Consumer Complaints and Reviews
I am a former owner of an EmbroidMe in South Georgia. I am writing this post to warn anyone that may read this NOT to buy this franchise! My husband and I bought into this scam in 2009. My husband was out of a job at the time and our options were limited. He cashed in all his retirement that he had accrued and we partnered with my parents to buy EmbroidMe. We worked very hard for 5 years but just couldn't lose any more money. To date, we have lost about $170,000 and are still paying $900 a month for equipment that is worth half of what we owe!
The franchise has several downfalls. They require an expensive storefront, yet want you to cater to businesses and market outside. They also give little outside help, other than to tell us to hire an expensive marketing person! Also, our used equipment that we purchased from the franchise was way overpriced from its value. We felt like they didn't care if we survived as a business because they had already made their money selling us the franchise! I feel the need to write this to warn anyone looking into this franchise. DO NOT BUY! We will be paying for this mistake for a long time!
I have placed about four previous orders with Ray Marouf, owner of EmbroidMe franchise at 6245 E. Bell Rd, Scottsdale, AZ. 85254. We've always found Ray to have a bad attitude and be quite impolite each order. However, this last experience was over the top and certainly the last time we will ever do business with him. In mid-June I stopped at his store to place an order for embroidery on some ball caps. While there I quickly looked through some short sleeve shirts on the rack in the showroom. I picked out a Gildan short sleeve shirt that was exactly the same style the one I was wearing. The other shirt was a different brand. I tried on the shirt of the different brand to make sure it fit correctly, but if did not need to try on the Gildan shirt as I had almost two dozen of these at home in my closet and knew how they fit. All I had to do was make sure it was an XL size.
I asked Ray to include these two shirts with my ball cap order and embroider my company logo on them as previous orders. When I came back a week later to pick them up, I merely opened the plastic bag and looked at the logos to see how they looked, and then paid and left. A couple days later I put on the Gildan brand shirt to wear to work and noticed as I looked in the mirror that the manufacturer had sewn the collar on completely wrong. A few days later I drove over to Rays office to show him the one shirt and ask for either a refund or even store credit for another shirt. He blew up, yelled at me loudly and said he wouldn't do anything about it. I asked him nicely at least three times if there was anything he could towards credit of future work, or anything. He absolutely refused to work with me at all and flat-out said he wouldn't do anything at all. He refused to let me put the shirt on to show him the manufacturing defect.
I asked my credit union to reverse the charge due to the circumstances. They did reverse the charge provisionally waiting on a response from Ray. Today they called me and said Ray is still set on not accepting responsibility for selling me defective shirt. So the credit union has put the charge back on my card. This franchisee is a particularly bad blemish on your company's name. I am asking your company to do the right thing and make a refund to me for that one shirt to make this situation right. Thank you for your attention to this matter.
My order was consistently late. The proof was overdue as was the delivery of the final product. When I went to pick the order up I learned it had been outsourced and an employee had gone to the firm that actually fulfilled my order and was on their way back to the store after picking with the order. I was not happy as I needed the shirts in 30 minutes for an event. They were promised on the prior Friday and it was Tuesday and I was now waiting in the store for the employee to arrive. An employee named Brian, called the employee who had gone to pick up the order on her cell phone. She advised that she was on her way back. I asked that she please hurry and please come directly back as, again, the order was overdue and I needed it literally in 30 minutes.
The employee picking up the order knew that as I had been working with her on the order from the start. Brian all of a sudden started screaming at me that he would not ask his employee to speed and risk her life! I said I never used those words and did not want that either. He told me to get out of his store as I was trespassing. I was beyond shocked at his need for anger management. I told him I was not leaving. I paid $550 for my order and I wanted it. He tried to grab my purse and said he planned to throw my purse and then me out into the parking lot as I was trespassing and not wanted! I told him, as an attorney, I could help him define 'trespassing'. This was a store open for retail business. A Welcome and Open sign was on the door! I had a paid order, how was I trespassing???
He got 4 inches from my face screaming at me that I was a ** and not an attorney and to get the hell out now. He carried on about how he did not need my business and he would literally kick me in the ass to get me to leave. Amazing to me that he thinks it is acceptable to threaten someone like that. He is approximately 6 ft and 170 lbs to my 5 ft and 110 lbs, but regardless, no one has the right to lose their temper to such an extreme and threaten verbal abuse. I stood my ground, sat down, and said I was not leaving; I was going to wait for my order unless he wanted to give me a full refund.
If he felt I was trespassing, he should call the police. I recorded this entire discussion on my cell phone as soon as he started going nuts. At this point another customer came in so he turned his attention to her and I sat there silently waiting for my order to arrive. I have contacted the Better Business Bureau, and now ConsumerAffairs to alert others to the behavior that this store feels is acceptable. I have left 3 emails and 4 voice messages for the corporate office of EmbriodMe to have them address this kind of franchise owner behavior; however I have had no response. Guess the terrible customer service starts at the top.
