Who signs up for 7-Eleven wage slavery and sharecropping in 2015?

November 2, 2010

No new immigrant to Australia or the United States does.

Nobody does it intentionally.

They think it is impossible in a free society for modern day sharecropping to thrive in plain sight.

They learn, partially and too late, that the business risks are deeper and wider than they could ever imagine. Before WikidFranchise, no one has inventoried these investment risks. They blame themselves, miss the patterns and like in all well-structured con games 50% of the marks are good for a 2nd go.

He has the experience without the understanding. T.S. Eliot

— Thanks to ShawnBlog.com

7-Eleven (version Australia) and Big Franchising: conspiracies of fraud, extortion and theft.

September 2, 2015

I have defined Big Franchising and the role of industry enablers elsewhere.

7-Eleven Russ Withers

Click here to watch a 45 minute expose called 7-Eleven: The Price of Convenience.

Modern franchising runs identically, internationally, on all countries sharing a British Common law heritage.

The highest levels of national government known full-well for decades that wage theft is largely responsible for the extraordinary ROI that is achieved by franchisors such as Mr. Withers and Ms. Barlow.

Cross-posted on WikiFranchise.org.

Robert Reich understates the risk of private equity piracy for largely franchised corporations.

August 9, 2015

Yes: employees get cut and they make it “lean and mean”.

BUT the real  gravy for PE experts, like Warren Buffett, is clawing back franchisees’ operating margins, capital investments and even their personal net worth.

My Canadian and U.S. franchisee friends at Tim Hortons/3G Capital may want to pay attention to Dr. Reich.

Meanwhile, CDN and U.S. taxpayers pick up the tab.

Warren-Buffett dairy queen

See: ‘He copied us!’ Warren Buffet’s Dairy Queen ‘rips off’ Subway

Franchising relies on excellent information management.

August 5, 2015

My son and I are interested in pursuing other consulting sector work.


Since 1998, we’ve established an international reputation for excellence in business data analysis. Our initial research has been in the business format franchising sector, centred on FDDs.

While we continue to pursue other commercial and non-commercial consulting clients, those parties interested in purchasing control of our franchise industry capability can contact:

Mr. Les Stewart MBA

Midhurst Ontario Canada

705 737-4635 Office

705 627-2242 Cell

LinkedIn, WikiFranchise

If John Sotos would talk to me, what would we talk about after all these years?

July 7, 2015

I took John and Susan Kezios’s picture on the first day of the public hearings that resulted in the Arthur Wishart Act (Franchise Disclosure), 2000. EPSON scanner ImageWho knows…maybe one day our widows will will talk?

How efficient and effective are the best franchisors in using their franchisees’ store investments?

February 25, 2015

Of the investment resources they attract, do they use them effectively or are they squandered?

Efficiency drucker

I chose some of the more “blue chip” of the U.S.-based systems and chased down their 2013 FDD (thank you the state of Wisconsin).

Preserving Franchisee Investments

Opportunism is when someone in a position of advantage, uses that position against another. In franchising, the situation that the franchisor controls the store’s sunk cost investment, can be exploited. A very good test of opportunism is: If the ownership of the assets were reversed, would the alleged “opportunist” likely change their decision?

Total Added Lost

While the 5 systems grew by 4,342 new stores (adding +$6-billion to franchisors’ coffers), there was also a loss of 1,738 stores or $2.5-billion of franchisee store investment that left the industry.

How goodHow “sticky” are franchisee investments in these systems? On average for every $1.00 of new franchisee that enters the market 42.2% was lost from 2010 to 2013.



Measured from the best practice level of Dunkin’ Donuts, there is some very large variation in these systems as they purport to take care of “other people’s money”.


Losing over 40% of the invested capital in 4 years? It seems the franchise industry is a bit of a leaky bucket.

  • Fairly apparent when the information is publicly available.

Kudos to the states of California, Wisconsin, Minnesota, Washington, and soon-to-be New York for their online repository of franchise disclosure documents.

