Many times, franchisees do not make very good decisions once they realize they are in a difficult position.
They act like animals that are cornered or have been entrapped.
Their base emotions (fear, disgust, shame) take over, pushing out all logic or planning. They react, often stupidly.
Their much-needed higher level facilities cannot be invoked once the perceived loss of their house, life savings, efforts, identities (a successful person, provider, role model) and their core relationships (spouse, children, etc.) is threatened
The situation they are in easily swamps their easily-shaken identity, confidence and trust. This happens across all class, race, education levels: It is an ancient animal response.
Franchising opportunism creates a Scarcity Trap (top-down, master-servant relationship) that can be used to unleash the awesome power of what others have called The Irony of Poverty.
This situation has two very powerful characteristics:
1. The poor have to make better decisions than the well-off behave because they have very little room to recover from a bad decision.
2. The poor’s situation makes arriving at a better decision much less likely than someone who has access to better resources (ie. can’t contract for advice, no peer trust, no information sharing, collapse of imagination, empathy, etc.).
You get hit from both ends.
You are in an environment where the decisions have to be better, but you’re in an environment that by the very nature of that makes it harder for you apply better decisions. A Talk By Sendhil Mullainathan
Working with at-risk franchisees you see these rubbed-raw emotions everyday. They have simply been put into a situation that disables their cognitive abilities.
They are impaired from helping themselves and too afraid to trust anyone else.
You are stuck in a well-laid scarcity trap with seemingly no way out.