Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Good morning.
Well, I caught up withcorporate yesterday.
It went so-so.
It didn't go extremely well, itdidn't go terribly well, but I
definitely did not feel listenedto as a franchisee.
Basically, the call started offa little bit rough.
It was myself and a couplefolks that are frontline workers
(00:25):
for the brand and then so highup people on the brand as well.
I'll keep titles and names umconfidential, but basically said
all right, um, thanks everyonefor hopping on.
Today we're going to talk aboutthe studio.
Um, yeah, as you probably saw,I'm not able to keep the doors
open, so we're declaringpersonal bankruptcy.
My attorney advised we closethe doors and yeah, I have
(00:54):
everything here ready to go sothat it can be handed off if you
guys want to take it over.
Yeah, I don't know how elsewe'd like to open.
And one of the higher ups, hesaid well, man, you kind of F
this whole thing up.
And he didn't say F, he saidthe actual word.
So pardon my French, but you Fthis whole thing up.
You made the brand look bad.
There are other people whoselivelihoods are at stake.
My family is impacted.
(01:15):
The other folks on corporate'sfamilies are impacted.
I mean, I know you have afamily.
But, yeah, I just want to getthat out there and say my piece.
And he may have said that stufflater on, um, but that's the
thing that comes to mind fromrecollection from yesterday.
So wrote that in there twominutes into the 40 minute
conversation.
(01:35):
And, um, obviously I know thatthey're going to be butthurt
about what I did.
Um, they're not going to getpaid royalties anymore.
They now have members to handlefor the pushback.
So, yeah, I wasn't expectingthem to give me hugs and kisses
walking into the call, but itdefinitely started.
It felt like they were implyingthat I owed them something and
(02:01):
I can owe them good faith, brandrepresentation, a good faith
transition for members, but thepoint of personal bankruptcy is
to not financially owe themanymore.
So I went through a few morethings, one of the higher ups at
one point.
There were two points where Iknew that I was not being
listened to, and one of them waswhere, well, I guess there were
(02:23):
three.
The first one was where I saidlike, yeah, like.
This is a business.
We cannot keep injecting ourpersonal cash into, like we are.
We're losing money personallyevery month.
It's not just business funds,we're not losing personal funds.
Declaring bankruptcy was theonly way to stop the twice a day
phone calls, twice a daycertified letters to me and the
studio and stop collectionsefforts Like we just don't have
(02:45):
the money.
We were told the bank was goingto 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 foranything other than our debit
cards.
We now need to go find those sothat we can buy groceries this
week.
And I don't know how we'regoing to do that.
(03:06):
We don't.
And then they just continuetalking about something
completely different, and I'lladmit that was kind of like a
fishing attempt on my part tosee if they were listening To
say like, hey, I don't know howwe're going to buy groceries.
This week We'll be able to buygroceries, we have the money to
do it.
But I was hoping that they werelistening enough to catch them
(03:30):
off guard To be like wait, youcan't buy groceries or you don't
know how to buy groceriesEnough to at least hear when I
say something that's a littlebit outlandish but yet real at
the same time.
And they completely glossedover it.
They moved past it.
So that was my confirmation.
They were not listening to myscenario.
Um, to the credit, one of theguys in the call did speak up at
(03:51):
the moment and say like hey,for what it's worth, nathan,
yeah, we're having to deal witha lot of customer questions, a
lot of customer complaints, um,and so I've run.
I'm not going to make plight ofyour situation.
I'm sorry that you're declaringbankruptcy.
Um, so I don't want to makelight of that.
Uh, and then we continuetalking about other things.
(04:12):
But one of the folks on thecall 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 wasjust more listening.
I guess it was the main upperperson that I'm more perturbed
by.
So that was the first one Notacknowledging we didn't have a
(04:32):
confident way to buy groceries.
Another one was like.
Probably two minutes later theysaid like, so let me get this
straight.
Uh, your plan, nathan, was togo ahead and sell a bunch of
paid in fulls, shut the businessdown and then run away with all
the cash.
Is that right?
And on this, and right beforethat, I told him uh, no, last
(04:53):
year we bought the business.
The seller did a paid in fullsale.
They took the cash, sold it tous.
