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Business Wed Oct 17 2007

Franchised Coffee Shop Seized

Franchised coffee shops don't seem to be doing to well in Chicago, with the Coffee Beanery on Damen breaking ties and becoming the independent Bucktown Beanery and now the apparent closure of Saxbys Coffee. The Saxbys Coffee on the corner of Jefferson and Lake was seized by the Cook County Sheriff's Department recently and the location, as well as the local Saxbys Training Facility, is no longer listed on the Philadelphia based companies website. A Plano store is open and operating, but a second location in Chicago was to open on North Clark but never came to fruition. From what little information I was able to gather, the owners or manager of the Lake Street store may have had issues in regards to paying employees — as in not paying them. Saxbys has been billed as an alternative to the corporate giant Starbucks — a location of which is coincidentally across the street.

UPDATE 7/26/09: John Larson, former owner of Saxbys Coffee, contacted us and offered the following letter of explanation regarding this case:

I am John Larson, Founder of Saxbys Coffee. Many posts have appeared after this article was written and I wanted to take this opportunity, given to me by the Editor of Gapers Block, to set the record straight.

I started Saxbys Coffee in Windsor, Colorado in January 2004. The concept was simple; a coffee shop which would eventually rival Starbucks Coffee. At the time there were no other coffee shops which were expanding aggressively and as a result Starbucks began raising prices on their products often and offered less service (they actually stopped stirring the drinks). Saxbys Coffee was designed to give superior customer service at a price which was lower than Starbucks. I used my over $400,000 of my own money to grow this company (which I would never get back).

In order to challenge Starbucks we would have to franchise the business and grow through Area Developers (mini-franchisors of Saxbys Coffee). This was not in any way a get rich quick scheme as one post states on this page and was a legitimate business set up to catch up to Starbucks in half the time it took Starbucks. For the most part the first two and a half years were successful for everyone.

Due to personal family issues I stepped down as an Officer and Director of Saxbys Coffee in September 2006 and Nick Bayer was voted in as Sole Director and Sole Officer which effectively gave Nick Bayer total control over Saxbys Coffee. Nick Bayer went on a rampage and set out to cancel many Area Developer contracts and close down many franchises that Nick Bayer felt remained loyal to me.

Nick Bayer then, as Sole Director and Sole Officer of Saxbys Coffee, fraudulently sold all the assets of Saxbys Coffee (which totaled over $6,000,000) for a mere $5,000 down and $300,000 to be paid in three years to Saxbys Coffee Worldwide LLC which is a corporation formed by Joe Grasso just days before the fraudulent sale. Joe Grasso "rewarded" Nick for his part in this "sweet deal" by giving Nick a job as President of the "new" Saxbys Coffee along with bonuses and jobs for Nick Bayer's father, mother and best friends. They were all given back pay as an added incentive.

One of the first actions the new Saxbys Coffee did was to stop paying rents and employees at all Chicago locations in an apparent effort to embarrass me (I lived in Chicago and the new Saxbys Coffee was in Philadelphia). As a result all the landlords evicted Saxbys Coffee in the Chicago locations.

Nick then continued his "witch-hunt" for all the other Area Developers and franchisees he wanted closed and Nick succeeded in ruining many lives through financial devastation (including mine).

Please take the time to read everything that happened with Saxbys Coffee and you will find that everything "bad" happened AFTER I stepped down in September 2006. Also please take note that I have filed two lawsuits against Nick Bayer, Joe Grasso, and Saxbys Coffee Worldwide, LLC for the fraudulent sale. One case is in the Chicago Circuit Court in Illinois (filed in July 2007) and the other is in Philadelphia and was filed this year. I will provide court case numbers and witnesses to anyone who asks.

This ordeal has financially devastated me, my family, my friends, and several hard working and honest Area Developers and franchisees that put their trust in Saxbys Coffee. Stepping down and giving Nick Bayer control was my mistake and one which I will regret for the rest of my life.

The court cases will go on (justice is slow) but we (the shareholders of Saxbys Coffee, Inc.) will be victorious. As a side note, ne of the reasons the court in Chicago is taking so long is because Nick Bayer, Joe Grasso, and Saxbys Coffee Worldwide, LLC, refuse to pay their attorneys. As a result the attorneys fire Nick Bayer, Joe Grasso, and Saxbys Coffee Worldwide, LLC. As their clients and the judicial system allows several months for new lawyers to be acquired and get caught up to speed o the case. This has happened on three occasions already.

