Owners Meeting

Had a good call with Mr Gong Xian today to discuss the status of the project. Amanda took all the notes and will upload them. The summary of the call is that we are going to work with the legal team to try and get out of the Fantastic Sams project. We are working on a new plan with Matirx/ Loreal and should be able to present something to Gong via email in the next 2 weeks. We have a management meeting with the new management consulting company tentatively for 5/18/16 Wednesday morning at 9am EST. Gong Wants and invite to the meeting. We also set up monthly recurring meetings with Gong to update on status.

Sabrina

Comments (1)

  1. Amanda Ramirez :

    Meeting Notes with Mr Gong Xian on 5/13/16

    Sabrina is giving a Status on the project and challenges we’ve had along the way

    Back in December when were working towards another model, we rolled out that new model and while it improved slightly, it didnt improve at the speed we were hoping for.

    So in the process we have been interviewing salon management experts to help us figure out the best strategy to move forward with the locations and the project. We have faced many challenged with the Fantastic Sams brand, the franchisor has promised support but they have pulled out from that, and they are not doing what they had originally planned, like reduced fees, construction fees, management and training

    So we have been looking for other solutions that we feel would be a better program so we have found a salon management and consulting company and they are willing to take on the project

    Gong asked:
    Are you saying that because the franchisor has stopped supporting, we have to give up my investment?

    It’s not that they completed stopped supporting, it’s that they are not doing the level of support they promised at the beginning

    And just to clarify, we have only paid for the franchise fees, but theres still 440k in his account

    What we would like to do, with his permission, is to move his project to another brand, Loreal. It’s a salon brand, but it’s independent, not a franchise. We would be using their educators, their training and ill explain the benefits in a moment.

    If I agree to the brand, what are the next steps?

    We need to first cancel the franchise Agreement, we are now talking with legal, but they dont feel it’s a material change, so we can move forward with another concept

    We were looking for the right company with the best track record, and they are a large company with many resources, much bigger than Fantastic Sams.

    He doesnt have to do anything, we will be doing everything. We will give him a new plan of how it will work. We will have a financial plan within the next week or two. He looks forward to seeing this plan.

    This company has trainers, educators, an accounting department, we have a lot of resources available, they have Business and salon based training available.

    How do they get paid?

    They get paid off of the products we seel, then a small consulting fee, their incentive is on selling product and that automatically increases revenue

    He looks forward to seeing the financial statement, but he doesnt wanna give too much details right now. Can we now have a regular meeting?

    Gong – We need to have a monthly meeting, and we can set the goals for the next meeting.

    We want to do this because the fees FS charges on a monthly basis put too much strain on the business, but they provide equal or greater value, the fees are not sufficient for the support they are providing and they wont do the things necessary to provide the value necessary to make our investors successful.

    This new program we are going into is a tiered system, so they have many prices available for all kinds of customers and this allows us to increase revenue, and we feel like this group will be a great fit for this project.

    Next steps:
    Continue working with his attorneys to get out of the FS brand
    Get him the new model and financial plan

    He’s willing to accept the new model and in terms of getting out the brand

    He paid 50k for initial investment and this is a loss, can they be reimbursed?
    Are there any risks to changing the brand?

    Yes, there are risks. We could have a non-complete. In their contracts, they state you cannot operate another salon, so this is a legal battle. We have a lot of evidence against them, and we are going to try and work with them on making this happen

    Because we have so much evidence against them, and they were very involved in every decision that we’ve made through the project, so franchising have to report any lawsuits and failure that they have, so we are going to use that as a way to fight for the rights of our investors saying they will have to report these negative losses and this can impact their business moving forward.

    What if they refuse to cooperate?

    We have a legal team, and we are going to fight it. It’s been a hard project for them as well, and they dont wanna go through a lawsuit.

    How long does that take?

    We have a proposal against them, we need FS to release us. Our Attorney is working on it, this should not take very long.

    He hopes to see progress and the outcomes of the legal team in the next meeting.

    We are planning a meeting nexy Wednesday where the management company will be talking about the management if he would like to attend, so he can hear from the management company. They would like to attend. We will send him information on it.

    We will begin talking with attorneys and initiating the process with the new implementation next week, and we will keep him informed.

    He would like to meet us face to face.We could go to the Summit and he can meet the management team, that would be a good thing. If there are any events coming up, please inform him, and again im willing to come to the US and meet you face to face. We would love that.

    Gong – Anything else you would like add about the project?

    Everything we’ve been doing has been for his best interest and the delays on this project is because we wanna be cautious with his investment , we want to protect him.

    Gong – I hope we can communicate with each other and move the project forward

    Action Steps required

    Information about the call next week
    List of events with Summit
    Next call confirmed for June 10 of 2016, at 9:00AM

    FranVest Management Team

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