If the Oz Franchise Bar took over an Airline

  • Notice how being a pilot is a credence good just like being a franchise lawyer.

Not very funny at the time but black humour is a very, very effective way of coping with, at times, overwhelmingly negative emotions.

If you don’t do your interior work, you remain vulnerable and cannot properly grieve for the person you used to be.

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4 Responses to If the Oz Franchise Bar took over an Airline

  1. Carol Cross says:

    The gallows humor gave me a good laugh —and the tears came rolling down in spite of the generational gap. Monty makes us laugh at human nature and ourselves. How clever of you to tie this to the OZ BAR and the regulation of franchising,

    I remember when I first started to investigate franchising, a few years ago, you, Les Stewart, indicated in a Post on the Blue Mau Mau Site how Susan Kezios of the American Franchisee Association talked about the attorneys and how at their gathnerings they would laugh and trade legal ways in which to nail the franchisees to the Cross.

    Thanks, Les Stewart!

    Like

  2. Carol Cross says:

    When the FTC regulated franchising in the late 70’s in the United States, a franchise for sale became a “credence good” product sold to a “business” consumer through a package containing a government mandated disclosure document and a boilerplate unilateral franchise agreement. The credibility of the franchisor is established by the government through mandated disclosure, as required under the FTC Rule.

    Under law in the United States, the buyers of retail franchises get no protection under consumer laws because they are not considered “consumers” under most State laws. The franchisee is not a consumer, not an employee, not a partner, not a sub-contractor. There is no legal definition of a “franchisee” except the inaccurate description that a “franchisee” is a small business person eligible for a Small Business loan from the government.

    However, The SBA Advocacy Committee indicates that a franchisee does NOT own a business of his own in any real sense and that instead it is a contractual business investment with a finite term

    Franchisors are permitted to sell their franchises under law with no government mandated proof of their possible value in terms of disclosed historical performance statistics and “earnings claims.”

    The regulation of franchising by the federal government provided the credibility to franchisors who could then sell their franchises to the public at any degree of risk of failure or lack of profitability with immunity under the law.

    A retail franchise is thus a “credence good” product! Is this right?

    Carol

    Like

  3. franchisefool says:

    Carol,

    A credence good is a term from economics so I doubt if you will find a hard-core legal expert to agree that franchising is legally a credence good.

    It is the scholars of a small and new academic discipline called Law and Economics that are bringing these issues forward.

    It is my position that Mom and Pop franchises have a very, very high level of undisclosed business risk because of the number and complexity of the relationships that the investor must navigate through (pre-, at signing and post-sale).

    While each of the individual relationships (franchisee to sales agent, to franchisor, to lender, to lawyer, etc.) appears different and independent WHEN IN FACT THEY are NOT.

    They are legally separate but act in a tactical, business way AS IF they were the same company (ie. the bank is the treasury, the sales agent is the marketing department, the trade association is the PR firm, etc.)

    What makes all of these relationships the SAME is that they owe their allegiance to interests that oppose the investor. These aligned interests are highly profitable, repeating, intolerant of dissent and undisclosed.

    Big Franchising’s power comes from its unseen, surprising and unsuspecting roots.

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  4. Carol Cross says:

    Okay! They are all part of a “scheme” in which franchisees are considered merely “resources” for all of the interests involved that are supported by the status quo of regulation and the law —that is defended as public policy for the “greater good.”

    Pretty disgusting stuff! Franchisees are calculated sacrifices, as necessary, to the interests of those who are served by franchise asctivity in the economy.

    Carol

    Like

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