I agree with Bob 100%!!
I have a very similar experience as a franchisee of The Entrepreneur's Source. I am losing everything - my entire investment. That is my franchise fee of $45,000 and over $10,000 worth of supplies and marketing materials. I also lost over $15,000 that I was required to pay in monthly - $750 (per month) advertising fees over the period of 24 months. I have been trying to sell my consulting franchise for over a year and the franchisor has made every effort to block and impede a sale.
I blame the CEO, Terry Powell, directly because it is not in his interest to help sell existing consultant franchises when they can just sell a brand new franchise for more money. I know if a TES consultant in Florida who I cannot name but who was able to sell his franchise and he received only $4,000 and Terry Powell received $32,000! What is so ironic is that Terry Powell keeps sending out emails to us saying how the value of our franchise keeps going up whenever he raises the franchisee free. What a SCAM!
My husband and I went up to Southbury, CT to meet personally with Terry Powell before investing in this franchise. We sat right across from him and he looked us straight in the eye and told us one lie after another. Basically, everything he told us was misrepresented! We asked him what the failure rate was in TES and he told us it was only about 10% and that most of those people didn't follow the system. We have since learned that the actually failure rate is closer to 50% and may even be higher.
And not following the system is the same BS that all franchisors use to justify why franchisees fail. If that's the case maybe they need to look more closely at their franchise models. Terry Powell also assured us that we could sell our franchise if we wanted to get out, and that he would even help us sell it -- another bold face lie!!
I heard the same lies as Bob when I was checking out this franchise as Bob did. The people I was working with, Tom Wolf (regional director) and Chris Otter kept telling me this was a "Dream Business." They kept telling me about other consultants who were making 10-20 placements a year with the average placement fee of $9,000. Right now there are about 300+ consultants and I don't think more than 3 or 4 are making that many placements. Most of us are failing and losing money every month. Everyone of the 9 people in my training academy are struggling and several have already dropped out losing their entire investment!
Now Terry Powell has made the postcard mailing program mandatory so that I am forced to send postcards out to all the leads I receive each month. This is an additional expense of $400 per month in addition to my $750 advertising fee. As franchisees we have no option. If we didn't agree to this we could be terminated. Before, I could decide who I wanted to send a mailer. Many consultants who were negative and complained about this additional expense were threatened by Terry Powell with lawsuits. Several were actually terminated from TES for sending out emails to other consultants who didn't agree with this.
Terry Powell even had all the email addresses of the consultants removed from our intranet site! The thing that pisses me off is that most of the 30 or so leads we receive each month suck! You call these people and they don't know who you are or how you got their name. Most are not in the least interested in buying a franchise and now we have to send out over a dozen post cards to every lead we receive.
Even if you find a client who wants to work with you to find a franchise, many of the franchisors we work with are terrible. We are telling our clients that franchises have a 90% success rate. This is an outright, boldface lie!!! Franchises really don't have any better success rate than do independent businesses. That's because franchisors don't count the franchisees who sell or close down their business as a failure. As a matter of fact, when I was validating the TES franchise and I checked through the UFOC there were only about 10-15 TES consultants who had left the system. In reality there were more 50 and maybe even 100. That's because people who were considered inactive or who had just closed down were not counted as terminated. This is a very common practice with all franchisors not only TES.
The bottom-line is The Entrepreneur's Source is a fraud. There is currently a huge lawsuit involving about 20 former consultants with damages over 1 million dollars. Complaints have also been filed with the Federal Trade Commission and the Connecticut Attorney General against TES.
I would advise anyone thinking of investing in a TES franchise to forget it! And, I would advise anyone working with a TES consultant to be very cautious before investing in a franchise. Do yourself a favor read The Franchise Fraud by Robert Purvin and Franchise Dreams by Peter M. Birkeland. You will find that owning a franchise, especially a TES franchise, is your worst nightmare!!!!
Ms. X Anonymous TES Consultant
Washington, District of Columbia