Cornish Oggy Oggy... Our Story

       Under New Management!  
          see the Nov 2008 update

Thankfully there has been a change of Directorship
at the company.  What follows is an account of our
experience with the previous management of the

Cornish Oggy Oggy Pasty Company

I was working for an exploration company as an Electronics Technician, drilling for oil off the coast of Tierra del Fuego, Argentina.  This was at the back end of 2004.  If I stayed there in the freezing cold, I was due to work Christmas and New Year.  I had thought about choosing a franchised business for a while and this seemed like a good time to go for it.  I went to the October Birmingham Franchise Exhibition with my wife Jill, and decided that before I left there, I would have chosen a franchise.  This was primarily to be my new job, but if it was something that Jill liked also, well, we could do it together.  I was tired of working away from home and wanted to spend more time with my family.

We decided that we would consider everything, even businesses that we had no knowledge of.  After all, the whole point of a franchise is that they help you with the startup and give all the support you need to keep going and eventually to thrive.  According to franchising sources, 93% of franchises are still successful after five years.  It was for this reason that we went for a franchise.  It seemed like a 93% chance of success.  We were used to hard work and long hours, but we had no "proven formula", which is the key to a successful business.  We looked at posts that pop up out of your driveway to stop car theft, granite worktops, chocolate fountains and all kinds of businesses.  At the time when we were looking for somewhere to get lunch, we discovered The Cornish Oggy Oggy Pasty Company stand.  The pasties smelled really good and the free samples were tasty.  They say you should never go shopping when you are hungry and they, whoever they are, were right. 

We approached a representative from one of the major banks to see if borrowing against our house would be a viable way to gain the £70,000 we would need.  He said that based on the value of our house, there should be no problem.  At the time, we had no mortgage or loans and had £15,000 in the bank.  The example profit & loss forecast that Oggy supplied showed three sets of figures.  The lowest was £4,500 weekly NET sales, £5,500 and £6,500 for the highest.  It looked like these figures would be the projected least, average and top NET figures we could expect.  The operating profits were £51,000, £65,040 and £80,630 respectively.  I was making over £50,000 in my job at that time, and these projections looked promising. 

After asking lots of questions, we were told that the franchisees who got in at the start were well on the way to owning two, then three or more shops. There was a lot of hype, but it seemed that within two years and some hard work, we could open three shops in our given area, with managers in each one.  At 47 years old and retirement now firmly on the horizon, this seemed like a good way to provide a pension.  After operating the three or more shops for ten years, they could be sold off for a good profit, or maintained as an income.  This was going to be the new pizza.  Good, hand made pasties, with flavours for every palate.  "Food on the go."

In fact the video CD we received summed it up. "Hello, I’m Paul Clark.  I joined the business to help develop the franchise side of the company.  I’ve previously worked with large restaurants and food service companies.  The thing that attracted me to getting involved with the Oggy, is firstly, from the franchisee’s perspective, this represents a fantastic opportunity to get into a business with a low investment: a simple operation.  The business is very easily operated.  All the pasties are produced down in Cornwall, and then brought up to the shops and baked on site.  The quality of product is also a key area, which is important to our franchisees.  And finally, this business gives excellent returns to the franchisees.

As I say, low investment, good profitability, and everyone seems to do very well out of running this business.

Pasties have recently hit the headlines as the new fast food phenomenon.  And I think the interesting thing about the pasty market, is it’s really capturing the public’s imagination, with a hot, hand held snack.  I’ve, as I say, been involved in a number of different restaurant concepts, and what we’re now seeing is a lot of people quite prepared to walk in the high street with a hot product, or simply sit down, have a snack at lunchtime.  And with the number of people now visiting Cornwall, the Cornish pasty is really attractive to a very broad audience. 

We’ve developed a full support training package, so the idea is that we’ll actually help you through the whole process, and at the end of this process, we’ll have identified sites with you, we’ll have trained you, and we’ll help you to open your successful business.  Thank you very much, and we look forward to meeting you.”

Brilliant.  I contacted Paul Clark, the Franchise "Director", and told him we were interested. We went to the nearest Oggy Oggy shop thirty miles away in Southport.  The owner there was doing fine and his shop seemed busy enough.  We had a chat with him and there didn't seem to be a down side.  I gave notice to my company and made one more trip to Argentina.  Everyone asked me what I was going to do.  "I'm going to open a fast food franchise," I told them.  I didn't say what it was, because I didn't want the negativity of people saying, "Oh yeah, my mate tried that and it failed in a few months."  I'll soon be my own boss and have three shops doing really well, I thought.

Jill and I met Paul Clark, Brian Stanleick and Nick Ringer, directors of Oggy Oggy at the newly opened West Bromwich shop in December 2004.  Later on, we wondered if they were there to sort out a problem at the shop, since it closed shortly afterwards,  We were told that the owners had financial problems with another shop they had, and that this has led to the pasty shop having to close.  It was "nothing to do with the pasty shop's failure."