People like Nick Bayer and Joe Grasso should be sitting in jail with the other fraudulent executives who cheat honest people.

I am including my email address and cell phone number for anyone who wants or needs additional information. I am doing this because I have nothing to hide, I am not afraid of any slander lawsuits as I only tell the truth, and I have documents to back up everything I say. My cell number is 312-515-9272 and my email address is johnlarson[at]jetgroup7[dot]com. Feel free to contact me regarding anything in this case.

To the bloggers who post things when they don't know the facts, I have one simple question. Why don't you use your real first and last name when you recklessly slander someone with no regard for the tole it takes on their life? You don't because you're afraid of a slander lawsuit because what you say is not the truth. My hope is that the readers of this article take that into consideration when reading the mean spirited posts following this article.

Sincerely,
John Larson

UPDATE 2: Comments have been closed.

 

kyle / November 20, 2007 10:12 PM

well thats not new with saxbys they have had to close a few stores in New York , CA and CO . im reporting on a few people that have worked for them and when this hits the news it will be big. from black mail to oweing alot of people.most of all the sales people!

Jeff / November 25, 2007 4:22 PM

Saxbys Coffee was founded by John Larson as a get rich con…He started with Capri Coffee Break in Windsor CO and after losing a copyright infringement lawsuit he abandoned the Capri Coffee franchisees and started anew with Saxbys Coffee. Larson used Nick Bayer to be his “President” for Saxbys to help keep his tarnished past out of the picture. Today Saxbys Coffee is Larson’s and Bayer’s facade of a soon to be large up and coming business at the expense of “area developers.” These “area developers” use their finances and time to give Saxbys some credibility as an honest investment. The idea is to sell off their majority interest to unsuspecting investors who would believe that Saxbys would go up against the likes of Starbucks. They are still pressing forward with their scam despite their corporate store and training facility being seized by the Cook County Sheriffs Department in Illinois, and Cease and Desist orders from the State of California. In just a few short years they have had to move the Saxbys Coffee corporate headquarters from Colorado to Illinois then to Georgia and now under the guise of a buyout has relocated to Philadelphia were Nick Bayer, President and CEO of Saxbys Coffee, is still leading the company for Walnut Street Capital to stay ahead of criminal prosecution. Both Larson and Bayer claim to have nothing to do with each other so when issues of discrepancy and fraud come up, they can point their fingers at the other one another. Like a perfect partnership between the two so no answers have to be given. Hopefully those that have already invested would be able to pick up the pieces, like some of the Capri Coffee franchisees did, after Larson and Bayer get their money. The store in Plano was franchised when Saxbys Coffee did not have a state registration for franchising and is operating illegally! Hopefully these people can be stopped before more people get screwed!!!

saxbys area developer / December 12, 2007 11:38 AM

ilove your news and i will provied more info.

Bill / February 9, 2008 5:17 PM

Most of these claims are relatively off base. The store wasn't corporate and the reason they got shut down is because they weren't paying the franchise fees.

Kathy / February 17, 2008 2:41 PM

Funny thing is they always used to advertise on their web site Saxbys that the chicago store was their coporate training center. I was thinking about opening a shop and even went to chicago to check it out. After talking with people in the area was told they could not sell franchises in Chicago they didn't have the okay from Illinois.
So what is truth and what is lye.

Sorry Bill / March 4, 2008 9:12 PM

Bill,

Sorry to say what jeff describes is very true. Most people dont find out what they got into until they are building out their store and at that point what can they do? Their landlord will still want rent, the note holder for their buildout will expect to get paid... There is a reason Saxbys cant sell in VA and CA, There is a reason Nick Bayer had to go to a training for compliance in MD. Stay away... I have 3 friends who are still owed money and one friends dad.. Saxbys didnt honour any of their agreements... Not all Big Red grads are like this guy. He gives us a bad name!

Mark / March 9, 2008 5:41 PM

I don't know where all this information is coming from but there is a Saxby's in Hayward, CA. I've been there, and my daughter just started working there. I'd never heard of it before last week.

Clarify Mark / March 16, 2008 12:49 PM

Mark,

Existing stores are free to do business. Actually Saxbys can still open corporateowned stores in CA and VA. Its new franchise agreements they cant sign. Hope your daughter enjoys the new job! She wont likely be affected by anyhting discussed here so no need to worry.

