Wire Service POS system Contracts - can you quit?

[domineaux]

Just this past week I've become aware there are many florists that are stuck with Teleflora POS system. These shops are going into the tank every month.
Some are really hurting and exorbitant late charges are piling up as well.

The Teleflora POS contract is a very unilateral agreement. I would go far enough to say a contestable agreement.
There are several things in their contract that run up a flag for me.

The third paragraph a duzzie...

3. Default. Any of the following shall constitute an event of default hereunder ("Default")
----a) Termination of Customer's Teleflora membership for any reason

If you bought the POS system you have to continue with Teleflora membership, until your obligation on the POS agreement is complete.
There is a Monthly maintenance fee on the POS system $100+, plus the POS system costs over $7,000.

The above is terrible, but most important... what is Teleflora bound to do? ZIp, nada, zilch, nothing.
Teleflora doesn't guarantee anything as far as providing you any income stream from orders or expectation of orders.
Yet, they bind purchasers to a Teleflora membership even though it may mean you get no profitable business.

Seriously, I think if you really want to break this agreement I think you could do it. You will probably have to get an attorney.
I don't believe TF will give in without a fight, because word would get out and a flood of people would quit.
So, you can probably expect legal resistance from TF.

Someone reading this may already be able to share their experience; terminating their Teleflora POS and membership without completing it.

Another thought on this is : Teleflora is creating the dependency between the POS and membership. That has undertones of expectation of orders, which purchaser will receive to enable purchaser to pay for the system.

If we were "locked in" on this lousy contract arrangement I'm reasonably sure it could defeated, and probably get some compensation for damages in the process.
I say damages, because I would expect Teleflora to route enough profitable business to my shop to meet the POS agreement obligations I have to them.
In other words, I would expect to receive enough profitable orders from Teleflora each month to pay for it... to the exclusion of every other Teleflora member in my area, that wasn't paying for the POS system.
Why would you say would I have those expectations? Because it is within the power of their order system to route those orders to your shop, because they are sending orders all into the local areas you serve.
Areas, which you have articulated and defined to Teleflora. Also, you may be paying for receiving incoming orders from other local areas as well.

The threat of damages might be enough to get you off the contract, because I seriously doubt TF would want a court precedent against them for payment of any damages.
Naturally, they would make a gag order a requirement for letting you out of the contract.

 

[TOTO]

The WS's just farm out their delinquent member accounts to collection agencies. No plaintiff court time for them!

On the flip side, and by the time a florist gets to the collections point in time, they have no money left to be a plaintiff themselves and in order to get FREE from the contract.

Hopefully, they were smart enough to be a C-Corp or an LLC and not sign any personal guarantees with their WS's.

Best course of action is to avoid the WS POS Technology ball and chain trap to being with and purchase an independent POS system like FAS or one of the other proven systems.

 

[theRKF]

You're right - this has been a strategy for managing membership for many, many years. The 5+ yr contracts are designed to keep florists in the fold. That's why the WS are willing to sell at or just above cost.

Where are you are off track (IMHO - FWIW) is that TF is not bound to to offer the florist any promise of revenue, any more so than any other provider. (Background: I'm a 5th generation florist, have worked for 3 POS platforms and sell websites for florists)

Even the TF membership itself is not an obligation to provide orders. You can't blame the phone company if customers aren't calling, you can't blame your website provider if you never update or market your site, and you can't blame a POS provider if you don't use a POS as designed -> to streamline your business and boost your marketing.

Besides: The term of the WS POS contracts is typically determined by financing, which is handled through the membership contract. If you don't want to be tied to the WS, use your bank, 3rd party leasing or pay cash

 

[domineaux]

The WS's just farm out their delinquent member accounts to collection agencies. No plaintiff court time for them!

On the flip side, and by the time a florist gets to the collections point in time, they have no money left to be a plaintiff themselves and in order to get FREE from the contract.

Hopefully, they were smart enough to be a C-Corp or an LLC and not sign any personal guarantees with their WS's.

