Complaint Review: Minuteman Press International Inc - Farmingdale New York

Minuteman overcharged its Australian franchisees AUD116.60 per year for the use of its FOCUS Management System. Minuteman charged franchisees AUD419.10 per year when it should have charged AUD302.50.

Minuteman overcharged its Australian franchisees over a long period of time; at least from 2008 to 2013, i.e. at least 6 years.

As at the end of 2013 Minuteman had approximately 50 franchisees in Australia. The annual over charge of AUD116.60 for 50 Australian franchisees equates to an annual overcharge of AUD5,830. Minuteman repeatedly overcharged its franchisees since at least 2008, i.e. 6 years. Therefore total over charge of Australian franchisees for 6 years amounts to AUD34,980.

There is no reason to belief that the over charges have been isolated to Australian franchisees; in all likelihood Minuteman over charges all its franchisees.

As at the end of 2013 Minuteman had approximately 935 franchisees worldwide. The annual over charge of $116.60 for 935 franchisees worldwide, based on the over charges in Australia, equates therefore to an annual overcharge of $109,021. Minuteman repeatedly overcharged its franchisees since at least 2008, i.e. 6 years. Therefore total over charge of all Minuteman franchisees worldwide for 6 years, based on the over charges in Australia, amounts therefore to $654,126.

All Minuteman franchisees, worldwide, are advised to review their invoices for the annual FOCUS fees. It is recommended franchisees review all invoices from at least 2008. The annual charge should be the equivalent of USD285 plus any applicable tax. If franchisees find they have been overcharged they should demand their money back. Alternative the misconduct can be reported to the government regulator, such as the Federal Trade Commission.

The Minuteman rip-off methodology:  

Minuteman Press franchisees have to sign the Minuteman FOCUS Management System License Agreement. The agreement gives the franchisee the right to use the Minuteman FOCUS Management Software (FOCUS). Franchisees use FOCUS to maintain its customer database, prepare customer quotes, manage production, measure profitability, do customer invoicing and to manage accounts receivable. Franchisees are dependent on FOCUS for the day-to-day running of the franchise business and their businesses are extremely vulnerable when FOCUS does not work.

In terms of the FOCUS Management Software License Agreement and the Franchise Agreement franchisees have to pay to Minuteman USD285 plus tax annually on the anniversary of the store. The USD285 is converted to local currency on the date of the invoice.

Real life example of Minuteman’s unethical and immoral conduct towards its franchisees:

Store owner queried exorbitant invoice charge of AUD419.10 during September 2011. Minuteman’s Senior Executive Vice President, Michael Jutt, personally received notice of the query.

Minuteman refused to pass credit for the over charge. Store Owner had to pay the invoice in full. If store owner elected to withhold payment Minuteman would “disconnect” the franchisee’s FOCUS system. A brief explanation of the procedure:  Minuteman programmed FOCUS to demand a secret code to be keyed into FOCUS, once a year on the anniversary of the store. In order prevent FOCUS from “shutting down” the franchisee has to request the secret code from Minuteman in New York. Without the secret code FOCUS stops working and the franchisee cannot use FOCUS. Consequently the franchise business is paralyzed. Minuteman will not provide the franchisee with the secret code unless the franchisee has paid its FOCUS account in full.

Store Owner declared a dispute with Minuteman and requested mediation. Minuteman hired lawyers to represent it at Mediation. Minuteman persisted denying over charging for FOCUS annual fee notwithstanding the fact it was blatantly obvious from the FOCUS License Agreement that the over charges were indefensible.

During 2013 store owner again received an invoice for AUD419.10 and again queried the exorbitant charge for the FOCUS annual fee.

The President of Minuteman, Bob Titus, personally authorized credit to be passed. However all other Australian franchisees had to pay AUD419.10.

During February 2014 Australian Minuteman franchisees were alerted to the over charges.

During March 2014 Bob Titus and Michael Jutt sent an email to all Australian franchisees. In the email Minuteman admitted they over charged franchisees for the annual FOCUS fee. Bob Titus and Michael Jutt explained the over-charges occurred due to an “inadvertent error”. This was a blatant lie by Bob Titus and Michael Jutt. They have been fully aware of the over charges for a number of years.

At the end of April 2014, two and a half years after it was brought to its attention, Minuteman finally and reluctantly repaid the Australian franchisees for the over charges for the FOCUS Annual License Fee. However, as always with Minuteman, there was a sting in the tail. The amount repaid to franchisees was calculated on the assumption that the Australian Dollar remained stable against the US Dollar over the period of 6 years. This is not so as the Australian Dollar strengthened against the US Dollar during this period. Once again Minuteman short changed its franchisees.

It is also known that Minuteman over charges all its franchisees, worldwide, for monthly royalties. Minuteman does so in breach of its own franchise agreement. A further report explaining the misconduct in this regard will follow.

And then there is the unlawful conduct of Minuteman management and its employees who work in Australia in breach and violation of their visa restrictions………..

During 1998 Minuteman and its founder, Roy Titus, were prosecuted by the Federal Trade Commission for serious misconduct against its franchisees and prospective franchisees. They were found guilty, convicted, fined $3,47 million and enjoined with a Permanent Injunction Order by Judge Hurley in the US District Court for the Eastern District of New York. It was a landmark judgment. The press releases from the Federal Trade Commission and the Judge Hurley’s judgment can be found on the website of the Federal Trade Commission. To access the information go to the website, type “Minuteman Press” in the search box in the top right of the web-page. The links to the press releases and judgment will be listed in the search results.

Today the President of Minuteman Press is Robert Titus, the son of Roy Titus. The court conviction has not stopped the Minuteman misconduct towards its franchisees and prospective franchisees. It continues relentlessly.