How can 3G Capital guarantee “no staff cuts” at the 3,600 CDN Tim Hortons franchisee-owned stores?

January 29, 2015

Industry Canada may not understand franchising: who actually employs these 96,000 Canadians.

Tim Hortons Youve been fired

Theo Moudakis / Toronto Star

But how can 3G Capital (buyers of U.S. Burger King in 2010) offer any assurances that the 1,100 or so CDN franchisees won’t be forced to lay off their staff once their gross margins and equity are “right-sized?

Is 3G Capital:

  1. incompetent,
  2. willfully misrepresenting things to Canadians and our duly elected politicians, or
  3. admitting that they are “joint employers” (with the franchisees) of those 96,000 franchisee employees?

Note recent charges against McDonald’s by the U.S. National Labor Relations Board: NLRB Charges McDonald’s as Joint Employer with Franchisees.

The National Labor Relations Board filed 13 cases against McDonald’s Corp. (NYSE:MCD) and its franchisees this month, alleging they violated the rights of employees, who worked at McDonald’s restaurants at various locations across the country.

The government agency’s complaints state that McDonald’s and its restaurant owners made statements and took actions against fast food workers for engaging in activities that aimed to improve their wages and working conditions. They accuse the parties of interfering with nationwide protests organized by unions over the past two years over their terms and conditions of employment.

Protect franchisees and they will protect their staff.

  1. Are Canadian federal officials either 1. or 2. (see above)?
  2. Is organized labour and others who wants a $15 minimum wage for the 1,140,000 franchisee-employeed staff in Canada?
  3. How about Industry Canada who risks public taxes while guaranteeing $1.4 billion of franchisee business loans (1999 to 2007).

Fool Land is full of some of the smartest people I know

January 8, 2011

Everybody plays the fool.

We’re all the same with an infinite combination of changing mix of strengths and weaknesses.

How we exercise free (once we regain our footing) will determine our destiny.

[Golden Age Comic Book Stories]


Those who would sacrifice liberty for security deserve neither.

December 12, 2010

Franchisees need to grow up.

Benjamin Franklin 1706-1790

Tyranny is seldom (in the long run, never) imposed on people from without; it is a projection of their own pusillanimity (defintion: cowardice).  Tyranny and mob rule are the same thing.

Northrop Frye in Fearful Symmetry

[via The Educated Imagination]


Cut the crap. Gimme me some more of these Talking Heads

October 27, 2010

This ain’t no party, This ain’t no disco: Stop fooling around.

A media release

In the world of franchising, few brands have the luxury of expanding their business with a cult-like brand following and organic public interest. Vancouver based franchisor, Men in Kilts, is among the lucky few who have had this experience. Rather than going through the usual motions of aggressively marketing and blanket selling franchises, the company is literally turning down hundreds of would-be franchisees. The rationale behind this decision? An uncompromising model of sustainable, long term growth that is heavily focused on the success of individual franchises – a system strategically designed to attract the best-of-the-best.

Member of the Canadian Franchise Association? Nope.

  • Key success factors: Watching someone in a dress power wash your house?

My, my. my.

Life During Wartime, Talking Heads from the 1984 documentary Stop Making Sense

Heard of a van that is loaded with weapons
packed up and ready to go
Heard of some gravesites, out by the highway
a place where nobody knows
The sound of gunfire, off in the distance
I’m getting used to it now
Lived in a brownstone, lived in the ghetto
I’ve lived all over this town

This ain’t no party, this ain’t no disco
this ain’t no fooling around
No time for dancing, or lovey dovey
I ain’t got time for that now

Transmit the message, to the receiver
hope for an answer some day
I got three passports, couple of visas
don’t even know my real name
High on a hillside, trucks are loading
everything’s ready to roll
I sleep in the daytime, I work in the nightime
I might not ever get home

This ain’t no party, this ain’t no disco
this ain’t no fooling around
This ain’t no Mudd club, or C. B. G. B.
I ain’t got time for that now

Heard about Houston? Heard about Detroit?
Heard about Pittsburgh, PA?
You oughta know not to stand by the window
somebody might see you up there
I got some groceries, some peanut butter
to last a couple of days
But I ain’t got no speakers
ain’t got no headphones
ain’t got no records to play

Why stay in college? Why go to night school?
Gonna be different this time?
Can’t write a letter, can’t send a postcard
I can’t write nothing at all
This ain’t no party, this ain’t no disco
this ain’t no fooling around
I’d love you hold you, I’d like to kiss you
I ain’t got no time for that now

