Predictive Profiles’ stance against the Dwyer Group is ‘out of survival’
Illustration by Jonathan Hankin
As any vendor would be, Carla Bainbridge was thrilled when she landed a contract with the Dwyer Group, a well-known franchisor with 21 service brands under its growing umbrella in Texas. Her company, Predictive Profiles, was to be the preferred provider, she said, of a software platform that aids in the recruiting and hiring of front-line employees.
Bainbridge says she invested more than $700,000 in her software platform so it would work with all of Dwyer’s 2,800 franchisees at the time, with the stated goal to get at least 70 percent of them as users. She traveled to Waco, Texas, in the fall of 2016 for Dwyer’s annual convention, where she said her company’s service was touted by Mary Kennedy Thompson, chief operating officer of Dwyer, as a benefit to the whole group with one of their most vexing problems, hiring.
“We built a custom platform for each brand … and we had to train them all. We spent months, and I had 10 folks doing training and usernames and passwords,” said Bainbridge, whose company is based in Minneapolis. The payoff? “I was looking at, OK, we’re going to generate a million and a half dollars in revenue from Dwyer Group annually, and obviously reoccurring.”
An afternoon phone call
Then in February of last year, she said she got a phone call on a Friday afternoon from Thompson. “She says, we’ve had a little change of plans. I can’t discuss it any further than that, and that’s the way it’s going to be.” Bainbridge later heard, according to a complaint she filed against Dwyer, that another company, Career Plug, alleged in the lawsuit to be owned by a Dwyer board member, was going to be used instead.
She was initially going to let the whole thing slide, so as not to go up against an important franchisor co-chaired by Dina Dwyer-Owens, daughter of the late Don Dwyer. Dwyer-Owens is well-known in franchising and business circles for an often recited code of values that everyone in the Dwyer Group abides by and Dwyer-Owens uses in a best-selling book and in her motivational speeches.
“Lo and behold they brought suit against me to make sure there never was a partnership” in the eyes of the law. “So that kind of forced my hand. I’m either going to try to reclaim what I lost or just walk away.” Referring to her attorney, Justin Klein of Marks & Klein, “I said, OK Justin, do you want to take this on and he said hell yeah.”
Dwyer fulfilled ‘its only obligation’
Dwyer’s petition, called ProTradeNet v. Predictive Profiles, filed in McClennan County, Texas, says the Dwyer subsidiary used a standard agreement, called a Distributor Vendor Relations Agreement, with Predictive as it does with other vendors. Predictive Profiles was a “non-exclusive preferred vendor” for franchisees’ career portals and ProTrade Net’s “sole obligation is to let franchisees know of the program and nothing else,” and the plaintiff fulfilled “its only obligation.”
Jim Dunnam of Dunnam & Dunnam in Waco is Dwyer’s attorney. Asked about Bainbridge’s claim about her company’s investment, he said, “I’ve yet to see anything that would materially substantiate that. I do know they entered into a non-exclusive contract that was terminable” in 90 days with or without cause, “so it was real clear what the relationship was.
“This litigation was started when Predictive said they were in a partnership” with Dwyer, “which is not accurate, and threatened a bunch of stuff,” he said.
Executives at Dwyer sent over a statement that read in part: “Our primary goal, as always, is to protect and assist our franchisees. Predictive’s actions have become increasingly disruptive for franchisees and we have been asked by many of them to help stop this disruption,” it said in part.
“Fundamentally, Predictive Profiles has and continues to post for jobs for franchisees when there are no job openings. This, of course, creates a great deal of disruption and confusion,” the statement said. “Predictive is also posting for jobs for franchisees who have never retained Predictive, including for positions that do not have openings.
“We are confident that once all facts are fully known, Predictive Profiles' misconduct will be clear. But we cannot try a lawsuit and conduct discovery in the press.”
Said Dunnam, “At the end of the day I’m getting complaints, and I see them virtually daily, about the types of things I have just related to you, and why won’t they correct it,” he said, referring to Predictive Profiles.
Not out of vindication
Bainbridge says in the early days she decided to contact Dwyer-Owens to talk it over. “Maybe she doesn’t even know that her company is not abiding by the code of values,” Bainbridge says.
“So I disclosed what was going on. Oh my god, the sh** hit the fan.” This was in May 2018. “The lawyers, there was one of them, now there’s 10 of them. Their big point is, don’t disclose this, do not talk about this to anybody.”
Klein, Bainbridge’s attorney, said he thinks the dispute goes beyond just one tiny vendor against one big franchisor. “The franchise industry is only as good as the people who can support the industry,” he says. “Companies don’t have to do business with one another, but if you sign a contract to do business with one another then you should have to live up to it. Unfortunately she got the raw deal here.”
He’s well aware of the stakes. “I think it’s a huge risk” to go after Dwyer. “They are a gorilla. I think it took a lot for Carla to stand up for herself, but quite frankly it’s not out of vindication but out of survival.”
Beth Ewen is editor-in-chief of Franchise Times, and writes the Continental Franchise Review® column in each issue. Send interesting legal and public policy cases to email@example.com.