Should the 1,100 Canadian Tim Hortons’ franchisees unionize themselves?

Considering the Ontario Labour Relations Board’s ruling (The Ontario Labour Relations Board Opens The Door To Franchisee Unionization In The Canada Bread Certification Case), you’d think it’s worth looking at.

Do you think the Tim Hortons franchisees have understood that they’ll likely be paying 3G Capital for the privilege of exiting their stores?

• ie. that the franchisor, currently, can unilaterally drive a franchisee’s equity into the negative and hide the fact from the market and other with confidentiality agreements.

Do you think the franchisees perceive themselves to be at war?

Who profits when a $500-million Canadian class-action franchise lawsuit happens?

The least likely are individual franchisees.

That may or may not happen especially when 98% of all lawsuits never make it to trial and withstand an appeal.

The negotiations are held between the 2 lawyers. Franchisees are decision takers.

Parties:

• Franchisor (defendent) – the only payer, repeat player, credence good monopolists, (happier to pay 2 law firms a lot rather than a little to hundreds of franchisees)
• Franchisor’s Specialized Law firm – only one in Canada, repeat player, expert credence good provider, member of franchisor association
• Franchisees (plaintiff) – one time player, only non-credence good player, unskilled but unaware
• Franchisee’s Specialized Law firm – only one in Canada, repeat player, expert credence good provider, member of franchisor association

Both CDN law firms (one for the franchisor, one for the franchisee) at this level are businesspeople, first and foremost.

The two law firms act as rent seeking coercive monopolists.

Welcome to the Pie Face case study in financial engineering: debt- and franchisee-destruction mode.

Modern franchising purges itself of unwanted legal obligations: debt and franchisee life savings.

It is instructive to see this ostensible “failure” in slow-motion.

Articles so far (updated on Jan 21, 2015):

• Bakery franchise Pie Face in administration
• How Pie Face cooked its own goose
• More Pie Face stores to close, vast majority are unprofitable: franchisee
• ‘Not fair play’: franchisees uninvited to Pie Face meeting
• Pie Face goes into administration
• Pie Face hit with second lawsuit in the US
• Pie Face seeking rent cuts
• Pie Face Suddenly Closes Nearly All Its NYC Locations
• Pie Face under attack as disgruntled builder sues US arm over unpaid bills and receivers appointed
• Unprofitable Pie Face traded while insolvent: creditors’ report
• “I’ve suffered $1 million in losses”: Pie Face franchisee tells all
• Pie Face to open its second outlet in the UAE

Analogy: Modern franchising is the operating system software (a technology). The cute logos are simply the different software applications  that run on this extremely sophisticated operation system. There is merit in not revealing this code (eg. may hinder “cooling out the marks“)

Australia, United States, Canada, Great Britain, India, UAE…it’s all the same common law (contract law technology/architecture).

Keep an eye on WikiFranchise.org’s archive of articles on Pie Face (click here)

Founders Wayne Homschek and Betty Fong at a Pie Face in Sydney’s Bondi Junction in the early days. Picture: Troy Bendeich Source: News Corp Australia

Intentional Insolvency: While it is revealed in the report that Mr Homschek probably has no personal assets in Australia, the Pie Face founder and his wife have now put forward a deal to seize back control of the group from voluntary administrators with the backing of TCA and a fresh capital raising on Wall Street.

That proposal will be put to creditors at a meeting slated for tomorrow in Sydney. The administrators have recommended creditors vote in favour of the proposal by Mr Homschek.

Life shall always prevail

Gömböc

If you fall down, just pick yourself up.

[newshelton.com]

Fascism and capitalism get along very nicely

Democracy conflicts with both because what is best for citizens is frequently not optimal for profiteers.

Democratic rights exist 24/7 for 100% of flesh-and-blood human beings. Or they exist in no time for 0%.

You should never trade your fundamental rights (speech, association) for a dollar.

[Golden Age Comic Book Stories]

Peddling franchises is easy if you know human weaknesses

We are influenced much more than we ever imagine by the selling situation.

We still believe in the Choice Myth.

[InterATrial]

Your eyes transmit: your brain interpretes (imperfectly at times) based on experience

Do you see “A B C” horizontally or “12 13 14” vertically?

Notice how the central image (B or 13) doesn’t change?

Notice that, even when you know the trick, your brain can’t help but still be tricked?

You thought you were buying a real business but you didn’t, after all.

Thanks to Mighty Optical Illusions

Is Blue MauMau a social media propaganda system?

Does Blue MauMau provide just a cynical illusion of debate?

One of the ways you control what people think is by creating the illusion that there’s a debate going on, but making sure that that debate stays within very narrow margins. Namely, you have to make sure that both sides in the debate accept certain assumptions, and those assumptions turn out to be the propaganda system. As long as everyone accepts the propaganda system, then you can have a debate.

— Noam Chomsky

Three or four people talking at each other does not constitute much of a community.

Corporatism v. Democracy: What concept really won WWII?

Franchising degrades humans.

I use World War II images for a reason.

I think democratic societies won the battles but lost the war against totalitarianism. The tyrants wear business casual.

John Ralston Saul has made an important contribution to my thinking by writing The Doubter’s Companion: A Dictionary of Aggressive Common Sense.

One of his key definitions:

CORPORATISM

Among the most important yet most rarely used words. Better than any other it describes the organization of modern society.

Corporatism is the persistent rival school of representative government. In place of the democratic idea of individual citizens who vote, confer legitimacy and participate to the best of their ability, individuals in the corporatist state are reduced to the role of secondary participants. They belong to their professional or expert groups – their corporations – and the state is run by ongoing negotiations between those various interests. This is the natural way of organizing things in a civilization based on expertise and devoted to the exercise of power through bureaucratic structures…

The surface argument of corporatism has always been that democracy is inefficient, ineffective, corrupting, subject to whims and emotions. Corporatism, on the other hand, presents itself as professional and responsible. It promises to deliver prosperity by helping those who know how to do their jobs properly and in concert…

Note:

The Second World War was about many things, but at its heart is was a battle between two concepts of civilization – the one based on individualism and democracy, and the other one corporatist authoritarianism. Theoretically the democratic individualists won.

Yet since 1945 corporatism has advanced with even greater strength and now has a real hold on day-to-day power.

Somehow we seem to have lost World War II after all…

What makes modern franchising most offensive (to me) is its corruption of mom-and-pops’ individual labour and basic human rights (speech, association). It produces serious and long-lasting physical, mental, spiritual and ethical disease (dis-ease).

Franchising is not alone and may not even the most severe but this but this is an area I know about, so this is why I write.

Price as a false obstacle

Everybody uses money as an excuse for their actions or inactions.

Salespeople learn this early and should never forget it.

They are skilled in looking at the meaning  beneath the obstacle that is thrown at them.

Almost 95% of the time, cost or expense is not the real reason for not buying a good or service. It’s an easy way to brush off some person, or in franchising’s case, the threat that the franchisee wants to deny.

Leaders sell themselves first and then their goods and services 2nd.

That’s the challenge and the reward.