The first thing that was needed was a shop.  We wanted a takeaway shop at this stage, as it would be a lot easier than having to have waitress service and all the things that go with having a seating area.  It would be an easily managed operation.  We would receive frozen pasties once a week and bake them on the premises and sell them, well,  like hot cakes. I had plenty of time to go around the towns near my home in Lancashire.  We had been given instructions to find a shop with a particular level of footfall, ie so many people going past per hour.  Ultimately, the choice of premises would be down to Brian Stanleick, a director and founder of Oggy Oggy, and a surveyor from their property agent, Taylor, Son and Creber.  Taylor, Son and Creber would be charging 10% of the first year's rent for their services.  Brian Stanleick was mentioned on the company's literature as saying, "Siting is important and I personally choose the site for the franchisee."  This was reassuring, as obviously their experience would be vital in choosing the correct location.  The three most important aspects of a property are location, location, location.

The surveyor from Taylor, Son and Creber paid a visit on the 6th January 2005 and I showed him the empty properties that I had found.  The only place that was suitable for footfall that day was Preston.  It was a very stormy day; the wind was strong and the rain was horizontal.  Everyone in their right mind was indoors, but the centre of Preston was busy.  The shop that was chosen was an ex sandwich shop from a national chain.  Over the next weeks, Jill and I went to sit on the bench opposite, counting people going past.  We took some video footage and sent the clips to Oggy Oggy's franchise manager in Manchester.  She tellingly left soon after and went to work for Sayers, a rival bakery firm.  The average footfall was above the amount required, so we had a promising site.  Brian Stanleick, Nick Wheeldon from Taylor, Son & Creber and a building surveyor from an associated company paid a visit to the shop shortly afterwards.  The building needed a lot of work and there was a bad leak in the flat roof, but I was told that it wasn't a big problem.  The survey was £700, which I thought a little expensive, especially since we were paying an MRICS surveyor £4,000 to rubber stamp one of the properties I showed him, but I felt under pressure to agree.  

Processes linked with acquiring the shop lease were not going well.  By march 2005, we were no nearer to moving in.  During this time, I had no income and was gradually using up the savings that were to go towards the investment in the business.  I put together a business plan based on Paul Clark's advice and using the projections he gave me.  This had yearly sales of £285,859.  Inputting the £40,000 rent, £17,500 rates and loan repayments into the spreadsheet gave an operating profit of £37,710.  It was not as good as the figures given earlier, but it was still a healthy profit.  I spent many sleepless nights wondering if I had done the right thing.  Calculating how many pasties per hour we would have to sell to break even.  In fact, the spreadsheet given to us was from a non-franchised shop, we discovered later.  Paul Clark also said that because we would be having a larger coffee shop, our takings would be higher than the spreadsheet.  Due to the large rent and the size of the shop, we were forced to go for a takeaway/coffee shop arrangement to maximise returns.  The upstairs of the shop would not be used initially, but if the coffee shop proved popular, we could expand into the unused space.

We went to the Torquay shop in June for training.  We were there for a week and at the end of it, we could do what was necessary to run a coffee shop operation.  I discovered what hard work retailing is, but reconciled it by the thought that it would just be for a few months until the shop would be run by a manager.  We would then move onto the next shop and so on.  Jill gave notice to her civil service employer shortly afterwards.  All the equipment suppliers were on standby.  Although we were paying for the shopfit and some equipment with borrowed money, some items were to be leased, in line with Oggy's practice and through their arranged lease company. This included two ovens, stands and a rack, baking trays, two heated display, one ambient display, tables and chairs for 48 covers and a walk in freezer. We were as ready as we could be.

We had borrowed £60,000 against our house and used up our savings. We eventually acquired the lease on the 29th July 2005.  The shop was to open on the 10th August.

We were using WCL, a shopfitting firm that Oggy Oggy provided.  The shop fit would cost £30,000, but did not include electrics.  This was because their quote for this was almost twice the price we were quoted from another company we chose.  I tried them for a price as I had seen their van round the corner a few times.  They had recently done the electrics for a coffee shop down the road, and seemed professional enough.  It seemed strange that although we were told that the shopfit, equipment leasing and food supplies were cheaper due to Oggy's buying power, their price was higher for electrics; the one thing we had got in a second estimate for.  We were even told by two of the Oggy staff to shop around and not to use the  smallwares supplier they recommended.  Additionally, WCL's plumber told us that it would have been cheaper for us to have called him directly rather than go through the shopfit company.  We later found out that another franchisee had insisted on using a shopfitting company of his own choice as it was much cheaper than using Oggy's.  WCL ceased trading just after completing our shop fit.

The roof was still leaking, despite assurances from the previous tenant to the contrary.  We ended up using a children's paddling pool to collect the water coming through the roof.  It needed emptying every morning.  My sister's boyfriend is a roofer, and he kindly repaired the hole a while later without charge. It also proved crucial that family members had offered to help decorate the areas not covered by the shop fit.  Without their steady work, the back of the ground floor and used part of the upstairs of the premises would have been uninhabitable.  Even so, it would be touch and go whether we made the 10th August deadline or not.  The shopfitters made things as difficult as they could for the electricians, presumably because we used our own.  They refused to sign for any goods arriving, so many supplies were returned.

