Bakers Delight Victims
When considering purchasing a franchise beware of the hidden pitfalls. The following story gives a real life example of what can go wrong using the Bakers Delight example.
My Name is Robert Ferraro and my story of the way Bakers Delight Holdings has conducted them selves with me I hope will save some people of heartache and sorrow.
My wife and I became Bakers Delight franchisees in 1995 leasing Bakers Delight Hawthorn for 18 months for a lease fee of $10,000 p/m, (nothing to sneeze at hey) but made ends meet and turned a poor run store into a success once again.
After this time Roger Gillespie met with us with an opportunity to purchase our own store starting with leasing first and option to buy, the place was Goulburn NSW, we accepted the challenge and moved to Goulburn in November 1997.
After four and a half years of hard work and commitment to the franchise system and more on our behalf with community involvement and marketing we had a successful store and were the apples in Rogers eyes with a NSW Prime Ministers award for small business community partnership and several records in MAT% increase on the business in Australia.
In early 2000 we decided to sell Goulburn and get out of the franchise and start something else.
In November 2000 we still had not sold the Goulburn store and were in Melbourne for the BDH Xmas Ball when Roger asked for us to meet with him (boy do we regret going) Roger somehow built our ego to move to south Australia to purchase 2 stores from the COBS group mind you according to Roger and his merry men the potential of these stores was always there for the takings.
Roger was prepared to move mountains to get us to purchase these 2 stores Gawler and Munno Para to the point where BDH had set up for 2 new franchisees to lease the bakery off us till the purchaser was ready to take over after finishing his training,
(Yes BDH wasted no time in finding a purchaser for Goulburn yet no one was sent our way beforehand) Roger can move mountains when it suits his back pocket.
January 2001 we came to SA for a holiday and to see what stores were available in SA, well we met with Jarrod Smith and Mark Mcpherson whom showed us 2 stores in which BDH had up for sale, one store we were not even allowed to go inside of because BDH did not want leasing Franchisees to know Munno Para was about to be sold there were issues with them we were told, spent all of 1 hr at shopping centre then moved on to Gawler.
When we looked at Gawler the shopping centre had full tenancy and we were told by Jarrod and Mark that tenancy was sound and strong and that after Steve and Karen Fairfield would hand the store over to BDH it would be looked after by Jarrod Smith himself until we came across to take over Gawler we were there for about an hour during this time we had a short conversation with Steve Fairfield (care taking Franchisee) before being driven to Barossa Valley and stopping for lunch at Heidelberg Café Tunanda where we continued negotiations on the 2 stores.
At that meeting we were promised that upon purchase of the 2 stores the leases would be both brought up to a 5+5 yrs lease terms and would have the support of BDH in growing the store portfolio to possibly 5 stores in the northern region as Jarrod Smith Called it the FERRARO strip (Main North Road).
First 12 months here in SA we poured many thousands of Dollars into the businesses and achieved great growth in both stores BDH even awarded us an award for the highest MAT % increase in Australasia Rob and Melissa Ferraro were placed high on a Pedder stool for all Franchisees to follow our example.
After 12 months We have raised many concerns and issues with BDH and Landlords of Gawler on issues in which have and would affect our trading and profits in future only to be told by Steven Payn (CBRE property manager) to pull My head in and mind my own business, well the performance, condition and tenancy is my business because it all affects our bottom line during this conversation I told Steven Payn that if he was in front of me I would nock his head off I guess since then Steven Payn has not gone out of his way to help us in any way nor has the Landlord.
We were sold 2 stores under false information Sucked in by a better term We did not get legal advice because we needed to save money as we were short on funds to purchase the store and have always been told by BDH property department that don’t bother to try to change anything on the contracts as they are non negotiable.
BDH were very keen to see us here that they even loaned our company $50,000 just to make sure that we would take the 2 stores off their hands on the proviso the loan was paid back within 6 months I suppose that once we were in there (2 stores) they were no longer their problem (BDH).
At the end of 12 months of being in SA we placed our stores on the market because our confidence in BDH management had expired all the promises of support and expansion had not transpired.
