. We will be offering sponsorship and advertising opportunities shortly.

Smarter franchisors and smarter franchisees are good for franchising. No attorney will ever go hungry in franchising ' but, hopefully, by getting better information we can reward the best and expose the worst. The Internet will definitely chase some of the worst away.

FBLA: Apparently, you're not going away, either.

Kelly: No, I'm like the crazy kid on the playground. I'm not the biggest kid, but when I start slugging, I won't stop. And people on my site won't stop griping if they have been wronged, and they will share everything they know. I don't think we've even scratched the surface of what we can do.

Remember, I'm a marketing guy. I want to spend my time promoting the good opportunities, not just bashing the bad. But when it comes to allowing franchisees to voice their complaints, I'm one of the only games in town. The truth is currently in high demand, and right now I'm one of the only ones with it in stock.

Editor's note: All the FranBest Network blogs can be found at www.franbest.com. Sean Kelly can be reached at [email protected] or 717-656-2107 x24.

Franchisees complain about the imbalance of power between themselves and franchisors, especially when franchisor-franchisee relationships go awry. The Web has changed that dynamic significantly by giving franchisees an easy way to voice their complaints widely and anonymously.

Sean Kelly is providing one of the most popular forums for franchisees to vent about franchisors ' whether fairly or unfairly. A 20-year veteran of the franchising industry who participated in the startup of more than 100 franchises concepts, Kelly started a series of franchise-related blogs in November 2006 that have quickly become must-reads for franchisors, franchisees, franchise counsel, and consumers.

In this Q&A, Kelly discusses the launch of his first blog, www.franchisepick.com, the growth of his www.franbest.com network, and the impact that his latest blog site, www.unhappyfranchisee.com, is having on the industry.

FBLA: How did you get started in franchising, and how did you end up as the franchise blogging guru?

Kelly: Twenty years ago, I took a job writing franchise brochures at a booming franchise consulting firm. After my first day, I asked myself: “Is this franchise industry a total scam?” Twenty years and some hundreds [of] franchise companies later, I am still asking the same question.

FBLA: You're no closer to an answer?

Kelly: Actually, the answer is the same as it was 20 years ago: yes and no. On the one hand, there are many, many franchise organizations that are truly dedicated to creating win-win-win relationships between franchisor, franchisees, and vendors. Therein lies the real power of franchising ' the Yes. However, there are many, many other bogus, flawed and/or high-risk concepts being promoted to an unsuspecting public by cloud merchants and serial scammers. They would be the No.

The problem has been that the franchise industry has done a superb job of stifling negative publicity, both individually and collectively, both justified or not. Your talented readers have effectively protected their franchisor clients with gag orders and non-disclosure clauses. Entrepreneurial publications have protected their franchisor advertisers by creating a wondrous franchise world where everyone is in business for themselves, not by themselves, and virtually no franchise ever fails. But it's a fictional world.

Collectively, this is stifling the growth of the franchise industry because franchise prospects do not have the means to distinguish between the solid companies and “concepts and cloud merchants.”

FBLA: Do you think the Internet ' and, specifically, blogging ' is changing that dynamic?

Kelly: I started my first real blog, FranchisePick.com, in November 2006 primarily as a promotional vehicle for my franchise clients. The tagline was “Picking the Perfect Franchise.” My approach is always straightforward and no B.S. ' but I didn't set out to be the “60 Minutes” or Ralph Nader of franchising. I owe that style to the franchise attorneys who scrutinized every word of my brochure copy when I started. They forced me to develop the unlikely marketing habit of telling the truth. I never resort to promises, veiled earnings claims, or hyperbole in my copy.

My reputation as blogging troublemaker began in January 2007. I wrote a post about tech blogger Robert Scoble's claim that his brother was getting cheated by an outfit called Java Jo'z. I immediately received an email from Java Jo'z legal department, threatening to sue me for libel and slander if I didn't take down the post immediately. Wrong approach to take with a stubborn Irishman with a popular blog. I immediately responded by digging in to the story and blogging on their growing improprieties ' and continued to do so for the next year and a half.