A while before the shopfit took place, we had advertised with the local job centre for staff.  We interviewed them while the shopfit was in progress. This was the second time we had gone through the interview process; the first batch was in June, and by the time the shop opened, the people we saw were no longer available.  The staff we selected, which basically were all that turned up, were to begin training with Steve Isaacs from Oggy Oggy the day before opening day.

It was four days before opening when I went up some stepladders to paint the back kitchen ceiling.  The ladders were constantly in use by various people and I failed to notice the safety catch was not in place.  Consequently, with a wet floor from a plumbing job in progress, the ladders opened up while I was at the top.  I fell awkwardly onto my left wrist and it immediately looked different.  Jill drove me to the nearest hospital, Preston Royal, and we went to A & E.  After X rays, the prognosis was that my wrist was badly broken and that I should stay there until an operation could take place.  For me, this was impossible, it seemed.  Everything had to be co-ordinated or the opening day would slip.  For Jill, this was a major problem too.  I had all the contact phone numbers and information and they had my mobile number, not hers.  I remember seeing her walk away; me feeling lost.  I was sitting in one of those flimsy outfits with my back uncovered. I had missed tea time and a male nurse was trying to get me a sandwich and a toothbrush for later.  I thought that this must be the lowest point of my life.  I wasn't to know then that we were going to go a lot lower.

The next day, the operation was postponed due to road accidents.  It was difficult to wait around when I knew what Jill must be going through.  On top of that, I wasn't supposed to use my mobile phone while in the ward.  I resorted to sneaking into the toilet a few times to find out what was happening at the shop.  The day after, the operation went ahead, and I was the proud owner of a scaffolding set on my arm.  I wanted to leave that afternoon, but it wasn't possible.  The next day, I decided that I had to go, since it was staff training day. I discharged myself and my son picked me up from hospital.  I later found out that he had come back early from a visit to London to assist Jill when he was told of the situation.

Jill filled me in on what had been happening over the past few days.  The shop looked surprisingly good and apart from a good clean seemed ready to open.  A miracle had occurred while I was away, although I knew that it had taken a lot of people a lot of hard work.  The staff were being shown how to make drinks and present food.  They had been issued with the green shirts and aprons we bought.  The baking trays were all being fired to precondition the silicone coating.  A float was prepared for the till.  Dust was cleaned up and the equipment cleaned to a shine.  Steve Isaacs' presence was a godsend.  The next day, the 10th August, would be the first day of the rest of our lives.  He took one look at my arm and said that I should try and stay out of the way or it would put customers off.  I began to cover it with a tea towel to minimise the shock.  I had a range of my own tea towels, aptly coloured red, which I would use for the next few weeks.

We opened the door at nine o'clock, on schedule.  From then on, this involved leaving the house at 06:45 and driving twenty miles to the shop.  We started the first bake at 07:30, so that at 09:00 we were ready. Initially, we had far too many staff in the shop, but with attrition, experience and a reworked schedule, we were able to get a lower manning level within a few days.  On the first day after opening the door, we stood there wondering why no-one was coming in the shop.  After about an hour, a customer came in and asked for a cooked breakfast.  He had seen the A board display showing a breakfast pasty.  We explained that we didn't cook breakfasts and he began to swear before leaving in a temper.  After this inauspicious start, things began to improve and we made almost £500 net (after VAT deductions) that day.

Over the first week we made £2,700 net.  Steve Isaacs wished us luck and left a few days later.  The end of that week's takings were £3,700 and the week after £3,963.  Our break even point was £4,000, so we could begin to see that all the hard work was paying off.  We were told by Paul Clark that because of the high temperatures that year, people were not eating as many pasties and that we should diversify into baguettes. This would involve a rework to the new shopfit and the purchase of a "grab and go" chiller cabinet and somewhere to keep the fillings.  Since we seemed to be doing OK and we had no spare money for any new equipment, we said that we would concentrate on doing what we had been trained to do instead.  For the same reason, we held off on an ice cream freezer, especially since it was now September and the weather would start to cool.  The thought struck us that pasties were a traditional summer food, so why should the sales go down when it was hot?  But a town centre is not the beach...

The following week our takings fell to £3681.52.  The week after they were £3151.04 and stayed at that level.  During these first weeks, the only contact from Oggy Oggy was in various news flashes that the range of food to be sold could be increased, if desired, to baked potatoes, bacon and sausage rolls, crisps, chocolate and soup.  When I had called Paul Clark to ask how other franchisees were doing, he would always say that at shop A, potatoes were "flying out the door."  Or at shop B, they couldn't keep up with baguette demand.  Our situation would mirror theirs if we just invested some money into new equipment.  I began to call other franchisees to find out how things were going in other parts of the country.  It soon became clear that other franchisees were experiencing difficulties.  When shop A or B were asked about their robust sales, they would laugh at what I repeated.  It was as if a fog was beginning to clear, and the image of something unpleasant was beginning to show itself. 

We were fortunate that our daughter returned from a year in Australia in September and started working in the shop. She immediately became an asset and helped run the business. Before she started, there was no slack in the management structure.  If one of us was ill, it was difficult to run the shop. Hospital appointments were awkward.  Our son also came and helped once a week, working hard with the pasty delivery.  Initially there were three pallets of frozen pasties to put in the freezer.  From then on there were two.  A couple of weeks after the operation, my thumb became painful, then I couldn't move it outwards,only inwards.  One of the tendons had severed and would require another operation sometime. 

