372. Met with corporate and didn’t feel listened to but rather them wanting to use me

Transcript

Opening up about the corporate call

Speaker 1 0:32

Good morning . Well , I caught up with corporate yesterday . It went so-so . It didn't go extremely well , it didn't go terribly well , but I definitely did not feel listened to as a franchisee . Basically , the call started off a little bit rough . It was myself and a couple folks that are frontline workers for the brand and then so high up people on the brand as well . I'll keep titles and names um confidential , but basically said all right , um , thanks everyone for hopping on . Today we're going to talk about the studio .

Speaker 1 1:10

Um , yeah , as you probably saw , I'm not able to keep the doors open , so we're declaring personal bankruptcy . My attorney advised we close the doors and yeah , I have everything here ready to go so that it can be handed off if you guys want to take it over . Yeah , I don't know how else we'd like to open . And one of the higher ups , he said well , man , you kind of F this whole thing up . And he didn't say F , he said the actual word . So pardon my French , but you F this whole thing up . You made the brand look bad .

Speaker 1 1:42

There are other people whose livelihoods are at stake . My family is impacted . The other folks on corporate's families are impacted . I mean , I know you have a family . But , yeah , I just want to get that out there and say my piece . And he may have said that stuff later on , um , but that's the thing that comes to mind from recollection from yesterday . So wrote that in there two minutes into the 40 minute conversation . And , um , obviously I know that they're going to be butthurt about what I did . Um , they're not going to get paid royalties anymore . They now have members to handle for the pushback .

Speaker 1 2:19

So , yeah , I wasn't expecting them to give me hugs and kisses walking into the call , but it definitely started . It felt like they were implying that I owed them something and I can owe them good faith , brand representation , a good faith transition for members , but the point of personal bankruptcy is to not financially owe them anymore . So I went through a few more things , one of the higher ups at one point . There were two points where I knew that I was not being listened to , and one of them was where , well , I guess there were three . The first one was where I said like , yeah , like . This is a business . We cannot keep injecting our personal cash into , like we are . We're losing money personally every month . It's not just business funds , we're not losing personal funds . Declaring

Bankruptcy realities and being unheard

Speaker 1 3:06

bankruptcy was the only way to stop the twice a day phone calls , twice a day certified letters to me and the studio and stop collections efforts Like we just don't have the money .

Speaker 1 3:17

We were told the bank was going to seize assets on the 1st , and so , yeah , we told the members , like on the 5th , that we're closing the doors , and so , yeah , we now have zero credit cards . We have zero ways to pay for anything other than our debit cards . We now need to go find those so that we can buy groceries this week . And I don't know how we're going to do that . We don't . And then they just continue talking about something completely different , and I'll admit that was kind of like a fishing attempt on my part to see if they were listening To say like , hey , I don't know how we're going to buy groceries . This week We'll be able to buy groceries , we have the money to do it . But I was hoping that they were listening enough to catch them off guard To be like wait , you can't buy groceries or you don't know how to buy groceries Enough to at least hear when I say something that's a little bit outlandish but yet real at the same time . And they completely glossed over it . They moved past it . So that was my confirmation . They were not listening to my scenario .

Speaker 1 4:19

Um , to the credit , one of the guys in the call did speak up at the moment and say like hey , for what it's worth , nathan , yeah , we're having to deal with a lot of customer questions , a lot of customer complaints , um , and so I've run . I'm not going to make plight of your situation . I'm sorry that you're declaring bankruptcy . Um , so I don't want to make light of that . Uh , and then we continue talking about other things . But one of the folks on the call was very reasonable and I did appreciate that . The frontline person was very , very good at being able to pull stuff up very quickly and he was just more listening . I guess it was the main upper person that I'm more perturbed by . So that was the first one Not acknowledging we didn't have a confident way to buy groceries . Another one was like .

Speaker 1 5:12

Probably two minutes later they said like , so let me get this straight . Uh , your plan , nathan , was to go ahead and sell a bunch of paid in fulls , shut the business down and then run away with all the cash . Is that right ? And on this , and right before that , I told him uh , no , last year we bought the business . The seller did a paid in full sale . They took the cash , sold it to us . We've been servicing those 35 members for over a year now they are due for a paid in full . We have sold zero paid in fulls and now whoever opens the studio can sell those paid in fulls .

Speaker 1 5:40

And then the upper person said like so let me get this straight . You , your plan , was to sell a bunch of paid-in-fulls , take the money

False accusations about paid-in-full sales

Speaker 1 5:46

and run and then corporate has to issue refunds . Am I right ? And I said no , the exact opposite . The seller did that to us . We could do that . We have not done that . I have given executive order to my team for the past four plus months to not sell a single paid in full . They have been explicitly told to not do that . And someone chimed in . But Nathan , like you're the owner , anything that your staff does you're responsible for . I said okay , I'm fine with that . I asked them how many paid in fulls we've sold . I've told them to sell none . We have sold none and if they have , I would have undone it on the spot .

Speaker 1 6:25

And then the frontline guy says actually pulling up the report , and the upper guy says hey , frontline worker , how many pips has Nathan sold recently ? Frontline worker says actually , it looks like he has sold zero paid-in-fulls since the CRM migration eight months ago , so it's hard to tell from what they sold last year . So on the spot I said I've sold zero of these . Basically , it's like selling a gift card , closing the business and then the customer has no way to redeem the gift card and so it's a sneaky , sleazy way to get money and screw the consumer over . And so I was not selling gift , I was not selling gift cards , and I was being accused of that on the spot by the upper person . The frontline person said hey , like please don't be doing this . I said I'm not doing it . Frontline person says oh , you haven't sold a gift card in eight months . And so I felt confirmed and validated .