In December 02 I was diagnosed with Major depression it was kept quiet for a while until Mel spoke to Jude Thorpe business consultant #3 in18 months about the problems we were having and reiterate the point that we needed to get out of this industry.
The SA management did not do enough to help us get out of the system to avoid any further losses both financially and physically.
November 2002 Jarrod Smith (4th largest BDH stakeholder at the time) stood in front of all SA Franchisees at the SA conference in the Barossa and said quote” If anyone wanted to get off the bus BDH will help us implement an exit strategy just ring the bell and we will stop the bus” Jarrod Smith.
We are still waiting for this bus to stop and let us off, in mid 2003 Melissa contacted Ron and Sue Lawns whom were earlier interested in buying one of our stores but could not get finance and let them know that Munno Para was on the market, Ron and Sue initiated proceedings and negotiation with us and BDH to purchase Munno Para store this all happened because of Melissa Ferraro not BDH not nobody yet BDH still takes the credit for making the sale happen at Munno Para.
BDH staff in SA advised the Lawns on several occasions on matters that as a result cost us in excess of $25,000 in loss of sale price and wages for making staff redundant upon sale.
On the 9th June 04 I served BDH with a notice of dispute on several issues (please read attached notice) in which has cost our company many thousands of dollars, since then we have not been able to get a straight answer from any BDH staff or management or the landlord at Gawler, our livelihood was hanging in the balance because of the incompetency of the SA management and BDH property department I have been labelled as a troublemaker by the Landlord according to Jarrod Smith and this is the reason that why the landlord has not executed the extension of lease so that we are able to refinance with the bank.
BDH has known of our financial position with ANZ since march 04 when we first requested an extension of lease and was granted one but has not been executed yet by landlord because they will only execute for new franchisee, we have a lease until 31st December 06 as it stands BDH only gave us a 4 yr lease from time of purchase but did not notify us of this until January 7th 2004.
All BDH and Landlord are doing is screwing us to the wall with our cash flow due to $7000 per month repayments to ANZ the reason that both BDH and Landlords are doing so to make sure that we the Ferraro’s have no money left to fight them in court which they know that if a judge has to decide it will not go in their favour the easiest way is to ruin peoples lives and take all we have in time bit by bit.
Well it is now February 2007 and Bakers Delight achieved their goal my marriage has ended and we had to sell absolutely everything including our home to pay our business debts after being blackmailed by BDH into selling our Gawler store back to them for half the price we paid for it not to mention solicitors bills for the amount of $30,000 and mounting debts with accountant and living off credit cards, the conflicts of interest and unfair trading by BDH and their staff were of the highest levels ever encountered but as I said to Mr Gillespie and his merry men and woman “WHAT GOES ROUND COMES ROUND AND THEIR DAY WILL COME” I hope that one day the accc will investigate their business dealings and promises to expose the true Bakers Delight Business and its Greedy people whom have lined their pockets at the expense of innocent people like us, all up our losses for the 5 yrs in South Australia were in excess of $800,000 thank you Roger Gillespie for ruining our lives
More reading follow the link http://bakersdeligh.googlepages.com
- 6680 reads
Re: Bakers Delight Victims
Hi there,
We feel your pain! The same thing has happened to us in New Zealand
with Bakers Delight! We too have lost everything!!
Re: Bakers Delight Victims
Hi don't know if you guys know this but Bakers Delight is being investigated by th ACCC here in Australia for many breaches of the fair trading act as well as franchise chrning check out this site for more info www.bakersdelightlies.com.au send your story in as well the more people tell about their not so delightful experience the more lives we save Cheers Rob....
Re: Bakers Delight Victims
Has the website www.bakersdelightlies.com or com.au been taken off by someone? I can't reach it. I feel all your pain too. I am not a Bakers delight franchise, but from another franchise group. Believe me, the franchising industry is a total and utter disgrace to this country. There are MANY franchisees of many franchises being treated appallingly - and franchisors are allowed to continue a rule of terror without constraint and without accountability and without a body with teeth enough to stand up to these bullies who are fighting with money 'stolen' from franchisees for services and promises never delivered. SOMETHING HAS TO BE DONE.
