HUGE REVENUE LOSS FOR BRICKS & MINIFIGS FRANCHISEES | RECKLESS BEN SAGA

[00:00:00]A topic I wanted to discuss was franchises and the franchise bricks and mini figs.

[00:00:07]So you have all these franchises right now that are caught up in this awful situation. They got into, you know, this business expecting to have a Lego store.

[00:00:21]It being exciting. They're new business owners. Maybe they were former business owners, but they got into it with the expectation it would be great. it would be fun and it's a way for them to put food on the table and more. And unfortunately, these same folks are finding themselves being hated along with the rest of Bricks and Minifigs.

[00:00:44]>> Yeah.

[00:00:45]>> And a lot of comments that I read are people coming down on these little stores. They're shunning the stores. I'm not going to buy from there. I don't want anything to do with them anymore.

[00:00:55]And I'm not saying that you don't have a choice in that. I get that. I do understand that. But my focus on this particular topic is I don't think we should be hating these small businesses.

[00:01:08]They can't easily get out of it. In fact, I went in and I found a couple of like ways in which to get out and they're not easy. Like these are not easy ways to get out of this. So there is sell or trans transfer the franchise, right? So you just get out of it. You sell it off and you're done with it.

[00:01:27]somebody else buys it. That's exactly what happened with Crystal in the story of the Bricks and Minifigs and Reckless Ben. Crystal ends up well, they kind of came and just took it over because she was moving overseas. So, we know of an instance like that. Negotiate a mutual termination. So, that is you talking to the franchise and saying, "I want out. I want to terminate it. Can we terminate our agreement early?" Because typically when you are a l one of these deals, it's a long-term deal. You're talking 5 to 10 year deals.

[00:02:01]>> Yeah. So, I was able to watch a video today. I found a really good video and this is on the YouTube channel Lus.

[00:02:13]And the gentleman who runs it, his name is Tony and he owns a copyright law firm.

[00:02:20]and he had a lot of really really really great information and I feel like a lot of what he said is sort of mirroring what you found. So I'm glad that we have like different sources for this. This is really great. But one thing that he had mentioned about that is a lot of times the term isn't going to be the same across the board for these franchise owners because it has to do with rent and things like that like the the lease which is which was really interesting to me. So it can vary.

[00:02:56]>> That makes sense. Yeah. I'm I'm sure all of these situations vary.

[00:03:00]>> Yeah.

[00:03:00]>> So there are two more.

[00:03:02]>> Okay.

[00:03:02]>> Sell back to corporate.

[00:03:04]>> Yes. And lastly, exit via breach of contract, which basically means that you're ending the contract before the term is over and you're just like, I'm done.

[00:03:17]>> And that is where legal things start to factor in and it gets really it could get really ugly if you do something like that.

[00:03:25]>> Is that where the arbitration would happen?

[00:03:29]>> I'm not a law guy.

[00:03:30]>> I'm I'm I'm with you on that. Nor am I.

[00:03:32]It reads, "If the lency believes the franchiser failed to uphold their end of the franchise disclosure document FDD or contract, such as failing to provide promise, marketing support, territorial protection, or training, they can attempt to terminate for cause."

[00:03:52]>> Okay, interesting.

[00:03:54]>> And so it has a catch. A catch.

[00:03:56]>> Okay, >> this almost always triggers an expensive legal battle.

[00:04:01]Franchisers have deep pockets and legal teams ready to counter sue for liquidated damages or to enforce strict non-compete clauses that prevents the LE from opening an independent toy or Lego re resale shop for several years.

[00:04:20]>> Yeah, I would imagine that would be in like a certain like mile radius or something.

[00:04:25]>> Basically, it just shuts these guys down.

[00:04:27]>> Jeez. Yeah, that that's a nightmare. The word arbitration came up a lot and I was like, "Okay, I get the gist of what it could possibly be based off of the context, but I did have to look it up."

[00:04:40]So, arbitration is an alternative dispute resolution method where disputing parties present their arguments to an impartial third party who is called an arbitrator or I guess like an alternative term might be like a mediator.

[00:04:55]>> Okay.

[00:04:56]>> Uh that's not official. That's sort of just where like where my mind goes.

[00:05:02]>> Okay.

[00:05:02]>> When hearing that definition instead of going to court, the arbitrator reviews the facts and makes a fine final legally binding decision which completely resolves the conflict.

[00:05:14]>> Oh, interesting.

