Ray Borradale: Australia’s favourite and honoured franchisee

Advocates are made by predators.

I owe my franchisor, Nutri-Lawn, a lot.

Maybe Midas taught Ray something.

He continues to contribute by writing on Blue MauMau.org where his comments ring true.

Going Independent: breaking the franchise chain

I started renting a Nutri-Lawn franchise in 1992. I built it up to be the 2nd largest fertilizing and chemical application service in Simcoe County.

This is what my trucks like when I was a franchisee.

Long story…I decided to stop operating under that logo so the trucks went “vanilla” briefly in 1998.

Then I put my customers into a new image (Lawn Depot) for 3 years.

Only 3 ways to get out of franchise:

1. abandon it (leave all sunk and actual investments for the next guy),
2. sell it (with the franchisor’s approval) to the next franchisee or franchisor or
3. go independent (just say no).

Lessons learned from franchised  to independent business:

• kept 95% of my residential customers/sales,
• achieved 115% of commercial business,
• customers buy services from people they know and trust (logo on the truck is useless in 99% of Tier 2 franchises),
• started Ontario’s 1st purchasing co-op for lawn care operators, and
• dropped 20% of my fertilizer, chemical costs.

I added lawn sprinkler service and installation in 1994. I continue today to serve these customers.

Profitably, with one spouse and without having to lie to support my family.

Glen my next-door neighbour said I went Nutri-Gone.

franchise Churning: Sell ‘em, Take ‘em back and Sell ‘em again

“I should have bought a fucking Hortons,” so Peter told me.

Maybe yes. Maybe no.

Peter Bell is an original.

He and I were Ontario Nutri-Lawn franchisees in the 1990s. He was in a partnership with a “friend” Marc Thiebaud at OGS, in the Oshawa/Whitby area.

Peter is smart. He didn’t take the legal dead-end like I did. But both he and I signed based on false earning claims delivered by wonky pro forma income statements.

In 1998, from the franchisor’s unusual point of view, Nutri-Lawn had 24 successful Ontario territories (ie. open, paying royalties).

From the franchisee investor another picture emerges. From 1990 to 1997 of the 24 territories:

1. there were 17 franchisee ownership changes,
   
2. 3 were on their 3rd franchisee, and
3. 11 were on their second.

In 8 years in Canada’s most prosperous province.

Zero bankruptcies because everyone else sold their pig of a business to the next mark. I defied their stupid, hard-to-enforce non-compete clause and took my customers into another company while I fought them in Court. Mine (I think) was the only legal challenge and subsequent, rather high-profile bankruptcy.  Summary

Peter and I both got hung out to dry, but God, we had a few laughs.

Churning: the rapid selling, failure, retaking and re-selling of franchises. Can be intentional or unintentional but the outcome is the same for the investor. Useful to change the logo (old on top).

Lipstick on a pig.

A hallmark of even the bluest of “blue chip” systems.

Sotos LLP: The McDonalds of CDN franchisee lawyers?

I have learned directly, personally, in-their-armpits relationships from the best in franchising.

Ted Gorski, McDonald’s, CollegePro Painters, Nutri-Lawn, Tony Martin, Canadian Imperial Bank of Commerce, Sam Grange, John Lorinc, Paul Herminston, Katherine Swinton, Canadian Franchise Association, Country Style, Gillian Hadfield, Michael Webster, Jay Harris, etc. They’re all brilliant in their areas of expertise.

When I got into a corner and thought I needed legal help I hired the best I couldn’t afford. John Sotos was my on-and-off-again lawyer from 1998 t0 2000 and I learned a great many things from John and his partner David Sterns. Both John and Michael told me to look at and talk to the banks. Oddly enough, the first lawyer I talked to about franchising in 1982 is now a Ontario Superior Court justice in Barrie. I like lawyers but they’ve got to cover their rent too, you know!

Many franchisees want to fight.

That’s good…and bad at the same time.

Many franchisees think in terms of black and white; now or never; us/them.

That’s good…and bad at the same time.

Many franchisees would rather choose a “white knight” professional instead of a group of franchisees plotting their own course.

That’s not good…and really, really horribly bad.

The McDonald’s U.S.A. president described his corporation as a real estate company with an interest in hamburgers. Let me repeat: McDonald’s is a landlord (to franchisees) with an interest in fast food.

I learned that the economics of modern litigation is very similar.

1. The franchise industry legal cash flows = 95% by franchisors,
2. Once the retainer is paid any consultants are shown the door (only one expert, please),
3. Franchisees are one-shot clients (v. repeat business for franchisors),
4. Disclosure laws are a God-send for billable hours, and
5. The industry has a very, very long memory for those that oppose it’s interests.