Re: Bakers Delight Victims
THEY ARE A BUNCH OF FKN WANKA KUNTZ! I HAVE WORKED AS A BAKER FOR 1 BD STORE AND THE SHIT THE FRANCHISEES HAD TO GO THREW WAS REALLY DISGRACEFUL. POOR PPL JUST TRYING TO RUN A BUSINESS AND SUCCEED. ONCE AGAIN BD U ARE A BUNCH OF KUNTZ!
Re: Bakers Delight Victims
Bakers Delight has had alot of very bad publicity over the past few months. It just seems to get worse and worse. There is a Bakers Delight in about any and every shopping area. With this much negative attention it makes you wonder how many of those shops make money?. I bet this has been happening for years. They just boot the poor owner out when he has no money left then sell it to the next poor sucker. The public non the wiser the shop is still trading must be a good business. Internet access and people speaking out will prevent Franchises like Bakers Delight preying on our next generation. BUYER BEWARE
Re: Bakers Delight Victims
My name is John Purtell and along with my wife (DIANNE) purchased Bakers Delight in Bullcreek. We were told on numerous occasions by a few representatives of BD that the store would take $10K per week. Never in the 2.5 years that we operated did it come anywhere close. We opened on about $6K at the end of 2001 and when we left the store in 2004 we had managed to get T/O up to about $7.2K.
Our experience with Bakers Delight was far from "delightful". Our intention when first looking into becoming a franchisee with BD was to LEASE a store which BD advertised as an option of only requiring $20K to get "onboard". We were well aware that financially, leasing would be our only option as we have a young family and didn't have the at least $100K cash outlay required by BD to purchase a new store and be a fully fledged franchisee.
After we sat through one of the many seminars that BD hold recruiting new franchisees we were approached by a BD representative and asked if we were interested. We told them our financial situation only allowed us to entertain the Lease option, to which the response from the BD Representative was that BD no longer offer the LEASE option. With this info we advised that while interested our financial situation didn't allow us to continue with our enquiries into becoming franchisees with BD. However, instead of allowing us to walk away, the representative said don't let "the money" side of things deter you we can do lots of different and innovative things to help you get into your own shop.
Our road to "HELL" had officially begun when we sat down to listen and ultimately got taken for the deception ride that BD delivers.
We were upfront with the little cash we had to secure a bakery whilst BD assured us that it would be ok and that their preferred lender WESTPAC Bank would be able to put something together for us and that we would be CASH POSITIVE the day we start trading in our $10K a week store.
Needless to say that our store never traded well, although we had "expert" opinions from other franchises and BD representatives, not to mention the Franchisors of BD themselves- Roger and Leslie Gillespie, trying to find fault with the way we were operating for a possible reason the store was just not successful, however, no fault in our operations could be found as we followed the so called BD System to a T. After our numerous cries for help, BD chose to sit back and watch us "GO UNDER". So here we are today with 4 young children, our business lost to liquidation, our family home lost and now officially bankrupt to boot, not to mention the mental stress and strain on our marriage and our family. My wife had a nervous breakdown and required medication and the need to call on other family members to assist in caring for our young children resulted.
While we did seek legal advice initially and advised that we would have a good case against BD on a few points any hopes of pursuing this line of enquiry were dashed as we didn't have and still don't have a cent to our name to fight these "Giants" and their high paid lawyers.
At the end of the day I just want our story heard as it has come to our attention that BD has also been "underhanded" with a number of franchisees and that "WE" are not an isolated "incident". BD needs to be made accountable for way they do business.
I thank you for your time and would welcome any questions you may have.
Yours sincerely,
John Purtell
Re: Bakers Delight Victims
I accidently came across this web site, and am a little stunned at the BD Bashing going on!!! I have been an employee of a successful BD store for some time now........ I understand I am not a Franchisee, but I have had the chance to observe the success that can be had by making GOOD & WISE business choices!!! Mr Ferraro, even you said in your story that you had made a success of several stores and were ready to move on! Yet all it took was a little 'EGO' stroking to keep you in - that was YOUR choice, the BD staff were only doing their JOB! Unfortunately for you this last business choice faild you...... In life you need to take responsibility for your own short comings - I have sympathy for anyone who, as a result of a failed business falls on hard times - but failded businesses is not contained to just BD Stores......... Many more independant businesses go under!!! Not everyone is suited to be business owners as they may not have the skills and knowledge to maintain a business - BDH are not fortune tellers, they can not see into the future to see if an individual is cut out to run their own business....... At the end of the day BDH have a job to do also!!!