We've been servicing those 35members for over a year now they
are due for a paid in full.
We have sold zero paid in fullsand now whoever opens the
studio can sell those paid infulls.
And then the upper person saidlike so let me get this straight
.
You, your plan, was to sell abunch of paid-in-fulls, take the
(05:14):
money and run and thencorporate has to issue refunds.
Am I right?
And I said no, the exactopposite.
The seller did that to us.
We could do that.
We have not done that.
I have given executive order tomy team for the past four plus
months to not sell a single paidin full.
They have been explicitly toldto not do that.
(05:36):
And someone chimed in.
But Nathan, like you're theowner, anything that your staff
does you're responsible for.
I said okay, I'm fine with that.
I asked them how many paid infulls we've sold.
I've told them to sell none.
We have sold none and if theyhave, I would have undone it on
the spot.
And then the frontline guy saysactually pulling up the report,
(05:57):
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 CRMmigration eight months ago, so
it's hard to tell from what theysold last year.
So on the spot I said I've soldzero of these.
Basically, it's like selling agift card, closing the business
(06:19):
and then the customer has no wayto redeem the gift card and so
it's a sneaky, sleazy way to getmoney and screw the consumer
over.
And so I was not selling gift,I was not selling gift cards,
and I was being accused of thaton 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, youhaven't sold a gift card in
(06:39):
eight months.
And so I felt confirmed andvalidated.
So, upper person, if you'relistening to this, I hope you
eat the words, because I toldyou I was not screwing over the
consumer.
You assumed I was screwing overthe consumer.
Everyone else has confirmed I'mnot screwing over the consumer.
So I will gladly accept yourapology when you decide to issue
(07:00):
it and I will issue acorrection when I receive that.
So that was the second one whereI knew I was not going to be
given the light of day by theupper person.
Well, I told you I was notscrewing the consumer.
You said I was screwing theconsumer.
You heard I was screwing theconsumer.
You said I was screwing theconsumer.
You heard I was screwing theconsumer and everyone else says
I was screwing the was notscrewing the consumer.
(07:20):
So there you have it.
So there's that one.
Um not listening when I saidI'm not sure we're gonna buy
groceries, being told I'mscrewing 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 maderight.
You have a moral obligation tohave told this stuff sooner,
which, sure, yes, I will concedethat I could have told
corporate sooner.
I was closing the doors.
(07:42):
After talking with otherfranchise, former franchisees of
this and other brands, otherbusiness owners, this was the
unanimous feedback I received tonot inform corporate ahead of
the consumer.
Feedback I received to notinform corporate ahead of the
consumer because, historically,corporate has stepped in and
harmed the experience formembers and staff and owners
more than if they had not known,and so, for better or worse,
(08:05):
track record wise.
That was the advice I receivedand that was the advice that I
followed.
So corporate did find out aheadof 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.
But near the end of the call,corporate said all right, well,
nathan, um, well, and I didmention along the way, um, I've
(08:26):
been intentional with my conduct, with my wording and everything
.
I've used the word indefinitely, not permanently closed.
All the pages are frozen andpaused, so nothing has been
deleted and everything has beenallowed to remain open in the
sense that, like, I just neededto give the new password to
management and then, like it's aturnkey business essentially,
(08:48):
so nothing has been deleted orburned and I even, like,
recommended the four nearestother brand other locations when
closing the studio and so I'vedone nothing to exploit, I've
explicitly done nothing hard toharm the brand and, yes, people
may be butthurt that they foundout 12 hours before the next
(09:08):
class that the studio was closed.
But anyhow, the upper personsaid all right, well, you have a
brand obligation.
I can't remember if he saidmoral obligation, but I believe
he said moral obligation to haveconducted myself differently.
I've conducted myselfdifferently and so to make it
easier for them to refund allthe customers, he's asking me to
(09:31):
wire the remaining bank accountfunds from my business account
to corporate and then they willhandle the disbursement and
cutting checks to members.
I said I'm open to it.
I'm going to talk to myattorney 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 thinghere.
And all the while, my merchantaccount got shut off several
(09:56):
days ago.
So what would make sense is if Iissue 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 thecredit card processor so that
the funds go straight to theclient account.
So for me, back to the customer.
