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  1. Carol Cross says:

    Happy to see Les Stewart back on line and TELLING us the truth in his own inimitable manner that sometimes makes me laugh and sometimes makes me cry. If the truth doesn’t “OUT” it won’t be because Les Stewart hasn’t tried to expose it in the most interesting, entertaining, and persistent manner with expert dedication, research, and understanding of the industry — and the franchise contracts from hell that pave the way for the exploitation and abuse of franchisees with immunity and impunity under existing laws.

    Of course, the UK is in Recession, and ALL governments apparently turn their backs when franchisors try to redistribute the money from the life savings of innocent citizens looking for jobs to the franchisor’s pockets, and to the pockets of the bankers of the World.

    In the USA, and other countries, I assume, the small business loan programs act as a subsidy of franchising when the guaranteed portions of these small business loans are sold as securities by the banks in the secondary markets. See Mercatus on Policy: Banking on the SBA, wherein Veronique de Rugy indicates “Yet, in FY20087, the Small Business Administration (SBA) will guarantee 28 billion in loans. That’s because the SBA serves two powerful constituencies: lawmakers who have successfully sold the SBA as a program to help the so popular small businesses and the banking industry, which profits by issuing and selling the low-risk, government-guaranteed small-business loans.”

    The lawmakers in the US Congress passed a new initiative in June of 2007 in HONOR of Veterans and their families, named The Patriot Express Loan. that has made veterans the targets of mature and newer franchisors who will try to survive the recession on the backs of the veterans and their families who will be qualified for these quickie Patriot Express Loans that will be guaranteed by the Small Business Administration, who, of course, disclaims in small print that any of the franchises that appear on the SBA Franchise Registry are recommended by the SBA or the VA-with its VET-Fran discounts, etc…

    The moral hazard of ineffective government regulation that sets up “marks” (VETS and their families) for the predators is truly disgusting and un-American in my opinion but, of course, franchising is practiced much the same way in all countries, as is pointed out by Les Stewart.

    The UK Minister of Industry did hold hearings a year or so ago and did decide NOT to “especially” regulate franchising because this might present a a false sense of security to returning Vets, She must have realized what was unfolding in the USA who did regulate franchising, and she even commented that the status quo of the law in the UK gave UK citizens as much protection as Americans were getting under Regulation. What does this tell you?

    Let’s hope that President Obama will look at the industry of franchising which is represented as the answer to jobs in our country and see it for what it is. Should the SBA be subsidizing franchisors and big business under the guise that a franchisee is a small business person? Should the FTC and the SBA and the VA and the Congress of the USA be working together to provide a false sense of security to VETS and their families who are the targets of predator franchisors who operate with immunity under ineffective law and regulation?

    If franchising can’t stand in the economies of nations without full disclosure of the known risks to new buyers of franchises, as represented by past and present financial performance statistics of the units in a system, should franchising be growing in World Economies?

    When Caveat Emptor is offered as an excuse for the moral hazard of “trickery” and “lies” and fraud is redefined and protected under regulation and contract law, does the end really justify the means?


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