Creative types are sensitive to what is happening RIGHT NOW.
A recent Ontario appeal court decision is very important for every Canadian franchisee.
First time ever. Read it here:
- Appeal Court decision: Salah v. Timothy’s Coffees of the World Inc., 2010
- Trial Court decision: Salah v. Timothy’s Coffees of the World Inc., 2009
Suddenly the economics of pleading good faith has tipped significantly in franchisees’ favour, not just in Ontario but beyond Canada as well..
Some systems have 50, 100 or 1,000 franchisees.
You do the math of the aggregate value of a group or class action lawsuit.
You still need protection against choosing the wrong attorney but great news this fall.
Kudos: First franchisee call-out on internet:
Jeff Lefler, National Bread Network, October 21, 2010
[full chronology on Blue MauMau]
In 1998, I was asked to create a corporate identity (see letter).
The purpose was to move from a temporary working group, chaired by the Ontario government (Franchise Sector Working Team, 1996-2000?)…
…to a permanent mediation function (non-court dispute resolution process)…
..that would be housed within a national, franchisee/franchisor/banking sector run self-regulatory agency:
- National Franchise Council of Canada.
This never got off the ground for several reasons. But it was not for the lack of franchisee effort. The Canadian Alliance of Franchise Operators stopped in 2005 (lack of revenue).
After 11 years, the need has never been greater.
There is, until now, no economic market to support it..
When a franchise crashes, it can devastate some families for decades.
Citizens own their own laws, don’t they? Not the experts.
Humans constantly evaluate risks in their environment. Very high evolutionary weight is given to this skill but in complex post-industrial financial decisions, more and more people are understanding just how irrational human decision making is. Our laws should take into account human factors.
People (and this is empirically proven) compensate for perceived risks:
- drivers with anti-lock brakes/air bags are more reckless (speed, distance, reaction time) than others,
- car drivers follow helmeted cyclists closer than non-helmeted cyclists,
- the greater the safety improvements in skydiving, the divers take on more risk,
- football players have much more serious injuries than rugby players…
Franchise disclosure laws simply shift (not reduce) net risks for a population while giving a dangerous false sense of authority to a decaying industry. The judges know this in all jurisdictions because they have had their own franchisee clients by the time they get appointed to the bench. Lawmakers have a much more difficult time resisting policy tsunamis.
- How about making the franchisor show they acted acted fairly instead?
I think this is a very clever idea and would prevent much bad behavior.
This was a suggestion brought forward by Gerald Nori of Wishart Law Firm LLP in 2000.
I think it’s interesting that in that circumstance the Grange report does a reverse of onus. It says there has to be fair dealing, and if there isn’t fair dealing, then it’s up to the franchisor to show, and I quote, “that the contract between the parties was fair.” In other words, the onus shifts, not from the franchisee to prove they were treated unfairly but to the franchisor to prove that franchisor dealt with this individual fairly. I think that’s an extremely important concept. It goes on to say that the franchisor’s conduct was “equitable in the circumstance.” So you have this onus on the franchisor, at that point, to prove they dealt with this person fairly.
And in response to a question By John O’Toole that this may increase litigation, Mr. Nori was firm in the opposite direction:
I would see it as just the opposite. I would see it as the big guy now having to come into court with all the resources and proving that the treatment was fair under the circumstances. That’s a tremendous onus for the little guy to prove. The other thing is that the documentation is never there. The documentation is always in head office, and you never know whether you’re getting the whole story. So I think that’s an extremely important concept.When I spotted that in the Grange report, I thought, “Boy, there’s something that really would have some meaning in this legislation to equalize the playing field,” because it is tremendously unequal.
Mr. Nori’s reference to the Grange Report under (see under Legislative Approach, (iii.) Contractual v. equitable approach section) is from 1970:
3. In these dealings also, placing the burden upon the franchisor to prove,
(a) that the contract is fair; and
(b) that the franchisor’s exercise of his rights under the contract is justified in the circumstances.
