FTC Busts Amish! Quilt Cache Seized from “Illegal Franchise”

Pre-dawn raid cracks “largest illegal franchise and pyramid scheme in world history.”

Leola, PA In a massive crackdown on what’s been called an epidemic of new “lifestyle” business opportunity scams, the FTC* has filed suit against the 150,000 members of the Amish community for running what they declare is the largest illegal franchise and pyramid scheme in world history.

According to FTC Director of Consumer Protection Amanda Linn: “Project ‘Going Buggy’ is the culmination of many month’s of intense inter-departmental cooperation and coordination. We have launched a multi-prong, multi-state attack on a business opportunity scam that is sweeping this nation in epidemic proportions.”

Clandestine “Chow Chow Labs” Uncovered; Quilt stash seized.

According to Linn, the target of their sting operation is a well-organized group operating under various names, including “The Amish,” “The Old Order Amish,” or “The Plain People.” Group members are recognizeable by their plain, handmade clothing, their all-black horse and buggies and their refusal to conform to use of modern conveniences such as automobiles and electricity. In settlements in Lancaster County, PA and Holmes County, OH, the Amish reportedly generate billions of dollars making and selling quilts, wood furniture, apple butter, ‘shoofly pies’, baked goods and a variety of strange relishes manufactured in underground facilities called “Chow Chow labs.”

“For years the Amish have been profiting from a business network that requires a standardized appearance, uniform, strict operating procedures, and the payment of fees and, in some cases, vegetables, into a centralized fund. That’s the very definition of a franchise,“ according to Linn. Franchise entities are required to conform to the FTC’s Franchise Rule, which includes written disclosure of the terms of the agreement, providing names and addresses of all corporate officers and franchisees, and a prohibition against making any return-on-investment promises.

Widespread “Churnings Claims” Alleged.

The FTC charges that unsuspecting participants were duped into conforming to the Amish franchise program literally from birth. Prospective Amish franchisees were subjected to long “church services,” lasting 3-5 hours in duration, in which they were promised spiritual riches in the afterlife if they followed Amish procedures. According to the FTC, all references to profit potential, spiritual or otherwise, must be properly disclosed as an Earnings Claim in Item 19 of a properly prepared Uniform Franchise Offering Circular (UFOC) document. Amish recruiters are alleged to have made widespread “Churnings Claims,” offering promises of austerity and discomfort to their recruits.

The FTC alleges that unwitting franchisees attended an 18-year training program, were issued an extensive operations manual ( “Holy Bible’) and were regularly inspected by operations reps (known as “Bishops”). The Amish members were prohibited from using modern plumbing or appliances or from operating their business on Sundays. Additionally, they were forced to contribute to community relief funds, to make and deliver hot dishes to sick neighbors and to work without pay at communal “barn-raisings.”In a pre-dawn raid, Federal officers descended on Amish fields, dairy barns and roadside stands in Intercourse and Bird-in-Hand, PA, and Nappanee and Farmerstown, OH. Assets and evidence seized in the raid included mattresses stuffed with cash, butter churns, milking stools, plows, carpentry devices, several trays of whoopie pies, bales of a suspicious hemp-like substance and a dog named Spooner. Over a dozen buggies were impounded.

Suspects were immediately required to relinquish their traditional Amish garb (including beards) as evidence, and were given, in exchange, tropical beachware generously donated by the Tommy Bahama company.

Operation “Going Buggy” Continues.

More federal seizures are sure to come in the FTC’s Operation ‘Going Buggy’.” According to Linn, “The Amish seemed almost relieved. Their living conditions were deplorable: no phone, no lights, no motor car. Not a single luxury. Children ran barefoot and fished from creeks without proper tackle. They still used push mowers. They had no television, much less Playstation 2 or xBox. As one young Amish child I interviewed said ‘It’s like being grounded… all of the time.’”

* Clarification: The FTC in this story stands for Fictional Trade Commission, and is in no way affiliated with the legitimate and venerable Federal agency that shares its initials. In fact, anything or anyone else anywhere at any time is entirely coincidental.

PHOTO CREDIT: The Electric Amish. Used by Permission. Visit the Electric Amish Website. Buy their CD awhile.

Franchise Graveyard: Dial-A-Husband

More like Dial-A-Deadbeat…

The August 29, 2006 edition of the Montreal Gazette carried this story of an alleged franchisor scammer who sold Dial-A-Husband International handyman franchises then split with the fees. Two of the franchisees have carried on under the same name, and the franchisor is on the run.

Moral of the story: Do background checks on the principals before handing over your check.

