Franchisee organizations need legal standing in civil litigation

It’s only fair to both sides and will stop the continuing carnage.

Independent franchisee associations, IndFA and their consultants should be treated as if they were individuals within a franchise agreement.

• Franchisors’ corporations get to accumulate over decades information, expertise and capital.
• Franchisees should have the same advantages by building their own IndFA and contracting with a consulting firm that specializes in leadership development,  conflict resolution and system reform.

Dr. Gillian Hadfield: Amend the Bill to include mechanisms for low cost enforcement of the rights and obligations. Mechanism could include permitting franchise association/class standing in civil litigation; dispute resolution mechanisms including mediation that would operate outside the civil litigation system.  SUMMARY OF RECOMMENDATIONS, BILL 33 – Franchise Disclosure Act, 1999, Legislative Assembly of Ontario, Canada, March 31, 2000

– Justice, Plaster model created by Walter Allward between 1925 and 1930 and used by stonemasons in the construction of the Vimy Memorial in France. The figure of Justice leans her forehead against a sword hilt.

The silence of possible betrayal

Franchising is a technology that borrows methods from totalitarian strategies.

The Womb State

Totalitarianism  is a  man’s escape form the fearful realities of life into the virtual womb of the leader. The individual’s actions are directed from this womb – from the inner sanctum. The mystic center is a control of everything man need no longer assume responsibility for his own life. The order and logic of the prenatal world reign. There is peace and silence, the peace of utter submission. The members of the womb state do not really communicate; between them there is silence, the silence of possible betrayal, not the mature silence of reticence and reservedness. Totalitaria increases the gap between the things one shows and communicates and the things one secretly dreams and thinks deep within oneself. It develops the artificial split-mindedness of political science. Whatever little remains of individual feeling and opinion is kept carefully enclosed. In the schizophrenic world of Totalitaria, there is no free mutual exchange, no conversation, no exclamation, no release from emotional tension. It is a world of silent conspirators. Indeed, the atmosphere of suspicion is the big attacker of mental freedom because it makes people cling together, conspiring against mysterious enemies – first from outside, then among themselves….

The deep hate the sick individual feels toward the parental figure cannot be expressed directly, and so it is displaced onto the self or onto scapegoats. Scapegoatism is also part of the totalitarian strategy. As we pointed out before, the scapegoat temporarily absorbs all the individual’s inner fury and rage. Kulaks, Negroes, Jews, Communists, capitalists, profiteers and warmongers – any or all of them can play the role. Perhaps the greatest dangers, to the totalitarian mind, is the use of intellect and awareness and the “egg-head’s” demand for free, verifying thinking. Aberration and perversion are chosen by the citizens of Totalitaria, as they are by the inhabitants of madhouses, over tiring, intellectual control.

– Dr. Joost A. M. Meerloo,The Rape of the Mind: The Psychology of Thought Control, Menticide, and Brainwashing, 1956, p. 121 – 2

Any form of leadership may gradually turn into dictatorship.

Thinking of the recent challenges faced by a specific franchisor.

Being a leader, carrying great power and responsibility for other people’s lives, is a monumental test for the human psyche. The weak leader is the man who cannot meet it, who simply abdicates his responsibility. The dictator is the man who replaces the existing standards of justice and morality by more and more private prestige, by more and more power, and eventually isolated himself more and more from the rest of humanity. His suspicion grows, his isolation grows, and the vicious cycle leading to a paranoid attitude begins to develop.

The dictator is not only a sick man, he is also a cruel opportunist. He sees no value in any other person and feels no gratitude for any help he may have received. He his suspicious an dishonest and believes that his personal ends justify any menas he may use to achieve them. Peculiarly enough, every tyrant still searches for some self-justification. Without such a soothing device ofr his own conscience, he cannot live. His attitude toward other people is manipulative; to him, they are merely tools for the advancement of his own interests…

It is because the dictator is afraid, albeit unconsciously, of his own internal contradictions, that he is afraid of the same internal contradictions of his fellow men. He must purge and purge, terrorize and terrorize n order to still his own raging inner drives. He must kill every doubter, destroy every person who makes a mistake, imprison everyone who cannot be proved to be utterly single-minded…

– Dr. Joost A. M. Meerloo, The Rape of the Mind: The Psychology of Thought, Control, Menticide, and Brainwashing, 1956, p 115-6.

What has our franchisor ever given us?

Running some meetings are more difficult than others.

It is in the long run that the corporation lives.

John Kenneth Galbraith spoke of “countervailing power”. [Detail]

His analysis is useful in viewing franchisee and franchisor relationships.

The massive reduction in risk that is inherent in the development of the modern corporation has been far from fully appreciated.

All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum.

