Jim Kane, a California master, closed up shop in January 1983 and took an out-of-pocket loss of $368,000. "Pop-Ins had gone from incompetent to negligent to fraudulent," Kane says. "I was afraid that by associating with these people I'd end up in jail."
Kane had two concerns. As a master, he thought he might be responsible for the price and quality of products like Carpet Cleaning Compound. He was concerned, as well, about the case of James Wong, who had put down a $2,000 check to reserve a franchise when Brothers was in California in July 1982. The check had been cashed, but over the next six months Wong hadn't heard another word from Pop-Ins. Headquarters told Kane "not to worry."
Kane, however, was plenty worried. Brothers had promised him that she would open a regional office to help him develop his master franchise, and launch a massive media blitz. She even bought a condominium in nearby Cypress, Calif., so she'd be more available. But the regional office closed five months after it opened, and the media blitz fizzled. The condo stayed empty. Exasperated, Kane closed the business and filed suit against Pop-Ins in U.S. District Court in Cincinnati.
For Lynn Karp the final straw would come a month later, in February, at a meeting of franchisees at which Brothers announced that Amway Corp. would join Century on the list of approved product suppliers, making Pop-Ins a master distributor in the Amway system. It was a way they could all make money together, Brothers explained.
"I went berserk," Karp remembers. "I bought this franchise because you told us it was 'the Cadillac of the industry," she remembers shouting at Brothers. "I don't want the company I've built to be associated with something as tacky as Amway."
Running a Pop-Ins franchise had changed the professor's wife -- she was now a business owner challenged by selling and managing. Week after week she had topped the Pop-Ins sales list, not by strictly following company procedures but by adding her own innovations. Now she thought of the Cincinnati franchise as her creation -- and she was determined not to let it be diminished by any of Brothers's more desperate initiatives. The day after the announcement, she called her lawyer and told him to sue. Eight months later, Karp closed her Pop-Ins and reopened it under a new name, Mopettes.
The effect in Columbiana was disastrous. Karp had been Pop-Ins' biggest royalty producer, and Kane had represented her hope for future growth. Brothers's worst nightmare was coming true. But this time it wasn't just 2 franchisees suing, asking for their money back. By May 1983, there were 19 different franchisees, including her 12 biggest revenue earners, all of them accusing her of fraud.
"MR. T"
LOOKING BACK AT THE FRANCHISE REVOLT, CAROL Brothers sees herself more sinned against than sinning. Like many start-up franchisors, she'd had too many fires to put out, and too much to learn. There was never the time or money to give her franchisees everything they thought they deserved. She's done her best, "but with franchisees, no matter what you do, it isn't right," she explains. Now, by scheming to avoid paying royalties, they were trying to destroy her company and walk away with her idea.
But Brothers also blamed herself for the lawsuits. She was convinced it all went back to the first time she'd been sued. She'd looked like a pushover then. This time she swore she would send a tougher message.
Jim Kane got his message driving to work, when he noticed a blue car in the rearview mirror, following him. Kane tried speeding up, slowing down, then changing freeways. But the driver, a large man with blond hair, stayed right on his tail. When Kane pulled into his office parking lot, the blue car was out of sight, but when he looked out the window from his office, he saw it again, cruising slowly up and down the street.
Kane recognized the car as belonging to Pop-Ins and reported the incident to a friend in a nearby police station. He also phoned the attorney in Ohio who was handling his suit against Pop-Ins, and the attorney brought it to the attention of the FBI. "I'm convinced we're dealing with evil and dangerous people," is how the attorney assessed the situation.
Lynn Karp found the tires slashed on her company cars when she came to open Mopettes one July morning. Her office had been broken into, but nothing of value was stolen except for some files and customers' keys. A police investigation came up empty-handed. Three weeks later, however, a man called the office, announcing himself as "Mr. T." According to Karp, Mr. T said he had been hired by Carol to rough her up, but he was willing to switch allegiances, exchanging information for a fee. Mr. T proposed a meeting at a location of her choice, even recommending that she bring along a police officer if that would make her more comfortable. They agreed to meet at the Dayton (Ohio) Mall. A few days before the scheduled meeting, Karp says she got an envelope in the Mopettes morning mail with pictures of herself wearing different outfits over different days at different places -- a demonstration, she presumed, of how easy she was to follow.
