John And Lori Hornyak Sold Us A False Franchise and Corporate Opportunity Chandler Arizona

My husband and I first purchased a business (Education Perks) from Lori Hornyak who at the time was co-owner of Mommy Perks along with Shara Lawrence-Weiss. Education Perks was sold to us based on the same concept as Mommy Perks. Unfortunately, upon purchase, Lori did not advise us at that time that she had a business partner. According to our lawyer, since Lori had a 50/50 partner and sold us a business concept that her partner legally owned 50% of, then what she really sold us was a Corporate Opportunity and that is illegal. To this date, Lori's former business partner Shara Lawrence-Weiss has not received her 50% of the profit that Lori made from selling Education Perks.

On our Education Perks contract and via telephone conversations with Lori it was made clear that this business was being sold as a business that offers Franchises. It was even sold to us with a franchise owner on board.

We also purchased a Franchise Area from Lori's husband John Hornyak from his business called Your Local Community Connection.

On April 15th I received an e-mail from Lori stating that after doing some research we have decided at Mommy Perks not to consider what we offer franchises, we are now calling them Representative areas. I wanted to pass this information onto you and would suggest that you consider doing the same.

This e-mail alarmed my husband and me for two reasons. One, it seemed strange that she had suggested to simply renaming Franchise Owners to Area Representatives. Two, Lori didn't mention the franchise area that we had purchased from her husband at all in the e-mail. If that now wasn't a franchise then what did we pay for? Since we had to borrow the money to purchase both businesses (my husband had been laid off of work) we felt it necessary to include our investor in the meeting with the attorney. We had the attorney review my e-mail from Lori as well as both contracts (Education Perks and Your Local Community Connection).

The attorney advised our investor and us that Lori and John's businesses were not registered. Therefore they could not legally sell franchises. Even if they had been registered, they did not legally meet the FTC franchise laws.

Rather than tell the story, I have posted below the actual correspondence that we have had with John and Lori Hornyak regarding the information the attorney gave us.

From: Rick Lynch (Blocked for security)
To: mommyperks (Lori Hornyak) (Blocked for security)
Subject: Re: Checking with you about AD Connection
Date: Wed, 14 May 2008 12:53:00 -0700
Lori,
Regarding the Ad Connection business. My investor that helped me start this business and I went to a franchise law attorney and in doing so we found out the contract between us was not legal due to John's business not being registered. He cannot legally sell an area or a portion of his business as a franchise. Even if his business was registered we did not receive the disclosure statement that the FTC requires 10 days prior to us signing any contract and paying money into buying the business. . We thank you for the opportunity but in order to protect John and my self from any legal trouble we have decided to take our attorney's advice and opt-out of the contract. I have the box of bags not opened that I can return to John and at that time we would also like to get our original investment back of the $1000.00 that needs to be repaid to our investor. Please let me know when John can meet me.
Thank you,
Richard Lynch



From: The Hornyak Home (Blocked for security)
To: Rick (Blocked for security)
Sent: Thursday, May 15, 2008 5:45 PM
Subject: RE: Checking with you about AD Connection

Hi Rick,
Thank you for checking in with me. Yes, we now have to reword the contract as there is a new law going into effect mid summer in AZ that will change the rules etc.
Actually the whole contract would not be valid as we didn't sell you part of Your Local Community Connection, you named your area Ad Connection. We actually may be having a change of ownership before long and I was going to tell you that we would take out the payment part of the wording and marked paid in full.

However we wouldn't be willing to refund the first payment as that just covered all of the time that John spent setting everything up for you as well as going around with you and training etc.. What we sold you was the concept per say, not the "business". You are still able to use the information we shared with you to run a program under your own name without any issues at all. Please consider all of this when making this request as we wouldn't be providing you with all off of our information, training etc. for free. So in light of all of this, we should void the contract and you can keep the information, set up of the program and do with it what you wish.

Please let me know if you have any questions.

Thank you,
Lori

Here is our response to the above e-mail:

From: Rick (blocked for security)
To: The Hornyak Home (blocked for security
Subject: ad connection
Date: Sunday, 18 May 2008 3:40am

Lori, I agree with you when you state that the whole contract is not valid or legal - that is what our Attorney said as well. You can't just re-word a contract when a law changes, the contract was not legal even prior to the AZ law changing because the contract states specifically "Your Local Community Connection Franchising Agreement" and the FTC franchise law was not met. The contract states that I was obtaining the rights to a specific area and John did not have the legal right to sell an area as he was not legally a franchise (even before the AZ law change).

The area I supposedly obtained was named something other than Your Local Community Connection only because you said using that name would be rather long. I do have an e-mail where you say that we would/could use the same name and link to Your Local Community Connection site. I can forward that e-mail to you if you would like. It also states in the contract that the East Mesa Franchise name must be agreed upon by both parties.

Again, if I was only buying a concept then why would the name have to be approved by the owner of Your Local Community Connection? That is buying a business - not a concept. It also states in the contract that I "must follow any rules and Code of Conduct set forth by Your local Community Connection in the present and future to keep my status as the owner of the East Mesa Franchise".

If I did not own part of the business and was only sold a concept, why would this statement be in my contract? If I owned my own business (not a franchise) you would not be able take away my status as an East Mesa Franchise owner and I would not have any rules of conduct that I would have to adhere to. I understand that you shared some training and information with me but I do not feel that it was worth $1000. I am willing to meet you half way and only ask for $500 back so that John gets compensated for the training and that we get compensated for an illegal transaction and hardship. Thank You,Rick


The email above was sent on both May 18th, 2008 and again on July 9th 2008 to Lori Hornyak.

Below is the final correspondence that we have received from the Hornyak's. They have never gotten back to us since the e-mail below:

Subject: RE: ad connection
From: The Hornyak Home (Blocked for security)
Date: Wed, July 09, 2008 8:19 pm
To: Rick (Blocked for security)

I will need to talk to John about all of this as well as our lawyer. Basically it was an unfortunate wording issue is all, everything we provided is still useable, so I don't think there really is an issue here. Truly the training we provided is valuable and can develop into a nice income for you until you find something else or in place of. John just signed up a new account yesterday for our area and they have another store in Mesa where they want fliers delivered. This person wants fliers done along with 2 other of the businesses in his plaza, that is almost a $1000.00 account right there, so the market is there to make a living with what we shared. I will get back with you once I speak to everyone on my end.
Lori


In addition to selling false franchises, Lori has also taken payment for false advertising. We paid Lori $300 to fax fliers out on Education Perks behalf to pre-schools nationwide. When we asked Lori for fax numbers and phone numbers so that we may do follow up calls she refused to give us that information. She stated in an email to us that because I was upset with her, she didn't feel compelled to hand over that information.

I don't deny that I was upset with Lori due to the false franchise selling at that time. However, I still paid for a service and she had an obligation to follow through with this service or refund our money. Neither has been done.

My goal in filing this report was not due to a personal vendetta. My only goal was to make people aware of John and Lori Hornyak's previous business transactions and hopefully by doing so they will do their homework and research before entering into any legal dealings with them or anyone else.

Dori ****
Mesa, Arizona
U.S.A.