Sunshine is the best disinfectant — including franchising disputes.

June 23, 2012

The franchising industry (legal bar, banking, franchisor, suppliers) is highly organized.

The franchise bar reigns supreme not just intellectually but on a tightly-controlled cash flow basis. Variation from the established social norms are not tolerated. Everyone knows their place.

An interesting article by Jennifer Dolman of Osler LLP about their clients’ dreams:  Who’s the fairest franchise party of all?

Author:

Jennifer Dolman is a litigation partner with Osler, Hoskin & Harcourt LLP in Toronto. A frequent speaker and writer on franchise law, Jennifer has particular expertise representing franchisors on franchise disputes. She was named Toronto Franchise Lawyer of the Year by The Best Lawyers in Canada 2012 and a Franchise Times Legal Eagle 2012. Jennifer can be reached at jdolman@osler.com or  (416) 862-5911.

Advice: Have us fight for you in the shadows, and not in the light of day (ie. an ON  Court of law).

quote by  by Justice Lewis Brandeis 1856 – 1941

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The public Role of Tier 2 franchise attorneys

August 12, 2010

In my post On the Nature of Tyranny, I tried to present Northrop Frye‘s analysis of William Blake.Blake saw the fundamental struggle on earth between two opposing forces:

  1. champions of tyranny (not the apparent nasties but those that profit from defending them; those that write for power; sophists) and
  2. visionaries (the “enlightened ones” lol).

Franchise bar: In advanced franchising cultures, there are two archetypal fixers: one for the franchisors and ditto for franchisees.

Everyone else in the franchise bar is lower status individual, dependent on these two alpha males and the evolution of the bar’s sociology: norms, history, rewards/punishments, career advancements, access to law makers/regulators, referrals, who is “us” and who is “them”,  etc.

One role of the Tier 2 attorneys is to engage in battles on behalf of the pack when here is a threat.

Their out-of-character behavior explains a lot about a system that created, empowers and defends tyrants.


Franchise Bar: The Name of the Game is Shame

October 11, 2009

Shame

Bad dog.

Filthy animal.

Shame dis-ables franchisees.

It breeds a cluster of behaviours that is inaccurately categorized as depression.

The affect of shame – humiliation disables their defences, confuses them and makes them appear to others (and themselves) as stupid, grim and uneducated: a lower caste.

My observation is that shame is the primary driver in modern, mom-pop franchising today. It is its strength and its downfall.

All addictions are either killed by those that benefit from them in the short-term. Or they kill the addicted host.

Dispute Resolution: Within a franchise, franchisors trigger this emotion on the individual level. When franchisees ask questions and surface to the public policy areas, the associations and their franchise bar takes over that shaming exercise. Of course, the cannon fodder lawyers (ie. Tier 2 intellectuals, overly-ambitious and -trusting) are sent into the parliamentarian No-Man’s-Land.

The franchise bar and their leaders are the engineers of this very high cash flow shame – silencing game.

Franchisees: Be Attentive.

  1. The start for individual healing is identifying their depression as shame in drag and seeking out those that have gone through it. It helps with the isolation and sweeps away the confusion and deceit. Listen. Laugh. Live again.
  2. Maybe looking at the Compass of Shame with your partner?
  3. Always, always, always report in with the only true franchise professional: your family medical doctor.

Leave franchising to devour itself. There’s lots of interior work and other-centred work to do.

The worm will commit suicide just like every other totalitarian empire has despite the illusion of strength of its tin-pot tyrants.


Q: What will the grocers say to the politicians at the public hearings?

August 2, 2009

SecondOpinion

A: Whatever the fcuk I tell them to say.

This was my question to, and answer from, a Toronto, Canada lawyer before the hearings that lead up to the Arthur Wishart Act (Franchise Disclosure), 2000.

The real power behind established independent franchisee associations (IndFAs), is a handful of lawyers in North America.

All professionals will act so as to further and strengthen their current and future cash flows. This is not a huge insight.

But when the two objectives conflict (actually solving problems versus appearing to solve them) the professional’s needs are satisfied first because no one has the experience, knowledge or interest in challenging how the problem is framed.

Lawyers compel franchisees to deal with problems in the same way that denies the information/communication/internet revolution has ever happened. THINK: Would you want your doctor to treat you the same way the physicians did 100 years ago?

IndFAs never fulfill their potential because that would interfere with the dominant credence good providers’ interests (ie. the franchisee “Fixer” attorney). The credence good cheating problem is overcome by severing the attorney’s influence.

He is either allowed to do

  1. the diagnostic work (strategic planning) OR
  2. the proposed solution (actual litigation), BUT never both.

This helps to reduce the inherent conflict in being able to (1) frame the problem and (2) deliver the solution the the “problem”.

Any experienced IndFA executive knows that the lawyers have effectively captured almost all of the IndFAs. The litigation is a well-thought out puppet show between the industry’s legal titans.

  • This is the real reason that the American Franchisee Association is dormant: its attorney “supporters” want it that way.
  • Same why the AAFD so frequently put their foot into a warm pile of poo and lacks any credibility at all.

IndFAs are ineffective and usually deemed a “failure” because that  serves the most powerful stakeholders interests to do so.

The solution is to move toward a franchisee-centric model such as an Attorneyless franchisee network, AFN where no attorney can capture and disable the web-enabled massive power that franchisees have (Stewart’s Law of Group Power).

This is especially true when the franchisor is a publicly traded corporation in a mature industry that touches the public every day in a very intimate way in a rigid 24/7 product cycle.

The way out starts with one independent thinker asking for a 2nd opinion.


It’s a bluff: Predatory franchising is an antiquated technology

July 30, 2009

WizardofOzThe industry elites know it’s curtains for predatory franchising.

What gave them power (litigation) has been stripped away.

Oh and the financial institutions (especially the government guaranteed loan program administrators) are very, very nervous about being past the tipping point.) They know what lenders’ due diligence duty is.

The old software was based on the economics of scarcity and is hopelessly, helplessly out-of-date.

Advances in  communication (bandwidth, storage & processing) have smashed the franchise bar’s closely-held monopoly on how franchising really works. What they charged $300 per hour for, is now largely available for free here, Blue MauMau or WikiFranchise.org.

It seems ironic that their crowning jewel (intellectual property) has been used against them.

Search a:

  1. tradename tag cloud or
  2. tradename directly (ie. McDonald’s or Quiznos), or
  3. name of a franchising executive.

Immediately, 100% anonymously and for free, this reveals what they had so successfully charged for  concealing in the past.  High-quality information, immediately available with the promise/threat of 1,00s of semi-anonymous contributors writing on WikidFranchise via personal narratives.

The true costs of opportunism (reduction in negative externalities) is more accurately being assigned to tradenames and and the individuals who control them. What we were told was random, now appears as it really is: a well-thought out system that is repeated all over the world. Designed as precisely as any Swiss watch.

  • The goal?: to re-distribute (not create) capital.

The King Experts, the thought-leaders  know this. The Fixers denied, got angry, bargained and then got into a major league funk in the last 10 years.

They now accept that putting the internet back in the bottle is impossible.

  • It is a revolution.

Franchisees need to walk into an empty room and go about their business of making money since the law has become irrelevant. The curtain has been pulled back.

Frightened, old fools: more to be pitied than ever feared.

What is current, has currency with politicians.


What I do makes franchising sustainable despite franchisors’ mid-management thuggery

June 10, 2009

I only work with franchisees. I have only ever worked for franchisees.

SwiftKick

I do not get paid by franchisors or their law firms or anyone else.

  • Paradoxically enough, the result of what I do helps both franchisees AND franchisors.

Here is how this is done:

1. Franchise managers have developed some bad habits over time. They tend to be very direct and at times abusive in achieving their goals. The problem is that it has worked in the pre-internet franchise stage.

2. They can do this because they there have (until lately) been very few costs associated with predatory actions. Sure there are some lawsuits but those are just a cost of doing business. Over 98% of all actionable claims never get filed or are quickly brushed aside by the captured franchise bar.

3. It is easier to squeeze more and more out of a captive investor by bullying than it is in being a human being using persuasion.

4. When I come around, the middle level managers don’t know what to do. They  try their “old ways” (threaten termination, cut revenue, heap abuse) and sometimes it scares off the novice franchisee organizer. More frequently these days, it does not. The informal leader (visible but a spokesperson)  hangs tough and perseveres. Everyone is allowed to stay in the grass as long as they throw in $2,000 each to launch the leaderless group.

5. If the franchisees are part of a publicly-traded company, with some patience and courage, senior management will become aware that a “problem” exists. They tell the mid-level grunts to “solve” it (ie. Wounded Knee Massacre).

This too is logical since (pre-internet), the hot-heads will have usually burned themselves out while the bulk of the group stay in the weeds, too afraid to come out and take a stand.

6. The internet comes along and changes franchising’s landscape. Now, every stupid incriminating email can be distributed for zero cost at a 100% ANONYMOUS manner, to every corner or even a vast geography such as Canada: 2 official languages and 4 distinct regions.

7. These Olde Tyme, Inquisition-based managers act as the best organizer in the world for the informal franchisee leader. All management is seen as a bully as well as being fat/lazy/stupid. The group holds fast after the first shit storm and escalated the problems to senior management. Teeth become a little more bared.

8. The senior manager does not want his boss to continue to be copied on the emails, so he brings in new managers (“Mistakes were made…yadda, yadda…) who hopefully can manage in a higher-order way: deal with ambiguity, listening skills, negotiation, franchisees as an asset not expense,  and basic human sharing.

9. The franchisor:franchisee relationship moves from a Parent:Child to an Adult:Adult relationship (see Transactional Analysis). Franchisees forgive but don’t forget.

10. Franchisor and franchisees move to a more equal footing based on respect. Get used to my mug, boys: Franchisors will turn on in a flash if they think they can get away with it. The tag cloud over at WikiFranchise.org, FranchiseFool and $500,000 reserve in the franchisees’ bank account will tend to keep them on the straight and narrow in the long run. Think managing a multi-million sales corporation with a substantial equity component. Professional management: exec director/franchisee (salary similar to franchisor’s manager sitting across the table), office, staff, functioning board & executive, travel. Toe-to-toe in a suit: billion sales on their side more than balanced by you owning their loading docks (“axehandle approach” to be avoided).

11. The dominant franchisor law firm (one in every country) had historically been The Fixer for the franchisors.

  • Post Web 2.0, I’m the franchisees’ Fixer.

— Franchisees must at first be quite patient while their immediate “boss” self-destructs. It’s not their fault: they get paid for their muscle not their brains (as you well know).

It only takes one person with a budget to contact me to have me evaluate their situation.

Calling a lawyer first is a fool’s game. They suck on non-legal or non-litigation tasks. You need a human being first. I wrangle lawyers when needed.


The Lord hates a coward

May 9, 2009

It should not be a surprise that the American Franchisee Association is headquartered in Chicago, Illinois.


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