[00:05:15]>> So, it's similar to a trial, but it's less formal. There's no jury, and the hearings are held privately.

[00:05:24]>> Interesting. The reason that people use arbitration versus a trial is because it's faster, cheaper, and less complex than traditional litigation because >> so it's like fasttracking it. Is that basically what that is? Okay.

[00:05:38]>> So the arbitrator is usually an expert in the field of dispute. So like with the bricks and mini figs franchise, I would assume that they would be an expert in like franchise disputes. I'll just call it that. But I I don't know if that's like an actual term or not.

[00:05:56]>> Understood.

[00:05:56]>> Um but the outcome can be much more precise than relying on a randomly assigned court judge or jury.

[00:06:03]>> Yeah, I've heard of arbitration before, but I not I I guess you're like you. I don't have like a deep understanding of it, but that that makes sense what you're saying.

[00:06:14]>> Context clues is how a lot of things work with us, right? Pretty much like as people, you might not fully understand it, but you sort of like have an idea.

[00:06:22]based off of whatever it is you're listening to or reading to or watching or whatever. Reading to what am I saying? Reading or watching.

[00:06:31]>> Right. Right.

[00:06:32]>> Um so L US had some very good information. So first of all he mentioned that he spoke with two franchise owners and their sales like just the sales in the store are down between 25 and 35% of what they would be. And this is ju just after the bricks and mini figs Ben stuff has come out.

[00:06:59]>> That's significant.

[00:07:00]>> It is significant. And I was watching some other video. I don't believe it was this one, but the person basically said, like you had mentioned, if the franchiseor doesn't hold up their end of the bargain, like marketing and things like that, then the franchisee can basically go after them. Well, one thing that they're doing is they're sort of shining a negative light on Bricks and Minigs, whether they're trying to or not, >> but that could potentially be a reason for someone to try to get out of it. And >> L US was basically giving advice to Bricks and Minifigs owners saying you need to document everything like what's happening, your sales, how you're responded to if you bring up your concerns. If you complain now, you might potentially be able to get out of a contract like your your franchise contract. write a complaint and hire a lawyer and try to get a release from that contract. Lus also had a copy of their franchise disclosure agreement which is he refers to as an FDD and it was 393 pages and he brought up a very good point. He said, "How many people do you think have actually read all 393 pages?" And if they did read it, how much did they understand? But in a situation where you're spending as much money as these franchise owners do to like just start this Bricks and Mini Figs franchise, they have enough money to hire a lawyer. Like there are requirements. They have to have a certain net worth. They have a they have to have a certain amount of money in liquid assets. they they have to be a fairly wealthy person with like a decent amount that they can spend to open this business. Right. Right.

[00:09:11]>> So, in that case, if I am putting that much of my money up, like I'm talking hundreds of thousands of dollars, >> I'm hiring a lawyer to look this over.

[00:09:21]I'm not going to I'm not going to go in blindly.

[00:09:24]>> I use Google Gemini lately and it'll actually give you the data and it tells you where it's coming from.

[00:09:28]>> Yeah. So you can sort of click on it and read and just make sure like, hey, this is this is not a um, hey, go use AI. I'm not saying that or or I'm buy into AI.

[00:09:39]I'm just saying that it does help in scenarios like that. That's I guess what I'm saying is if I was in this conundrum, if I had this problem, I think that's the first thing I would do if they had a PDF is push it through AI and say, "Hey, hey AI, can you tell me what's going on here?" Because as an average person and maybe you don't have access to a lawyer, you know, owning a small business is very expensive. So, you know, you have this small business, you're trying to get it up and running.

[00:10:04]They always say, what is the thing or what is the term um uh the saying? It's almost like you need like be five years in business before you start actually making money. Something like that.

[00:10:14]>> Yeah. I think it's normally like three to five years.

[00:10:16]>> Exactly. So, you know, you're you're struggling. And so now Brexit Minifigs has put a lot of people in danger. They put their business in danger, their what they considered their livelihood in danger. I'm watching a lot of these pages and it's really it's really messed up. But these pages are posting like, "Hey, come on down to our store. We're doing a special, you know, Lego build or something like that." And all these people are angry emojiing it and and really coming down on them. And those folks are pissed off at Bricks and Minigs. Understood. But a lot of these guys don't have a choice. They don't have a choice in the matter. I mean, it would cost them a lot of money to get out of it or if they want to move on somewhere else. Like, you got to think about all of the steps it's going to take for that to happen. I mean, it has to be overwhelming for them and they're just trying to do the best they can with what they've got.