Trouble in transit, got through the roadblock
we blended in with the crowd
We got computers, we’re tapping phone lines
I know that ain’t allowed
We dress like students, we dress like housewives
or in a suit and a tie
I changed my hairstyle so many times now
don’t know what I look like!
You make me shiver, I feel so tender
we make a pretty good team
Don’t get exhausted, I’ll do some driving
you ought to get you some sleep
Get you instructions, follow directions
then you should change your address
Maybe tomorrow, maybe the next day
whatever you think is best
Burned all my notebooks, what good are notebooks?
They won’t help me survive
My chest is aching, burns like a furnace
the burning keeps me alive
Try to stay healthy, physical fitness
don’t want to catch no disease
Try to be careful, don’t take no chances
you better watch what you say


Attorneys steer this Ship of Fools

February 2, 2010

What kind of professional would intentionally provide a creditor’s wife a faulty chair to sit in?

Would you trust that person?

Would you trust his landlord?

If you knew what I know, What would you call them both?

Good answer.


All aboard the McShip of Fools: Das Narrenschiff

August 31, 2009

narrenschiffBuying a franchise is a real trip.

  1. Really good writing survives a very long time.
  2. Lies move quickly but truth lasts.
  3. Lies do not become true over time, no matter how many times they are repeated by shills.

In 1494, a German theologian and lawyer wrote a best seller called Das Narrenschiff (Latin = Stultifera Navis, English = Ship of Fools).

Why Brant wrote this is fairly apparent in the prologue:

For profit and salutary instruction, admonition and pursuit of wisdom, reason and good manners: Also for contempt and punishment of folly, blindness, error, and stupidity of all stations and kinds of men.

It is a classic piece of literature that was instantly popular and still speaks of mans universal tendency to act foolishly (ie. to set sail on a journey of self-delusion).

Note the hat symbolism: the donkey ears.

Brant used satire to point out the abuses of power he saw in the state and the Roman Catholic Church. He did that to keep his head attached to his neck.

I chose the fool theme here at FranchiseFool and on WikiFranchise.org (thousands of case studies) to draw attention to the hypocrisy and dangers within modern franchising without being sued for the 3rd time. My message is ultra-serious but I need to teach in an indirect manner.

Any legitimate industry or authority should be able to handle satire from one person.

Historically, another role of a is to speak truth to authority.

Franchise “leaders” cannot tolerate my persistence that mom-and-pop franchising is the height of folly: It’s Unsafe at any Speed because the franchisor can strip value (exercise unilateral opportunism) while you have little or no defence to protect your sunk costs.

When you hear anyone say either:

  1. But no one can predict the future or,
  2. that person lost money and is therefore untrustworthy or,
  3. He’s just antifranchising

…that is a best indication you’re dealing with a 100% genuine jackass travel agent.


WSJ Franchising Review: WikiFranchise.org

March 24, 2009

Thanks to Richard Gibson at the Wall Street Journal for his mention of WikiFranchise.org, the franchise industry’s first wiki that I edit.wallstreetjournal

In an article entitled Blogs Provide Insight to Would-Be Franchisees, Gibson gives a thumbs-up review, I thought:

WikiFranchise.org. Among the newest franchise sites — it was launched earlier this month — is WikiFranchise.org, a takeoff on the popular Wikipedia concept. The site invites contributions from franchisees on their experiences. One recent entry recounted a Maryland couple’s marathon dispute with a coffee-shop franchiser.

The site, which is updated daily, features a convenient search capability by franchise brand. A search under “Burger King,” for instance, turned up more than 60 items, some from as far back as 2001.

I agree with Don over at Blue MauMau when he said in Blogs Provide Insight to Franchisee Wannabees that the subheading to the article was very appropriate:

Sites Offer News, Comments, Updates on the Happenings at Other Businesses; Complaints Are Welcome Too

WikidFranchise provides a safe, unbiased environment for franchisees’ stories. With your story and your help, it can only become better.


Deer: Are We Trade Show Activists?

February 13, 2009

wolfdeer5A good question but a better one is:

Can we afford not to understand how we got roped into a losing deal?

I think you better Get Smart or you’ll find yourself on the wrong side of the next buffet.

  • In confidence games, it’s a fact that more than 50% of the chumps are good for at least a 2nd fleecing.

I took a look at a trade show advertisement this week and the posting was picked up on Michael Webster’s weblog.

Anyone who contacts me is invited to join me in interpreting how a trade show works. Live.

It is a very sophisticated and well-thought out selling environment that is used to qualify candidates; economically but mostly psychologically.

Your lack of awareness of the dangers [ignorance?] is really your admission ticket.

The first step in protecting your family is education.

I’ll be relying on the Six “Weapons of Influence”: social proof, authority,commitment and consistency, reciprocation, liking and scarcity. Bring your copies. You’ll get a tutorial on not only the Science of Persuasion but on relevant cognitive biases (especially confirmation), The Tipping Point, behavioral economics, Theories of Unusual Events and Risk Homeostatis, heuristics (eg. human thinking shortcuts that usually help us but sometimes result in catastrophic errors) and 10 years of intense industry analysis.

Agenda

  1. We’ll go over the basic confidence game role structure and process: house, roper, inside man, shill, chump, fixer, etc.
  2. Why it is so critical to have independent legal advice before you sign (goes double for deals less than $20,000).
  3. The selling value of comparing (anchoring) a new system with the best, most successful franchisor: McDonald’s.
  4. What something called “Prospect Theory” has to say why you will stay in a losing business much, much longer than you could ever imagine.
  5. Why you should only sign when there is an Independent Franchisee Association, IndFA present (versus the lapdog Franchisor Advisory Council).
  6. We’ll decode the hidden messages within the marketing material (worked for an advertising design studio + Ivey MBA + McLuhan disciple).
  7. I’ll explain the role of the current SME loan guarantee program.
  8. Why Canada is a safe harbour for white-collar crime.
  9. How this recession is shattering the conventional wisdom that franchises sell better, the worse the economy gets [HINT: new sales, now, are the worst on record].
  10. Why the hook has to be planted in the male first.
  11. How shame is invoked to silence particularly new Canadians.
  12. Why exceptionally thorough pre-sale due diligence is much more limited than you think and could in fact increase your chance of business failure.
  13. The role of the expert seminar.
  14. Why the most rational and dodgiest should absolutely force a copy of Ontario’s franchise law into your hands.

All of these fraudproofing skills are entirely understandable, applicable to many situations and will last a lifetime. I was taught by the best.

In these days of Bernie Madoff, BIM, CitiGroup, etc., I don’t think you (or anyone you know in the traditional or new media) can afford to turn not to learn more about the Science of Persuasion and applied psychology.

Offer to Sellers: You can join us as well. I will gladly discuss my views in front of anyone, at anytime. These persuasion techniques have been proven scientifically and it’s time that more people understood how skillfully they are applied in franchising.

If I were in your shoes, I’d much rather guarantee us free rein rather than be seen to be resisting evaluation. That old hand-in-the-lens shot sells television shows but is, by its airing, basic proof of guilt.

Consumer education is good and only the fraudsters have anything to hide.

Cost?: Nothing

Just call me at 705-737-4635. Bring the whole family. les.j.stewart@gmail.com

PS: Do me a favour: Sign up to receive each new post (see top right, RSS feed). FranchiseFool is now read in 44 countries. Not bad for a single Canuck in one year, I think.

— UPDATED for Fall 2009


FranchiseFool & Web 2.0: Raising possible Doubt

January 27, 2009

question1I’ve been noticing something funny.

WordPress.com keeps an eye on a statistic called Referrers: “People clicked links from these pages to get to your blog.” (It’s an incomplete measurement but it’ll do for now.)

  • In the last week, FranchiseFool reached 28 countries (Google searches: Jan 20-26).

I don’t care much about the numbers of page views, although every month has seen a positive growth since I started in February 2008. Still, December 2008 was 4,028 views; January probably around 7,000 views. This may or may not be anything to sneeze at. I’ve never traded in volume goods or ideas.

You may notice that I do not allow any form of advertising because I think it’d distract the viewer (and me, for sure) from the central message of FranchiseFool which is:

  1. You’re not alone,
  2. There are lots of people out there who share your uneasiness about franchising, and
  3. many do not have enough technical knowledge to know “why” but are keen to learn.

Mine was always a very narrow focus, a niche market: Those dissatisfied with the normal caveat emptor or all-franchisees-are-stupid thought-terminating clichés (words used to stifle debate by people intent on covering up their guilty feelings) that pass for industry expertise.

