Several thousand, I’d imagine.
- WikiFranchise.org: Immigrants as Prey, Cannon fodder, Language shortcomings create a vulnerability
- Franchising Opportunism, 2005 paper
This is what someone searched for today on FranchiseFool.com.
Have they ever been profitable?
Except for the shills and house negroes?
my, my, my
John Lorinc wrote the book on franchising from a franchisee’s investor viewpoint.
I’m glad to see it is still available to buy online and is in many Canadian libraries.
The hidden banking side is revealed in Chapter 4, The 90% Solution: Franchise Economics, some of which I excerpted in a WikiFranchise.org post.
What did the business press have to say about Lorinc’s work?:
Finlayson strikes a cautionary note, specifically about the hinted at misuse of the Canada Small Business Financing program, CSBFP:
Does all this matter to you? Yes, it does. In 1993, in the wake of vigorous complaints by small-business owners that Canadian banks were reluctant to finance them, Ottawa raised the ceiling on loans guaranteed by the Small Business Loans Administration to $250,000 and its guarantee rate from 85 per cent to 90 per cent, sparking a bank lending rush to franchisees and shifting the risk of franchise investments onto taxpayers’ (your) shoulders.
The Risk: Only a fraction of the Liars’ Loans are ever claimed by the banks, thereby grossly understating Industry Canada’s default statistics (Franchised v. Non-Franchised loan performance). The franchisee thinks he signed a government-backed loan but it never gets registered as such. As their bankruptcy, loss of life savings, marital and family breakdown escalate over the life of their 12 to 18 month franchise career, the franchisee NEVER looks to Box 9 of the CSBFP loan application form (Projected Sales ) as the source of their trouble; where the lie is put into the “Liars’ Loan”. The proceeds of these engineered-to-fail loans is split upfront by the franchise banker with the bank, banker, franchisor and sales agent. If questioned, the bank shreds the paperwork and waits for the lawsuit.
And, seriously, how many of these Immigrants as prey losers could or would ever sue a Schedule 1 chartered bank?
The Return: Smashing quarterly earnings goals, record profits, high turnover in the small business division of each of the banks, and making franchise lending the most lucrative form of commercial lending in Canada. Private gain/public loss enabled by a criminogenic environment, moral hazard, regulatory capture…
Lorinc carefully mentions the “windfall profits” in this arrangement of churning:
What’s more, some banks and franchisors have put the SBLA program [predecessor government guaranteed loan program] to questionable use during foreclosure actions against franchisees, says one former owner who has been through the process. When a bank calls a loan against a non-performing franchisee, the 90% guarantee effectively relieves the bank’s receiver from trying to get the best possible value while disposing of the owner’s assets. With most of the loan covered by the Canadian taxpayer, the assets – fixtures, kitchen equipment, inventory, etc. – can be sold quickly at a deep discount, possibly below market value. This allows the franchisor too step in and buy back the property at better-than-firesale prices, thus generating a windfall profit when the store is later re-sold to another franchisee.
An important work that, depressingly, is as relevant in 2012 as it was in 1995.
Millions $ are wasted in franchising because of franchisees’ passive resistance to even very good, mutually profitable franchisor-led inititiatives.
If franchisees perceive themselves to be indentured into a form of slavery, Who is their Lincoln?
What then did you expect when you unbound the gag that muted those black mouths? That they would chant your praises? Did you think that when those heads that our fathers had forcibly bowed down to the ground were raised again, you would find adoration in their eyes?
— Jean-Paul Sartre 1905 – 1980
I am quite effective doing it for a wide range of clients.
Inground sprinklers. Landscaping lighting. Business consulting. Email Indexing Service (wiki). Speaking. Marketing. Sales. Projects.
Any landscape projects planned this season in the GTA or central ON?
Midhurst, ON 705-737-4635 begin_of_the_skype_highlighting 705-737-4635 end_of_the_skype_highlighting Tel
I’m going to take some time off.
Franchising is low-grade entrepreneurial pornography.
Read Franchising Opportunism and you judge. The horrendous losses on unregistered guaranteed government loans are self-financed on inflated appraisals.
A clip joint or fleshpot is an establishment, usually a strip club or entertainment bar, typically one claiming to offer adult entertainment or bottle service, in which customers are tricked into paying money and receive poor goods or services, or none, in return.
Typically, clip joints suggest the possibility of sex, charge excessively high prices for watered-down drinks, and then eject customers when they become unwilling or unable to spend more money. The product or service may be illicit, offering the victim no recourse through official or legal channels. Wikipedia
The process by which banks create money is so simple that the mind is repelled. John Kenneth Galbraith
Ultra-white teeth, shiny suits and orange skin.