Saturdays were very stressful.  That would be the day when the early phone call came to say that one of the staff was ill and couldn't come in.  Saturday was the busiest day and made up a third of the weekly takings.  If the shop was really busy, I'd worry about not having enough staff and enough pasties ready.  If the shop wasn't busy, I'd worry about having staff standing about and too many pasties to get rid of.  We sometimes had to call a relative at short notice to help wash up or wait on tables.  They always gave their time gladly and worked for nothing.  Some of the staff were really good and could assess any situation and act accordingly.  Some were not so good.  One of these didn't turn up one day and didn't call.  When she came in the shop the next day, her excuse was that her brother had been in court the day before.  She had walked past the shop on the way to the court to watch the hearing. She said that she thought we must have seen her and known where she was going, so she didn't need to call.  It must have  been a coincidence that when we later dismissed her for another incident, the till began to balance for the first time.

We had worked hard and followed the plan.  We had researched the footfall and gone along with all that was asked of us. We had learned the trade but found that the trade was now on the move.  Pasties were not the new pizza.  In desperation, these new food lines were being brought in, but it was still a pasty shop with a few other items.  We had been told that although there were Greggs and Hampsons on every street, they were not competition because they had a lower priced structure and we had a higher class product.  People would pay for that difference.  Well, in Preston at least, they want the higher class product at a Greggs price.  People would come in the shop with a Pound in their hands and see what it would buy.  At that time it was really only a sausage roll.  Even the smallest pasty was just over a Pound.  Eat in prices were even higher due to VAT.  The new posters all showed only take away prices, which caused many arguments at the till if customers had eaten in.  We later found out that with a new Oggy shop, the takings for the first few weeks were generally the best, because people would try something new.  After that, the shop was just another food store in an increasingly competitive high street.

Footfall, by itself, does not mean anything apart from whether the street is busy or not.  This is the only thing that we were asked to research in order to find a good location.  Oggy didn't seem to consider any other factors such as whether or not those passers by have money or the desire to buy their product. While Brian Stanleick and Co were visiting, they didn't ask anyone passing by if they would pay £1.65 for the standard pasty.  No-one asked us to conduct any such research.  A pasty shop in Cornwall is bound to do better than a similar shop in the north.  People on holiday in Cornwall want to buy Cornish things and have the spending money to do it.

With many similar franchise businesses, the franchisor takes the risk and takes on the property lease.  With Oggy, you have to take on the lease.  This is a massive undertaking.  In our case, there were three years left on a twenty five year lease.  The landlord wants some kind of commitment from the tenant, so generally there is an undertaking or guarantee to pay a year's rent in the first three years if the business fails.  We had to get a guarantee from the bank to pay £40,000 if we defaulted on paying rent.  Although we paid £880 a year for this priviledge, the bank would pursue us for the money if they ever had to pay up.  We could not just walk away if we didn't like the way things were.  In fact, the landlord would be entitled to the remaining three years of term's rent, if we defaulted.  So, if you don't like the way things are, all you can do is try and sell the shop.  The alternative is to keep going and hope that things improve.  But with a monthy rent of £3,333, £1,450 business rates, £650 loan repayment, £700 equipment lease, let alone the utility and staff costs, we would soon begin to get into difficulties.

For the franchisor, Oggy, our profit or loss made no difference.  They were the suppliers of our main product, so we had to pay whatever they asked.  On top of that, we paid them 5% of our net takings.  The rumour was that they also made a percentage of anything else we bought through their affiliated suppliers.  If we made a loss, they still made a profit.  The initial £7,500 (now £10,000) franchise fee was icing on the cake.

We knew from the beginning that it would be hard work with little reward, but thought that things would gradually improve.  We were paying ourselves just over £2 per hour to cover our basic household costs.  Our staff on minimum wage were more than twice as well off.  Plus, they got days off.  Our evenings were spent washing uniforms and towels, going to the cash and carry, filling in the accounts, preparing wages and tax forms and falling asleep in front of the tv. Initially we had Sundays off, but we were forced to open seven days a week to try and maximise our takings.  We were on a treadmill, running as fast as we could but getting deeper and deeper into a hole.  We couldn't jump off either, without losing the home we lived in. I sent an email to Brian Stanleick, indicating that if a buyer expressed an interest in a shop in Lancashire at the upcoming National Franchise Exhibition in Birmingham, our shop would be available for purchase. He didn't reply.

 In early October, we expressed our dissatisfaction with our low takings and the loss of direction of the business.  The new product range had become compulsory, so we were required to buy new equipment and perform a refit just two months after opening.  We had no money for this, and no faith that the changes would work.  Paul Clark suggested that if we were unhappy, we should meet with the directors of Oggy Oggy.  I agreed to this and would meet Brian Stanleick, Nick Ringer and Paul Clark at one of their seminars in Coventry later that month.  In the meantime, we approached a business agent to discover what our shop was worth on the open market.  Based on the takings, it was conservatively priced at £99,950.  We agreed to market the shop and paid an "advertising fee" up front.  If the shop sold for that price, we would recover our startup costs and have almost enough to pay off the equipment lease.  It gave us hope.