[00:11:07]>> Yeah.

[00:11:07]>> And so, based on this video from this uh YouTuber, it's a law lawyer YouTuber, right?

[00:11:13]>> Yeah. So, >> so based on what he's saying, sorry, I don't mean to interrupt, but based off what he's saying, 25 to 30%.

[00:11:21]>> 25 drop.

[00:11:23]>> Well, that's crazy.

[00:11:24]>> So, that doesn't even include the extras that Bricks and Minigs does, like birthday parties for example, or like camps for kids. It doesn't include any of that. So, I wonder if any of that's down or if they're like he basically said it's just they're just going off the sales. I did come across uh Bricks and Minigs. They tell you a bit on their franchise website what it what the expectations are and they have an FAQ and it was very interesting.

[00:12:02]So, they're not showing the FDD, the franchise document, but they are telling you some like general rules, which is very interesting. One of the frequently asked questions, so they say, I don't you have to be filthy rich to be able to afford this. So, I'll get into that in a moment. Okay.

[00:12:24]>> But one of the questions is, can I purchase more than one franchise at a time?

[00:12:28]>> Wow. Um I can't even fathom having the money to purchase one of them with the amount that they like just to start up, >> right?

[00:12:35]>> Um and what did you say that cost?

[00:12:38]>> I didn't say it. You didn't say. Okay.

[00:12:39]Okay. Gotcha. Gotcha.

[00:12:41]>> So you absolutely can is what they say.

[00:12:44]They offer an additional they offer additional franchises for a reduced fee of $25,000 per franchise. So I think they're they're giving you $25,000 off.

[00:12:58]I don't think that you're purchasing it for $25,000.

[00:13:02]Then it says, "How do I know what to buy for my store? Don't worry, we got your back. We will supply you with a complete list of approved product, furnitureures, fixtures, signage, and technology you'll need for your store."

[00:13:15]Um, >> so they're covering them for a lot of various things.

[00:13:19]>> Yeah, >> it sounds like like kind of getting you started up.

[00:13:21]>> Yeah.

[00:13:22]>> Cutting money down.

[00:13:24]Well, >> you know, >> I mean, because in the end it makes them money.

[00:13:28]>> It does.

[00:13:28]>> So, they're trying to make they're I guess they're setting themselves up for >> to win.

[00:13:33]>> In the grand scheme of things, a $25,000 discount is nothing in this instance.

[00:13:40]Like, to me, that's significant. Now, we all come from different income brackets and everything.

[00:13:47]>> So, I'm not I'm just I'm just talking as me.

[00:13:51]>> I got it, >> right? So, listen to this. What is the total estimated initial investment for a Bricks and Minigs franchise? Now, keep in mind this is on Bricks and Minigs franchise side of their website, okay?

[00:14:03]Okay, this is coming directly from them.

[00:14:05]The total investment to open a Bricks and Miniigs franchise ranges from $33,500 >> to $597,500.

[00:14:16]And this includes a $40,000 franchise fee. Oh, so maybe it is a $25,000 franchise fee. You're basically saving $15,000.

[00:14:27]>> Maybe. Yeah, >> maybe. That's what it sounds like.

[00:14:29]>> Regardless, if you save $15,000 or $25,000, that is nothing compared to even the lower end of it, which is 3003.

[00:14:37]>> It's something. I mean, you know, >> that's money that you're not spending.

[00:14:41]>> Yeah. This includes a $40,000 franchise fee, which covers a protected territory, training programs, a website, and an operations manual. Additional costs include a point of sales system, fixtures and equipment, real estate and improvements, starting inventory and signage and marketing. What are the financial requirements to become a franchisee?

[00:15:03]Prospective franchises must ha must have a net worth of at least $175,000 and $75,000 in liquid capital. While Bricks and Minifigs does not offer direct financing, they are on the SBA approved lending list and can provide some guidance for financing assistance.

[00:15:22]Another thing is you don't need any prior experience with LEGO or retail.

[00:15:29]The franchise provides a thorough training program, including a six-day training program and 3 days of on-site training to prepare new franchises for success. What's interesting about all of this, and the reason that I bring all of this up is these people are spending so much money to get into this and for Bricks and Minigs to make these you you trust when you're opening this franchise, you're like so stoked. You have this new business, right? You're so stoked about it. You're trusting that Bricks and Minigs is going to set you up for success. All of that sounded very promising. Yeah, I agree.

