Reading Between the Lines: Franchise Press Releases
Franchise press releases are often the first glimpse into a brand’s story; but they’re written to sell, not to inform. Franchisors and their PR teams carefully craft these messages to spotlight wins and bury red flags. That’s why prospective franchisees must read them with a critical eye.
Why It Matters
Press releases tend to highlight top performers and success stories, using language like “industry-leading” or “innovative.” What’s missing? The failures, lawsuits, closures, and average outcomes. This selective framing can mislead readers, especially those already excited about the brand.
What to Watch For
Cherry-picked data: Look for specific claims and ask: Where’s the source?
Omissions: What isn’t mentioned? Struggling locations? Financial risk?
Superlatives without support: Terms like “fastest-growing” should be backed by facts.
Do Your Homework
Cross-check press release claims against:
Franchise Disclosure Documents (FDDs): Especially Items 3 (litigation) and 19 (earnings).
Independent sources: Industry news, FTC databases, and franchisee forums.
Existing and former franchisees: Ask about startup costs, support, and daily operations. Silence from former owners can speak volumes.
Franchise due diligence means going beyond the brochure. The press release might tell you what the brand wants you to hear, but your research will reveal what you need to know.
The Press Release Problem: Hype vs. Reality
In March 2019, QSR Magazine published a glowing article announcing a “23-unit development deal” between I Heart Mac & Cheese and franchise group Manor 3, LLC, led by Vinny Greco, Dan Dollard, and Michael Norris. The article, adapted almost directly from a company press release, promoted the illusion of rapid growth and strong momentum in New York.
But here’s what really happened:
Manor 3 only signed for eight units, not 23. (Source: 2020 FDD, Exhibit H)
They opened just one location, in Hauppauge, NY, in early 2021.
That location closed approximately five months later.
As of the 2023 FDD, no other units have opened or are in development.
Despite this, Manor 3 is still listed in Exhibit G of the 2023 FDD as an “active” franchisee. So are many others who paid fees but never opened, quietly shut down, or exited under confidential settlements.
And the inconsistencies don’t stop there.
While Exhibit G of the 2023 FDD outlines outlet changes, Item 20 fails to report any new franchise openings or closures in New York for 2021, conveniently omitting the brief and failed Hauppauge unit altogether.
The FDD's Table 3 reveals further red flags. It notes:
New York began 2020 with two franchise locations.
Both were terminated; one of which (Patchogue, NY) was “reacquired” by the franchisor.
That same Patchogue location was originally opened by corporate in 2018, sold to franchisee Elizabeth Torres (who also opened Bayside, Queens), and later shuttered. Torres famously called the brand a “scam” in a mass email, prompting the franchisor to sue her in 2020 for Breach of Promissory Note (2 counts; one for Patchogue and one for Bayside), Slander, Libel, Defamation, and Tortious Interference. The case was quietly settled in 2021 with Torres purportedly signing a confidentiality agreement. The lawyer representing Plaintiffs in this case? Gary Phillips of Phillips, Cantor, & Shalek, P.A. I did tell you that his name would come up again. This won’t be the last time either.
Yet in Table 3, no activity is reported for 2021 or 2022, as if Hauppauge never existed.
Still, Table 5, which shows projected openings as of December 31, 2022, lists nine signed but unopened New York franchise agreements, with two expected to open in 2023.
As of today, there are zero I Heart Mac & Cheese locations operating in New York.
Why Would a Franchisor Do This?
There are two main reasons:
1. To Maintain the Illusion of Growth
Keeping failed or inactive franchisees listed creates the appearance of a healthy, expanding system. It gives investors and brokers the false impression of momentum, when in fact many of these “franchisees” represent closed units, disputes, or silent exits.
2. To Inflate Validation Pools
Exhibit H offers a list of franchisees for prospects to contact during due diligence. Including names of people who never opened or have left the system, often under NDAs, masks the true state of the brand. With many unable or unwilling to speak, the franchisor can steer candidates toward a small group of still-operating owners who haven’t yet experienced failure.
🔎 Due Diligence Tip: Don’t Trust the Franchisee List at Face Value
Just because someone is listed as a franchisee in the FDD doesn’t mean:
They ever opened a location
They’re happy with the brand
They’re allowed to speak freely
Here’s what to do instead:
✅ Ask how many of the listed franchisees are operational.
If the franchisor won’t say, that’s a red flag.
✅ Ask if any listed franchisees are under non-disparagement or settlement agreements.
These legal tools silence unhappy operators.
✅ Cross-reference the list with open store locations.
If dozens of franchisees are listed but only a handful of stores exist, something doesn’t add up.
✅ Contact former franchisees if possible.
They’re often the only ones who can give you the full story, if they’re not gagged.
This information is based on publicly available documents, court filings, and the franchisor’s Franchise Disclosure Document (FDD). Interpretations, observations, and conclusions drawn herein represent the informed opinions of Franchise Reality Check™ and are intended to encourage deeper due diligence by prospective franchisees. This content should not be construed as legal, financial, or investment advice. Prospective investors should consult with a qualified franchise attorney and CPA before making any franchise purchase decisions.