In the assumption that power belongs as a matter of course to capital, all economists are Marxians.

- JKG 1908 – 2006

War if necessary but not necessarily war

Canadian Tire is a rare franchisee success story.

At one time, Canadian Tire,  grocery and auto dealers all used to have real power with their franchisor. The grocers and auto dealers went south over the decades.

Only Canadian Tire consistently stood up to their franchisor and resisted being betrayed by their “professionals”.

Anytime the franchisor had a stupid idea, slam, the CT franchisees hammered them.

• Smart. Tough. Cohesive.

Use legal, organizational and technological leverage to move your franchisor

Multiply your efforts by using the laws of our society intelligently.

Accelerating Relationship Leverage

A private for-profit corporation (anonymous franchisee shareholders) AND a 100% locked-down, franchise law-specific indexed document database (wiki) pivoting WITH a highly public attorneyless franchise network.

Benefits

• solves the information and resource imbalance endemic in franchising,
• takes less than 3.0 per cent of franchisees needed to start as shareholders,
• valuation of for-profit calculated annually (franchisees will clamour for 0.1% share in 5 years),
• allows innovators and early adopters to carry at first,
• focuses attention on a single, credible voice for franchisees that is respected because it is in the franchisor’s  self-interest to do so,
• shareholder anonymity balanced with managerial control (no one shareholder can highjack the agenda),
• accesses the most cautious investors (overcomes stigma of betrayals and organizational collapse),
• retains franchisee “equity” (for-profit franchisee corp. directly aims to support and increase re-sale value),
• prevents much of future franchisor opportunism: self-interest with deceit (franchisee cost avoidance),
• voluntarily shifts capital from franchisee’s “equity” (temporary, illusory) to group equity (real),
• more able to reform system rather than just legally fight and be forced to leave,
• facilitates: vendor programs, franchisee self-borrowing, stock purchase PADs, training, life:work balance,  buying/selling franchises,
• each franchisee is issued a membership in the attorneyless franchise network and a share in the for-profit corporation (one share),
• enables former franchisees to invest (if desired),
• strategically positioned to defend against private equity vultures,
• builds trust with shareholder group (external investments, reducing risks, development),
• accesses and retains expertise that dues-paying organizations cannot afford, and
• capitalizes on the fact that CDN, ON Court decisions have shifted economics on dispute resolution in franchisees’ favour.

Costs

• takes time, need for long-term perspective,
• 24 franchisee shareholders to start “risking” 2% of their cash they’ve made in the last 10 years,
• requires patient shareholders (no interest payable initially).

Why franchisees need $1-million cash in the bank

To have profitable peace with  your franchisor, you better be preparing for war.

Listen to George:

Pacifism is objectively pro-fascist. This is elementary common sense. If you hamper the war effort of one side, you automatically help out that of the other. Nor is there any real way of remaining outside such a war as the present one. In practice, ‘he that is not with me is against me.’

If you turn the other cheek, you will get a harder blow on it than you got on the first one. This does not always happen, but it is to be expected, and you ought not to complain if it does happen.

War against a foreign country only happens when the moneyed classes think they are going to profit from it.

We sleep safe in our beds because rough men stand ready in the night to visit violence on those who would do us harm.

- George Orwell

Capital must accumulate and patiently wait

A for-profit, multi-share  corporation is the only effective means of preventing future franchisor opportunism.

Only got non-profit, dues-supported IndFA after 3 years?

• License for impotence at best, failure at worst.

Elites take criticism very badly.

Today, the term courtesan has become a euphemism to designate an escort or a prostitute, especially one who attracts wealthy clients.

Apart from their self-assurance, the most common characteristics of our elites are cynicism, rhetoric and the worship of both ambition and power. These were also the characteristics of eighteenth-century courtesans. The assumption is that the world-weary-cynicism demonstrates intellectual superiority. In reality it indicates neither intelligence, experience nor accuracy. If anything, it demonstrates mediocrity and an inability to profit from experience. To be world-weary is to be willing to go on repeating old mistakes. p.580

…

I am invariably struck when dealing with members of our elites by their profound  pessimism. Above all, they are pessimistic about the human character. They consider it unlikely that the average individual will work hard enough or recognize beauty or vote for the best policies or even obey in a suitable manner. They take as a given that this individual cannot or will not understand the complexities of whatever responsibilities fate has thrust upon someone who has expertise and power. p. 582

- from the chapter, The Virtue of Doubt, Voltaire’s Bastards, John Ralston Saul

List of Prostitutes and Courtesans

[O]ur élite is primarily and increasingly managerial. A managerial élite manages. A crisis, unfortunately, requires thought. Thought is not a management function.

 - Reflections of a Siamese Twin