Dozens of Java Jo'z “depositers” left messages on FranchisePick.com telling how the company had taken their refundable deposits and basically told them “tough luck” when they asked for it back. The outcry on my and other blogs ranked high in search engines and impaired the “new” owners' ability to sell franchises. CEO “Morg” Morgan claimed that my little blog was costing him $3 million per month in lost franchise sales. It forced him to dip into the payments due to the former owner (who was in jail) to repay the franchisees their money. From my perspective, it forced him to do the right thing.

When the “new” company, Cuppy's Coffee, continued the same practices of their predecessor, the comments returned to FranchisePick.com to warn Cuppy's prospects. Some of those prospects are out $30K to $40K each.

FBLA: In the ongoing Cuppy's controversy, you're also taking on a group that is trying to be a “white hat” in the industry, the American Association of Franchisees and Dealers.

Kelly: In trying to offset the negative press, Cuppy's Coffee schmoozed the American Association of Franchisees and Dealers (“AAFD”) and eared AAFD's “contract accreditation,” which Cuppy's then used to show what good guys they were. It enabled the company's construction arm to take more deposits (which they didn't escrow) ' in some cases without disclosing the prospects or furnishing the celebrated contract.

Yes, I have been harshly critical of the AAFD and its CEO Bob Purvin on this issue. I truly respect Bob and all he's done, but I think the AAFD got played like a violin. And that's the beauty of the Internet: I'm able to challenge Bob's point-of-view, he's able to challenge mine, and the readers can decide for themselves that I'm right.

FBLA: Any other interesting skirmishes in your short existence?

Kelly: In 2007, iSold It was being touted as Entrepreneur magazine's No. 1 Top New Franchise and was being heavily hyped in the press. At the same time, my readers were reporting that more than 60 franchisees had failed, homes were being lost, and the company was on the verge of bankruptcy. After I posted proof of this on FranchisePick.com, iSold It ceased franchise sales. Shortly thereafter, Entrepreneur removed them from their listings. To this day, if you look online for Entrepreneur's 2007 Top New Franchises list, it starts with No. 2.

Entrepreneur is in the business of selling ads. It's not a non-profit organization. I don't blame them for hyping their advertisers. But there needs to be some balance. Who's providing it? The Small Business Administration now distributes a franchise guide written by a franchise brokerage. There's a shortage of truth ' so I'm meeting the demand.

FBLA: Is that where UnhappyFranchisee.com fits in?

Kelly: Exactly. I want to provide both sides of the story. I have positive sites that only allow positive comments, such as FranBest.com, and a parody site called Franworst.com. I have HappyFranchisee.com that posts positive franchise profiles, and UnhappyFranchisee.com where struggling franchisees can share their stories. The point is not to tear down franchise companies, but to reward best practices and get the worst out in the open so they can be discussed, understood and addressed.

FBLA: That's quite a franchise media collection. How large is your empire?

Kelly: I have about 20 active Web sites and more than 50,000 unique visitors per month. My goal is to reach more than 500,000 unique page views per month by the end of the year. While Entrepreneur's got nothing to worry about, my readership is as high or higher than many well-known trade magazines.

FBLA: While UnhappyFranchisee.com seems to be mostly for individuals who are franchisees, is the franchise legal community participating?

Kelly: Definitely. A number of attorneys contribute to our sites. There are franchisees who are using the sites to educate themselves and, in some cases, organize. It's a valuable interface between franchisor attorneys, franchisee attorneys, and their prospective clients. We will be offering sponsorship and advertising opportunities shortly.

Smarter franchisors and smarter franchisees are good for franchising. No attorney will ever go hungry in franchising ' but, hopefully, by getting better information we can reward the best and expose the worst. The Internet will definitely chase some of the worst away.

FBLA: Apparently, you're not going away, either.

Kelly: No, I'm like the crazy kid on the playground. I'm not the biggest kid, but when I start slugging, I won't stop. And people on my site won't stop griping if they have been wronged, and they will share everything they know. I don't think we've even scratched the surface of what we can do.

Remember, I'm a marketing guy. I want to spend my time promoting the good opportunities, not just bashing the bad. But when it comes to allowing franchisees to voice their complaints, I'm one of the only games in town. The truth is currently in high demand, and right now I'm one of the only ones with it in stock.

Editor's note: All the FranBest Network blogs can be found at www.franbest.com. Sean Kelly can be reached at [email protected] or 717-656-2107 x24.