Fraud is a game with little downside risk

Make-believe jail time for CDN criminal fraud.

Detective Fred Kerr makes some excellent points in this Toronto Star article, Views from behind a fraud detective’s desk.

The sentences we’re getting in Canada are truly an embarrassment, because they’re so low.

A few years ago I had a $7.5 million investment fraud in Vaughan, a Ponzi scheme. He was targeting teachers … 35 people lost $7.5 million. Some people mortgaged their homes to invest with him. Some lost their life savings. He was sentenced to 4 1/2 years in jail, but realistically he was out on the street after just 13 months.

Q: What can be done to keep criminals behind bars longer?

A: The federal government recently introduced legislation to change that, so white-collar criminals will spend more time in jail. It’s long overdue …

Low sentences and conditional sentences served at home aren’t enough. We call it “make-believe jail,” because people are sitting at home and it’s hard to enforce. … There’s no deterrent there.

Q: What signal does that send?

A: In Canada we see a lot of people re-offending. That’s common. We re-arrest them many times and then they’re back on the street.

If you’re thinking of buying a franchise, talk to an experienced copper. They know how next-to-impossible criminal fraud is to prove and how expensive the civil justice system is.

This is how I saw the story on WikidFranchise.org as it relates to my experiences in franchising.

In the end, They’ll use your marriage against you

Whatever you’re attached to will be used to your disadvantage in predatory franchising relationships.

Ray makes many excellent points over at Blue MauMau.

One of his greatest insights is this:

your marriage will be used as a way of making you do what “they” want you to do.

In my experience, the attorney you hire to protect your family is simply weak, not evil.

That is their role, their fate.

Their folly.

Franchising is a house

Imagine yourself as a living house.

God comes in to rebuild that house. At first, perhaps, you can understand what He is doing. He is getting the drains right and stopping the leaks in the roof and so on: you knew that those jobs needed doing and so you are not surprised. But presently He starts knocking the house about in a way that hurts abominably and does not seem to make sense. What on earth is He up to?

The explanation is that He is building quite a different house from the one you thought of — throwing out a new wing here, putting on an extra floor there, running up towers, making courtyards. You thought you were going to be made into a decent little cottage: but He is building a palace.

He intends to come and live in it Himself.

– Mere Christianity, C.S. Lewis, Image

Ontario franchise law is +90% irrelevant

Existing laws are a result of a competition.

A competition of interests, normally between opposing groups.

Any statute exists because:

1. some interest(s) wanted them,
2. that group had the clout to push the political system to put it into place while
3. defeating opposing views.

Franchisees face the combined strength of what I have defined as Big Franchising. The pathetic state of Canadian franchise law is the predictable result. Ontario, PEI, Alberta and (sort of) New Brunswick have specific franchise laws.

In Ontario, the relevant law is the Arthur Wishart Act (Franchise Disclosure), 2000.

I helped push for the first Ontario, starting in 1998. I was even an expert witness at the public hearings. The Wishart Act was sold to me as a “compromise” or as a “first step”. Those were lies and I believed them: then.

The Ontario government has refused to listen to repeated calls for improving the laws, from franchisees.

Privately, many MPPs know the score but Big Franchising blocks for their friends to the Premier.

The industry had a problem in the lat 90s: they couldn’t sell as many outlets because of very high profile nightmare cases such as Pizza Pizza or 3 for 1 Pizza and Wings.  They needed a fake law (McLaw: make-believe fairness) and they got it. The Ministry of Consumer’s reaction to  Country Style’s alleged dirty CCAA and the Grand & Toy mass terminations confirmed that.

99% of all abuse is never seen by Ontario judge (let alone a jury of citizens)

The high cost of litigation and the franchise bar’s “filtering process” sees to that.

The law needs to change to become relevant or be abolished.

Now.

Welcome to Ontario Food, Inc.

What we put in our bodies is important.

Monopoly profits should not be the only criteria.

More and cheaper is not sustainable.

Pirates make someone else pay for their plunder.

• Want the truth? Ask a farmer.

The industrial food complex uses franchising as a means to produce, distribute and sell a rapidly declining quality product.

I will be sharing stories about the grocery industry in Ontario and Canada.

Some topics people talk to me are:

1. food safety (malicious food tampering),
2. less nutrition,
3. 100 Mile Diets,
4. the role of the franchise bar,
5. suppliers’ inability to get shelf space,
6. corporate concentration (all in the families),
7. kickbacks, allowances, payola,
8. higher cost + smaller variety,
9. regulatory capture of government,

I encourage anyone with grocery industry experience to keep an eye on FranchiseFool. Why not comment or send along a guest (anonymous) article? I’ll post it here and on WikidFranchise.org.

Sometimes the real snakes wear the finest suits.

Unorganized, passive franchisees attract abuse

Solomon is at it again.

Everyone should read this post.

Over at a Blue MauMau post called Power of a United Phalanx, Richard Solomon spells out the facts:

There is one indispensible maxim – no matter what your franchise contract says, no franchisor can force abuse down your throat if he is confronted with a united phalanx of determined franchisees who have provided the resources needed to get the job done.

People who tell you that there is such a thing as “fair franchising” and touchy feely nonsense like that will never be able to lead you to a reasonably safe future. Abusive franchisors don’t give a tinker’s damn about chatters and whiners. They believe their contracts give them the right to do whatever they feel like, and only confrontation can deter the abuse. Abuse always carries with it the generation of additional revenue from the franchisees that they never contemplated when they signed their contracts. Abusive, opportunistic franchisors do not forego revenue streams because some sissy threatened to call them a name or to give them adverse publicity. Only with a united and funded independent franchisee association can you counter these kinds of people.

