Selling Poo-filled franchise systems likely 100% Legal

Michael Webster brings up a good point in his article Can You Sell an Unproven System as a Franchise? It is worthwhile looking at Janet Sparks’ original report in Franchising Times.

When discussing a pending Colorado lawsuit, I tend to agree with Michael’s prediction:

I believe that the law in this area will turn out to be, in essence, that you can franchise any piece of poo, as long as you “disclose” in tricky legal fashion that you are a piece of poo.

It is of course a stupid law that would protect investors in franchise systems [franchisors] by allowing any old piece of poo to float through the system – but such is the dedication to the power of disclosure laws, much like the efficient market hypothesis, our regulators and legislature will continue to allow indentured servitude as long as it properly disclosed.

This is the state-of-the-art of legal protection in the home of franchising. And they are very aggressive in advocating for this lack of accountability for franchisors around the world.

Michael again:

I think that Seid‘s position is legally correct, [franchisors have zero duty to provide a proven system] even though both immoral and absurd.

But that is the problem prospective franchisees face – any piece of poo wrapped in a franchise agreement, and FDD can be sold for hundreds of thousands of dollars to the unsuspecting public who believe that they are buying a “proven” system.

Disclosing you are a worthless piece of poo is all the protection that Big Franchising is willing to give you.

Go ahead and choose your Type of modern franchise [see Bristol Stool Chart, above]. Or…

  • For Mom and Pops, Franchising is Unsafe at any Brand.

If you knew how to separate the pepper from the fly poo, you’d start your own business and not share an industry rife with “proven” psychopaths. [social predators: lack of conscience & empathy, glib, bullying, violence]

2 Responses to Selling Poo-filled franchise systems likely 100% Legal

  1. Carol Cross says:

    I enjoyed Michael Websters comments about the perpetuation of POO franchises by way of government regulation of the franchise industry, and his comments concerning Michael Seid’s position.

    Thanks to Janet Sparks for her coverage of this Colorado trial in The Franchise Times. There was a recent article in “Fortune” I believe? in which a respected law professor discussed the “purchase” of law professors as expert witnesses by the corporate parties who buy this testimony to support the legal positions of their clients with the hope that the judge will be impressed with neutral? and legal position of the Professor — who, of course, is paid very well for his expert witness opinion.

    In this particular case in the court in Colorado, I’m not surprised that Michael Seid who wrote “Franchising for Dummies” will be the expert witness for the franchise industry. I remember his artful explanation of Item 20 for Entrepreneur that was on the Internet.

    While Michael Seid claims he doesn’t represent the IFA, he certainly always holds a position that supports the IFA, and doesn’t want any changes in the regulation of franchising that would in any way diminish the pool of “marks” that is made available to franchisors who have no duty under the law, in his opinion, to be competent.

    Why would Michael Seid want any of these prospective franchisee dummies to smarten up as a result of effective and fair regulation of franchising?

    Thanks to Michael Webster for telling it like it is and thanks to Les Stewart for bringing it to my attention.


  2. franchisefool says:


    As usual you are most welcome!

    Thanks for the Fortune article reference. I think it’s theMay 30th, the one called “Blowing the whistle on unethical lawyers: Legal professor William Simon aims to shame colleagues who sell their opinions for the right price.” by Roger Parloff.

    Simon sounds like a tough Stanford tenured prof. The security that an academic career was never intended to be a crutch; their economic independence is just as important as paying Judges from public funds as opposed to having them earn revenue from corporate sponsorships.

    I’ll take a closer look and, again, thanks.

    Les Stewart


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