Can an empire be saved by shaming investors like Ariel Buk?

There are costs involved in maintaining investor confidence and commercial relationships. Some people need to learn to “take one for the team”.

Ariel Buk and Sonia Karabin may need to understand that they should cool down, be quiet and go away about losing a $85,000 deposit on a non-existent Ontario, Canada franchise. They and, by extension, the many hundreds of other “failed franchisees” need to be taught their role in this confidence game by the industry stakeholders: take one for the team or risk being shamed.

1. James Daw presents the story in yesterday’s Toronto Star article,  Ice cream dream becomes nightmare about Mr Buk’s experience with Piazza Gelateria and Café. This is shrewd. For example, Mr. Daw opines:

They [husband and wife] should have looked more closely at the business opportunity, and their decision to use mainly borrowed funds after Buk had lost his job.

They should have considered the minimum $300,000 cost of a lawyer to sue for a refund if things went wrong, and the chances of recovering anything from a relatively young numbered company.

2. Robert Cialdini lists authority as one of Six Weapons of Influence. My experience is that attorneys are given a  lot of authority by new Canadians. Many of us see past their pretensions, BS and fear. [Examples of authority.]

Ben Hanuka of Davis Moldaver LLP is quoted as saying:

“Very few mom-and-pop franchisees ever go to that length (of hiring experts to research a franchise opportunity),” says Hanuka. “It sounds too complicated to them.”

All it well with the world the reader is assured. Go back to sleep because these people get what they deserved. The blame lies with:

  1. the anonymous, individual “other” (mildly retarded immigrant scapegoat) deserved what he got (“your success follows from your blind obedience to authority” dogma)  and not that
  2. stakeholders align their self-interest in maintaining a facade of legitimacy: not a fake, or a Potemkin village scheme which has preyed upon identifiable groups, in plain sight,  since at least 1971.

Social Psychology-based Hypothesis: Elite stakeholders deflect systemic wrongdoing by using the largely-internal mechanisms of On Cooling the Mark Out by Erving Goffman (shame-humiliation effect) while using the public’s widespread fallacy of theBelief in a Just World, BJW (Melvin Lerner, retired University of Waterloo, Canada) in the country’s largest daily newspaper.

Every dying empire resorts to displays of public humiliation.

Why were people crucified in Jesus’ time?
Crucifixion was a Roman custom used on the worst malefactors and rebellious slaves. Judea was a tributary to Rome at that time. It is recorded by the Jewish historian Josephus that after the last rebellion of the Jews and the capture and razing of Jerusalem, the countryside was practically denuded of trees the Romans crucified so many. WikiAnswer

Detail: Crucifixion was often performed to terrorize onlookers into submission. Victims were left on display after death as warnings. Crucifixion was usually intended to provide a death that was particularly slow, painful (hence the term excruciating, literally “out of crucifying”), gruesome (hence dissuading against the crimes punishable by it), humiliating, and public, using whatever means were most expedient for that goal. Crucifixion methods varied considerably with location and time period…

While a crucifixion was an execution, it was also a humiliation, by making the condemned as vulnerable as possible. Although artists have depicted the figure on a cross with a loin cloth or a covering of the genitals, writings by Seneca the Younger suggest that victims were crucified completely nude. When the criminal had to urinate or defecate, they had to do so in the open, in view of passers-by, resulting in discomfort and the attraction of insects. Despite its frequent use by the Romans, the horrors of crucifixion did not escape mention by some of their eminent orators. Cicero for example, in a speech that appears to have been an early bid for its abolition,  described crucifixion as “a most cruel and disgusting punishment”, and suggested that “the very mention of the cross should be far removed not only from a Roman citizen’s body, but from his mind, his eyes, his ears.” Wikipedia

Humiliation is the most unpredictable, violent and destructive human emotion. It can result in many types of loss (see Bob “Bhupinder” Baber, WikidFranchise)

7 Responses to Can an empire be saved by shaming investors like Ariel Buk?

  1. Carol Cross says:

    Yes! In retrospect the media reporters like James Daw so often want to spread the blame to the victim who shouldn’t have been approved in the first place for a loan to “gamble” on this franchise after he lost his job.
    ” .

    It is not surprising that the Business Press cooperates with the status quo and the special interests to protect the hybrid business model, i.e. “franchising” in what they believe to be their best interests.

    The business media cooperate in hiding the intrinsic very high risk in the purchase of any franchise and generally blame the victims for their lack of efficient due diligence prior to purchase when they write articles for public consumption. It is not politically correct to knock frtanchising which is supported by public policy and the powserful special interest groups.

  2. What I would want to know from Ben is whether his services have actually prevented anyone from buying a crappy franchise.

    I very much doubt that Ben could have a) seen this as a fraud, and b) convinced his clients of that.

    Ben is essentially repeating the tired phrase – you should have done your homework- when he knows that it would not have mattered that the couple did their homework.

  3. Les Stewart says:

    Michael,

    Perhaps what lies at the heart of this “2 worlds” issue is a fundamental underappreciation for the power, clarity and potential of groups of franchisees.

    Many attorneys have little time or interest in understanding this ingroup norms, standards and argot. They attribute group behavior based on their individualistic, one-on-one legal/medical model training.

    You have invested time and energy in that study and are uniquely qualified industry “bilingual” stakeholder.

    I appreciated you introducing me to Cialdini and Goffman and working through some preliminary thoughts regarding confirmation bias and cognitive dissonance.

    I look forward to seeing what other social psychology insights might lead to greater franchisee self-knowledge.

    Les.

  4. Les;

    I should probably qualify my remarks, Ben probably doesn’t know he is repeating nonsense.

    Which makes him, and many more, all the more dangerous.

  5. Ariel Buk says:

    My name is Ariel Buk and I have been a victim of someone that knew exactly what he was doing, he was clearly taking my money and walking away. I am a proud immigrant in Canada, my kids are Canadians and this is my country as much as yours. We are not perfect like you and I am not sorry about that. You should be ashamed of your words and should take them back….

  6. Ariel, all of us posting here feel very sorry for your loss. But, we think that you are being hung out to dry by the legal system, the court system and other interested commentators.

    Certainly, nobody who is posting here is perfect. Indeed, that is part of the point. Some people are pretending that if you had just consulted them, you would not have lost your money.

    Les and I are very skeptical about that claim.

  7. Carol Cross says:

    Ariel —I am sorry for your loss. I am trying to point out that the status quo of the law that is supported by public policy ENABLES franchisors and banking and lending institutions to victimize prospective franchisees and take their money and homes (posted as collateral) with immunity under the law because franchising, which is “gambling” is protected by government.
    ,
    The qualifications to be a franchisor under law have been set very low in order to encourange franchisors and in order to protect them from the franchisees (who are merely resources to try to grow THEIR businesses) when the franchisees businesses fail to thrive.

    You are correct. The franchisors KNOW they have this protection and that they can victimize franchisees with immunity under existing laws. The franchisors themselves sometimes become the victims of this business model called “franchising” that is protected at the highest levels of government throughout the world because the startup of small businesses is considered to be vitally important to local economies.

    http://thegreatfranchisingrobbery.blogspot.com

    Blaming the franchisees for not doing better due diligence deflects attention away from the systemic abuses in the sale and the financing of franchises.

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