[00:16:09]>> But for them to go and make these weird decisions to go rogue, to threaten people, Kai McAllister, who is a a big head of the company, was basically >> physically or you just saying he Are you saying he has a big head or he has he's >> I've never seen him, but Oh, okay.

[00:16:30]>> I mean, maybe. I don't know.

[00:16:32]>> You're just saying he has a big head?

[00:16:34]No, he's a big He's a big He he's big in the company. He's at the head like the top of the company.

[00:16:40]>> He's a big He's the He's a large head at the top. Okay, I got it.

[00:16:44]>> He's got he's got a big round head.

[00:16:45]>> There is so many meanings to say a big head. But now I get where you're going.

[00:16:48]>> He was essentially like threatening people like, "Hey, if you try to fight this, you're going after this big corporation.

[00:16:59]We will win. You will lose. [ __ ] you."

[00:17:02]He's making all these decisions. Josh is making these decisions. Hey, we'll give you the Lego sets back if you do XYZ.

[00:17:09]What Lego sets? We never heard of Lego sets. What are you talking about? We didn't seal Lego sets. You stole Lego sets. But the last phone call we had, the Lego sets didn't exist. So, how did you steal Lego sets that didn't exist?

[00:17:24]It's it's just so much contradictory coming from these high ups making them look so bad and it's reflecting on these poor franchises, >> right? And that's the problem is that the, you know, these franchises are now stuck holding the bag. Yeah.

[00:17:40]>> And so what do they do now? I mean, we just read off all the ways to get out of it, but I mean, it's not easy. None of the ways that we read are easy >> unless they are coming up to the end of their term, right?

[00:17:52]>> They wait it out. They just take the money and they they run once the contract is up. They can open a new store. They can they can change the name supposedly according to L US. They can in this situation they can basically operate a same type of business. Now, I don't know if there would be like a non-compete clause within the contracts, but according to Lus, he believes that they can open a new store under a different name, get rid of all the bricks and minifig stuff, get rid of the logos, the marketing, the signage, whatever, and now they're free of the contract, they can do their own thing. But the other options are incredibly difficult. They'd probably leave you a ton in debt. It's absolutely insane. It is. So, L US was explaining that if you found a third party buyer to take over the store, which is one of the things that I mentioned found, it must be approved by Bricks and Minifigs. And they can deny that transition for whatever reason they want.

[00:19:01]>> They can basically say, "Oh, you seem shady. I don't want to I don't I don't want you to own a bricks and mini figs."

[00:19:07]And then boom, done. Sorry. You can't sell it. Right?

[00:19:11]>> There is a transfer fee. So, either you, the franchisee or the buyer, or both of you come to an agreement, one of you has to pay $30,000 as a transfer fee.

[00:19:24]Additionally, if the buyer is from Bricks and Minigs, for example, Josh or Brandon, apparently there's another fee because they're almost like a fixer. So they would like you'd pay for sort of like their services of like taking it over. I don't even know what that's about. If someone knows, please mention that in the comment section down below. There is a another fee which is a $10,000 training fee for the buyer. So the new buyer comes in, they pay this $30,000 or somebody pays it, then there's $10,000 to train them.

[00:20:00]>> Cost is astronomical.

[00:20:03]>> Yeah. And these guys right now are are trying to figure out what the hell they're going to do. And I'm going to assume that a lot of them are like kind of in the middle or the beginning of their deal.

[00:20:13]>> Yeah.

[00:20:13]>> And if they are and they're not at the end of the term, they're not lucky enough to be at the end of their term, they're stuck in this and >> they expect that the franchise or bricks and mini figs would handle the situation the right way and boost their business.

[00:20:28]Instead, they're driving them all right into the ground. They're losing revenue.

[00:20:32]They're not looking good. People are hating on him because right now everybody is on the side side of reckless Ben and team and and we're all for for him and to see him and and Brian win this thing.

[00:20:46]>> And unfortunately, these little franchises are caught in the middle of all this. And what I really hate is that people are coming down on them as hard as they are. You don't have to buy from them. That's fine. But to go on their posts of a little store located out in bum [ __ ] wherever and say, "Oh, you steal from old people." I read that and I'm thinking, "You guys just don't even understand what the [ __ ] is going on.