The meeting also gave me some optimism, and I told Jill what had been said.  We would receive some help if we agreed to pay the overdue pasty payments by the end of the year and implement the new range of products in entirety.  The assistance would be in the form an amount of free pasties each month, but would not begin until January.  We would hold the sale of the shop, but could not stop it as that would have incurred a £1,000 charge.  We approached the bank and requested a £10,000 overdraft to keep us going in the meantime. 

We got on with things in a better frame of mind.  However, with the unrealistic targets set over the month and following an unannounced acrimonious visit by Paul Clark, we decided that we had no choice but to get out of the franchise in what ever way possible.  You can put any projections on paper and say how much it will bring in, but if things don't sell you can't make people buy.  His ideas and ours had diverged to such an extent that we could not agree with anything he said.  The "simple operation", "excellent returns to the franchisee", "good profitability" and "successful business" had for us become a complicated loss making business.  We felt we were just part of an experiment to find the right formula for their franchise, and we were paying for the research.  It was clear to us that keeping the business running would just increase our losses.  We informed him and the directors of Oggy Oggy that our business was for sale, but that we would, in the meantime, uphold the Oggy principles and run the shop to the best of our ability.

The shop was for sale and when it sold, our problems would be over.  In the meantime, Christmas was coming and sales improved.  We had implemented most of the new food lines, apart from baguettes.  Later, on examining the take up of these new products, the daily mean sales were as follows:

Baked potatoes - 2.5 per day
Bacon/sausage bap - 3.5 per day
Soup - 7.8 per day

The "additional" sales from the increased range were £85 net per week on average.  However we had to buy an additional £300 table and other items in order to prepare them.  Because of this and since we threw away more of these items than we sold, it is doubtful if we made any profit on the new lines.  Oggy, who didn't supply any of these supplemental products, still took their 5% cut from any sales made.  We had to do all the running around to the cash and carry, butcher or greengrocer, and then pay a fee to sell items to make up for the flagship products that were not selling as well as predicted.

In the last weeks of 2005, takings steadily rose to a maximum of £4,737 one week. Any profit made was channelled into paying back the money owed to Crantock Bakery, the suppliers of the pasties and the owners of Oggy Oggy. According to the latest data available from Companies House, Crantock Bakery own 75% of The Cornish Oggie Oggie Pasty Co (Distribution) Limited. We were always told that the arrangement between Oggy and Crantock was a partnership; we were not informed that Crantock effectively owned Oggy.  This debt had reached £5,200 by November. The shop was really busy at times, and although it was hard work, we managed to get an idea of how the shop should be performing.  We almost paid back the amount we owed the bakery by the end of the year.   However,  when we reopened after the New Year break, the takings dropped to £2,000 per week net.

Crantock bakery's payment terms are 14 days.  Most other suppliers allowed a longer payment period.  In early January, 2006, just a couple of weeks after receiving a bottle of Champagne and a Christmas card signed by "all at Oggy Oggy", franchisees received a letter from Crantock Bakery reinforcing the credit terms.  It stated that anyone outside these terms would be denied supplies.  After this, their franchise would be taken away.  Even though we had, in effect, arranged a partnership with them by becoming franchisees, we had no more favour than any other buyer of their products. In addition, Matthew Hurry, the financial director, phoned the shop and informed us that we must make additional payments of £500 per week until the outstanding amount was paid off.  We said that we would try, but with takings half what was required to break even, it was clear that we had a problem.  We told him about our situation, and since our weekly figures had been sent to the head office since opening day, there could be no misunderstanding about our finances.  On the 12th January,  we  sent an email to  Crantock Bakery outlining our concerns of the strict payment schedule and told them that stopping further deliveries would result in the shop closing down.  No reply was forthcoming.

On the 19th January, some prospective buyers from our agent contacted Paul Clark with plans for expanding the business and opening a bakery upstairs for pies. A week later, they made an offer of £57,000 for the business.  We had recently dropped our asking price to £69,950 due to lack of interest.  The advertised price did not include the equipment lease, which we hoped a buyer would take over.  Their price was to include the equipment  within the lease, so we would have to clear the outstanding  debt  of  £28,000, leaving a balance of around £15,000 after agent and legal costs. Since the overdraft was now approaching its £10,000 limit, we would have little left after clearing it and still be £60,000 in debt.  We had begun to realise that any sale was better than carrying on making a loss, since we could not see  the situation improving  under the current regime. We would be left with a  ten year loan to repay, but at least we would be off the treadmill.

On the 27th January, a letter was circulated to all franchisees to the effect that we needed to order the new signage and materials for the yearly price increase coming in March.  For our shop, this meant a cost to us of £728.62.  We had NI and VAT payments due at that time.  We had made a £500 payment to the bakery and we had nothing left.  Our overdraft was at its limit and we were unable to pay ourselves or our daughter any wages.  We had begun to lay off staff.  I informed Paul Clark that we could not afford to pay for it.  I also said that it was financial suicide to be increasing prices when sales were so low.  He answered that the price of the package would be offset by the supply of some free pasties, so really it was free. I told him that pasties were not selling well, so it would not help us to pay it.  I said that since the new buyers would be gaining the benefit, if any, from the new prices, then they should pay for the package. We would be selling at the old price and absorb the increased cost ourselves until the sale went through.