Best course of action is to avoid the WS POS Technology ball and chain trap to being with and purchase an independent POS system like FAS or one of the other proven systems.

Never make any payments or make any payment arrangements with a collection agency.
You will never get off their lists, if you ever pay them one single dollar.

If you get a supoena from an attorney in your area, then you can talk to the attorney and make a settlement offer.
In discussions with an attorney you can always negotiate better terms. Attorneys don't have time to mess with you, and their plaintiff won't want to keep writing the attorney the "big checks".

A collection agency doesn't care if they call you 10,000 times or call you 20 times a day. They will always pursue the entire amount owed they will never negotiate less or a settlement offer.
Why, because the collector calling is probably direct commission as a percent of what is collected. Collection agencies will make your life miserable, if you talk to them.
Collection agencies are what they say they are, they have no power to do anything...except refer your account back to the principal.

Rule 1 - never talk to a collection agency. Don't return calls, or speak with any collector.
Just wait it out, wait for contact by a local attorney. If someone calls and says "I'm an attorney... that's BS". An attorney will never call you. You may get a pre-suit letter, but remember it must be from a local attorney.
There are attorneys that work with collection agencies, but they can't sue you or do anything unless they are licensed to practice law in your state. It will always narrow down to a local attorney before suit is filed.

You don't have to be going broke or be broke to negotiate with an attorney.

A collecion agency is in business to collect money, never to sue you. Collection agencies work on a percentage of the amount owed. A collection agency will keep your account as long as possible and harrass your drawers off.
Just don't talk to them. Hang up, but don't discuss anything about the account. CA can hold onto your account by giving the principal reports on what you've said to them, etc. A collection agency will never let go an account until it is taken from them.
CA can make your life miserable, so just remember that before you ever discuss your delinquent account with them.

TOTO is right on "start a Corp or LLC " and do it now is not soon enough. Never ever sign a personal guarantee with anyone, especially if your are Corp or LLC. If you sign personal guarantee you negate everything your corp or LLC stands for.
You will be coerced like crazy to sign personal guarantees, because the creditor knows how important they are. Just remember how important they are, and never sign one. Try to arrange other terms,etc., but don't pierce your own corporate veil with PG.

 

[goldfish]

Some florists have successfully re-negotiated the POS contract (basically obligation to repay the seller's financing) and kept the POS system after terminating their membership. I don't know the detail, but my guess is that, as long as you keep paying the POS maintenance fee and whatever the repayment term of principle and reasonable interest, it would only make sense for TF to agree to the new terms. The alternative, default on the loan, would be the worst case scenario for TF.

I think florists should treat a WS company just like any other service provider. They have no obligation to make sure florists would be profitable with the service they provide. The onus is on the florists, not WS companies. If you are not happy with the service, then quit, that's all.

 

[domineaux]

Infinite

I understand your viewpoint, and it all sounds like a wrap when you read the contracts.

Yet, when you get into a lawsuit for real and have a good attorney you will find there are even possibilities for collecting damages against the big bad deceitful TF.
Your attorney would make a counter-claim for damages when you filed your answer with the court.

You'd be surprised how quick people who have written self serving contracts like TF will back off when a court trial is imminent. When it is about to be a jury trial, even more so.
It is astonishing how much favor the little guy gets when the jury listens to the plight of the little guy and reads all the slick lawyerish documents of someone like TF.

Even before the trial begins the judge will generally order both parties to do their best to negotiate a settlement.

All a contract is... is an agreement between two or more parties. Contracts are always subject to interpretation and other considerations.

When a Policeman gives you a ticket he will verbally tell you what the tickets says, what is expected of you, etc. Why because when the other party has no part in creating the document mis-communication is possible.

TF creates the contract and you have no say in the wording, you must accept those words and none other. If there is any part of that agreement that is not fully understood and the salesperson tells you to sign by the X you've got a good case.

 

[BOSS]

Florists have been known to be able to sell their wire service POS systems to another agreeing florist.

Why anyone would buy one is beyond me, but it's been known to happen.