Is it fair to force franchisees to prove that their franchisor has acted in “bad faith”?

February 24, 2015

No. Since 1971, there have been recommendations in Ontario that franchisors should have the burden of proof when challenged about acting unfairly.

Reverse the onus

The first one was by a retired Superior Court Justice and the next one a former partner to the actual Arthur Wishart, a lawyer from Sault Ste. Marie.

1. The Grange Report


Legislative approach

(iii.) Contractual v. equitable approach

3. In these dealings also, placing the burden upon the franchisor to prove,

(a) that the contract is fair; and

(b) that the franchisor’s exercise of his rights under the contract is justified in the circumstances.

Report of The Minister’s Committee on Franchising, The Honourable Arthur Wishart, W.C., M.P.P., Minister of Financial and Consumer Affairs by S. G. M. Grange, Q.C., June 1, 1971.

2. Public Hearing testimony


I think it’s interesting that in that circumstance the Grange report does a reverse of onus. It says there has to be fair dealing, and if there isn’t fair dealing, then it’s up to the franchisor to show, and I quote, “that the contract between the parties was fair.” In other words, the onus shifts, not from the franchisee to prove they were treated unfairly but to the franchisor to prove that franchisor dealt with this individual fairly. I think that’s an extremely important concept. It goes on to say that the franchisor’s conduct was “equitable in the circumstance.” So you have this onus on the franchisor, at that point, to prove they dealt with this person fairly.

Mr. Gerald Nori, Wishart and Partners, March 7, 2000.

One of the greatest barriers is franchisee access to information.


Why is it so hard for Canadian entrepreneurs to access franchise disclosure documents in Canada?

February 24, 2015

Perversely, much more information is available via U.S. internet sources for Tim Hortons franchises than can be found north of the 49th parallel by an independent researcher.

Tim usa

Since 1979, the U.S. Federal Trade Commission has required all franchise disclosure documents to be publicly available (the Franchise Rule). As an example, this is the first of 555 pages of the free online copy of the 2013 Tim Hortons Traditional FDD. This is critical information; similar to financial market prospectuses.

Tim Hortons USA Inc 2013 FDD

It’s as easy as going to the Wisconsin site, typing in the name of the system, and more-often-than-not a free pdf shows an unbelievable amount of investment disclosure information.

How about getting the most recent filing for Tim Hortons in Canada? On Feb 17th, I emailed the new owners and asked for a copy and received this reply:

Dear Les Stewart:

Thank you for your message. All of the information we are able to provide the general public is available on our website. If it is not on the website, we regret to inform you it is proprietary in nature and we are unable to fulfill your request.

The TDL Group Corp.
Angelee ,
Franchising Canada Representative

The Ontario law is called the Arthur Wishart Act (Franchise Disclosure), 2000. It’s disclosure requirements were modeled on the U.S. model.

Disclosure requirements (standard format, both U.S. and Canada)

  • bankruptcies (p. 17 of the U.S. Tim Hortons Traditional FDD),
  • litigation history, (p. 15),
  • corporate-, franchisor-owned outlets (p. 72),
  • franchised stores: terminated, non-renewed, re-acquired, ceased operation, transferred, and sold-but-not-opened (by category for 3 years, p. 72),
  • fees (royalty, advertising, computer, other, p.17),
  • franchisor’s financial statements (p. 85),
  • list of current franchisees: name, address and telephone number (Exhibit O: p. 333),
  • list of recent former franchisees: name, address and telephone number (Exhibit P: p. 387),
  • restrictions on sources of products and services (and amount $ franchisor receives, Item 8: p. 32),
  • entire franchise agreement (p. 133), financial representations (Item 19: p. 69) and
  • leases, trademarks, etc.

The Ontario government/Wishart currently does not require either (1) public filing or (2) an online repository of documents.

I believe Canadian small business investors deserve as much access to this financial information than do our United States neighbours.

How can we have informed public policy without publicly-available, agreed-to data?


Get every new post delivered to your Inbox.

%d bloggers like this: