YouTube will become a very effective means of information sharing for franchise investors.
This is the first general franchise message [ie. it’s not this brand or that brand that is acting in a predatory fashion] to hit YouTube. It reflects the reality that all franchise relationships have the same characteristics, the same tools or potential; everywhere, all around the world.
What makes franchising different than independent business is its ability to ransom your life savings. This is done because, at the moment you sign, your investment instantly changes from 100% liquidity to next to zero [transforms into a sunk cost]. You imagine yourself in control but have lost 100% control of your assets.
New franchisees come to realize quite quickly that they go along with the franchisor or they will be punished. Many franchisees kid themselves; hoping upon hope that their masters will allow them to exit by selling to the next sucker. That rarely happens because the franchisor makes more money the less you make at re-sale.
Over years and after signing a confidentiality agreement, investors realize that it was always this way: the moment you signed, 90% of what they put in was always at the franchisor’s absolute use. The sunk cost nature is the source of a franchisor exercising their discretion in a one-sided manner (opportunism).
- The franchisee’s near total net worth is tied to the whims of a party that has next-to no penalties if they choose to act in a dictatorial manner.
Soon I think we will have a franchising channel with dozens of trademark correspondents bringing back information that is not constrained by government decisions, coerced confidentiality provisions or SLAPPs.
That is very good news for good systems and not so good for opportunistic ones.
- And this should be applauded by all stakeholders that want to improve quality, in what we perceive to be a free market economy.
Thanks to the folks at BakersDelightLies.com for bringing this out.