[00:21:10]You sound like idiots. You're attacking this little store that has nothing to do with it. I mean, they really have no They're not involved at all. The only way they're involved is that they bought into a franchise that they thought was going to be good for them only to find out that the franchise does not know what the hell they're doing. ran all the little franchises right into the ground.

[00:21:29]All these mom and pop shops are hurting.

[00:21:31]>> They had no idea this was going to happen and now it's happened.

[00:21:35]>> Yeah.

[00:21:35]>> And what do they do? Now they're just they're just stuck.

[00:21:38]>> They they in probably in debt. They can't make the money that >> they, you know, need to make in order to to survive. I mean, 25 to 35% revenue loss is huge.

[00:21:51]>> It's insane.

[00:21:52]>> It's huge. And and it's hurting them. I don't know. I just feel awful for them.

[00:21:56]I'm human and I feel I have feelings for people that are being that are that are like caught in the middle and sort of they're being mistreated by the b the the powers that be.

[00:22:07]>> And if the powers that be would have just straightened this out right away, we wouldn't be here even talking about this. But think about the amount of stores that are being affected by this.

[00:22:15]And I see posts because we're making all this content all the time and we're constantly posting about it, posting our links in our, you know, Gascast we hunt together group on Facebook. things from Bricks and Minifigs pop up from all over the place and there's one I believe in Virginia because that popped up and I saw all these angry comments on it. Some of them people were fine and there isn't much going on. I do see some angry emojis but overall it's not bad but this has become a widespread story now.

[00:22:41]They're getting beat up. All these little franchises are getting beat up.

[00:22:44]>> It's a really sad situation.

[00:22:46]>> It is.

[00:22:46]>> And I hope that this all comes to an end soon. And I hope also that the franchises can somehow throughout all of the legalities that happened with this like somehow these franchises can take maybe they could band together and take bricks and minifigs to court >> that was sort of an option >> and shut this whole thing down and say we want out and we all want out whatever stores want out. I'm going to assume most or all of them and say let's get out of this altogether.

[00:23:12]>> You know it's like a humongous I don't know. Is that a lawsuit? I don't know what that would be.

[00:23:16]>> I would imagine so.

[00:23:17]>> Yeah.

[00:23:18]So basically they could go after them if Bricks and Minigs is not fulfilling their promises that are outlined in that contract. And yeah, I mean it seems like they're not right now. I mean some of it.

[00:23:34]>> So I guess my take the takeaways from this don't go and beat up the little franchisee. I I don't think you should.

[00:23:41]I've got we've gotten even a lot of comments on our >> YouTube channel here. um people coming down on them and they're like, "Oh, why are you taking up for them? It's bricks and minifigs." I'm like, "Oh my god, they're two separate things." Please, what are you saying? What are you thinking? You don't understand.

[00:23:56]>> They're the same, but they're they're separate in a way that because these one guys did something bad doesn't mean all of them do something bad. Right. That's like if you find out that the CEO of your favorite fast food chain murdered somebody.

[00:24:16]>> All fast food chain CEOs commit murder now.

[00:24:20]>> Well, no. Don't go to your favorite fast food chain because their CEO kills somebody. You never know the all the fast food chains might have a killer inside. Yeah.

[00:24:28]>> You know, I know that's ridiculous, >> you know, uh to say all of that, but I that's how I view it. That's how I view this thing. But this is all messed up. I I I hate this part of it.

[00:24:39]>> Same. I I I feel like though when you come up with these ridiculous analogies, I feel like it just sort of helps you to describe how you're feeling. So, I don't see anything wrong with that.

[00:24:51]>> 100% agree. 100% agree. Um, before we close this video out, we do want to thank everybody who went to mischief Toytoys.com today, purchased their Coven of uh Mischief membership and also for those who got into the Coven of Mischief, which is our secret program within Mischief Toys, our independent toy company, they were able to buy all sorts of special things that no one else can buy publicly. We had pin sets. We have pre-orders on shirts. We actually had a a lanyard that came or was also sold with another pin that we have, a golden black pin. So, all sorts of cool stuff happening on uh mischief toys.com today. And we're so thankful. We actually unveiled our golden gargoyle, which is the one only one of its kind at this very moment. There will be an overall number of 28 of them. And this one is going to be given away uh randomly to somebody who spends over $50 as a coven member on mischieftoys.com.

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[00:28:15]>> Bye.

[00:28:19]Oh, yeah.