Selling a McLaw: Solomon on Oz

In an op-ed post on Blue MauMau, U.S. attorney Richard Solomon presents his extremely important views on the future of Oz franchise law. He speaks with true authority.

The article is called Australian Franchise Law: Assurances of Protection or Just More Christians Thrown to the Lions? and should be nailed to the forehead of everyone who thinks government or the ACCC will do anything other than serve their masters.

Richard starts his summary in his usual, no BS manner:

…Will Australia become a dumping ground for over the hill concepts that can no longer find growth in America? Yes it will in very many cases. Will American franchise companies pre-empt the market, stifling Australian concept creation? Probably. Will the flavors of Australian culture now found in its native small businesses be lost or diluted? Of course. Now aint that a shame?

What about the useless U.S. “protection systems”?

Will the Australian regulatory scheme track the franchisor advantaged regulatory scheme in America? You’re damn right it will. If that is what’s in store for our friends down under, why the hell do it at all?

Isn’t it bad enough that America blindsides its citizens with a pretense of investment protection in the franchise business? Why are the Aussies considering a similar system for themselves? Are they so self loathing that they would consciously set their own people up for investment disaster?

The franchisor lobby will win any battle in the political arena.

When the IFA [International Franchise Association] is finished with the Australian government, it will have either no franchise regulation or it will have regulation so weak as to be a ridiculous charade.

The only power the franchisor lobby fears is digital information sharing because it cannot control its distribution. They use the law (word-, type-based, linear); the fools use the new media: the internet (electric, acoustic, all-at-once)

Power never takes a back step – only in the face of more power. Malcolm X

One Response to Selling a McLaw: Solomon on Oz

  1. Carol Cross says:

    Richard Solomon just can’t help telling the truth “in his “no BS” manner.

    Why would the Australians want American style regulation of franchising that in effect protects the franchisors from fraud in the courts? American franchisors appear to be able to legally sell franchises at any degree of risk or lack of profitability to new buyers, as long as they are compliant with the government disclosure Rules and Regulations?

    Under cover of government regulation, The FTC Rule, a lot of pigs and dogs are sold to an unsuspecting public —and this isn’t fraud because The FTC Rule/FDD in the hands of predators is a license to lie, cheat, and steal with immunity under the law.

    How is franchise fraud defined? Obviously the powers that be in franchising and the government knew always that there would a certain percentage of failures in all systems and that franchising wouldn’t be durable in world economies if the failures could bring and win suits for fraudulent inducement to contract because of the franchisor’s misrepresentation of the success or failure of the franchise in the sales process. Obviously, the powers that be knew that franchises might not be attractive investments for new buyers if the real risks, as demonstrated by unit performance statistics, were disclosed to new buyers. The compromise in American regulation of franchising that requires no disclosure of financial performance on a unit basis works against the interests of prospective franchisees who invest without any idea of the risk they are taking with their lives and their savings.


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