Class-action lawsuits poised to make franchisors eat humble pie

January 20, 2011

Ontario justices are sending a strong message to franchisors to play nice when sharing profits.

Pet Valu, Midas, Shoppers Drug Mart, Quiznos, Tim Hortons, Bulk Barn, Sunoco…just the first.

The cases often revolve around how the franchisor uses its power to set the prices – both the prices that franchisees must pay for the products they sell, and how much they can sell them for.

“It’s about dividing up the profit pie. And the person who has the pie cutter is the franchisor. And so, they cut themselves the biggest piece,” Mr. Sterns said. “But on the other hand, the franchisees are the ones who put a lot of investment into making the pie.”

Mr. Shaw is absolutely right and absolutely wrong:

  1. The technology for organizing pre-trial franchisee groups is improving (daily) but
  2. This is just the tip of the iceberg.

I guarantee that.

[see Revolt of the Franchisee: Behind some of the biggest brands - Midas, Quiznos, Tim Hortons - the messy class-action battles or The Globe and Mail]


UPS franchisee slain in Toronto, Canada

February 25, 2009

upsstoreThe Globe and Mail and Timothy Appleby reported yesterday on the death of a 36-year-old, newly married businessman who had recently purchased a UPS store.

Whoever killed George Koutroubis ensured the Toronto businessman’s demise was painful and thorough: A source familiar with Peel Region’s third homicide investigation of the year said Mr. Koutroubis was “beaten almost beyond recognition.”

No suspects have been identified and no arrest warrants issued. Complicating the investigation is the fact that the recently married Mr. Koutroubis, a graduate in business studies, had no known criminal history.

The article ‘Beaten almost beyond recognition’ [.pdf] continues:

But a theory police have been exploring from the outset is that along with business interests encompassing part-time ownership of an elegant downtown restaurant, a United Parcel Service franchise and several rental properties, Mr. Koutroubis worked as a bookie, expediting sports bets.

Insp. English declined to say if gambling played a role in his death.

“At this stage, I am not prepared to comment on that aspect,” he said.

My best wishes go out to the Koutroubis family and friends.


The Class War is Over, and We Lost

January 30, 2009

redstallionFranchising is one part of a bigger picture.

Increasingly, it is more difficult for good people to do ignore this hollowing out. You make your choice by choosing to do nothing.

My brother-in-law Leo ran a gas station and then had a Red Stallion franchise. His dad ran the same 2-bay Sunoco garage in the east end of London, Ontario for decades.

When I was just starting into looking into franchising, about 10 years ago, Leo said something that I remembered when I watched the video below:

Franchising is just a part of the puzzle, Les. They’ve been screwing small businesspeople for years and years.

It’s like a lot of things” is what Gordon Pitts said this to my wife in 1998 when she called about franchising. Pitts is the  editor at The Globe and Mail newpaper, Canada’s national business daily.

Below is a video 9:43 video with Bill Moyers interviewing economist Dean Baker and journalist Bob Herbert. Dean is a frequent contributor to Beat the Press weblog where his comments seem ring true.

These are my impressions:

  1. Franchising is only one part of  an ongoing economic clear-cutting of non-elites.
  2. Predatory actions are the new American Dream, including small business lending.
  3. The media is not asking for solutions, they’re part of the problem (bias is not recognized).
  4. Listen to the nuns: chicanery happens when you neuter the watchdogs.
  5. Bailouts have zero accountability (paying out the elites who got us in this mess).
  6. Debt enslaves. Usury is a forgotten concept.
  7. Any collective impulse such as unions (or Independent Franchise Associations or national groups of IndFA) is ridiculed which maintains the elite’s control.
  8. Employers simply terminate troublemakers: It’s cheaper to drag it out for 2 to 3 years and pay a small fine, if anything at all. Ditto in franchising.

I never really thought about class warfare before.

  • I think about it a lot more lately.

The bilateral Value of Symbolic, non-violent Acts

December 19, 2008

ricksalutinIn The Globe and Mail newspaper opinion article named Peace on Earth, good shoes toward men, author Rick Salutin touches on an important point.