All lawyers are businesspeople that operate in a near-monopoly on certain words and concepts.

Learning these terms is not hard if you have (1) a learning tool and (2) a willingness to face some difficult facts.

Most let their emotions rule their decision making (ie. denial and fear) but in their defense, aren’t really conscious of doing so. They’ve been conditioned to be on their knees and look to Daddy for acceptance.

Education is the only way out.

WikidFranchise.org

The Apprenticeship of Les Stewart

Some background:

• born on RCAF Station Senneterre, PQ, 1959,
• school: Cedarview and Forest Hill in Midhurst, St. Mary’s, St. Joseph’s and North Collegiate in Barrie,
• twice a franchisee (Arjay Painting and Nutri-Lawn, Midhurst, ON),
• a franchisee’s crew Barrie and 1st assistant manager, Orillia 3254, McDonald’s Canada (B.O.C., Silver Hat, & AAA, 1972-80),
• BA, 1983 and MBA, 1987, The University of Western Ontario, London, ON,
• Medical audit coordinator, St. Thomas Psychiatric Hospital, St. Thomas, Canada, (1987, provincial psychiatric hospital),
• Budget analyst, Victoria Hospital, London, Ontario, (acute care regional teaching hospital, 1988-92),
• founded Canada’s 1st national franchisee association, Midhurst, ON (Canadian Alliance of Franchise Operators, CAFO, 1998-2005),
• been sued twice: Nutri-Lawn’s then owner, The Franchise Company (FirstService Corporation) and then then by a consulting client’s franchisor (Tupperware Canada Inc.), SLAPP,
• took my franchised lawn care business independent in 1998,
• represented myself at an injunction hearing, franchisor unsuccessfully sought to enforce their non-compete clause, Barrie, ON, 1999 (Justice Paul Herminston, Barrie),
• experienced a 5 day trial, (Justice Katherine Swinton, Toronto,  May 1999),
• lost (+$125,000 unfavourable award),
• bankruptcy papers for self and corporation when the fee waiver agreement was withdrawn (Jay Harris, Harris & Partners Inc., 2001),
• unpaid policy analyst for Mr. Tony Martin, MPP Sault Ste. Marie, 1998 to 2001 (provincial, federal politician),
• expert witness at public hearing which lead to Ontario’s first franchise law, Toronto, ON (Arthur Wishart Act (Franchise Disclosure), 2000),
• created the Information Sharing Projectand submitted unsuccessful project proposal to the Ontario Ministry of Consumer and Commercial Affairs in 2003 (digital teaching, due diligence and business risk assessment tool; embryonic form of WikidFranchise.org),
• identified Predatory Franchise Lending to Industry Canada, 2005 (18 month investigation: bank, consultant, franchisor, Office of the Privacy Commissioner of Canada, Minister of Finance, RCMP Commercial Crime Unit, OBSI, FCAC, PMO, etc.),
• case preparation for a +$6-million civil law suit based on predatory lending principles,
• media contributor, 1997 – present,
• contributed to the Prince Edward Island, Ontario, West and South Australian franchise inquires, http://www.cafo.net (ret.),
• Blue MauMau contributor: 459 posts (since Oct 2007),
• founded and editor of FranchiseFool weblog: 1,082 posts, 150,732 views & 994 comments (since Feb 2008),
• founded and co-editor of WikidFranchise.org, world’s 1st independent industry reputation wiki (repository of franchise-specific documents, unique business risk search capability, and open source archive for investment-grade information): +2,300 documents, 324,054 hits  & 7.5 GB bandwidth downloaded, (since Feb 2009),
• endorsed Bill 102, An Act to amend the Arthur Wishart Act (Franchise Disclosure), September 23, 2010,  Legislative Assembly of Ontario (start @ 1440),
• attended the International Association of Franchisees and Dealers annual conference, Indianapolis, 2010,
• attended Ontario Bar Association annual Franchise Law Conference (2009 and 2010),
• named Knight of the Year – 2011, Barrie Council 1626, Knights of Columbus, Barrie, ON,
• editor of FranchiseBanker.ca weblog: 21 posts, 588 views & 14 comments  (since March 2012), and
• leadership training and support to independent franchisee associations (members, boards and executives),
• team member: management consulting team specializing in mom-and-pop business format franchising,
• pre-trial development of large-scale group and class action legal actions, and
• ongoing investigations (Les Stewart Consulting, 2000, LinkedIn).