The only sin is self-deception

April 19, 2011

Always comes down to free-will.

There’s no shame in not being ready. Play the role written for you. Don’t bet what you can’t afford to lose.

[Olly Moss]


Attentive presale due diligence is highly unreliable.

August 21, 2010

You maybe looking for one risk, be 100% accurate in quantifying it, sign but get totally blindsided by a hidden risk.

Our brains evolved to look for certain types of risks. They suck with highly abstract risks.

The breadth and depth of these dangrs is what I;m trying to suggest in my Risks section of WikidFranchise.

This video shows how easily attention to one thing blinds you to another.


You mean like franchisees?

June 11, 2010

Zombies.


Franchising relies on human learning weaknesses

May 1, 2010

Visual information can be deceiving.

Dan Ariely suggests that humans are predictably bad in making financial decisions.

I believe that is true and explains much of franchising’s cash flow.


How shall we fuck off, oh lord?

April 20, 2010

Raj Patel is not the messiah.

Even though his new book, The Value of Nothing, seems pretty good.


A thousand-yard stare

February 22, 2010

Some people feel that running a franchise is like being in a war.

They sometimes exhibit symptoms like combat stress reaction:

  1. fatigue,
  2. slower reaction times,
  3. indecision,
  4. disconnection from one’s surroundings, and
  5. inability to prioritize.

They show to their loved ones a Thousand-yard stare.

Look familiar?


Lizard in the morning, lizard in the evening…

January 29, 2010

Stuffing down lizard, early and later this am.

Again.

Godin‘s up to no good.

Again.

Be Attentive:

The lizard is a physical part of your brain, the pre-historic lump near the brain stem that is responsible for fear and rage and reproductive drive. Why did the chicken cross the road? Because her lizard brain told her to.

Want to know why so many companies can’t keep up with Apple? It’s because they compromise, have meetings, work to fit in, fear the critics and generally work to appease the lizard. Meetings are just one symptom of an organization run by the lizard brain. Late launches, middle of the road products and the rationalization that goes with them are others.

Don’t just do something,  stand there.

The amygdala isn’t going away. Your lizard brain is here to stay, and your job is to figure out how to quiet it and ignore it. This is so important, I wanted to put it on the cover of my new book. We realized, though, that the lizard brain is freaked out by a picture of itself, and if you want to sell books to someone struggling with the resistance (that would be all of us) best to keep it a little more on the down low.

Now you’ve seen the icon and you know its name. What are you going to do about it?

Take a holiday.


forever Jung and Half-formed boy Predators

January 28, 2009

calvinhobbes1Why won’t these little worms just grow up?

Enough is enough, already.

Yes, we know you’re tough and smart. We know the gym class shower room was demeaning. And yes pulling the wings off flies does hold some amusement value.

  • But seriously: Get some help in the second half of your life.

There are some people (mostly male) that think the worst of people, are never satisfied with any accomplishment and would rather kill something rather than share a little bit (let alone collaborate).

  • They’re so emotionally shut down and compartmentalized that all that’s left is fear and anger.

It’s been my experience that modern franchising is practiced by fearful men who lack the confidence and maturity that should have been formed during their boyhood. They’ve never learned to trust themselves, mask their inadequacies with arrogance and accumulate wealth but are unable to enjoy the use of those resources.

They act-out as if they were european dragons or worms (from the old English): like Smaug of The Hobbit fame: only hoard and destroy, are master hynotists, believe themselves to be invulnerable (although they are not), have a dry but cruel sense of humour with an “overwhelming personality”; their Achilles’ Heel is always hubris: overweening arrogance, superbia.

They try to deny part of their nature but it keeps popping up, especially when their Divine Right to Decide is questioned by lesser mortals.

One Model: Within every individual, there are two forces, world views or archetypes at play: every male has within him a female side, and every female has male characteristics within her.

Carl Gustav Jung identified unconscious forces called anima and animus.

  • anima is the unconscious feminine component of men and
  • animus is the unconscious masculine component in women.

Jung believed that the anima and animus act as guides to the unconscious unified Self, and that forming an awareness and a connection with the anima or animus is one of the most difficult and rewarding steps in psychological growth.

Jung reported that he identified his anima as she spoke to him, as an inner voice, unexpectedly one day.

Often, when people ignore the anima or animus complexes, the anima or animus vies for attention by projecting itself on others. This explains, according to Jung, why we are sometimes immediately attracted to certain strangers: we see our anima or animus in them. Love at first sight is an example of anima and animus projection. Moreover, people who strongly identify with their gender role (e.g. a man who acts aggressively and never cries) have not actively recognized or engaged their anima or animus.

Jung attributed human rational thought to be the male nature, while the irrational aspect is considered to be natural female. Consequently, irrationality is the male anima shadow and rationality is the female animus shadow. (Analytical Psychology)

When a half-formed male is seriously confronted, he becomes unglued: screaming, cursing, the issue becomes a life-and-death struggle against the Questioner. I’ve seen this type of tantrum up close and you tend not to forget the experience. I think every franchisee has experienced this.

  • It can be a franchisor, a lawyer, a politician: it doesn’t matter (see Big Franchising).

