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| Jerrod Sessler, Candidate R-WA4 (see end note) |
As the late Richard Solomon, a renowned franchise lawyer once wrote, “Year in and year out, people who understand almost nothing about small business investment risk … sign long term draconian franchise agreements, putting everything they have or will have on the line in impossible propositions.” Unfortunately, many of the people who do this are veterans.
One of the candidates running for Congress in Washington’s 4th Congressional District, Jerrod Sessler, is the franchisor for Yellow Van Handyman, a kind of “odd job” home repair service. Like many Franchisors, Sessler targets veterans. He promotes himself as a “decorated Navy veteran” (he served 36 months and won an “Achievement Medal”), advertises on sites like “hirepatriots.com,” and offers a discount to qualifying vets.
Sessler is the CEO of HomeTask, Inc., Headquartered in Burien, WA. Sessler’s 2019 HomeTask Franchise Disclosure Document (FDD) is written to cover both Yellow Van Handyman, and Lawn Army, a yard service franchise. HomeTask’s FDD states in bold type, “…no government agency has verified the information contained in this document.” That’s important, because by no means can you believe everything you read in an FDD.
Sessler’s FDD states that besides Yellow Van Handyman and Lawn Army, “HomeTask does not operate in any other lines of business.” However, Sessler worked at starting up more than a dozen franchises, ranging from poop scooping to tacos, including: Pet Butler, Haco Taco, Freggies, Todoblue, DD Licensing, Blue Crew, Plumbing Doctor, Data Doctor, Hot Feet Fitness, and Jakes Juice Bar. According to the Washington State Secretary of State Corporations website, these entities are either no longer active, or never started. Lawn Army has no active franchisees.
You wouldn’t know that from reading the 2014 article on PRWeb, which says that, “Lawn Army has grown from a simple vision to conducting operations in three territories with thousands of pounds of yard waste being cut, trimmed, and hauled away each month.” Or this piece in “MrFran,” which claims, “Lawn Army opened only a year ago and has recently signed its 100th customer.” These are advertisements written to read like news items. The FTC is warning industry about deceptive advertising. “Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” according to FTC’s Bureau of Consumer Protection.
Yellow Van Handyman is the lone active franchise in HomeTask’s arsenal. Yet, according to a 2013 article in PRWeb, the HomeTask parent company, “now oversees six franchise concepts and over 171 locations across the nation.” Yet Sessler’s 2018 FDD indicates that there are only 14 Yellow Van HandyMan franchises. It’s not clear from the Washington Labor & Industries website, how many of them have active licenses.
Some franchisors have been found to lowball startup costs as a way to entice prospective franchisees. For example, Sessler’s HomeTask FDD lists costs as:
$0 to $2,500 for a van
$0 to $1,000 for a computer, printer, and other office supplies
$500 to $1,000 for insurance
$400 for legal and accounting fees
$0 to $2,000 for supplies, utilities, vehicle maintenance, etc.
Whatever it ends up costing the franchisee to get up and running, they shouldn’t expect any help from HomeTask. Sessler’s FDD clearly states that, “The Franchisor does not finance any part of a prospective franchisee’s initial investment.”
The term of contract agreement for a Yellow Van HandyMan business is 10 years. A franchisee must pay costs and HomeTask fees throughout the term of that period. This includes the provision, as clearly stated in the FDD that, “You must pay us Back Office fees each week even if the franchise business has no revenue.”
A franchisee is forced to continue paying these fees even if the franchise agreement is terminated early. A franchise that borrows heavily to finance startup costs, can’t keep up with payments, and must terminate their contract with HomeTask early, can end up having made a “financially devastating decision”— a decision that will continue to haunt them long past bankruptcy.
According to the HomeTask FDD, franchisees and their immediate family members, “must sign nondisclosure and non-competition agreements acceptable to us [HomeTask].” This would include veterans. NDA’s tend to stifle complaints against misrepresentation.
Veterans are attractive prey for unscrupulous “franchisors,” selling franchise opportunities that are, literally, too good to be true. Franchising involves significant risk, both business and personal. As a veteran myself, I caution any vet; do your due diligence, and get legal help before signing that franchise agreement.
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End Note
Jerrod Sessler attended the January 6th insurrection. Originally, he denied being "at the insurrection," claiming he only watched it from his hotel room. The photo of Sessler and recent tweet by Sessler contradicts this, however.
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1 comment:
Great article
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