 

[goldfish]

domineaux, I think you are watching People's Court too much. The big guys always (well most of the time) win in a real court primarily by increasing the legal expense so much so that "little guys" just can't pay. This is true, even if you can find an attorney willing to work under contingency. All the expenses (such as travel fee, etc) must still be paid by the client. Do you know how much the attorneys charge for making photocopies?

Typically, corporate attorneys play the game of jurisdiction first; i.e., move the court far far away from your home, so that it would become too expensive for you to even attend the proceedings. One lawsuit I was personally involved, the attorney of the defendant tried to move the proceedings to Boston.

If this doesn't work, they will make a whole bunch of pre-trial motions that make the ongoing trial too expensive. I'm not a lawyer, so I don't know exactly what all those motions mean. All I know is that we couldn't pay for these. For example, deposition is very expensive, because travel expense for the person(s) deposed must be paid.

And then they come to you with a deal to sign. And you oblige because you can't continue any more. Been there done that. So, I would be very hesitant to recommend anyone to seek a legal remedy, unless you are very wealthy.

 

[domineaux]

Florists have been known to be able to sell their wire service POS systems to another agreeing florist.

Why anyone would buy one is beyond me, but it's been known to happen.

I have heard the same.

That gives even more credential to the amendablity or defeat of a TF POS system contract.

Actually, TF wuld advantage themselves contract wise to not include a mandate for maintaining membership and just sell the POS system on a note. TF is greedy for that wire service contract, which can be considerable over 5 years. If TF has to give up and not defend their contract what have they lost? The software is sunk cost ( already complete ), they will have gotten a considerable maintenance fee on a software that is supposed to be complete and they lose a monthly membership subscriber.

A plan of action:

All the florist needs to do is box up and return the software and it's a done deal. Box up the POS software, put it in a box certified mail with return receipt requested. Don't tell TF zip, just send it. If the florist retains and uses the POS software it will make things more difficult.

If the florist no longer has the software and has a receipt where TF has received the software it would take the devils lawyer to collect for something the florist no longer has.

Very important if you do the above: DO NOT KEEP A COPY OF THE POS SYSTEM OR CONTINUE TO USE IT.

If you have to say something about returning it after they receive it be very non-committal. Something like it wasn't what I expected it to be, it doesn't work for me, etc. Keep your options open and whatever you do... do not make any written statements.

There is no way TF can win in court with that burdensome one sided self serving contract.
TF knows it well enough, and has probably never taken it to court where the defendant has filed a counter-claim for damages.

You know I'm talking like TF is the great satan here, and I don't really believe that. I think, if yoiu just return it as described above with no fanfare or exuberant attitude TF may very well just go away causing you no problems of any kind.

 

[BOSS]

Are you a lawyer?

 

[domineaux]

domineaux, I think you are watching People's Court too much. The big guys always (well most of the time) win in a real court primarily by increasing the legal expense so much so that "little guys" just can't pay. This is true, even if you can find an attorney willing to work under contingency. All the expenses (such as travel fee, etc) must still be paid by the client. Do you know how much the attorneys charge for making photocopies?

Typically, corporate attorneys play the game of jurisdiction first; i.e., move the court far far away from your home, so that it would become too expensive for you to even attend the proceedings. One lawsuit I was personally involved, the attorney of the defendant tried to move the proceedings to Boston.

If this doesn't work, they will make a whole bunch of pre-trial motions that make the ongoing trial too expensive. I'm not a lawyer, so I don't know exactly what all those motions mean. All I know is that we couldn't pay for these. For example, deposition is very expensive, because travel expense for the person(s) deposed must be paid.

And then they come to you with a deal to sign. And you oblige because you can't continue any more. Been there done that. So, I would be very hesitant to recommend anyone to seek a legal remedy, unless you are very wealthy.

The state and county will usually be declared within the agreement to create a legal jusrisdiction. Legal actions are usually made in the state and county where the florist signed the contract.

There is no other recourse, except legal, when a business is in trouble with contracts, notes and other written encumbrances. Arbitration could be used, with mutual agreement.