Speaker 1 7:15

So , upper person , if you're listening to this , I hope you eat the words , because I told you I was not screwing over the consumer . You assumed I was screwing over the consumer . Everyone else has confirmed I'm not screwing over the consumer . So I will gladly accept your apology when you decide to issue it and I will issue a correction when I receive that .

Speaker 1 7:34

So that was the second one where I knew I was not going to be given the light of day by the upper person . Well , I told you I was not screwing the consumer . You said I was screwing the consumer . You heard I was screwing the consumer . You said I was screwing the consumer . You heard I was screwing the consumer and everyone else says I was screwing the was not screwing the consumer . So there you have it . So there's that one . Um not listening when I said I'm not sure we're gonna buy groceries , being told I'm screwing the consumer when that's not in fact the case . Uh , and then at the end , um , the upper person said well , nathan , things have to be made right . You have a moral obligation to have told this stuff sooner , which , sure , yes , I will concede that I could have told

Corporate demands and questionable requests

Speaker 1 8:11

corporate sooner . I was closing the doors .

Speaker 1 8:13

After talking with other franchise , former franchisees of this and other brands , other business owners , this was the unanimous feedback I received to not inform corporate ahead of the consumer . Feedback I received to not inform corporate ahead of the consumer because , historically , corporate has stepped in and harmed the experience for members and staff and owners more than if they had not known , and so , for better or worse , track record wise . That was the advice I received and that was the advice that I followed . So corporate did find out ahead of everyone else by like five or 10 minutes . It was not a multi-day heads up , and so I will . I will acknowledge that , um .

Speaker 1 8:50

But near the end of the call , corporate said all right , well , nathan , um , well , and I did mention along the way , um , I've been intentional with my conduct , with my wording and everything . I've used the word indefinitely , not permanently closed . All the pages are frozen and paused , so nothing has been deleted and everything has been allowed to remain open in the sense that , like , I just needed to give the new password to management and then , like it's a turnkey business essentially , so nothing has been deleted or burned and I even , like , recommended the four nearest other brand other locations when closing the studio and so I've done nothing to exploit , I've explicitly done nothing hard to harm the brand and , yes , people may be butthurt that they found out 12 hours before the next class that the studio was closed . But anyhow , the upper person said all right , well , you have a brand obligation . I can't remember if he said moral obligation , but I believe he said moral obligation to have conducted myself differently .

Speaker 1 9:57

I've conducted myself differently and so to make it easier for them to refund all the customers , he's asking me to wire the remaining bank account funds from my business account to corporate and then they will handle the disbursement and cutting checks to members . I said I'm open to it . I'm going to talk to my attorney first and go with what he recommends . He said well , don't forget , nathan , you have an obligation to your customers . You need to do the right thing here . And all the while , my merchant account got shut off several days ago .

Speaker 1 10:28

So what would make sense is if I issue a refund through our , so people pay us through a CRM , like they pay the club through like a credit card processor , what would make sense is I issue the refund back through the credit card processor so that the funds go straight to the client account . So for me , back to the customer . However , corporate has asked me to wire them funds and then they will handle all the distribution of the funds . However , if I do that , then corporate keeps all the royalties and commissions that they receive and then members get a feedback and I have no confirmation that anyone got a refund . So that sounds fishy . Uh , I will ask my attorney about that , Like I said I would . Uh , but it sounds fishy . Whenever someone says , wire me funds , that sounds fishy from the get go . So that was an oddity as well . They're trying to keep their royalties before customers get refunds so they can get their slice of the pie . So that's a little fishy too , along the way . And so , yeah , that's where things are at right now .

Speaker 1 11:29

So they also emailed out the members that I am in breach of contract and have broken my contract with corporate . And I asked them about that , like where in my 50-page franchise agreement did I breach it ? And the upper person said Nathan , I'm not going to go and find the exact line item for you , but somewhere in there it says you have to stay open for 10 years . You've been open for one year , so you're in breach of contract . And they messaged that the fact that I did not inform them of major operational changes ahead of time

Contract disputes and next steps

Speaker 1 12:02

means I'm also in breach of contract . Okay , um , first , I cannot confirm that in the franchise document . Yes , that would be . That would be . That would be the the right thing to do when it comes to business relations . Um , it'd be the handshake thing to do when it comes to business relations . It'd be the handshake thing to do .

Speaker 1 12:20

I'll concede that , if we're sticking to the letter of the contract , I'm not seeing that . So , for what it's worth , I haven't received confirmation on where I did wrong on that side , so I'll pause there . I have to hop into my first thing of the day . But as it stands , it sounds like the upper person is content throwing my name under the bus and dealing with the fallout without me being a partner in it . So they're teed up to open the the studio if they so ask . They have not asked for any permissions or passwords or things to make it easy for a transition . It sounds like they're wanting the remaining funds and then they will do with it as they please . So , for what it's worth , uh , it doesn't look like they want the studio to stay open , from what I can tell at the moment . Uh , we shall see in the future if that is different . That's where we're at , that's where we're going . Let's rock and roll .