As soon as I debug my son’s webcam, with your help, we’ll show what Web 2.0 can do to a house of cards. After all, if what I say is untrue, then what possible danger could we pose to a multi-trillion $, transnational empire?

Immediate Questions Arising (re: below of Referrers per Day)?

  1. Why is Poland so interested in FranchiseFool?
  2. Please someone tell me why one post, lebensunwertes Leben: A Life Unworthy of Life, “outsells” the 2nd most viewed post (Symbols: Strength through Unity) by a factor of 13.9 to 1 (8,783 v. 633)?
January %
20 21 22 23 24 25 26 Total Total
1 pl Poland 3 2 172 40 9 5 1 232 46.0%
2 it Italy 3 4 10 25 11 1 9 63 12.5%
3 uk UK 1 18 7 2 5 3 36 7.1%
4 nl Netherlands 1 24 3 2 3 2 35 6.9%
5 es Spain 8 8 1 2 5 24 4.8%
6 ca Canada 3 4 6 2 5 20 4.0%
7 tr Turkey 11 2 2 15 3.0%
8 br Brazil 1 1 8 2 2 14 2.8%
9 be Belgium 1 3 2 3 2 11 2.2%
10 cl Chile 9 1 10 2.0%
11 at Austria 2 3 5 1.0%
12 ch Switzerland 1 1 1 2 5 1.0%
13 mx Mexico 3 2 5 1.0%
14 de Germany 4 4 0.8%
15 fr France 3 1 4 0.8%
16 ei Ireland 3 3 0.6%
17 ar Argentina 1 1 2 0.4%
18 in India 2 2 0.4%
19 kr Korea 2 2 0.4%
20 py Paraguay 2 2 0.4%
21 tw Taiwan 2 2 0.4%
22 za South Africa 2 2 0.4%
23 bo Bolivia 1 1 0.2%
24 dk Denmark 1 1 0.2%
25 hn Honduras 1 1 0.2%
26 jp Japan 1 1 0.2%
27 pe Peru 1 1 0.2%
28 ve Venezuela 1 1 0.2%
Total 19 22 238 114 44 26 41 504 100.0%

CFA says Bank says Franchises 4 times more successful?

December 1, 2008

waynestateuusdeptcommerce1In a Blue MauMau post called Canada’s Misleading Franchise Success Rate Claims, Lionel Hutz PA quotes Ms. Lorraine McLachlan, president and CEO of the Canadian Franchise Association, as claiming:

McLachlan said that a recent study released by BMO [Bank of Montreal] indicated that nearly four times as many franchises succeed compared to independent small business.

“When you go into an established system, which is the hallmark of a franchise, the probability of success is obviously incrementally increased,” McLachlan said. “The fact that there are more than a couple of locations currently operating using that brand, using that system, suggests that it’s not a flash in the pan and that there is some history that it will succeed.”

… “in economic times such as these, the fact that you are dealing with an established system that has predictable success means that the bank in all likelihood is going to look somewhat more favourably on your application,” McLachlan said. “In many cases, the franchisor will help you work with the bank.”

The full article can be found at The Sudbury Star.

This is problematic because the franchise industry historically has been very loose with their success/failure statistics. Indeed this is what Dr. Timothy Bates of Wayne State University had to say:

Knowledgeable scholars who study franchising issues routinely express contempt for the failure rate statistics publicized by franchisors.

Francine Lafontaine, for example, states ‘one of the major selling points of franchising to franchisees over the years has been the statistics vehiculated by the trade press on the very low failure rates of franchised businesses compared to independent operations. These statistics never had real scientific basis’ (p. 14, 1994).

Such criticism does not deter the industry.
— Survival Patterns among Franchisee and Nonfranchised firms started in 1986 and 1987, U.S. Department of Commerce, p. 6.

I am unaware of any study since that time that would contradict this.

UPDATE

BMO Bank of Montreal: I had telephone conversation with Steve Iskierski, Senior Manager, National Franchising Services for BMO Bank of Montreal. Iskierski was unaware of the basis for this 4 times notion and their is certainly no study that he is aware that BMO has. He was unclear as to why Ms. McLachlan of the CFA would quote that figure and ascribed it to reporter misquotation.

Canadian Franchise Association: Emailed for copy of report. No response.

The Sudbury Star: Left a message for Janice Leuschen. No response.


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