The new buyers would need to be approved by Paul Clark and the directors.  They were to meet with him on the 17th February and would not meet the directors until March 10th, despite agreeing to buy in January.  It was obvious that any delays in this process would increase our debts very quickly, so for us, time was of the essence.  When I pointed this out to Paul Clark, he said that opening new stores was his priority and that fitting in our sale would be done when he could.  I followed that surely it was more important to shore up the existing network rather than expand when the retail sector was so poor.  In hindsight, this conversation appeared to be the point of no return.

In February, our weekly takings dropped even further to £1,800 net.  On the 6th February, our second set of free pasties did not arrive.  Since we could no longer afford to pay for a delivery, this shipment was crucial.  We were told that a meeting had taken place and that we would no longer be offered a free delivery.  On the 10th February, we received an email saying that we would not receive any further deliveries until the outstanding debt was cleared in full.  We replied that under the circumstances, we had no alternative but to sell what stock we held and then close the shop.  We felt that it was important to let other franchisees be aware of how we were being treated, so we copied them on Oggy's email and our reply.  Communication between franchisees was certainly not encouraged.  We were told that the communication chain was up to the directors and down to the franchisees, not across.

On Valentine's Day, we received a Default Notice from Oggy's solicitors. Under the Consumer Credit Act, this is the first step in the legal process of financial recovery.  The reasons stated were that we had offered our shop for sale before allowing Oggy Oggy to find a buyer, not implementing the new pricing structure and being behind with pasty payments.  The only real issue, and one we couldn't argue, was that we owed them money, but we had none.  We had informed them of our desire to sell in September.  Paul Clark had even agreed to the buyers' plan to take over our shop.  In addition, under the franchise agreement, we were free to sell pasties at a price lower than the guide price, but not higher.  To tell us that we owed them money, Oggy Oggy required their solicitor's letter costing £411.25 to be paid.  This, apparently, was their solution to our financial problems.  We had been screaming that things were not going as they should for months.  The same day, we received a letter from the bank that our overdraft would not be extended as our business credit score was too low. At the end of that day after cleaning up, I remembered the Valentine's Day present I had bought for Jill, but had totally forgotten about it due to the day's activities.  I have to admit that this was when I broke down.  That it had all come to this, on this day of all days.  I have worked offshore for more than twenty years, but this was the scariest thing I had ever been through.

The next day, we appealed to Brian Stanleick on a personal level, believing that perhaps he was unaware of our dire circumstances.  We had tied our lives to his star, and could not believe that he would just watch us suffer so much for having believed in his "odyssey". He replied later that the whole matter could be cleared up "by lunchtime" by paying £500 a week to clear the existing debt.  Where this was to come from, we don't know.  On the 17th we received another letter from the bank that our overdraft had been exceeded. 

We closed the shop on the 18th February, 2006.  We had told the staff that new owners would be taking over soon, which was why we were closing.  But it was clear from the diminishing stock in the freezer that something was wrong.  You should never close a shop if it is being sold as a going concern.  It was a sad day to say goodbye to each member of staff. We were losing some good friends.  Could we have borrowed more money to keep things afloat?  We could probably have borrowed more money against the house, but we couldn't afford the repayments on the existing loan.  In addition, it wasn't a case of weathering the storm for the sunshine to follow.  There was nothing to work towards. 

We went to the Job Centre the following week and signed on. Jill had a temporary job within two weeks.  I underwent another operation to use one of the tendons from my index finger to repair the thumb.  This meant several weeks wearing various splints and visits to three hospitals for follow up and physiotherapy.  We found that although we were in dire straits financially, the act of staying away from the shop, apart from weekly inspections, had a beneficial effect on our well being.  We realised what the constant struggle to spin that treadmill had been doing to us.  We had been mentally and physically exhausted.  If we had been at least breaking even, there would have been a point to it all.  Running a business at a steady or increasing loss is not good for anyone's health.  The stress made us snappy and we had argued daily.  It was hardly the ideal "husband and wife" operation we were told about.

We approached our family again for help.  This time, we needed money to pay the rent and other costs until the buyers took over the lease.  Again, they gave us help without question.  We even received bags of food and cleaning products.  If I had learned anything from the experience, it was that family are there when you need them.  I also realised what Jill had given up to support my dream of having a business, and how she and our children had worked so hard to help me. 

On March 21st, Oggy's solicitors sent us another letter, requesting payment of the following before any transfer would be considered:

Settlement of the Default Notice
Their charges for transferring the franchise to the new buyers
The franchise fee of £5,000 for the new buyers
The outstanding bill of £4,346.02

All in all, around £11,000 to pay up front at a time when they knew we were broke.  We informed Brian Stanleick that no money was available until the shop sale went through.  We didn't receive any acknowledgement that this would be acceptable or not.

A couple of days later, the owner of the Southport and Liverpool franchises called to say that he had closed his two shops. Southport was one of the original shops in the pilot project.  Still, Oggy Oggy attended the British Franchise Exhibition in London on the 25th to sign up more new franchisees.