One thing is sure, when you go to court you better be ready to fight like a bulldog. If you aren't willing to fight you'd do well to negotiate with your creditor for the best terms you can get.

Goldfish... does that sound better?

 

[domineaux]

Are you a lawyer?

No, I am a turnaround/workout specialist.

My wife is the florist and i picked up on these boards to learn more about the industry and business to assist her.

I do like to help people, thus my occupation.

 

[georgeb]

In addition to what goldfish says, if you are a corp or llc you must be represented by an attorney in most states. that is you cannot represent yourself/biz. One can run up some pretty good size bills just answering questions etc from the opposing side.

 

[theRKF]

All the florist needs to do is box up and return the software and it's a done deal. Box up the POS software, put it in a box certified mail with return receipt requested. Don't tell TF zip, just send it. If the florist retains and uses the POS software it will make things more difficult.

If the florist no longer has the software and has a receipt where TF has received the software it would take the devils lawyer to collect for something the florist no longer has.

Very important if you do the above: DO NOT KEEP A COPY OF THE POS SYSTEM OR CONTINUE TO USE IT.

There is no way TF can win in court with that burdensome one sided self serving contract.

I'm sorry, but this is really scary advice. You're not a lawyer, and you're gambling with people's livelihoods here. You can't just bundle up a POS and send it back without causing a major disruption to your business operations. Following that, the wire service (remember, I've worked for both) will quite willingly throw you to the legal wolves. The lawyers are on retainer, it's not even an extra cost for them - it's all in a days work. Those cats are sitting around looking for a fight, when they aren't suing each other Following your advice as stated will end very badly for the florist, likely including losing the battle AND paying the wire service's court costs. The contracts are to be contested in the WS' home town (LA, OKC or Chicago) so you have travel expenses - and possibly additional costs for local legal talent.

You're pitching some theories with confidence, but no experience in this area. Florists have gone to battle, but not a one that I know of has come out on the winning side. Don't confuse the occasional deal or acquiescence as a legal loss - they are willing to negotiate if you have something to offer, but walking away from tech & membership gives them no incentive to deal.

Ryan

 

[goldfish]

domineaux, I have an alternative idea. Unlike suing Teleflora for likely self-destruction, I propose the following.

Set up a meeting with the regional TF rep (the higher the rank, the better). For the meeting, bring your wife (if you don't have any, hire an actress) and kids (if you have none, hire kid actors).

In the meeting, one of your kids will say "Dad, why did you cancel the summer vacation?" or something along the line in the cutest possible voice. You reply "Sorry, but we just don't have money..." while making sure that your TF rep is paying attention to this "private" conversation. The kid then shouts "Why? We have a flower shop!" Wife interjects "We might lose the shop, that's why we are here..." The kid "What do you mean?" and start to cry. You then turn to the rep and make a big sigh. "Well..."

Of course you must coach them very well prior to the meeting, so that they know exactly what they are supposed to say. Just make sure that your kids won't say anything stupid in CNN live. Do you think this will work?

 

[domineaux]

Infinite -

As long as you have their merchandise they definitely have a cause against you.
If you send it back to them you have given your complaint a boost, which would work for your benefit in court.
It is very hard to make anyone pay for something they don't have.

You would only do this if your business in such a financial situation that you MUST do something, or hemorrhage into liquidation.

Consider the worst thing that could happen.
If you don't pay for the POS system and you keep it, they'll sue you.
If you send it back, and make your complaints their position is seriously impaired whether they sue or don't.

If you don't pay for it, you won't be able to use it anyway.
Afterall, you are bound to them with the system, which could also benefit you in court.

I would not think of taking these actions for any business unless their back is against the wall, and their ability to pay is seriously impaired.

If there isn't any money or viable assets, the lawyers will advise their client to give it up. They will do that, because clients don't really like to be jerked around by lawyers when there is not possibility for payment.
The attorney might ask for discovery, but you might be able to quash that with a recent financial statement. Lawyers and creditors aren't stupid. It is very stupid to waste time in court, when there are no prospects for getting paid.

Most people think lawyers are itching to take their heart out. Not true, competent lawyers just want to get paid.