However, corporate has asked meto wire them funds and then
(10:19):
they will handle all thedistribution of the funds.
However, if I do that, thencorporate keeps all the
royalties and commissions thatthey receive and then members
get a feedback and I have noconfirmation that anyone got a
refund.
So that sounds fishy.
Uh, I will ask my attorneyabout that, Like I said I would.
Uh, but it sounds fishy.
Whenever someone says, wire mefunds, that sounds fishy from
(10:42):
the get go.
So that was an oddity as well.
They're trying to keep theirroyalties before customers get
refunds so they can get theirslice of the pie.
So that's a little fishy too,along the way.
And so, yeah, that's wherethings are at right now.
So they also emailed out themembers that I am in breach of
(11:03):
contract and have broken mycontract with corporate.
And I asked them about that,like where in my 50-page
franchise agreement did I breachit?
And the upper person saidNathan, 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 10years.
You've been open for one year,so you're in breach of contract.
And they messaged that the factthat I did not inform them of
(11:27):
major operational changes aheadof time means I'm also in breach
of contract.
Okay, um, first, I cannotconfirm that in the franchise
document.
Yes, that would be.
That would be.
That would be the the rightthing to do when it comes to
business relations.
Um, it'd be the handshake thingto do when it comes to business
(11:47):
relations.
It'd be the handshake thing todo.
I'll concede that, if we'resticking to the letter of the
contract, I'm not seeing that.
So, for what it's worth, Ihaven't received confirmation on
where I did wrong on that side,so I'll pause there.
I have to hop into my firstthing of the day.
But as it stands, it soundslike the upper person is content
(12:10):
throwing my name under the busand dealing with the fallout
without me being a partner in it.
So they're teed up to open thethe studio if they so ask.
They have not asked for anypermissions or passwords or
things to make it easy for atransition.
It sounds like they're wantingthe remaining funds and then
they will do with it as theyplease.
So, for what it's worth, uh, itdoesn't look like they want the
(12:31):
studio to stay open, from whatI can tell at the moment.
Uh, we shall see in the futureif that is different.
That's where we're at, that'swhere we're going.
Let's rock and roll.
Good morning.
Well, I caught up withcorporate yesterday.
It went so-so.
It didn't go extremely well, itdidn't go terribly well, but I
definitely did not feel listenedto as a franchisee.
Basically, the call started offa little bit rough.
It was myself and a couplefolks that are frontline workers
(00:25):
for the brand and then so highup people on the brand as well.
I'll keep titles and names umconfidential, but basically said
all right, um, thanks everyonefor hopping on.
Today we're going to talk aboutthe studio.
Um, yeah, as you probably saw,I'm not able to keep the doors
open, so we're declaringpersonal bankruptcy.
My attorney advised we closethe doors and yeah, I have
(00:54):
everything here ready to go sothat it can be handed off if you
guys want to take it over.
Yeah, I don't know how elsewe'd like to open.
And one of the higher ups, hesaid well, man, you kind of F
this whole thing up.
And he didn't say F, he saidthe actual word.
So pardon my French, but you Fthis whole thing up.
You made the brand look bad.
There are other people whoselivelihoods are at stake.
My family is impacted.
(01:15):
The other folks on corporate'sfamilies are impacted.
I mean, I know you have afamily.
But, yeah, I just want to getthat out there and say my piece.
And he may have said that stufflater on, um, but that's the
thing that comes to mind fromrecollection from yesterday.
So wrote that in there twominutes into the 40 minute
conversation.
(01:35):
And, um, obviously I know thatthey're going to be butthurt
about what I did.
Um, they're not going to getpaid royalties anymore.
They now have members to handlefor the pushback.
So, yeah, I wasn't expectingthem to give me hugs and kisses
walking into the call, but itdefinitely started.
It felt like they were implyingthat I owed them something and
(02:01):
I can owe them good faith, brandrepresentation, a good faith
transition for members, but thepoint of personal bankruptcy is
to not financially owe themanymore.
So I went through a few morethings, one of the higher ups at
one point.
There were two points where Iknew that I was not being
listened to, and one of them waswhere, well, I guess there were
(02:23):
three.
The first one was where I saidlike, yeah, like.
This is a business.