I took 5 new shirts into the Dayville, CT store with a computer generated copy of the lettering that I wanted embroidered. The quality of the embroidery was just plain terrible. It looked like a cat scratched it onto the shirts. The clerk said that that was the way they came back from wherever she sent them out to be done. She said that it looked good to her but could see the obvious difference in a shirt that I was wearing from another store (ten years old and still looks sharp). I would never go back to this franchise or any of their other stores again. I just think they ruined five brand new shirts.
I came across this blog and am very disappointed with the comments. I'd like to share a different experience and perspective. We opened our EmbroidMe location a little over seven years ago. We started as a team of two in 1,350 sq. ft. and have grown to a headcount of 10 in 4,350 sq. ft. Has it been easy? No! This has been the most difficult thing I have done professionally but also the most rewarding. I suspect that anyone who has built a successful business (franchise or not) would agree.
When we purchased our franchise from UFG, we bought a set of tools that we believe gave us a head start. We used those tools and the result was we were able to grow our business more quickly than if we had started on our own. The key is we did it. We used what we bought and became successful. The franchise didn't make us successful, but it helped. We developed our strategic plan (market focus, pricing strategy, sales activity) using the knowledge gained from the franchisor and our general business experience. UFG did not force us to do anything but offered us the opportunity to take advantage of a multitude of resources that we would not have had access to on our own. I would like to say that every decision we made was correct, but we have had plenty of mistakes. We made corrections and learned. The key is we kept a close eye on things and reacted quickly when necessary.
Every owner is responsible for their own success or failure. I guess it's understandable that some of those who do not succeed blame their failure on others, but that's not the reality of being a business owner. If you cannot accept ultimate responsibility for your actions, you should work for someone else! The bottom line is we pay our royalties every month without regret.
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I had a sample shirt embroidered at a Schaumburg location, with very good results. When I came back to the location to have more shirts embroidered, they were temporarily closed. Wanting to keep the work consistent, I searched for other locations. I drove from Chicago to Arlington Hts., which is a bit of a distance, to find that location also closed, no warning on the website or sign in the window. I searched for yet another location in Crystal Lake. It was an hour and a half drive. This time around, I brought four designer shirts to be embroidered with a quote in block font. I gave very specific instructions as to the positioning of the text and the font written and photographs. I also asked to have a file emailed from the Schaumburg location. When I came back, all four shirts were embroidered with a distorted font. The text crossed over the side seam and was not centered. The wrong backing was used causing major puckering and uneven, sloped embroidery of the text.
I was also informed that the Schaumburg location had not been able to locate my file. No one bothered to call about the changes or stop the work when the first shirt was not to part. As a result, I lost $96 for services rendered and $110 per each destroyed shirt ($440). No apologies were made. The owner tried to send me back to the Schaumburg location, which was supposed to reopen first on July 6, then July 17, and is still not open as of Aug. 1. For obvious reason, I did not trust to go back to the place, which was in and out of business, so I gave Crystal Lake a chance to redo the work. I left one of the destroyed shirts with the owner to practice on Friday. He was supposed to call on Monday. He did not.
When I called again, I was told the work has not been done with no apologies as if nothing transpired. EmbroidMe is not a professional business. The individual franchise owners do not take responsibility for the quality of their own work or that of the company as a whole. There are no refund policies, sense of pride in the work performed nor professionalism on the part of the owners/managers in handling unsatisfactory work. As a result, I have lost $536, three weeks of time, and ended up discouraged, angry and empty handed.
I am so disappointed the work I had done at my local store was so bad it ruined my daughter's stocking for her first Christmas that was a gift from her great grandma. When I asked for a refund or to have it fixed, not only did the owner refused, he was rude and said there was nothing he could do about it and he was not in the habit of giving refunds. I am not in the habit of paying for shoddy work that I could do better myself. Something that was meant to be a lifetime heirloom is only meant for the trash. 60 dollars down the drain but far more in sentimental value.
EmbroidMe knowingly misrepresented the amount of capital required during our investigation phase. Current documents show estimated capital requirements being nearly four times what was represented to us upon our discovery. EmbroidMe also over exaggerates estimated first year revenue. Their training manual and discovery documents suggested first year sales should be in the neighborhood of $320,000. EmbroidMe rushes prospective new owners into their start up class, suggesting new stores will be open and ready for business almost immediately after returning from their two-week training session in Florida. I was rushed into training in October of 2005, with a commitment from EmbroidMe to have our store open in November, well before the holidays. Our store was not ready for occupation until early February 2006. Using their own numbers, EmbroidMe caused us a loss of $42,500 in sales, which was a loss in earnings of at least $12,750.
