Which is the most powerful and misunderstood provision of the most-feared franchise law in the world?

January 13, 2015

Section 4, Right to Associate, Ontario, Canada’s Arthur Wishart Act (Franchise Disclosure) 2000.

Right to Associate

As sure as water flows downhill, this will lead to franchisee-led, not lawyer-thwarted:

  1. trademark-specific WordPress weblog (then a Wikidot.com wiki),
  2. small groups of franchisees commissioning research (sharing cost information),
  3. non-lawyer franchise expert coach consulting,
  4. an independent franchisee association (no franchise bar involvement),
  5. shared services, supply co-operative(s),
  6. non-franchise bar case preparation, and
  7. equity and gross margin protection.

The Right to Associate provision (the de facto CDN standard and what all franchisees in the world aspire to for justice) is one last conceptual obstacle preventing franchisees from taking their appropriate seat at the adult’s table.

Proof?: after 14-15 years, the CDN franchise bar has filtered each attempt to plead Right to Associate (trial and appeal), thereby, defeating the ON justices from activating its potential.

The ON Superior Court of Justice will make the link to Section 2 of the Canadian Charter of Rights and Freedoms.

ON Surperior Court of Justice

Cross-posted on the Canadian Alliance of Franchise Operators website (CDNafo.ca)


Which smart Tim Hortons franchisees will choose to prosper under the new 3G Capital regime?

January 8, 2015

Unlike TDL, franchising has accurately been known as a Trap for the Trusting.

running businessman

 

With the proper use of research, information sharing, technology, and consulting, even a few operators can act to defend and even help themselves in a new regime.

But they need training and ultra-high levels of confidentiality.

  • A few, smart, willing-to-learn and -adapt operators will survive, grow, and prosper.

Others will choose to live in the past.

Originally posted on LesStewartConsulting.caConcernedTimHortonsFranchisees.ca and Canadian Alliance of Franchise Operators website (CDNafo.ca).


The Canadian Alliance of Franchise Operators, CAFO

November 26, 2014

We created CAFO in 1998 to give voice to “mom-and-pop” franchise operators.

cafo_smvlogo

We were the 1st association in Canada to improve the commercial interests of 76,000 franchise families because:

  • there was no Ontario law,
  • there was no one for journalists to talk to,
  • there was no one for politicians to learn from,
  • there was no FranchiseFool.com and WikiFranchise.org, or and
  • there was nothing to protect the “little guys”.

And more importantly, there was no where for franchisees to talk confidentially with someone they could trust.

In 2014, heading into the 15th anniversary of the Arthur Wishart Act (Franchise Disclosure), there are a lot of alternatives if franchisees wish to use them. (call: 705-737-4635)

This is one of the first articles (Sept 1998) in the Toronto Star called, Franchisees need fair-deal law:

LesStewartFRANCHISEE FIGHTER: Former franchisee Les Stewart has taken up the cause of franchisees.

WHAT PROTECTS A SMALL FRANCHISEE IN ONTARIO AGAINST UNFAIR DEALING BY THE FRANCHISOR CONTROLLING THE SYSTEM?

We asked Les Stewart, a landscaping supplies retailer in Barrie and a former franchisee and founder of the fledgling Canadian Association of Franchise Operators. (second of two parts)

Franchising is a $100 billion sector and a powerful concept of business organization. Many of Canada’s 76,000 franchise operators make a good buck.

But others, like Stewart, an MBA from the University of Western Ontario in London, have sad stories about being put into failing situations by deceptive franchisors, stripped of their savings and crushed by the costs of litigation in Ontario’s totally unregulated franchising regime.

Everyone warns prospective franchisees to investigate before investing, but exactly how are they supposed to check out the records of the 1,350 franchisors who want to sell them a business? Which are exemplary, which have reasonable standards of conduct, and which are practicing legalized fraud?

The best approach is to talk to franchisees in the system to find out whether head office delivers the business training and support it promises, and respects the commercial territories it purports to sell.

Unfortunately, there is no efficient way to identify and then locate those who have the most interesting tale to tell – the franchisees who failed. How many of these unfortunates have been spat out by each franchise system, who are they and why did they sell or go under?

Most U.S. states addressed this question with law decades ago, and Alberta adopted a similar standard in the 1990s. They require public disclosure of contract terms and verifiable disclosure of franchisee experience.

The laws cover all franchisors from mighty McDonald’s and across a business gamut that includes, among many others, such familiar names as Coffee Time, Mr. Sub, Mr. Lube, Giant Tiger, Mail Boxes Etc., First Choice Haircutters, Medichair, M&M Meat, Kiddie Kobbler, One Hour Motophoto, Ramada, Rent-a-Wreck, Ryan’s Quality Pet Foods, Shred-It, Servicemaster Lawn Care and about 1,340 others.

Ontario should have the disclosure Alberta has – and more, Stewart says. The law should allow franchisees to associate without fear of reprisal, and fact-finding to resolve disputes or affordable compulsory arbitration.

Any franchisee can go to court, says Stewart, but it’s no fun playing David to a franchisor’s Goliath in long and costly civil proceedings.

In Ontario, the Harris government’s draft legislation does not provide for a central registry of franchisor disclosures, and requires only that disclosure be made to a franchisee prospect before a contract is signed.

That’s essentially worthless, says Stewart. He says Queen’s Park should recognize franchising as an important function like banking or securities trading.

mike bear-webA little older with a unique background to bring to the table.

Still willing to talk to franchisees and their families.

Les Stewart Consulting: les.j.stewart@gmail.com


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