Information is much, much more valuable to franchisees than any franchise law will ever be.

June 8, 2017

Start the dialogue, record the franchisor’s every move and retain that information through successive ownership changes.

Start educating  your members in the two businesses they run: the store and the franchise relationship.

I started WikiFranchise.org in Feb 2009. I keep it open although most wikis are closely held.

Those with a greater command of the information, wins every time.

  • weblog
  • smart phones
  • wikis

 

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3G Capital poises for accelerated growth in U.S. Tim Hortons by closing stores?

November 23, 2015

Number of closed stores and terminated Canadian franchisees is both unknown and unknowable because of lapdog disclosure rules.

20151123 Tim Hortons

Tim Hortons confirmed that stores across Maine and New York closed on Friday. RENE JOHNSTON / TORONTO STAR FILE PHOTO

An interesting article in Canada’s largest daily newspaper, Tim Hortons closes locations in New York, Maine, (subheadline:
Coffee chain refuses to say if it has closed any Canadian outlets. It has reportedly closed more than 20 stores in the U.S.):

Tim Hortons has closed down many locations across New York and Maine, only a few weeks after reporting a profit of $49.6 million (U.S.).

The coffee chain would not confirm if any Canadian outlets had been closed or how many U.S. stores shut.

And also in a press release:

“As we build the foundation for accelerated growth in the U.S., we have decided to close some restaurants in New York and Maine.

Comment on article by reader “Relax”: Apparently, Tim Hortons has figured it out. The best way to “accelerate growth” in the US is to start by closing stores.

Canadian Franchise Industry Much More Secretive: Franchisors in the United States are required to report the number of stores and franchisees closed, terminated, etc. each year. There is even public access to their Franchise Disclosure Documents (see California’s search template: Tim Hortons USA Inc). In Canada, provincial ministries do not require franchisors to publish this data. So sad for investors or journalists or the captured franchisees’ billions of investment $.

Additional coverage:

Franchisors have traditionally sent signals to their franchisees on how they would be treated if they’re not seen to be “on the team”. Normally, the most vocal are out first.

Word from Canada is that the franchisees has it that their stores have never been more profitable.

The real prize is on the (surviving but fewer) CDN franchisees’ income statements.

 


Why is it so hard for Canadian entrepreneurs to access franchise disclosure documents in Canada?

February 24, 2015

Perversely, much more information is available via U.S. internet sources for Tim Hortons franchises than can be found north of the 49th parallel by an independent researcher.

Tim usa

Since 1979, the U.S. Federal Trade Commission has required all franchise disclosure documents to be publicly available (the Franchise Rule). As an example, this is the first of 555 pages of the free online copy of the 2013 Tim Hortons Traditional FDD. This is critical information; similar to financial market prospectuses.

Tim Hortons USA Inc 2013 FDD

It’s as easy as going to the Wisconsin site, typing in the name of the system, and more-often-than-not a free pdf shows an unbelievable amount of investment disclosure information.

How about getting the most recent filing for Tim Hortons in Canada? On Feb 17th, I emailed the new owners and asked for a copy and received this reply:

Dear Les Stewart:

Thank you for your message. All of the information we are able to provide the general public is available on our website. If it is not on the website, we regret to inform you it is proprietary in nature and we are unable to fulfill your request.

Sincerely,
The TDL Group Corp.
Angelee ,
Franchising Canada Representative

The Ontario law is called the Arthur Wishart Act (Franchise Disclosure), 2000. It’s disclosure requirements were modeled on the U.S. model.

Disclosure requirements (standard format, both U.S. and Canada)

  • bankruptcies (p. 17 of the U.S. Tim Hortons Traditional FDD),
  • litigation history, (p. 15),
  • corporate-, franchisor-owned outlets (p. 72),
  • franchised stores: terminated, non-renewed, re-acquired, ceased operation, transferred, and sold-but-not-opened (by category for 3 years, p. 72),
  • fees (royalty, advertising, computer, other, p.17),
  • franchisor’s financial statements (p. 85),
  • list of current franchisees: name, address and telephone number (Exhibit O: p. 333),
  • list of recent former franchisees: name, address and telephone number (Exhibit P: p. 387),
  • restrictions on sources of products and services (and amount $ franchisor receives, Item 8: p. 32),
  • entire franchise agreement (p. 133), financial representations (Item 19: p. 69) and
  • leases, trademarks, etc.

The Ontario government/Wishart currently does not require either (1) public filing or (2) an online repository of documents.

I believe Canadian small business investors deserve as much access to this financial information than do our United States neighbours.

How can we have informed public policy without publicly-available, agreed-to data?


What is the most powerful 1st step in franchisee empowerment?

February 18, 2015

A simple WordPress weblog.

weblog

It gets the ball rolling.

Nothing dispels the out-date fear of retaliation faster.

This is a good example for a 1,000 franchisee system.


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.

Charter of Rights

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

 


Why should we try to form another independent franchisee association?

July 30, 2012

That’s a very good question.

Traditionally, franchisee associations get a few quick wins and when the leaders are bought off or banished. The gains (plus) are clawed back.

That doesn’t have to happen any longer. The gains can be permanent, quantifiable and anonymous.

Like all things, managing information has changed: this time in franchise investors’ favour.

To release the million of dollars, you’ll need  a pro to advise you.


Use legal, organizational and technological leverage to move your franchisor

November 9, 2011

Multiply your efforts by using the laws of our society intelligently.

Accelerating Relationship Leverage

A private for-profit corporation (anonymous franchisee shareholders) AND a 100% locked-down, franchise law-specific indexed document database (wiki) pivoting WITH a highly public attorneyless franchise network.

Benefits

  • solves the information and resource imbalance endemic in franchising,
  • takes less than 3.0 per cent of franchisees needed to start as shareholders,
  • valuation of for-profit calculated annually (franchisees will clamour for 0.1% share in 5 years),
  • allows innovators and early adopters to carry at first,
  • focuses attention on a single, credible voice for franchisees that is respected because it is in the franchisor’s  self-interest to do so,
  • shareholder anonymity balanced with managerial control (no one shareholder can highjack the agenda),
  • accesses the most cautious investors (overcomes stigma of betrayals and organizational collapse),
  • retains franchisee “equity” (for-profit franchisee corp. directly aims to support and increase re-sale value),
  • prevents much of future franchisor opportunism: self-interest with deceit (franchisee cost avoidance),
  • voluntarily shifts capital from franchisee’s “equity” (temporary, illusory) to group equity (real),
  • more able to reform system rather than just legally fight and be forced to leave,
  • facilitates: vendor programs, franchisee self-borrowing, stock purchase PADs, training, life:work balance,  buying/selling franchises,
  • each franchisee is issued a membership in the attorneyless franchise network and a share in the for-profit corporation (one share),
  • enables former franchisees to invest (if desired),
  • strategically positioned to defend against private equity vultures,
  • builds trust with shareholder group (external investments, reducing risks, development),
  • accesses and retains expertise that dues-paying organizations cannot afford, and
  • capitalizes on the fact that CDN, ON Court decisions have shifted economics on dispute resolution in franchisees’ favour.

Costs

  • takes time, need for long-term perspective,
  • 24 franchisee shareholders to start “risking” 2% of their cash they’ve made in the last 10 years,
  • requires patient shareholders (no interest payable initially).

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