Newswatch 16 Investigates: Disenfranchised

SCOTT TOWNSHIP -- People looking to open a franchise restaurant hope to take in big profits and never have to report to a boss again. But one man from Columbia County who bought a bagel franchise claims he was ripped off and lost most of his life savings.

John Willis of Bloomsburg is a safety consultant who commutes three hours a day to and from Harrisburg. He wanted to spend more time with his son, so he looked into opening a franchise restaurant, and that, he says, is where his troubles started.

Franchise restaurants can be the ticket to the American dream. Many take in more than $1 million per year.

Willis was on track to open one in August at a shopping center on Route 11 near Bloomsburg.

Willis' dream started on craigslist.com. He found an ad for New York Bagel Café and Deli. The ad promised the company would get him 100 percent financing for the money needed to get started.

Willis put down a $24,000 deposit.

"Sounded like a real good deal."

But about that 100 percent financing, the owner of New York Bagel put Willis in touch with a lender who got a zero percent loan through credit cards

But the zero interest was good for just one year. After that, it went up to as much as 23 percent.

Willis immediately pulled the plug on the deal but says New York Bagel would not give back his $24,0000 deposit.

Our investigation of New York Bagel Café and Deli started with its web page which claims it has 18 franchises. We called the numbers; some are disconnected, and we could only determine six are open.

One New York Bagel listed in Florida closed last year, another listed as open in California closed in 2013.

Amber Robinson lives near San Francisco, and can't believe New York Bagel is still advertising her place as open.

"It closed six months, to the day, six months after it opened," said Robinson.

Robinson is a veteran of the Iraq War. She says the owner of New York Bagel told her they were looking for people just like her. But when she opened, she found that the bagels from suppliers were far more expensive than the owner quoted. So was the cost of equipping the restaurant.

"80 percent of it was the bull that they fed me, and said that they would fix and said that they would do, and so the places that I was lacking, they promised they would fill and they didn't," Robinson said.

As a result, Robinson says she lost $130,000 and is still paying off loans.

Our investigation also found New York Bagel Café and Deli is banned from doing business in Maryland and faces sanctions in Virginia for violating these states' franchising laws.

"It's ruining a lot of lives, including my own. It's losing a lot of dreams," said Willis. "I lost $24,000 and a dream. I'm never going to recoup that money to the point where I can start this business again."

New York Bagel is still advertising throughout our area on craigslist.com.

In an email, the company's owner claimed John Willis was given the financing he was promised.

We contacted other owners of New York Bagel franchises that are still open. One says the franchise is a solid business and he recently celebrated his restaurant's first anniversary.

But another told us the company never followed through with the promised advice and financing and says her business is struggling.

5 comments

  • Unhappy Franchisee (@UnhappyZ)

    For all you shaming the victim, don’t be so naive to think you can’t get scammed. The NY Bagel Scam is run by professionals who have cost dozens of families millions of dollars. We’ve documented and submitted complaints to the AG, FTC and FBI for 2 years and documented all at Unhappy Franchisee dot com. What should get you outraged is that law enforcement hasn’t stepped up and stopped these scammers.

  • Danny

    Well if you listen to the story, he was approved for his financing but didn’t take it! So he killed his own dream in my opinion! Some people are not meant to be in business

  • Sam

    Sucker born every minute,
    $24,000 investment to make $100,00 a year.
    It’s just not that easy to start a business with an amount that is equal to the purchase price of a car.

  • Meh

    stupid is as stupid does… how hard would it be to do some googling and actually research this business before spending 24k on it? a fool and his money are soon parted?????

Comments are closed.