Re: Bakers Delight Victims
I quote your comment, "BDH are not fortune tellers, they can not see into the future to see if an individual is cut out to run their own business....... At the end of the day BDH have a job to do also!!! "I think the point these people are making is that BDH do claim to be able to do these things.Not to mention it is a legal obligation of large companies (eg BDH) to insure you have the ability (skill and finance) to make good on the deal they are offering. plus there is a code of conduct for the franchise industry.
Yes they have a job to do and these people feel they are unethical in the way they do it the same as it would be unethical for you to put dirt into the bread or claim to start work an hour before you did.
And no one has even touched on the practice of employing new apprentices and sacking them when thay start third year and getting another new apprentice. There is a lot of talk about how great there in house training system is but how many apprentices get to finish there training???
DET missed this one!
Hey, Department of Education & Training, here's a story I think you
missed. Be sure to put it on Louise's file. There are no spelling
mistakes - it must be one of hers.
Re: Bakers Delight Victims
I am a current BD Franchisee who has over the years witnessed BD DESTROY numerous Franchisees lives.. I have like all franchisees chosen to cringe but shut my mouth at the sheer ruthless action that BD TAKE WHEN THEY GET THE SNIFF OF BLOOD.. Unfortunately i am now one of the franchisees that BD HAS IN THEIR SITES.... . I am now at the point of being insolvent. I must say that i have put my heart and soul in to the buisness as well as a vast amount of money. BD are aware of the problem but instead of working with me they are circling and waiting for me to fail... the day that i cease to be able to trade they will take control of the store and sell it to the next young couple who visits one of their seminars.. AS I and my ex wife did all those years ago... There about 70 stores for sale at anytime... AND THEIR would be another 100 up for sale if the franchisees belived that they could sell them.
BD have launched a major expansion in Canada.. They are building vast numbers of company owned stores at the expense of marketing in Australia... When was the last time you saw one of the catchy ads on TV.. tHEY HAVE REDUCED THE TV advertising from some 40+ weeks per year to virtually none..they will say that the reduction is a result of change in marketing strategy but that is BS ITS ONLY A GRAB FOR FRANCHISEE MARKETING ROYALTYS. SO the AUS MARKET IS SATURATED with stores and now they are selling the new stores to the unsuspecting canucks as COBS.
I have never met ROB FERRARO and i am not aware of the particulars of his situation.. But i do know that he was held up as a perfect example of what BD WANTED FROM THEIR FRANCHISEES.. There was hardly a time that he was not presented as a Golden haired boy... until he became of no use to them and he was subsequently shafted... HE is just the tip of the iceberg.
His comment about " what goes around comes around" is very true.. ROGER AND LESLIE GILLESPIE HAVE earned themselves 10 life times of bad Karma..
I am aware that my comments only devalue my buisness... But the truth needs to be told. I am the only one in my franchisee/ franchisor partnership who can hold his head high.
'
Re: Bakers Delight Victims
Please this is very inappropriate. The Gillespie family are of the highest calibre and this kind of website should be shut down.
Re: Bakers Delight Victims
The only thing that is inappropriate is that Roger Gillespie and his company, Bakers Delight, have managed to keep their unconscionable and criminal business practices out of the public eye for so long. Shutting down this web site is exactly the censorship that Bakers Delight would want.
Regarding your comment that this family is of the highest calibre, I disagree. I have first hand experience of members of this family using stand over tactics and intimidation. I am also willing to stand up and provide evidence of this in court. That time is getting closer.
Do yourself a favour and go to www.bakersdelightlies.com and see for yourself how this family and their company conduct themselves. Follow the links and you will find that the ACCC has posted a comment on their web site stating that they are investigating their behaviour.
The place that Roger Gillespie belongs is jail.
