Please stay away from "Hot" franchises

On Franchise Pick’s Website, here is what was posted

Here is what can happen to HOT Franchises:

{One more reason to work with an industry expert}

An Open Letter to Our Franchisees

As we have previously announced, we are now focusing all our
headquarters resources on supporting our current base of franchisees,
while limiting the sale of additional stores to new franchisees. We
will continue to add new stores with existing franchisees under current
development agreements and will also help facilitate transfers of
existing stores to new owners. iSold It, now in its fourth year of
operation, currently has over 170 franchised stores open. The chain has
sold more than $100 million of merchandise on eBay since inception.

As you may know, in December 2003, iSold It joined the fledgling
eBay drop-off store category, still in its infancy. The first two iSold
It stores, one company owned and one franchised, generated significant
interest from customers, the press and franchise candidates. The
initial customer response was so strong that, encouraged by their
results, that first franchisee quickly went on to purchase additional
development areas and opened more stores. As the category rapidly grew
and sales volumes were easily tracked (due to the transparent nature of
eBay), franchise candidates moved forward to open individual stores,
often securing areas large enough to develop multiple stores. After 18
months of operation, the 100th iSold It store was opened, and no stores
had closed.

Today, while encouraged by system-wide sales exceeding $4 million
per month, the distribution of sales by store has proven to be a bell
curve – with top stores exceeding $80 thousand per month and others
struggling to attain $10 thousand per month. Compounding the situation,
average selling prices and labor hours per item also vary significantly
by store, creating a wide range in store contribution margins. This has
resulted in a significant number of stores operating below break-even,
and has contributed to over 60 stores closing. Tragically, many
individuals who believed passionately in the potential for the category
have lost sizable investments, including homes and retirement savings.
We personally find this unacceptable and, despite continued interest in
this category, we do not feel comfortable selling any new franchises
until we get the failure rate lower.

Over the past 40 months, in an effort to support the network, we
have invested nearly $20 million in infrastructure, systems and
marketing — spending most of the $8 million in shareholder contributed
capital and $13 million in royalties and franchise fees. During this
time, no director or shareholder has ever received any distributions or
dividends from iSold It, with an exception for a small distribution to
shareholders in early 2005 to cover pass-through tax liability related
to 2004 company profitability. The company has not been profitable
since 2004 and no further distributions have been made. In addition,
with the exception of CEO Ken Sully, members of the Board of Directors
and shareholders do not draw any salary from the company.

Going forward, the company faces significant challenges.

First, the company must preserve its remaining cash so it can remain
solvent to support its franchisees. This is being addressed through
significant reductions in expenses, including difficult decisions
regarding headcount reductions and moving the office to a smaller
location.

Second, the company is now focusing all resources on supporting the
existing franchised stores. This is the rationale for eliminating the
franchise development group and exiting the company store. (In separate
posts, we will keep you current on the 3.0 conversion.)

The third and most significant challenge is addressing the claims of
a group of franchisees who regrettably have each suffered significant
financial losses. While we all feel very badly for anyone who lost
money, we believe we presented this concept fairly from the beginning
and it is unclear if we will be able reach a conclusion without
litigation, reorganization or insolvency.

The team at iSold It remains committed to supporting our current
franchisees and finding a success path for the network. We recognize
the hard work and sacrifices that each one of you has made to help
build your business and this company. We remain passionate about the
potential for our business and appreciate your continued support going
forward.

Ken Sully
President & CEO
iSold It, LLC