Do not confuse what I am telling you with an attitude of constant confrontation. The goal is not to have to confront your franchisor. You don’t have to confront anyone who has come to believe that you are a cohesive and organized force that will resist abuse. Being able to confront usually means you rarely need to confront.

You get the peace and profitability you deserve by being ready to go to war (marshaling resources).

Just because you thought you’d be given something should not stop you from defending what is rightfully yours: the fruits of your labour and investment: now and in the future.

phalanx n.1 Gk Hist. a line of battle, esp. a body of Macedonian infantry drawn up in close order.  2 a set of people etc,. forming a compact mass, or banded for a common purpose.

Solomon on flavours of Organized Crime

Richard Solomon is a dangerous man.

In a Blue MauMau October 13th comment called There is more than one Mafia, Solomon poses these questions:

1. Do you people really believe you are not dealing with organized crime?
2. Do you really believe every organized gangster dresses outlandishly and eats spaghetti all day?
3. Do you think that organized crime needs goons with guns to come around and shoot your children?
4. Is it possible that you are all that stupid?

The same questions crossed my mind as I lifted the rock on 3 for1 Pizza and Wings to discover they collected royalty fees — in person — each week – in cash.

Solomon goes on to describe a much more sophisticated predatory life form:

The other Mafia is Anglo Saxon Protestant or worse; wears very conservative tailor made suits; went to all the best schools; has a daddy who set him up so well that he could hire lower orders to do his dirty work; lawyers and contracts instead of guns; and professional managers instead of button men.

Judging by methods and results, can you honestly distinguish between Tony Soprano and  Rick Schaden or Mitt Romney (Bain Capital)? Are you experiencing a more pleasant life under Mitt the Shit than you would under Tony Soprano?

Solomon “Get real, people!”

Pure Solomon.

Pure wisdom.

Shaming debtors so they pay up

I think I love the Spanish.

They understand that public ridicule is a very powerful motivator.

I’d love to specialize in franchise industry-specific debt collection under the El Cobrador del Frac brand.

Or in English: The Debt Collector in Top Hat and Tails.

I had covered it in a previous post but a 2008 Independent article asks a very good question to recalcitrant payers:

If you owed a few thousand euros and found your footsteps dogged by a man wearing a top hat, tails and silken cummerbund, wouldn’t you pay up rather than face the humiliation of being shadowed by someone dressed like Count Dracula?

… El Cobrador del Frac – “The Debt collector in Top Hat and Tails” – is a nationwide operation which sends employees dressed like Hollywood villains to collect debts. To underline the message, the theatrically-clad collector carries a black briefcase with his calling spelled out in capital letters.

This YouTube video gives you a pretty good idea how they work. (I think when the 6 foot bunny follows you into the washroom, you’d tend to pay your debts.)

There is a very important distinction: They only target those debtors who (1) can afford to pay but (2) chose not to do so (voluntary deadbeats).

“We use no aggression, we just reclaim our debt. We fulfil an important social function,” he insists. “We don’t prey on cash-strapped individuals. We are dealing with professional debtors who know all the tricks and who can pay but don’t.”

I stay in franchising to reclaim debts.

“Get into business for Next to nothing”, said the Kid

Franchising offers a short-cut to prosperity.

Inexperienced people fall for a well-dressed up “get rich quick” scheme.

Over at Blue MauMau they’re saying that 70% of advertised franchise “opportunities” are bogus (ie. not investment worthy).

You should be wary of people promising “quick riches”: even if you seem to have to “work” for them,

This desire to get something for nothing has been very costly to many people who have dealt with me and with other con men. But I have found that this is the way it works. The average person, in my estimation, is ninety-nine per cent animal and one per cent human. The ninety-nine per cent that is animal causes very little trouble. But he one per cent that is human causes all our woes. When people learn – as I doubt they will – that they can’t get something for nothing, crime will diminish and we shall all live in greater harmony.

- Chapter: Early Adventures in Chicanery, The Con Game and “Yellow Kid” Weil, W.T. Brannon, 1948

Something for nothing (or some “bargain”) has proven very costly to many franchise investors.

But very profitable for those skilled in confidence games techniques.

Franchise Bar: The Name of the Game is Shame

Bad dog.

Filthy animal.

Shame dis-ables franchisees.

It breeds a cluster of behaviours that is inaccurately categorized as depression.

The affect of shame – humiliation disables their defences, confuses them and makes them appear to others (and themselves) as stupid, grim and uneducated: a lower caste.

My observation is that shame is the primary driver in modern, mom-pop franchising today. It is its strength and its downfall.

All addictions are either killed by those that benefit from them in the short-term. Or they kill the addicted host.

Dispute Resolution: Within a franchise, franchisors trigger this emotion on the individual level. When franchisees ask questions and surface to the public policy areas, the associations and their franchise bar takes over that shaming exercise. Of course, the cannon fodder lawyers (ie. Tier 2 intellectuals, overly-ambitious and -trusting) are sent into the parliamentarian No-Man’s-Land.

The franchise bar and their leaders are the engineers of this very high cash flow shame – silencing game.

Franchisees: Be Attentive.

1. The start for individual healing is identifying their depression as shame in drag and seeking out those that have gone through it. It helps with the isolation and sweeps away the confusion and deceit. Listen. Laugh. Live again.
2. Maybe looking at the Compass of Shame with your partner?
3. Always, always, always report in with the only true franchise professional: your family medical doctor.

Leave franchising to devour itself. There’s lots of interior work and other-centred work to do.

The worm will commit suicide just like every other totalitarian empire has despite the illusion of strength of its tin-pot tyrants.