“Justified” is the absence of opportunism. The test for opportunism is: Would the franchisor have likely made this decision if it were their own assets at risk?
Franchising is like being in a war zone.
My experience and training suggests that running a franchise provides the same type of mental conditioning that happens in total institutions (ie. patient in a mental health hospital, recruit in military basic training, life on a naval vessel) without any form of appeal.
Many former franchisees see their time as a franchisee as they would imaging doing time in prison would be like. Most will confidentially talk openly of being mentally tortured. Many require significant mental health intervention to recover some degree of normalcy. Even years after their experience, the mere mention of their experiences triggers the strongest emotional response possible, many of which revolve around shame.
clinical depression :: affective disorders :: violence (self & others) :: divorce :: hospitalizations :: estranged children :: broken extended families :: suicide
Dr. Meerloo’s insights ring very true to me as a former franchisee and provide tremendous hope because they use a quantifiable and scientific approach rather than a one-dimensional, ad hominem attack- and shame-based legal view.
In Book: It is Dr. Meerloo’s position that through pressure on the weak points in men’s makeup, totalitarian methods can turn anyone into a “traitor.” And in The Rape of the Mind he goes far beyond the direct military implications of mental torture to describing how our own culture unobtrusively shows symptoms of pressurizing people’s minds. He presents a systematic analysis of the methods of brainwashing and mental torture and coercion, and shows how totalitarian strategy, with its use of mass psychology, leads to systematized “rape of the mind.” He describes the new age of cold war with its mental terror, verbocracy, and semantic fog, the use of fear as a tool of mass submission and the problem of treason and loyalty, so loaded with dangerous confusion…
The first two and on-half years of World War II, Dr. Meerloo spend under the pressure of Nazi-occupied Holland, witnessing at firsthand the Nazi methods of mental torture on more than one occasion. During this time he was able to use his psychiatric and psychoanalytical knowledge to treat some of the victims. Then, after personal experience with enforced interrogation, he escaped from a Nazi prison and certain death to England, where he was able, as Chief of the Psychological Department of the Netherlands Forces, to observe and study coercive methods officially.
In this capacity he had to investigate not only traitors and collaborators, but also those members of the Resistance who had gone through the utmost of mental pressure. Later, as High Commissioner for Welfare, he came in closer contact with those who had gone through physical and mental torture. After the war, he came to the United States, where his war experiences would not permit him to concentrate solely on his psychiatric practice, but compelled him to go beyond purely medical aspects of the problem.
As more and more cases of thought control, brainwashing, and mental coercion were disclosed…his interest grew. It was Dr. Meerloo who coined the term menticide, the killing of the spirit, for this peculiar crime.
Each franchisor and franchisee with their own unique ISBN-type number.
Assigned by a private company under contract to the national franchise governing council with a corresponding gmail account accessible by both spouses, held confidentially by this corporation that is enabled legislatively to report to all levels of government. Online registration and due diligence portal protocol funded by franchise bankers (required number to get current account) and sponsored by industry and government authorities. Revenue neutral within 5 years (private or public equity funding?). Mediation intake, processing and reporting. Franchise bar credentialing. Pre-sale education. Industry and legislative program evaluation possible (ie. VetFran and others). Register all confidentiality agreements.
A basis for rational industry growth.
Within reach of any smart phone at pennies per entry.
A bright idea from down under.
- franchisees terrified of speaking on the record,
- how many problems?: “hundreds of complaints”,
- churning: serial reselling, gouging on supplies,
- South Australia is largest Australian small business state (+150,000),
- Commissioner has authority to mediate between franchisee and franchisor, and
- authority to report to Courts if one party refuses mediation.
- Franchisees get new advocate, ABC Adelaide
- Commissioner hired to protect small firms from ‘franchise bullies’, The Advertiser
- Small Business Commissioner, new laws for franchise sector, Business South Australia