EmbroidMe sets new owners up in class A retail space. This space gives the EmbroidMe store very high visibility, but is extremely costly. EmbroidMe uses this model to promote their brand awareness over the cost effectiveness for the store owner. At a cost of over $3,000/month, the EmbroidMe model actually cost us, and every other owner, current and past, well over $65,000 over the course of our three year run. EmbroidMe saddles the owners with an equipment package that is overly excessive and costly. I fully understand the franchisor benefits from this arrangement with Brother International and it is good business for them. My issue is this is another example of how their model is so one sided to their benefit, making success for the franchisee almost impossible. New stores do not need the amount or caliber of equipment provided. Now that I am in the industry, I am aware that equipment can be sourced at 20% to 30% of the cost of that issued by the franchisee. On an equipment lease of $150,000, my buyout in April of 2009 was still above $100,000. I had paid Brother International over $100,000 during our three-year run of owning our store, and still owed over $100,000. This for an equivalent equipment package that could be purchased for under $50,000.
EmbroidMe tells its owners that they are getting the best prices in the market place from vendors. The truth is that most, if not all of EmbroidMe's Medallion vendors, actually pay EmbroidMe a percentage of sales to be promoted to new owners. The net effect of this program is that EmbroidMe gains the benefit from owners using their suppliers and that, as an owner of a franchise of the supposed market leader, we got the same pricing as most any company that has an ASI#. I have an example of a new screen printer, with absolutely no credit history or purchasing power, getting the exact same pricing as EmbroidMe stores.
EmbroidMe charges owners a royalty fee which is split between a National Marketing fund and fees back to the franchise. As an owner, I was told that some of the resources we could expect in return for the royalty were field support and a fully operational Point of Sale software package. A package that, by the way, I also paid a $50 per month license fee. The quality of the field support was laughable and well renown in the industry. Many of the field support staff had no ability or experience in our industry and certainly little to no business experience. The only two things you could count on was a monthly call to retrieve store sales and an annual visit that only served as a check off to a requirement in the franchise agreement. These personnel added no value to the owners. The point of sale software when I started in 2006, FAS manager, was almost unusable. An initial upgrade to a program called EME Boss was an improvement. There were however major holes that an upgrade promised to repair. The promised repair was well over a year in delivery, not arriving until after we closed our doors in April 2009.
EmbroidMe corporate personnel are trained to educate owners in need of operating capital to take advantage of a little known loop hole in the IRA tax laws. Funds can be pulled out of an IRA or 401K and deposited into a C corporation tax free, as long as they are re-deposited back into the 401K fund at the time the business is sold or closed. I believe this practice takes unfair advantage of owners that still believe the EmbroidMe model is going to produce a profitable business, one that in any case, will hold some value at a point in time. I believe this is an irresponsible practice in light of the fact that most stores either close outright or are sold with a fire sale mentality. They know that store owners are not building wealth, but if these funds are accessed, the doors stay open a little longer, thereby ensuring royalties and other fees are paid for a longer period of time. Personally, I lost the entire value of my $450,000 401K plan, with the thought that at least some of it would be recovered upon sale of our business.
In February of 2008, I contacted corporate EmbroidMe, Ray *, regional VP, to let him know we needed to pursue the sale of our business. Even though our 2007 sales exceeded $500,000, the overhead in place, the cash flow needed and the labor and effort involved to do that much volume showed me that this was not going to be viable long term for my family. EmbroidMe corporate, in response to my request, added me to their Franchise Advisory Council and invited me to a corporate meeting in April of 2008. My attendance at that meeting confirmed my concerns. Even after only two years, our sales volume was one of the highest in the country and in private conversations with other owners, I confirmed that the model was succeeding only were a family had a separate primary income source, and the store itself was not looked upon to support a family. At best, this might be a decent second income.
After several months of little to no activity regarding potential new ownership, as well as several changes in regional corporate representation, it became clear that we would in fact have to close our doors. We continued to operate the business in good faith, generating sales of over $600,000 in 2008. I began laying off employees and attempting to renegotiate building and equipment lease payments. On the few occasions prospective new owners were brought into the store, an issue that had been a problem for me all during my relationship with EmbroidMe surfaced once again. I was told directly by Regional Vice President Tom F. to misrepresent the facts regarding the financial details of the business. Either by not discussing certain issues like cash needs or operating profit, or to simply ignore specific questions. This was a practice witnessed many times by myself and my key employees over the years when Pete *, Mike * or Tom * brought prospective new owners through our store. This is a practice that most any store owner current or past will verify.
In October 2009, I received a letter from Brother International asking for $17,000 in payment to resolve our lease. In that letter was a list of items listed as not received by EmbroidMe at the end of our relationship. The list was fraught with errors showing once again the attention to detail is not shown by your corporation. Ex-UFG employees started a new business, Financial Advisors, Inc., for the purpose of settling franchisee/franchisor disputes without the use of legal representation. The company has a stated advantage of settling disputes outside of the law, thereby allowing the franchisor to avoid listing the disputes in their disclosure documentation.
My story is typical of results echoed by most owners, past and present. Store closure rates are among the highest in the franchise industry. Most of us have lost our life savings, leave with serious debt. In my case, well over $500,000 has been last forever. Mostly we are upset with the fact that UFG knowingly continues to push a business model that is not positive for the owners. Day to day operating profit is not there and resales are typically fire sales. Even in our case where our top line sales were among the highest in the country. This industry can be profitable under different models, I have shown that myself since leaving the franchise.
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