Separate the Act and the Actor

There is a tendency to get confused when you are not meeting your financial goals in franchising.

Clear thinking is particularly important when you start becoming aware the something is wrong.

I get a little upset and  a lot suspicious when I hear name-calling (ad hominem arguments) going on. When ever I hear them from experienced industry players, my ears perk up and I question their real motives for speaking.

Not only are these arguments distracting and hurtful but most of all, they interfere with accurate decision making and the very serious work of determining what went wrong (in order to avoid the same mistake in the future).

What I think people should do, if put in an old-fashioned way is to Love the sinner but hate the sin. This is a fairly useful way of falling into a very human perception trap:

  1. For every cause there is an affect (A is caused by B) and
  2. Most outcomes are within the control of the franchisee (if I work hard, I will succeed).

I can absolutely tell you that both are functionally FALSE in modern mom-and-pop franchising.

  • But it serves the elite’s purposes to scapegoat the individual while suppressing institutional memory via gag orders and other silencing techniques.

The mistake you made was to sign a franchise agreement. At that moment, you lost control of your life savings and it was only a matter of time. That you were unaware of that fact does not change it.

  • The specific life saving Death Certificate is unique; it’s your life’s story for heaven’ sake.

But for all intents and purposes, the cause of death in immaterial. Dead is dead.

The King’s Death Certificate

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3 Responses to Separate the Act and the Actor

  1. Sean says:

    Interesting post, Les.

    I think it goes both ways, though. On my site I’ve got many unhappy franchisees blaming the franchisor, ranting and raving about them personally, etc.

    (Other than the victims of pure rat-bastard scammers,) I’ve started inviting some to consider whether they would be successful if they were out from the royalty and ad contributions and could do as they like. Would they be profitable as Ed’s Tan-o-rama instead of Hollywood Tans, for instance?

    If the answer’s no, then they probably made a more fundamental mistake. Bought a concept on personal preference rather than market need. Put their tanning salon in a predominantly black neighborhood. Bought a fair-weather business that wasn’t recession-resistant. Or thought their success was their FRs responsibility.

    I think the reasons for failure for many begin before they even talk to the FR. The Coffee Beanery franchisees may have a legit gripe about the sleazy sales tactics, but they were doomed from the moment they said “I want to own a coffee shop” instead of “Does my market NEED a coffee shop.”

    What do you think?

    Like

  2. Carol Cross says:

    “Dead is Dead” —-that’s for sure! Les Stewart does an excellent autopsy and I can only hope that readers will tell other readers that there are, as NOLO legal says, “Ten Good Reasons Not to Buy a Franchise” —that apply to any and all retail franchise offerings.

    The only good reason to buy a franchised business opportunity is “proof” that there are excellent odds of securing a good job and profits that could ultimately offset the great risk involved in any retail franchise investment.

    Unfortunately! government regulation in the United States concerning disclosure of risk permits franchisors to hide “unit profitability” and “unit failure” from new buyers of retail franchised business opportunities, and from investors in the franchisor, as well. Prospective franchisees are misled by the appearance of government oversight of franchisors and the product they are selling the public, and so too are the investors in the franchisors.

    The “justifiable theft” of the life savings of individuals who invest in ignorance and great good faith that their franchisor CAN’T succeed UNLESS they also succeed continues —–and is an even greater threat today because of the recession that appears to be spreading throughout the World.

    The art of “churning” is refined to the point that even large and mature systems depend to a greater extent on “churning” to maintain system sales and to provide the appearance that the system is still growing, even during recessions. It is FACT that franchising does grow during recessions because the “blood on the floor” is washed away in the ongoing deception of prospective buyers of retail franchises.

    The NEED for self employment of innocent job seekers is MET with artifice and lies concerning success, advanced by the franchisors and their agents who are then protected by misleading government regulation from any recourse for the lies and artifice in both arbitration and the US courts.

    I love my country but I ” hate the sin” that is committed in the name of my country, my Congress, and the FTC Rule. I hate the failure of the ABA to protect the law for all of the people, and to take sides to enhance their own financial interests, and I hate the taint of the Rule of Law that is demonstrated in the current status quo of franchising and the law.

    I join Les Stewart always in warning that FRANCHISING IS UNSAFE AT ANY BRAND. .

    Like

  3. Les Stewart says:

    Sean,

    Chief Lieutenant (pronouced “left-tenant”) Conspiracy Theorist reporting:

    In every confidence game, the mark (exiting franchisee) needs to be cooled out (anger managed). The franchisor is set up to be the scapegoat while the reputation of the banks, franchise bar, regulator, etc. are protected.

    (1) This is what happens In franchise systems that choose to act in a predatory fashion. The franchisor takes the hit which allows the underlying systemic imbalance (information and economic power) to continue to function.

    (2) All franchise systems retain the same rights. Therefore, any franchise system can act as opportunistically as they wish, whenever they wish.

    (3) Your equating franchise with independent business is a BS comparison. Many people are never qualified to do either and it’s only the lure of a “proven franchise system” that makes anyone strike the bait. Sorry Sean: D mark for Hindsight bias.

    (4) Franchise systems are not 100% evil or 0% evil. In any specific case, they can be opportunistic or not, depending on their self-interest.

    The best run ones know when they only have to motion toward the whip.

    For example, McDonald’s Canada does not have an independent franchisee association, IndFA although George Cohon and George Tidball brought the trademark north in the late ’60s. Why? Might have something to do with the 1st IndFA president’s fate (Ted Gorski, 3 stores taken in 1980, 2nd unionization attempt in N America).

    Let’s not oversimplify things, shall we?

    Les

    Like

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