Irrationality is the shadow side of an unbalanced psyche and it gets played out in volcanic bursts of rage. Innocent questions are heard by the child as if you were trying to kill them. (And in a psychological sense, you are: you’re calling them to put aside their childish ways.)

  • In franchising, this acting-out these man-boys, empowered by iron-clad agreements that are the same across all systems,  have the 100% unilateral right to bankrupt you and drive you into a mental hell.

All of the rights are on one side: for mom and pops, franchising is Unsafe at any Brand.

After the honeymoon is over and you’ve signed on for multiple, self-reinforcing monopoly relationships, your economic gender assault can occur with very little warning or defence.

Calvin and Hobbes


Risk Compensation: Why franchise laws & regulations cause more risky investing

January 27, 2009

noparachute1All franchise laws should be immediately repealed.

Everyone would be better off knowing that they’re in an airplane with an empty parachute.

Specific franchise laws give a false sense of security that, paradoxically, causes investors to behave in a more risky way than if there were no laws.

BTW: The push for franchise laws (with very rare exceptions) has always been by the franchisor and the franchise bar, not by franchisee investors or their advocates.

  1. The U.S. has had state and federal franchise laws for +40 years.  Alberta, Canada since 1971, Ontario since 2000. The outcome is the same: still very high investor risks.
  2. Relationship laws have existed since 1956 in the U.S. The toughest state law (Illinois) doesn’t seem to have had much positive effect, one way or the other.
  3. Direct regulatory federal laws in the U.S. and Australia, although they have the statutory power, are not used, except on the occasional token, hapless, no-name franchisor.

The primary mechanism that causes this INCREASE in risky investment behaviour is found in a theory called risk compensation:

Risk Compensation is an effect whereby individual people may tend to adjust their behaviour in response to perceived changes in risk…Another way of stating this is that individuals will behave less cautiously in situations where they feel “safer” or more protected.

The more we feel safe, the more risk we feel we can take on without additional costs. [Wikipedia]

Risk compensation is most clearly shown in studies of cars equipped with ABS brakes. The stated intent of mandatory ABS brakes was to reduce injuries and death due to collisions.

  • The irrefutable evidence, however, is that drivers (unintentionally, for sure) compensate for having ABS brakes systems by driving faster, following closer and taking corners more sharply (ie. they increase their risky behaviour).
  • The collision rates stays constant because of the human tendency to compensate for improvements not only in brakes but seatbelts, bicycle helmets and even parachute design safety improvements.

Note: Booth’s rule #2:

  • The safer skydiving gear becomes, the more chances skydivers will take, in order to keep the fatality rate constant.

Everyone’s first instinct is to cry for a law or an improved law against human behaviour. Risk compensation theory indicates that this is a fool’s errand and it is consistent with my study of franchise law over the last 10 years.

Opportunistic franchisors and their advisors know this human, perfectly non-rational characteristic to compensate for perceived “safer” situations.

Predators rely much more on their abilities to read human nature accurately, than do their prey. (It is wise to remember that there are only 2 principle ways to succeed: doing good work or cheating.)

Additionally, the Authority of the State is most clearly manifested in a law or regulation. Since the state holds a monopoly on coercive action (exercised by the police, military, courts, etc.), any franchise law signals a state “sanction” of sorts.

In this way, the state’s ultimate secular authority and legitimacy is attributed to the most poo-filled franchise system. It gives credence and camouflage to an industry without control or standards.

The Science of Persuasion: In the very important book Influence: The Psychology of Persuasion, Bob Cialdini calls authority his 5th of 6 “Weapons of Persuasion”:

  1. The logo of the FTC, the ACCC or the Ontario Legislative Assembly confers a legitimacy that can be exploited by some (badge of authority).
  2. Government guaranteed loans confer an aura that “This must be okay because the government and a Big Bank is risking their money, too” to even the most wicked scam (authority).
  3. The threat of  a lawsuit triggers (1) the fear of poverty and shame (bankruptcy) but also (2) of being perceived by other as behaving in an anti-social or near “criminal” way (social proof).
  4. Oh how charming everyone is, before you sign and how much you’ve become a shithead when you start to question the status quo (liking).
  5. How franchises that you should be paid to run, can instead be sold for 100,000s of  $ because of some “secret sauce” spiel (scarcity)

There is much hard science behind being persuasive that can be used for good or ill.

Take a look at this 3:11 video book review and imagine how Cialdini’s 6 Laws (reciprocity, commitment & consistency, authority, social proof, liking, scarcity) are used to snare franchisees.


They think they’re Owners: Why franchisees delay in bailing

December 30, 2008

Franchisees stay in money-losing operations much too long because they make a fundamental error (own versus rent).

They see themselves as “owners” of their business, while in fact, they are conditional renters of trademarks and an operating system.

  • This makes them overvalue their investment and continue to invest much, much more of their own personal identity in the business.
  • This is particularly true because the new renter is much less likely to share in that inflated worth.

This mismatch makes a negotiated sale much less possible, without adding in all the self-interest and network issues that the franchisor can bring to the table.

This video from Dan Ariely (Predictably Irrational) shows some research that was done that tends to support my conclusion. Summary:

  1. owners (sellers) would sell at $1,400, while the
  2. buyers valued the tickets at only $170.

Those that thought they were an owner, inflated their value by 8.2 times the market value.


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