Franchisee Dispute Life Cycle

Business is dog-eat-dog alright.

But, to quote a friend, franchising is dog-eat-goldfish.

If you thought you had any chance when you signed up, you quickly learn you are heavily outgunned.

Franchisees that do not achieve their financial goals go through 4 stages:

  1. They’re happy and continue to pay.
  2. They are unhappy and want some remedy.
  3. The realize their adversaries are a great deal stronger than they could hope to imagine (ie. the Industry’s Defense Mechanism responds) and then
  4. They abandon their claim.

Industry Defense Mechanism

Modern franchising is a complex, extremely profitable and multi-party machine. The illusion is that you have a single (one-on-one) relationship with a specific franchisor.

Nothing could be further from the truth.

You will be directly opposed by the following extremely powerful aligned interests:

  • franchise bar (95% fees paid by franchisors),
  • franchisor associations (controlled only by franchisors),
  • financial institutions (national service program),
  • salespeople (agents/brokers deal special deals) and
  • bankruptcy trustees (mop up, cover everyone’s tracks).

In addition, indirectly, your efforts will be opposed by:

  • politicians (responsive to contributors)
  • regulators (no effective franchisee voice)
  • media (will only scratch the surface) and
  • product franchisors (the auto, oil and grocery interests).

All direct and indirect resistance is amplified on an international, national and state level. For instance, the American Bar Association will support the heavily franchisor-influenced franchise bar in opposition to franchisee investors.

It is very unlikely that you will ever even get to the Courthouse steps.

BTW: This is why predatory franchising (intentional non-sustainable business investment models) is on the RISE: The odds are stacked too much in one party’s favour.

Please download this 1 page .pdf diagram of the Franchisee Dispute Life Cycle and give it some thought.

Your comments are welcomed and by all means share.

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