In early April, we received a call from the commercial agent that the buyers had discovered that the shop was not trading, and lowered their offer to £40,000.  We had no option but to accept.  The only alternative to a sale, at whatever price offered, was to seek advice from a debt specialist.  At least the new buyers would have a better chance of success with such a low start up price than we had.  However, a few days later we received a call from a man who was walking past the shop and saw a sign we had put there, informing the public of the "exciting new range of pies" that would soon compliment the pasty collection.  My mobile number was listed.  He was interested in the shop and called back a couple of weeks later with an offer of £25,000.  He ran his own franchise and did not want to work with Oggy Oggy.  Crucially, he would pay a non-refundable £10,000 deposit. The rent for May was due at the end of April and we had spent the family loans.  We asked the original buyers to pay the rent for May as a sign of good will, mentioning the new offer.  They refused.  We had two days to think about what to do; go for the near certainty of the existing buyers with a higher offer with extra costs, or switch to the lower cash offer to pay the rent.  It was at this time that another letter was sent from Oggy's solicitors to our solicitor, demanding the previously mentioned balance.

So it was that we opted for the new offer.  Our solicitor had told us to avoid the new offer altogether, but it felt the best thing to do.  We notified Brian Stanleick of our intentions on May 2nd and prepared for more solicitor's letters. We felt sorry for the other buyers, but relieved in a way that we would not be responsible for their future performance.  Maybe their additional products would have made the difference.  We will never know.  Paul Clark's email that followed was particularly nasty.  We were surprised to find that he considered our actions against the buyers "unacceptable" when he had sent us a Default Notice for finding them.  The threat of several legal actions and a bankruptcy notice were in line with our expectations, but it was the rage the letter contained that stood out.  This was followed by another email and then phone calls.  He informed us that he required the outstanding amount to be paid in the next seven days, or bankruptcy proceedings would follow.  He made a particular point of saying what an unpleasant, public business it would be, and did we want that?  We had made an offer of paying back what we owed the bakery at an affordable monthly rate, when we were settled in employment and in a position to do so. In fact, we had sent them a cheque for £10 in April.  It wasn't much, but it was £10 we could not afford to give.  He said that our offer of £100 a month was not satisfactory and he wanted the full amount.  I told him that we had other debts to pay besides the bakery bill, and that we had to service them all without preference to one.  He still wanted the full amount.

One reason why Paul Clark knew so much about insolvency is from personal experience, we later found out.  He was the founder and managing director of a company called "Megatop Food Services Limited", trading as "Fariba Wraps" from 300 Pavilion Drive, Northampton Business Park.  He had shops in Milton Keynes, Nottingham and Basingstoke; maybe there were more.  The company was formed in 2000 and is listed on the Bankrupt.com website.  It was a shock to find out that at the time when he was signing us up as franchisees and advising us in starting a business at the end of 2004, his own company was being wound up following its earlier liquidation.  It is a twist of fate that two of the towns where he had shops also had Oggy shops. 

In terms of the way we were treated, Paul Clark had breached the Administration of Justice Act 1970; Harassment of Debtors.  The other directors, if they were aware of his actions, were equally in breach.  We informed Brian Stanleick that if Paul Clark's actions did not cease, we would notify the Franchise Association, the Office of Fair Trading and the police.  Shortly afterward, he agreed to accept our offer.  So far, we don't consider ourselves settled enough to begin repayment, with all the other commitments we must maintain as a result of the shop's failure.  Really we would like a refund of the £7,500 franchise fee we paid, since we didn't get what we were given to expect.  The shop lease was finally assigned to the new owner at the end of July, a year and two days after we first took it.  The money we received barely paid the equipment lease settlement and solicitor's fees.  Although we settled the equipment lease finance three years early, we still had to pay the complete four year's interest. We lost £90,000 in all, not taking into account loss of earnings as a result of giving up well paid jobs.  In our late forties, it is not as easy as it was to get back into a career with a good pension.  If, for that year we'd walked through treacle every day with a wasp in our ears, ripping up a £50 note every two hours, we'd have had the same experience.  I later managed to get an engineering job, for which I am so grateful, but I now spend 85% of my time away from home.  Before I got  involved in franchising, I was only spending 50% of my time away from home.  It will take us another eight years or so to pay off the loan.  Jill asked why I didn't have the same mid life crisis as every other guy and just buy an expensive sports car instead of a shop.  At least we'd have something to show for the money.

In the months following our shop closing, we have seen several Oggy Oggy shops appear on the market.  They aren't usually advertised as Oggy Oggy.  We were told not to use their name when we advertised.  Of the ones we saw, the starting price would be similar to our starting price, but would drop just as quickly.  Bearing in mind that until this month, the Oggy Oggy website was projecting £200,000 net takings for a takeaway shop and £275,000 for a coffee shop operation, the for sale shops' advertised gross takings were £182,000 (with coffee shop), £208,000 (with coffee shop), £182,000 (with coffee shop) and £124,000 (takeaway).  The online projections have been removed from Oggy's website, but can still be found on associated franchise links.

http://www.whichfranchise.com/franchisorPage.cfm?companyID=2414

How do we feel about the whole episode?  Stupid for not seeing things for what they were.  Foolish for believing bad information.  Betrayed and abused. Angry.  We had to give anyone thinking of starting in this business the opportunity to hear another point of view.  When we searched the Internet for information about Oggy all we found was sweetness and light.

