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Franchisee clashes with The Cheesecake Shop over website

Friday, 29 July 2011 | By Michelle Hammond
An Australian franchisee has set up a scathing website called cheesecakeshoplies.com, which accuses food retailer The Cheesecake Shop of badly treating franchisees.

 

In an email sent to StartupSmart, Cheesecake Shop franchisee Brad Skuse – who has operated a store in South Australia since 2004 – included a link to the site.

 

The email was sent to a number of addresses including that of other news publications, the Australian Competition and Consumer Commission and The Cheesecake Shop’s support office.

 

The site mentions Warwick Konopacki, who founded The Cheesecake Shop in 1993 with Robert Konopacki.

 

“Warwick has grand plans that don’t involve the franchisees at TCS. What we are currently seeing is definitely forced and sometimes by duress by TCS staff,” Skuse states on the site.

 

Skuse, who set up the site earlier this week, says he is yet to have any contact with The Cheesecake Shop about the site, although he is expecting the company to make contact.

 

“Over the last six years, I have suffered intimidation and duress to sign documents to benefit the franchisor and the master franchisees,” Skuse told StartupSmart.

 

“Before entering into the franchise, I had two houses. I’m now in debt by $300,000 and being forced to spending $100,000 on my shop or face eviction.”

 

There are 200 Cheesecake Shop stores throughout Australia and New Zealand, although only around four are company-owned. Skuse says all franchisees are being forced to refurbish their stores.

 

“Last week, they did an Australia-wide survey [about the refurbishment] and pretty much everyone said it was overpriced, there was no return on investment, and it was simply ridiculous to do it in this current economic climate,” he says.

 

“But our hands are being forced by the franchisor through current franchise agreements.”

 

Cheesecakeshoplies.com is not the first site to slam a franchise – there are similar sites in existence for bakery chain Baker’s Delight and ice cream brand Baskin Robbins.

 

Skuse says he has the support of about 37 franchisees. If the company asks him to remove the site, he says he will refuse and is prepared to go to court.

 

“I’m just trying to stand up for mum-and-dad investors who go into this scenario of franchising and then realise there’s nothing at the end of it,” he says.

 

“I’ve been left with no other option [but to act on their behalf]. These people have got 30 lawyers and I’m left to defend myself.”

 

Skuse has considered exiting the franchise but says the company has informed him he still needs to refurbish his store before he is allowed to do so.

 

Ken Rosebery, general manager of The Cheesecake Shop, says he was only made aware of the site this morning but there will be an attempt to bring it down.

 

“This franchisee is disgruntled – he has been for some time – and we reject the claims he makes... There will be repercussions,” Rosebery says.

 

Roesbery confirmed all franchisees are being asked to refurbish their stores at a cost of up to $100,000, but are only required to do so on renewal of their agreement.

 

“As people are getting to their end of their terms, they have to upgrade. It’s their responsibility to upgrade their stores but Brad’s argument is that he can’t justify the upgrade,” he says.