We cannot keep injecting ourpersonal cash into, like we are.
We're losing money personallyevery month.
It's not just business funds,we're not losing personal funds.
Declaring bankruptcy was theonly way to stop the twice a day
phone calls, twice a daycertified letters to me and the
studio and stop collectionsefforts Like we just don't have
(02:45):
the money.
We were told the bank was goingto 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 foranything other than our debit
cards.
We now need to go find those sothat we can buy groceries this
week.
And I don't know how we'regoing to do that.
(03:06):
We don't.
And then they just continuetalking about something
completely different, and I'lladmit that was kind of like a
fishing attempt on my part tosee if they were listening To
say like, hey, I don't know howwe're going to buy groceries.
This week We'll be able to buygroceries, we have the money to
do it.
But I was hoping that they werelistening enough to catch them
(03:30):
off guard To be like wait, youcan't buy groceries or you don't
know how to buy groceriesEnough to at least hear when I
say something that's a littlebit outlandish but yet real at
the same time.
And they completely glossedover it.
They moved past it.
So that was my confirmation.
They were not listening to myscenario.
Um, to the credit, one of theguys in the call did speak up at
(03:51):
the moment and say like hey,for what it's worth, nathan,
yeah, we're having to deal witha lot of customer questions, a
lot of customer complaints, um,and so I've run.
I'm not going to make plight ofyour situation.
I'm sorry that you're declaringbankruptcy.
Um, so I don't want to makelight of that.
Uh, and then we continuetalking about other things.
(04:12):
But one of the folks on thecall 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 wasjust more listening.
I guess it was the main upperperson that I'm more perturbed
by.
So that was the first one Notacknowledging we didn't have a
(04:32):
confident way to buy groceries.
Another one was like.
Probably two minutes later theysaid like, so let me get this
straight.
Uh, your plan, nathan, was togo ahead and sell a bunch of
paid in fulls, shut the businessdown and then run away with all
the cash.
Is that right?
And on this, and right beforethat, I told him uh, no, last
(04:53):
year we bought the business.
The seller did a paid in fullsale.
They took the cash, sold it tous.
We've been servicing those 35members for over a year now they
are due for a paid in full.
We have sold zero paid in fullsand now whoever opens the
studio can sell those paid infulls.
And then the upper person saidlike so let me get this straight
.
You, your plan, was to sell abunch of paid-in-fulls, take the
(05:14):
money and run and thencorporate has to issue refunds.
Am I right?
And I said no, the exactopposite.
The seller did that to us.
We could do that.
We have not done that.
I have given executive order tomy team for the past four plus
months to not sell a single paidin full.
They have been explicitly toldto not do that.
(05:36):
And someone chimed in.
But Nathan, like you're theowner, anything that your staff
does you're responsible for.
I said okay, I'm fine with that.
I asked them how many paid infulls we've sold.
I've told them to sell none.
We have sold none and if theyhave, I would have undone it on
the spot.
And then the frontline guy saysactually pulling up the report,
(05:57):
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 CRMmigration eight months ago, so
it's hard to tell from what theysold last year.
So on the spot I said I've soldzero of these.
Basically, it's like selling agift card, closing the business
(06:19):
and then the customer has no wayto redeem the gift card and so
it's a sneaky, sleazy way to getmoney and screw the consumer
over.
And so I was not selling gift,I was not selling gift cards,
and I was being accused of thaton 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, youhaven't sold a gift card in
(06:39):
eight months.
And so I felt confirmed andvalidated.
So, upper person, if you'relistening to this, I hope you
eat the words, because I toldyou I was not screwing over the
consumer.
You assumed I was screwing overthe consumer.
Everyone else has confirmed I'mnot screwing over the consumer.
So I will gladly accept yourapology when you decide to issue
(07:00):
it and I will issue acorrection when I receive that.
So that was the second one whereI knew I was not going to be
given the light of day by theupper person.
Well, I told you I was notscrewing the consumer.
You said I was screwing theconsumer.
You heard I was screwing theconsumer.
You said I was screwing theconsumer.
You heard I was screwing theconsumer and everyone else says
I was screwing the was notscrewing the consumer.
(07:20):
So there you have it.
So there's that one.