John / March 19, 2008 2:59 PM

Saxbys coffee is being investigated by the FBI, IT IS ABOUT TIME!

Saxbys has burned most of their vendors by NOT paying. The name should be changed to BAYERS Coffe not Saxbys. Find any Saxbys vendor and ask them how much Saxbys owes them?

And when you are done with the vendors, ask the area developers how they feel about the Bayers.

The Bayers are about to take a fall, about time after all the grief they have caused so many people. Littel Nicky's lies are finally catching up to him!

John Larson / April 18, 2008 12:21 PM

Nick Bayer, Joe Grasso, and Kevin Meakim are all part of this fraud.
Go to scam.com and you will see most of the story as long as you read my reply.

Ex Saxbys / July 22, 2008 7:23 AM

The notes by Jeff Sun Nov 25 2007 previously listed here are correct. I had a Saxbys store for less than a year and sold it. Saxbys unethical corporate mandates are very unprofessional. The so called president (Nick Bayer) has no business experience. He has never run a company or has overseen employees etc. Ask them about how they make money? They make money by selling franchises only. It's s scam, a moving target you will never get a straight answer. I can't believe they have not been shut down yet.

Rob Crowley / June 19, 2009 12:06 PM

John Larson is the victim in all this mess. John Larson is the one who put his life savings into a company which Nick Bayer abused and then Nick Bayer illegally transferred the assets. This is why John Larson has been suing Nick Bayer and Saxbys Coffee in an Illinois court since July 2007. The judicial process is slow but justice will be served on Nick Bayer.

Scammed / August 31, 2009 4:05 PM

In my opinion, this John Larson is nothing but a liar. He wants you to beleive he is innocent, however, he and the Bayer family have had a long history together in another business venture. In my opinion, Larson cannot be trusted, he will make up a lie of the day and run with it; if you go against him, he will send a convicted felon to threaten and intimidate you. I do not beleive this "poor innocent me" story he is trying to sell. It is shameful that he does not care about people. He prefers to use people as a means to an end. John, one day you should go to church and pray to be forgiven for what you have done. I don't think you realy care who and how many you and your family hurt. Why don't you mention your family's involvement in this con? John, wake up and take responsibility for your actions.....I have already been burned by you and you family.

On The Fence / September 1, 2009 9:35 PM

It's hard to tell who to believe....however, if you do a little background research on the internet, you can see that Nick Bayer is not truthful. There's a radio interview online for Young Executives where he states that he was the founder of Saxbys Coffee. He actually states he was the founder. Later in another interview he tries to paint a picture of growing up in the inner city where he commutes over an hour or commutes an hour to get to high school---which is not accurate, he grew up in a suburb of Chicago and lived about 15 miles away. These are his OWN WORDS. In the interview he also states that it's his wish and his mission to see the Area Developers succeed, and he wants that more than his success. Even the interviewers seemed to call his bluff. It's rather entertaining. If you look through court documents and listen to the words out of his mouth, you can see that this is not an honest person you want to deal with. There are always two sides to the story, but John Larson is the only person offering contact information to discuss facts. Normally guilty parties are advised not to speak.

On the Fence / September 1, 2009 9:50 PM

I mean, seriously, it's at about the 11-12th minute of this interview...listen to the point you don't get sick.
http://www.executiveleadersradio.com/bayer-nick-355.aspx It is really too much.

SCAMMED / September 3, 2009 12:07 PM

I think they may all be liars. I know that John is a liar for sure. Nick may also be a liar. However, have you ever thought that they both may be lying in order to keep the rest of us guessing? In my opinion these guys are just professional con-artists. I beleive they will sell everyone else out just to save their own arses. I would avoid John at all costs. I do beleive he is a very dangerous person. How can people like this sleep at night. And to think they are both active in the buisness world makes me sick.

Burnt / September 9, 2009 5:05 AM

I know Joe Grasso. He is a smart guy. He has financial resources. He knows what he is doing. Its not about coffee.

