After more than 20 years as a San Jose postal employee, Phan Ha caught the entrepreneurial bug when she saw an ad in a local Vietnamese magazine seeking franchisees for new Juice Zone stores.
She took $200,000 in equity out of her home and joined her brother and sister in investing $280,000 with two Sacramento men who held the “master franchise” rights in California for the Canadian smoothie company.
But now the Has, along with other investors spread across the state, face economic devastation after the Sacramento company and its two owners filed for Chapter 7 bankruptcy in September. The company reported virtually no assets and debts of more than $3.6 million, at least half of which is owed to would-be franchisees. Under Chapter 7, the company would be liquidated, as would the debts of the owners.
“I feel like I cannot believe anybody anymore,” Phan Ha said. “I didn’t think in the United States they’d have these kind of people.”
The Ha family leased a 1,648-square-foot space on the ground floor of San Jose’s Fourth Street Garage. It’s a busy spot next to the new City Hall, which has brought about 2,000 workers to downtown.
Attorneys and a bankruptcy trustee are now trying to figure out what Steven Wayne Camp and Eric Vaughn Garrison, co-owners of now-defunct Sacramento Juice Franchising Corp., did with the funds they received to build the family’s store and others.
FranchiseBrief.com on December 17th, 2007 at 5:00 pm
Thats one of the major downsides of franchising. If the franchisor goes down, everyone goes down. And there is not much you can do about it…