Black Swan event(s) can happen simultaneously, be compounded, and quickly result in a negative (less than $0 value) to your personal net worth.
Franchising is unique in that the rational small business person will continue to throw good money after bad (sunk costs).
The Risk profile has changed.
3G Capital takeover x threatened/actual CCAA x gross margin erosion x organized labour x Fightfor15.org x equity appropriation x personal guaranteed = degradation to a negative gross margin business?
Nassim Taleb‘s Thanksgiving Day Turkey analogy:
Consider a turkey that is fed every day,” Taleb writes. “Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say.
“On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.”
Consider that the turkey’s experience may have, rather than no value, a negative value. It learned from observation, as we are all advised to do (hey, after all, this is what is believed to be the scientific method). Its confidence increased as the number of friendly feedings grew, and it felt increasingly safe even though the slaughter was more and more imminent. Consider that the feeling of safety reached its maximum when the risk was at the highest!
FranchiseFool.com 