Um not listening when I saidI'm not sure we're gonna buy
groceries, being told I'mscrewing 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 maderight.
You have a moral obligation tohave told this stuff sooner,
which, sure, yes, I will concedethat I could have told
corporate sooner.
I was closing the doors.
(07:42):
After talking with otherfranchise, former franchisees of
this and other brands, otherbusiness owners, this was the
unanimous feedback I received tonot inform corporate ahead of
the consumer.
Feedback I received to notinform corporate ahead of the
consumer because, historically,corporate has stepped in and
harmed the experience formembers and staff and owners
more than if they had not known,and so, for better or worse,
(08:05):
track record wise.
That was the advice I receivedand that was the advice that I
followed.
So corporate did find out aheadof 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.
But near the end of the call,corporate said all right, well,
nathan, um, well, and I didmention along the way, um, I've
(08:26):
been intentional with my conduct, with my wording and everything
.
I've used the word indefinitely, not permanently closed.
All the pages are frozen andpaused, so nothing has been
deleted and everything has beenallowed to remain open in the
sense that, like, I just neededto give the new password to
management and then, like it's aturnkey business essentially,
(08:48):
so nothing has been deleted orburned and I even, like,
recommended the four nearestother brand other locations when
closing the studio and so I'vedone nothing to exploit, I've
explicitly done nothing hard toharm the brand and, yes, people
may be butthurt that they foundout 12 hours before the next
(09:08):
class that the studio was closed.
But anyhow, the upper personsaid all right, well, you have a
brand obligation.
I can't remember if he saidmoral obligation, but I believe
he said moral obligation to haveconducted myself differently.
I've conducted myselfdifferently and so to make it
easier for them to refund allthe customers, he's asking me to
(09:31):
wire the remaining bank accountfunds from my business account
to corporate and then they willhandle the disbursement and
cutting checks to members.
I said I'm open to it.
I'm going to talk to myattorney 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 thinghere.
And all the while, my merchantaccount got shut off several
(09:56):
days ago.
So what would make sense is if Iissue 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 thecredit card processor so that
the funds go straight to theclient account.
So for me, back to the customer.
However, corporate has asked meto wire them funds and then
(10:19):
they will handle all thedistribution of the funds.
However, if I do that, thencorporate keeps all the
royalties and commissions thatthey receive and then members
get a feedback and I have noconfirmation that anyone got a
refund.
So that sounds fishy.
Uh, I will ask my attorneyabout that, Like I said I would.
Uh, but it sounds fishy.
Whenever someone says, wire mefunds, that sounds fishy from
(10:42):
the get go.
So that was an oddity as well.
They're trying to keep theirroyalties before customers get
refunds so they can get theirslice of the pie.
So that's a little fishy too,along the way.
And so, yeah, that's wherethings are at right now.
So they also emailed out themembers that I am in breach of
(11:03):
contract and have broken mycontract with corporate.
And I asked them about that,like where in my 50-page
franchise agreement did I breachit?
And the upper person saidNathan, 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 10years.
You've been open for one year,so you're in breach of contract.
And they messaged that the factthat I did not inform them of
(11:27):
major operational changes aheadof time means I'm also in breach
of contract.
Okay, um, first, I cannotconfirm that in the franchise
document.
Yes, that would be.
That would be.
That would be the the rightthing to do when it comes to
business relations.
Um, it'd be the handshake thingto do when it comes to business
(11:47):
relations.
It'd be the handshake thing todo.
I'll concede that, if we'resticking to the letter of the
contract, I'm not seeing that.
So, for what it's worth, Ihaven't received confirmation on
where I did wrong on that side,so I'll pause there.
I have to hop into my firstthing of the day.
But as it stands, it soundslike the upper person is content
(12:10):
throwing my name under the busand dealing with the fallout
without me being a partner in it.
So they're teed up to open thethe studio if they so ask.
They have not asked for anypermissions or passwords or
things to make it easy for atransition.
It sounds like they're wantingthe remaining funds and then
they will do with it as theyplease.
So, for what it's worth, uh, itdoesn't look like they want the
(12:31):
studio to stay open, from whatI can tell at the moment.
Uh, we shall see in the futureif that is different.
That's where we're at, that'swhere we're going.
Let's rock and roll.
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