United Kingdom franchise media: What soap?

UK journalists are still a lapdog when it comes to franchising.

Whenever I read the regurgitated franchisor press releases routed through the Kiwi-based Franchise-Chat.com, I want to retch. You seldom see such drivel ever making it past any self-respecting business editor in North America.

  • Kudos to the Oz and NZ rodeo clowns for wising your media to the International Brotherhood of FWW-FIBS [Franchisor Wankers Waiting for Franchise Investors to Bend down for the Soap]

A good example is the breathlessly titled: Flourishing franchises buck trend that was published by Adam Aiken at the Eastern Daily Press.

These “facts” are given to us by Natwest Bank and the British Franchise Association survey while some consultant [read: salesman] named Roy Seaman of Franchise Development Services says:

  • only 5% of franchises fail when
  • 65% of non-franchised small businesses fail.

Bullshit. Bullshit. And then more bullshit.

Please find below my very restrained email to Mr. Adam Aiken, Deputy Business Editor.

No response yet but I promise to report back, if they bother to wake up.

Date: Wed, 6 Aug 2008 21:30:13 -0400 (EDT)
From: “Les Stewart” <xxx.com>
Subject: Flourishing franchises buck trend
To: “Adam Aiken” <adam.aiken@archant.co.uk>

Adam,

I would question the credibility of the survivability of franchised versus non-franchised businesses. The North American franchise industry was well-known for bragging of such lower risks than independent businesses but was subsequently proven dead wrong by academics such as Timothy Bates, Gillian K. Hadfield and Scott Shane.

Knowledgeable scholars who study franchising issues routinely express contempt for the failure rate statistics publicized by franchisors. Francine Lafontaine, for example, states ‘one of the major selling points of franchising to franchisees over the years has been the statistics vehiculated by the trade press on the very low failure rates of franchised businesses compared to independent operations. These statistics never had real scientific basis’ (p. 14, 1994). Such criticism does not deter the industry.

Survival Patterns among Franchisee and Nonfranchised firms started in 1986 and 1987, U.S. Department of Commerce, p. 6.

The information that is in article, in my opinion, is seriously misleading to potential small business investors. I suspect an Australian site [BakersDelightLies.com] is more representative of UK investors’ experience rather than one-sided franchisor-only hyperbole.

If you’d like to take a look, I think my weblog and the U.S. Blue MauMau community provides a more independent view.

Les Stewart MBA
Midhurst, Canada
lesstewart.wordpress.com

One Response to United Kingdom franchise media: What soap?

  1. Carol Cross says:

    Obviously, this irresponsible reporting and hyping of franchise success does the job that it is intended to do and nobody is held responsible because who really knows the real failure rate of franchiSEES?

    Franchisors are encouraged by government and the special interests in the status quo as a means of stimulating the economy. Franchisees are merely expendable resources of cheap labor and cheap “venture” capital for the the franchisors who don’t always fail when their franchisees fail if they can acquire the assets of the failed franchisee to continue in the service of the franchisors.

    Why is it that franchisors can sell their franchises without disclosing their prprietory UNIT historical performance statistics to new buyers? Why is it that the sellers of franchises have no obligation to the buyers of franchises to make full disclosure of the risks and rewards as known to the franchisors before the sale is completed?

    Why is it that irresponsible and untrue comments concerning the risk of franchising to the franchisees is never corrected by the reporters and the myths are perpetuated?

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