Bayshore Theft

Hi Jacky,

My responses are below. I should have spent more time explaining the issues to you. I'm moving so fast to keep it all moving I just wanted to give you and update. I'm extremely active in correcting the issues.

Regarding all these challenges, my opinions are as below:
1) GM. Before my salon opened, you introduced the GM, Regina, to me, and said she was one of the greatest GMs. Also, she has a record of improving a salon's revenue. Now, it is hard to believe how such a dishonest person could operate my salon in good manners and attitudes. In addition, it has been a year since she became the GM of all my salons, but her misrepresentations was caught until now. I would like to have a comprehensive understanding of the next GM who will be in charge of my salons. I hope FranVest will pay more attention when interviewing the GM candidates and all other employees. Meanwhile, I suggest that FranVest establishes a supervision mechanism. Every employee, including the GM, should be supervised.

We did vet Regina. We did a background check on her. She came highly recommended. She worked with our franchisors directly and trained for months with them. She knows the market and the system. She has the experience and skills required to perform the work. We have monitored her work and performance, coached, trained and created corrective actions when standards were not met.

I found she was misrepresenting about where she was and who was doing what marketing activities. Employee issues are complicated. We have to provide proof which was hard to obtain. I collected, performed the performance review and have been dealing with results. Regina will continue to be on the the corrective action for the next 90 days in which time she has the ability to perform at the standards we set out. I created an intensified checklist of her responsibilities to ensure proper reporting during this time and have moved to attend all her managers meetings with her to again ensure proper reporting.

2) Bayshore theft. Although it is not a big loss, I want the employees who stole products to pay for the loss, and I want to know the name. Everything has a result, and she/he should realize that. In addition, I need to see the incident reports and approach to address this issue.

I will have the incident reports loaded in the portal. Sarah was the employee caught.

She was caught on camera.

3) Carolina Beach robbery. First, I need an accurate report of the stolen product value. Second, I want to know how this robbery happened. Please ask for the police help and I need to know who should be responsible for the loss. Third, does the salon has insurance? If so, can we proceed the settlement of claims? In any case, I don't think I will be the person who suffers all the loss.

I requested a copy of the police report multiple times. I should have it today as I talked to the manager as she was at the other location that was robbed. I will submit it to you.

Yes the salon has insurance. We will process the claim to the insurance co.

Honestly, I am a little disappointed over time. Many assignments were not completed.

Which assignments are you referring to?

In the phone conference with you and Maria when the investment was at risk, you proposed a lot of measures to improve my salons. You said cameras would be installed in all three salons so that I would be able to watch the store at any time. In fact, no camera was installed so far.

The camera at Bayshore was installed and it is how we caught Sarah. I can show you a record of the numerous requests I've made to the GM to install the cameras at Surf City and Carolina Beach. I even asked the salon manager if the camera was on location to be installed so I could hire a handyman to install it. I'm doing everything I can to accomplish this task. I will continue to work on its conclusion.

If we did have the camera in the store, it would not be a problem to track the employees stealing products, and the suspect who robbed my store would also be caught. In the phone conference, I proposed that we had a phone meeting at regular intervals.

If you would like to schedule a meeting with me at any time I am available to you. I'm meeting with your team every morning 5-6 times a week currently. It doesn't leave a lot of extra time in the morning because we are focused on working on the turn around.

However, I have requested for the February Financials for a month, and nothing was received until now. Without the balance sheet, I have no idea about the net income trending of all salons, and the phone meetings cannot be scheduled.

All I can do is request it from the Accountant. I've put tremendous pressure on them to deliver it but at the end of the day I have to await their deliver of the items. I am unable to complete the work myself. We have moved to a better more streamlined accounting system. The process of changing all billing, bookkeeping and accounting for 3 locations to a new team with the added complication of poor cooperation from the old team, it takes time. We did what we felt was in your best interest by switching accounting firms. We stand by that decision. The accountant explained to me that it takes time to figure out all the charges, categorizing them and setting them all up properly.

Regarding the loan repayment, Maria said she would create a repayment schedule and send it to me. The fact is, no further news came from Maria. Last month, you mentioned that another investor was interested in buying the Bayshore store, and I requested for a pricing scenario. It has been nearly a month and nothing was received.

I will check with Maria again. However we had to put together an entire marketing packet with a designer and everything. It is not a simple process. We do not have an investor for your store. We are working with a pool of investors and asked if you would be interested in offering your store.

In the past two weeks, all three salons had a downward trending. I reminded you and came up with my wonder. Spring holiday was not a sufficient reason to explain the decreasing revenue in all three salons. Something happened.

This is correct. All the salons across the entire region have performed poorly in the last 3 weeks. It is not isolated to your locations. There has been a lot of things happening in the last 3 weeks that we didn't anticipate and which we have had to accommodate for. I'm personally working with the managers right now directly coaching them on management and professional skills. The GM is out on medical release from her doctor. I have been working through the managers individual issues with each salon and helping them resolve them.

When you and Maria asked for the additional money to invest, my family and I made the decision within days. To be honest, it is so hard to make the decision in the circumstance that we were not in the U.S. and we could not visit the store. I believe that the number of investors who would like to put more money is very rare. The main thing we relied on was trust. We trust you, we trust FranVest, and we trust every employee working in my salons. Please don't let us down.

Jacky, I want nothing more than to honor your trust. We have sacrificed a lot. We value your trust and we are seriously working hard to effect change in your salons.

It is a long email and thank you for reading. I understand that you have to deal with a lot of things with my stores and others'. Your hard work is appreciated, and I am looking forward to seeing positive changes. Keep me updated and we will speak soon.


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