In the face of overwhelming power, symbolic acts are important. They hold the promise of growth for both sides of any conflict.

Specifically:

Journalist Muntader al-Zaidi, the shoe thrower of Baghdad, has given us all a Christmas present – like the gift of the Musli – in the form of a new way to react to rage and conflict, one that’s symbolic and non-violent. It evokes respect, even from its target, rather than further rage and violence.

Salutin seems to know a little bit about humiliation and shame:

Symbolic acts are therapeutic for people who feel, like many Iraqis and Palestinians, humiliated. You not only lose your homes and lives, you lose your sense of dignity. A restrained, controlled act helps restore that sense.

You could see it in the creativity of people raising shoes on poles in recent demos demanding U.S. withdrawal from Iraq, or pelting military convoys with shoes – rather than blowing them up with IEDs, which assault terrified young soldiers instead of the decision-makers. The latter are rarely exposed, except at press conferences, where the indignity can descend on them, if they have to dodge around like targets in a dunk tank.

He argues that even the targets are helped via non-violence:

Such acts can even be helpful for the targets. “This is a gift from the Iraqis … you dog!” yelled the shoe thrower. But he gave George Bush a chance to look quick on his feet and more astute than he ever did after 9/11. Remember his doltish “analysis”: It’s because they hate us for our freedoms. Here he called it an “interesting way for a person to express himself” – as if it gave him something to reflect on, for once. So it was a gift.

Litigation of any kind is a violent activity and should be avoided. It’s not a matter of winning and losing: It’s a matter of not being tricked into degrading yourself to their level.

  • Let’s put our heads together and throw some shoes and dodge the trap of being sucked into a war without end.

Try more creative ways; ways that can allow others to join in your situation. Looking outward is always the surest way of rising above.

  • It is the nature of pain to focus attention on ourselves.

The lesson that pain brings is that we’re all in it together.

Among the learned the lawyers claim first place, the most self-satisfied class of people, as they roll their rock of Sisyphus and string together six hundred laws in the same breath, no matter whether relevant or not, piling up opinion on opinion and gloss on gloss to make their profession seem the most difficult of all.

Anything which causes trouble has special merit in their eyes.

Desiderius Erasmus


Criminal groups threatening capital markets, RCMP

December 8, 2008

fattonyDean Beeby, The Canadian Press and The Globe and Mail have an interesting article today, Criminal groups threatening capital markets, RCMP.

OTTAWA — Organized crime has become a significant threat to Canada’s capital markets, a new report from the RCMP’s fraud squads says.

Major crime groups are recruiting investment professionals to help them move far beyond traditional activities – smuggling, extortion and counterfeiting – into the rarefied world of high finance and market manipulation, the Mounties say.

“Using the markets requires a degree of knowledge and expertise,” says the draft report from the RCMP‘s Integrated Market Enforcement Teams, or IMETs.

“Organized crime groups harness this skill set by using professional facilitators in the industry.

“The facilitators’ subjective knowledge of the true nature of these schemes ranges from willful blindness to direct fraudulent participation.”

This has hypothetical interest only since franchising is essentially a capital exchange mechanism. Further:

Organized crime and “criminalized professionals” – rogue investment specialists – are described as the two main players in financial crimes.

Criminalized professionals? They mean the crooked investment dealers, right? Right?

The Canadian Bar Association is ferocious in protecting any tiny little-weeny, tensy attempt to limit its members’ airtight solicitor-client privilege.

This of course (again in only the most-twisted imaginations possible) creates and maintains a safe haven for the buying and selling of legal services that enable international organized crime.

  • Fat Tony and his counsel have nothing to fear from any hoser.

It’s taken Canada years to develop its reputation as the world’s best place for white-collar crime:

  1. no national regulator (take our OSC…please),
  2. no securities investigations (Lord Black, Nortel, Livent…),
  3. amnesiac centralized commercial bankers.
  4. oh the list goes on and on.

A farce, really.  In summary, just go ask Al Rosen why he doesn’t invest in CDN listed stocks.


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