This year, the following shops have closed: Southport, Liverpool, Preston, Southampton, Lincoln, Norwich and Basingstoke.  Several others are for sale. They all have their story - you've hopefully read ours.  It has been a painful and humiliating process, but one we felt we must share.

Their website (www.oggyoggy.com) still boasts "Welcome to the most successful Cornish pasty franchise in the World.  OGGY OGGY has more branches and more successful franchisees than any other Cornish Pasty company."   We would like them to explain who the successful ones are, with figures to prove it. The claim of having more branches than any other pasty company is also questionable; the West Cornwall Pasty Co has 47 outlets to Oggy's 18 franchised shops.   They go on to say "Only OGGY OGGY has opened 20 Franchised stores in the last 2 years and we are now geared up to open another 20 in 2006  - This makes us the largest and most successful Cornish Pasty Franchise in the UK today".  What happened to most successful in the world?  We wish they would say where the 20 were opened this year.  They don't say that more shops closed than opened.  The website still shows a photograph of the outside of our shop, presumably as an example of what a good shop looks like.  There is no comment to say that it failed.

And yet, in October 2006, The Cornish Oggy Oggy Pasty Co had a stand at the Birmingham NEC National Franchise Exhibition  in order to  recruit new franchisees.

Graham and Jill, Ex Preston Franchisees   October 2006

Comment added November 2006...

"Hi Graham & Jill,
Our story is much the same as yours, losing a lot of money on a model that does not work.
We believe that as many people as possible should know of the high failure rate of Oggy Oggy Franchises.
We believe this would help stop more victims of this outrageously ugly Franchise."

 

The Glasgow shop closed recently.  The Romford and Redhill shops are in the process of closing down.

Paul Clark, the Franchise "Director", is no longer with Cornish Oggy Oggy.  Matthew Hurry, the Finance Director, has been removed from the Oggy website, although he is still at Crantock Bakery, according to their website.

Nottingham, an original part of the franchise pilot project, is now down to just a van. 

In 1995 a company was formed for selling pasties at shows and fairgrounds; "The Cornish Pasty Company (Mobile) Limited".  The directors are Peter Edwards (59), Harvey (HG) Laity (56), Brian Stanleick (64) and his wife Elizabeth Stanleick (47).  The units sell Crantock's "Cornish Pasty's".

Paul Clark, who was "let go" from Oggy Oggy has started his own van based pasty franchise called "The Phat Pasty Co".  http://www.phatpasty.com    Well, actually it is his wife Laura Clark, for obvious reasons.  The franchise is based on using Crantock Bakery pasties.  This company was in the process of being formed when Paul Clark was still an employee of The Oggy Oggy Pasty Company. While he was encouraging new franchisees to sign up to opening a shop and all the high cost that goes with that, their new company proclaims that their franchisees should say "No! to rents to pay, people to employ and major capital investment."

Sounds like a conflict of interests to me....

The Tamworth shop has now closed.  This makes the Cornish Oggy Oggy Pasty Company shop failure rate 50%, according to our calculation.  Franchising sources claim a general success rate of 93% for franchisees.  Although the company must have realised that their shop model does not work and have now moved over to a cheaper van based business, the issue of the the failed shops has not been addressed.  In fact, the Oggy website still promotes the shop based business as a successful one. 

December 2007        We have recently been involved in a case against PROBAKE LIMITED in Ascot, the Oggy recommended supplier of our ovens, in which a County Court Judge agreed with our claim.  Basically, Probake, formerly known as Leventi (UK) Limited, took possession of our ex shop equipment after agreeing to sell it on our behalf.  We never saw the equipment again, or received any money, despite many promises from Martyn Boden, ex director.  The Judge awarded us £5,000 plus costs which we have yet to receive.  This money was to go towards paying off some of our debt.  A search against the company revealed that there are other County Court Judgements against them.  In the end, it wasn't a shock, just a confirmation of the seedier side of this business. 

Martyn Boden's Myspace entry http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendid=82091499  says that "Hulk" earns "£250,000 and higher" per year.  If our treatment is typical, it is easy to see how.  He is now the director of PROBAKE EQUIPMENT LIMITED in Ascot.

On the 22nd and 23rd October 2008, the directors (Matthew Hurry, Nicholas Ringer, Brian Stanleick and Elizabeth Stanleick) resigned from the Cornish Oggie Oggie Pasty Company (Distribution) Limited.  The new owner took over on the 22nd also.  The business was sold as a going concern and will be primarily van based.  Having been appraised of the previous administration's operational style, the current owner is keen to improve the franchisee experience both for existing members and future ones.  This will include better support for the current members and a revised set of costings for any prospective franchisees.  We can only welcome the change and wish the new owner the best of luck.

Brian Stanleick's own Oggy operation will be restricted to Cornwall, Devon and Somerset.