Mark Massie
Apprentice Baker
I'd like to mention my nephew-in-law is an apprentice baker with Bakers
Delight in the A.C.T. and he is very happy with his employment. I'm
sorry to hear franchisees have had problems.
Re: Apprentice Baker
just wait till he gets to third year and they sack him and get another new cheap apprentice
Re: Bakers Delight Victims
I am a COBS Bread victim in Canada. I am going against Roger and Lesley and a District Manger at a hearing for gender and age discrimination and broken promises and lies. Has anyone in the BD family ever come across gender and age discrimination? I was told that their ideal candidate for Bakery Manager is a young man with 30 years left to work. I am a trained and experienced Pastry Chef with many years of management experience in the Food & Beverage industry and I was hoping to lease and franchise. I am so happy that did not work out.
Re: Bakers Delight Victims
I would recommend that you pose your question on the www.bakersdelightlies.com and www.bluemaumau.org websites as they have a wider Bakers Delight/COBS Bread audience.
Deceit, misrepresentations, intimidation and broken promises are some of the common behavioural themes of Bakers Delight that I have encountered both first hand and when speaking with other franchisees. It is the Bakers Delight culture and it is no surprise that it is emerging in Canada.
Mark Massie
Gender and age discrimination
Yes. We have a story about that.
http://sydney.indymedia.org.au/story/kind-thing-you-can-expect-n-s-w-anti-discrimination-board
Re: Bakers Delight Victims
To all who are hurting:
Depression, marriage breakup, disintergration of the family, bankruptcy, loss of family home, loss of dreams and hopes, an overwhelming sense of grief, failure and shame - these are recurring themes for many hard-working Australians who have experienced the trauma of a business collapse.
I have experienced two business collapses in the last 20 years and have just recently 'cut my losses' (to put it nicely) on a franchise business (not BD) that fell light-years short of expectations. As a result of those experiences I am writing a book to encourage the many thousands of other small-business people who, each year, fall on the battle-field of business . The book (a three part series) shares the stories of many other broken, business owners who pressed forward amongst overwhelming adversity and lived to declare that there is "Life After Liquidation".
In the coming months, I hope to finish the first draft of book #1 and I would like to forward a copy to you in the hope it might encourage you to keep pressing forward. Please email me at mark@LifeAfterLiquidation.com if you would like to recieve a free copy.
Regards
Mark Kenway
Re: Bakers Delight Victims
Beware of The Cheesecake Shop South Australian Master franchisee and all of the scumbags that associate with him. Michael Marinos is a Liar, crook and a disgrace to the cheesecake shop brand. I am glad top be out of the system even though the cost was great and i had to swallow my pride and walk away. Bring on karma!!!!!
Re: Bakers Delight Victims
we too lost $100k as a result of a bd scam cob store
Re: Bakers Delight Victims
Hi
I feel sorry for all the BD people who have lost their business,money & sometimes family..life is hard enough with BD making it harder..I personally do not back the big business's..choosing to surport the smaller strip shops and mum & dad business...to all BD people facing problems I wish you all the best of luck and good health for the future..
the best money manager I have found is MSN Money....you can trial it for 2months free from their web site, before buying
Lucy Morgan
Re: Bakers Delight Victims
I am going to buy one of the BD franchiese store in Brisbane. I have been told many + and - about BD Holdings and their dealings with Franchieses.
Anyone who owned the store previously can tell me how I can verify the turnover figures? Do you thing the person who is saling the business can play around the figures?
Anyone knows what is going to happen to BD system in 5 years time? I would like to have any feed back please.
What are the reasons of failure? Labour, Staff, BD Holdings policy, Lease, Sub lease, Food cost or anything else??
Many thanks
Re: Bakers Delight Victims
I have seen and experienced bakers delight lies and broken promises. They promise you the world and give you absolutely nothing in return. A few years ago I was involved with a company owned bakery that was not doing very well. Mostly because of its location. BD sold that store to an unsuspecting franchishee. BD told him that the store was very poorly managed and that he would be able to turn it around. It didn't happen, the problem was the location of the store not the people running it. BD were so keen to sell that store that they told all kinds of lies to to so. The worst company I have ever worked for. SLAVE LABOUR!!!!
Post new comment