Management

The Cheesecake Shop, Cheesecakeshoplie.com, Franchisee Breaches Agreement: Franchising

Rogue franchisee reignites battle with The Cheesecake Shop

By Michelle Hammond
Tuesday, 14 February 2012

Renegade Cheesecake Shop franchisee Brad Skuse has set up a site critical of the company, called cheesecakeshoplie.com, six months after being forced to take down cheesecakeshoplies.com.

Skuse, who has operated a TCS franchise in South Australia since 2004, set up a website in July last year called cheesecakeshoplies.com, accusing the company of treating its franchisees badly.

In August, Skuse reached an agreement with The Cheesecake Shop as a result of mediation. At the time, Skuse told StartupSmart he was “extremely happy” with the agreement.

Skuse denies that he has breached the agreement, a claim disputed by The Cheesecake Shop, which issued the following statement:

“The dispute between the Cheesecake Shop Pty Ltd and Bradley Skuse and B & F Skuse Pty Ltd has settled and it is a term of settlement that Brad Skuse deregister the website and agrees not to register the same or any similar website in the future”.

According to Skuse, the material on the site is “pretty much the same” as that of the first site.

“I’ve been inundated with phone calls from other [TCS] franchisees, begging me to help them,” Skuse says.

“I have limited information I can provide to them. This is one way to [disclose information].”

“The idea is for franchisees who didn’t get on board the first time to get on board this time. We’re certainly more united than last time.”

Skuse says while most of the franchisees’ complaints relate to a compulsory store upgrade, at a cost of up to $130,000, there are other issues concerning them.

“Like anything with franchising, there’s more it to than anyone can ever understand until they’re in it themselves,” he says.

“There are always ongoing issues with product development, stock control, and harassment and duress from The Cheesecake Shop management.”

Ken Rosebery, general manager of The Cheesecake Shop, says he has been aware of the site since yesterday afternoon but is yet to make contact with Skuse.

“We’re not going to signal our response at this stage but we will respond,” Rosebery says.

“Given that we reached an agreement, and that agreement has now been breached, we are surprised.”

“We’ve been more than generous in our accommodation of Mr Skuse and more than patient with him in that regard. We were prepared to sit down with him and we reached an agreement.”

“Clearly, we will act and we will deal with it.”

Rosebery says the material on the site is “untrue and offensive”, and breaches the company’s intellectual property. He also doubts whether other TCS franchisees have appealed to Skuse.

“I think that’s a lie,” Rosebery says.

“The cost of the upgrade is a significant investment. Not every franchisee is happy with that. Many are happy and there are some that will have their concerns.”

“Not everyone is completely happy with The Cheesecake Shop. It’s an evolving and vital business with change programs underway in a number of areas, so a lot is going on.”

“Are people broadly unhappy? No, I don’t believe they are... I’ve seen no evidence, and Mr Skuse has produced no evidence, to suggest people are unhappy.”

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Comments (2)

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I believe the original website was taken down after negotiations with TCS but TCS then refused to act in good faith.
The facts presented by franchisees;
The cost of the franchisee’s Cheesecake Shop upgrade has been massively inflated to feed additional revenue to the franchisor.
A very similar upgrade at Eagle Boys cost less than a third of the TCS ‘refresh’. While there is a small niche of TCS franchisees doing well they are in the minority.
Franchisees are to be terminated if they do not refresh their shops while many lenders are reluctant to finance given the performance of most TCS franchises.
Terminated franchisees will lose their investments and possibly be sued while TCS will take over their businesses for nothing.
Franchisees have strategically been intimidated and isolated with the TCS goal being to profit from the churning of franchisees.
Personally I believe the Cheesecake Shop refresh is the most blatantly abusive ripoff in Australian franchising at this time. Under Graeme Samuel the ACCC typically did nothing. I very much doubt Brad Skuse is lying about the current franchisee reaction to the website; I have been continually contacted by TCS franchisees for almost 4 years.

Ray Borradale , February 15, 2012

-1

Behind the Mamuska character of a sweet grandmother figure lays franchisors that do not listen to their franchisees. They do not understand people are trying to make a living and only want the best for their shop and to ignore suggestions for improvement boarders on the arrogant.
Higher turnover and less cost equals more profit. Happy franchises are more productive, enthusiastic which radiates into the surrounding communities. More profit for the franchisor, less stress on the franchisee and everybody should be happy.
Why would any franchisee be willing to harm the name of TCS if it is their only income? Is it a matter of hurt pride rather than astute business that the amount of time effort and other franchisee's money has been wasted when a resolution to these matters could have been brokered?
And really, do 99.999% of the population search the internet for information such as this or do they judge on quality and service?
Good faith is a one way street at the TCS.

Anom , February 28, 2012