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

June 21, 2017

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 firmonly 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.


Vigorous provincial government relations are invaluable in influencing Tim Hortons Brazilian-based vulture capitalists.

June 8, 2017

Franchisees need to speak out to their local MPPs (member of provincial parliament).

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Queen’s Park, Toronto, Canada

The independent franchisee association should make a legislative “wishlist” a priority.

Nothing, nothing makes a franchisor and his allies (Canadian Franchise Association, CFA et al) stand up and take notice.

Anyone who says talking to politicians is a waste of time, is working full-time for 3G, the CFA, its 1,199 other franchisors and their supporters: banks, legal service providers.

Start by suggesting the Ontario government reverse the onus on good faith in the Arthur Wishart Act.

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Est. 1998

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Mike Colle, MPP Eglinton Lawrence, Susan Kezios, President, American Franchisee Assocation, AFA and Les Stewart, Canadian Alliance of Franchise Operators, CAFO, Wishart Act hearings, 2000.

Les’s expert witness testimony.

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John Sotos, Sotos LLP and Susan Kezios, AFA, Wishart Act hearings, 2000

John’s expert witness testimony. Susan’s expert witness testimony.

Tony Martin MPP Sault Ste. Marie and Dr. Gillian K. Hadfield, University of Toronto, Toronto, Canada, 2000.

Dr. Hadfield’s expert witness testimony.

Three MPPs get together to try to make franchise fraud a criminal offence, Second Reading, 2010.

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Les Stewart, ON Premier Kathleen Wynne and Don Morgan, 2015.

Q: Why should any public official help your family when (it appears) you don’t give two hoots about the other +70,000 franchisee families?


Who has profited most handsomely from the passage of the Ontario Arthur Wishart (Frachise Disclosure) Act, 2000?

March 27, 2017

The mega group, elite class action and Tier 2 franchise bar practioneers.

Notwithstanding a very receptive Superior Court, almost no mom-and-pop franchisees.

That’s precisely why no attorney pleads right to associate issues.

The franchise bar profits more from filtering and defeating frachisee claims.


Is there an economic value to knowing precisely who the “rebel” Tim Hortons franchisees are?

March 23, 2017

Yes, especially if the franchisor wanted to do a mass termination or consolidation of stores.

 

Who would likely collect and deliver the membership list?:

  • franchisor,
  • independent franchisee association – executives,
  • independent franchisee association – management,
  • association lawyer, or
  • franchisee advisors (former franchisor/founder, former president).

Probably the emails sent to a safe server as well.


Exiting franchisees are dealt with in an engineered fashion.

March 4, 2016

The model is similar to what happens to the contents of your toilet when you flush it.

The maximum value ($, labour, reputation) to the franchisor is extracted thanks to the franchise bar.


What advice might Taleb give the CDN Target and Tim Hortons franchisees who are thinking of “lawyering up”?

February 4, 2015

Someone once called me franchising’s black swan.

Taleb Kahneman

In science, you need to understand the world; in business you need others to misunderstand it.

What does Nassim Nicholas Taleb define as a “sucker”:

The sucker’s trap is when you focus on what you know and what others don’t know, rather than the reverse.

Suckers think you cure greed with money, addiction with substances, expert problems with experts, banking with bankers. economics with economists, and debt crises with debt spending.

We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract. What they call “risk” I call opportunity; but what they call “low risk” opportunity I call a sucker problem.

I have no pecuniary interest in these schmozzles, only a few friends and their staff that I care about.

You are rich if and only if money you refuse tastes better than money you accept.


What is the Canadian Franchise Association doing to protect the 1,100 CDN franchisees and 96,000 employees at Tim Hortons?

February 1, 2015

The Canadian Franchise Association says it …advocates on behalf of franchisors and franchisees in Canada

CFA

Tim Hortons is a member of the CFA. The CFA’s Code of Ethics says that their members’ should treat each other with fairness.

Tony Martin former ON MPP and MP made certain recommendations from his experiences during the public hearings which led to Ontario’s 1st franchise law.

News Release
April 4, 2000

Investigate Franchise Association Abuses: Martin

Tony Martin, MPP

Tony Martin, MPP, Sault Ste. Marie
New Democratic Party
News Release
Legislative Assembly of Ontario, Canada

INVESTIGATE FRANCHISE ASSOCIATION ABUSES: MARTIN

TORONTO – The Consumer and Commercial Relations Ministry should investigate the Canadian Franchise Association over its failure to help Ontario franchise holders, NDP MPP Tony Martin said today.

The CFA is advising the Conservative government on proposed changes to provincial laws governing franchise agreements. But the association is under fire from hundreds of its own members for its indifference to their complaints, the NDP Critic for Consumer and Commercial Relations said in the Legislature today.

“The CFA has been of no help to many hundreds of entrepreneurs who lost their shirts in shoddy franchise deals,” Martin said. “Instead of taking the CFA’s advice this government should be sending in ministry staff to thoroughly investigate this association’s failures.”

Martin raised the case of Brenda Hope, a mother of two from Coldwater who lost $90,000 as a Chemwise Inc., franchisee. For more than a year, the CFA has refused to look into Hope’s complaints, although it endorsed Chemwise as a member.

Similarly, the CFA has refused to accept a registered letter from Bulk Barn franchisees who have a series of complaints against the franchisor. Martin was also refused when he tried to deliver the letter. The Sault Ste. Marie MPP called on Consumer and Commercial Affairs minister Bob Runciman to act now to protect small businesspeople.

“Perhaps the minister can convince the CFA to live up to its responsibilities to mediate franchise disputes. If he can’t, we need a full-scale probe of this group. It’s the least we can do for hard-working families who lose everything in dubious franchise deals,” Martin said.

The MPP has proposed his own legislation, Bill 35, that is far tougher than the government’s Bill 33. The Martin Franchise Bill would require full-disclosure of franchise contracts, a dispute resolution mechanism, the right to associate and the freedom to source products outside of the chain when not trademark related.

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Also: Martin’s questions directed to the CFA during their Mar 2000 expert witness testimony.

Source

CFA National Sponsors


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