Finally, if you are using the TF POS, and need the POS then you should pay for it.

The TF POS has a direct relationship with TF order system, so keeping the TF membership should be retained as well in such cases.

Remember the courts are overburdened, it is doubtful a civil court action could take place against you in less than 4 years.
Do you think a judge would hear a case, where you don't have the product and 3 to 4 years have passed.

There is always a certain amount of risk involved in any action where you don't pay as agreed, whether it is a cell phone contract or a TF POS system.

If you are able to successfully stay in business after your dump the albatross for that appx. 4 years you will have made the right decision. That can be a part of your defense if you are forced to trial. LOL

The cup is always half full, unless you want it half empty.

 

[domineaux]

domineaux, I have an alternative idea. Unlike suing Teleflora for likely self-destruction, I propose the following.

Set up a meeting with the regional TF rep (the higher the rank, the better). For the meeting, bring your wife (if you don't have any, hire an actress) and kids (if you have none, hire kid actors).

In the meeting, one of your kids will say "Dad, why did you cancel the summer vacation?" or something along the line in the cutest possible voice. You reply "Sorry, but we just don't have money..." while making sure that your TF rep is paying attention to this "private" conversation. The kid then shouts "Why? We have a flower shop!" Wife interjects "We might lose the shop, that's why we are here..." The kid "What do you mean?" and start to cry. You then turn to the rep and make a big sigh. "Well..."

Of course you must coach them very well prior to the meeting, so that they know exactly what they are supposed to say. Just make sure that your kids won't say anything stupid in CNN live. Do you think this will work?

Funny stuff there

Who knows, I've seen worse and it worked.

You still need to send their POS system software stuff back to them. If you don't pay for the POS and the membership you'll be cut off anyway. Don't be naive enough to think that doesn't matter.

Send back their disks, manuals in a nice box by certified mail with a return receipt requested. Don't tell anyone with TF you are sending it.

The receptionist or warehouse receivers care less and sign for anything certified. Throw in some other stuff as well, if you are so minded.

Sometimes you just have to deal with difficult situations in an un-orthodox manner.

You may have to click on the attachment couple times to get it to play. Probably something in the forum software.

 

[BOSS]

Most people think lawyers are itching to take their heart out. Not true, competent lawyers just want to get paid.

Speaking as one that has had direct personal contact with the lawyers that would be involved in any such case involving a wire service, trust me, they ARE just sitting around waiting for someone to do battle with.

I lost the first time around, and it was a minor issue (as far as I was concerned), I won't make that same mistake again.

 

[goldfish]

I would consult with a real lawyer before doing anything potentially stupid.

 

[domineaux]

This thread is fast becoming a Yes I say and No you say, and back and forth. LOL

Anyone reading this thread should be aware that troubled situations in business are rarely resolved easily, especially when significant sums of money are owed.

Not paying creditors is always tough, especially when they have contracts and so-called legitimate claims.

When companies like TF create their own uni-lateral contracts there are always possibilities to defeat their claims.

Principally, because people that create those contracts you sign that require you to "sign or else" , greedily over-reach with exorbitant terms and conditions that only favor their interests.

CONTRACT RULE - You should never, ever sign any contract without thoroughtly understanding it. Never just sign on the dotted line, because you trust the salesperson.

Always think carefullly of what making that contract could do, if your business becomes unprofitable in the future. Throw away your ROSE COLORED GLASSES.

If you don't like the terms of a contract like the TF POS, you can always scratch through items in the contract. If you scratch through an item, initial beside it.

Remember contracts are supposed to be mutual agreements, do exercise your mutual interests. You will be astonished how many creditors will accept your amendments to their contracts.

You should always have your busiiness in a Corp or LLC, because it negates you from personal liabilitity.

When a corp or LLC business is in trouble it is amazing how quick creditors will back off when there are no possibilities beyond the "broke business" to collect.

A corp or LLC is a non-person entity that has legal rights and remedies available to it.

If you get supoenas or other court documents you should arrange with an attorney to defend you.