John Larson (Actual Founder of Saxbys Coffee) / September 18, 2009 9:11 AM

Once again, a comment from nameless bloggers (Scammed & Burnt). I have shared my name, phone, and email address because I am writing the truth. I have to wonder which buddy of Nick Bayers are you? By the way, in regards to Nick Bayers false claims (of growing up in the inner city).....when did Naperville (an upper middle class city in Illinois) become an "inner city"? Nick Bayer did not found Saxbys Coffee. I founded it in early 2004 and Nick was hired in May 2005. Nick Bayer did not grow up un any "inner city". Nick Bayer is a habitual liar and I would ask anyone with any ability to ask him to prove any of his lies. Ask him how he founded a company in Colorado when he was living in Georgia and working for someone else? Ask him to give a school transcript of some inner city school he attended or even an address where he lived in an inner city. While you're at it, ask Nick Bayer how he aquired a company without putting in a single dime of his own money into it? Ask yourselves that same question. "How would someone aquire an entire company (with $6 million in assets) and sell that company (securing himself a lucrative job from buyers) without ever putting in a dime? Only through fraud. That is why the shareholders have sued Nick Bayer and will win.

John Larson / September 18, 2009 9:20 AM

Burnt and Scammed, in the future please include your name and contact information and stop hiding behind the computer.

SCAMMED / September 23, 2009 1:02 PM

John, How is it that you always want to point a finger at others. Take responsibilities for your own actions. You are the one that hides behind your enforcers. If you were an honest man I would expose myself. However, I do fear your recruited felons. I have already been visited. The FBI should investigate you and your associates. Once again shame on you for all the damage that has been done to others. You are nothing but a peice of scum. I would love to see the day you burn for what you have done. I will always be around to spread the word about you and your scams.

John Larson / October 2, 2009 10:00 AM

Scammed, you are not afraid of "enforcers" because you know there is no such thing. You are obviously a friend of Nick's. You won't expose yourself because you know I will sue you for your slander/libel/defamation.

scammed / October 2, 2009 4:29 PM

No John,I know there are enforcers because I have been visited by one of your enforcers, as well as called by your enforcers on several occasisions. I have proof on this. And if you want to go a little further into this John, you, yourself can connect the dots on the internet. You have been exposed. I can have my phone calls dumped and then we all can see the truth. John, I would love the opportunity to talk to the FBI and tell my story. In my opinion, this is the way your group operates in order to silence opposition to your agendas. John, go ahead file a law suite: Libel is want you want to use as your arguement, because it was written, slander is usually verbal; and any defamation that occured...you did it on your own accord. If you were honorable, your name would not be posted all over the internet as a scam/fraud/con man. Another thing John, when I mentioned certain things that I did not have factual information; I mentioned "my opinion" or "I think...". So John, dust off your law books and read a little. Or John, better yet, dust off your bible and read about how to treat the rest of the humans that live on this planet with you. John, in my opinion you are nothing but a peice of s**t, you just proved that you are an intimidator by your response by threatening legal action. John if this was not a public forum and my identty was exposed; I would be awaiting another arrival of your enforcers. Well John, go ahead file to sue me. As a smart man you will realize I have nothing left. I am not afraid of your attorneys, but I do fear for my life and bodily harm from your enforcers. John, remember, when there is nothing left to lose.....there is still vengence.

John Larson / October 7, 2009 12:05 PM

Wow!You sound you're writing a script for some action/drama movie filled with enforcers and thugs. In reality you are someone who is not stating your name because you know you are not telling an ounce of truth. Trust me, if I knew who you were I would sue you for libel but you won't expose yourself because you are obviously someone who knows Nick, and you are attempting to distort the truth. Either way I'm done communicating this way with you.

SCAMMED / October 13, 2009 10:40 AM

Why don't you want to talk anymore John? Afraid too much truth is being told? If you were honorable, none of this would have been mentioned. This is not against you personally; it is against your actions and the way you want to cover things up. I just wanted to warn people about your methods of operation. Trust me, I would love the day I see you in court . Only then would I reveal my name to the public along with the court records for all to see.

Unsure / October 19, 2009 10:07 AM

It looks like there is a lot of stuff going on behind the scenes. I do have one question to who ever can answer it: How is it that Larson says that he spent $400,000 on this start up company and two years later it is worth $6,000,000? Was the company this good? Or did a lot of people not get paid? Or is this an inflated valuation?

John Larson / October 20, 2009 11:07 AM

Unsure, again I do not understand the lack of real names here. To answer your question, the Area Developers purchased a large amount of the U.S. territory and they were suppose to pay over a period of ten years as they opened these new stores. When I stepped down in 2006 Nick decided to make life tough on these Area Developers and found ways to get them out of the company. If you email me your contact info I will give you the names (and contact info) of each Area Developer so you may contact them yourself to validate what I am saying.

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