Excerpt from the Montreal Gazette story:

“It’s been a real interesting struggle,” said Carmine Maurizio, the first Quebecer to invest in a Dial-A-Husband International Services Inc. franchise in July 2004.
Stephen McCavour followed suit three months later to become the second Dial-A-Husband in the province.

“We dished out $70,000 and $60,000 each,” Maurizio said.

Besides the $35,000 franchise fee, he invested that much again on trucks, tools, advertising and workers, only to be left high and dry along with about a dozen other franchisees in Ontario and Calgary by Dial-A-Husband founder Jim Gillingham.

“He has closed his doors and disappeared with all monies franchisees gave him,” Ontario franchisee Garry Shearer said yesterday from his Peterborough operation.
“When we confronted him and asked to look into the (company) books, he vanished.”

He is thought to be in Canada, but nobody knows where he is, including the police.

Maurizio recalled cornering Gillingham at a Home Depot convention in Toronto last September and having him run out of the building.

“We had security chasing him and he knocked over my partner, Stephen, who was trying to take photos of his licence plate.”

Dial-A-Husband, which Gillingham ran with his wife Sharron out of Mississauga, Ont., was dissolved at the end of 2004.

Maurizio, McCavour, Shearer and the few other remaining franchise owners have launched a lawsuit against Gillingham in Ottawa, claiming breach of contract and breach of Ontario’s franchising act for not fully disclosing his history.

Shearer noted the Gillinghams are wanted on fraud charges and warrants are out for both for not appearing in court to face the charges against them.

A January 2005 letter from the Suffolk County bureau of licensing in Hauppauge, N.Y., states that there were five open complaints and one closed complaint against Gillingham’s Ottawa-based JTG Construction Management LLC.

R.I.P. Dial-A-Husband,
Posthumously entered into the FranWorst Hall of Shame

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The Franchise That’s Too Good to be True: Quiznos!

While other chains waste valuable homepage real estate promoting their products to consumers, the Quiznos website puts their franchise information right up front, for your convenience:

“Realize your dream of owning your own business and start controlling your financial future by joining the fastest growing restaurant chain in the nation. The Quiznos franchise program gives you the tools needed to help you succeed:

* An excellent product * Strategic location assistance * Strong advertising
* A comprehensive training program * Ongoing local support
* A proven business model – simple and rewarding”

Everybody’s crazy about the Quiznos franchise! The awards are piling up!
#1 Restaurant Chain, Nation’s Restaurant News, June 2006, Growth in Number of U.S. Units – Top 100, Ranked #1 Five Years in a Row!

#2 Best Overall Franchise, Entrepreneur Magazine, January 2006, 27th Annual Top Franchise 500

#3 Top 50 Chains, QSR Magazine, August 2005, By Change in Systemwide Sales

Why does Quiznos stand out from its slow-growing competitors? No, it’s not their toasty bread, delicious meats, or plastic Q-shaped dishes. It’s not their demon-possessed baby spokesman, or the fact that they buy-one-get-one their franchisees to death to pass the savings on to you, the consumer. No, the secret to their amazing growth is their tough, determined leadership.

That’s right. Their lawyers and their tough, determined leadership.

While lesser chains might buckle under to the whining, pleas and death gasps of their desperate franchisees by actually listening, caring or wasting precious resources on assisting them, Quiznos keeps the wheels of progress grinding and crunching forward.

Weak, wimpy franchise chains might be intimidated by, or even try to avoid, the mounting lawsuits being waged against them by individuals who realized their dreams of business ownership and controlling their financial futures by joining the fastest growing restaurant chain in the nation, but not Quiznos. Quiznos knows they will never become #1 in litigation spending by being intimidated by malcontents. (Watch out, Fred DeLuca!)

So God bless Quiznos! God bless those award-givers and publishers of positive press! God bless the industry leaders, the associations and the government agencies that remain silent in the presence of such greatness!

It is success stories like Quiznos that inspire America, and account for the wonderful reputation franchising enjoys in American business!

See you on the veranda!

Millionaire Richard Quick, Esq.

Want to make the FranWorst Hall of Shame? Read up on Quiznos and learn from the best:

TSFA post on the passing of Quiznos franchisee Bob Baber

Alleged suicide note/letter by Quiznos franchisee Bob Baber

Tampa Tribune story on Quiznos

Discussion of Quiznos on Blue Mau Mau

Janet Sparks’ commentary on Quiznos franchise terminations

Quiznos memo regarding suicide of their franchisee (Blue Mau Mau)

Quiznos Termination notices for TSFA Board Members (Blue Mau Mau)
Toasted Subs Franchisee Association