Several thousand, I’d imagine.
- WikiFranchise.org: Immigrants as Prey, Cannon fodder, Language shortcomings create a vulnerability
- Franchising Opportunism, 2005 paper
Number of closed stores and terminated Canadian franchisees is both unknown and unknowable because of lapdog disclosure rules.
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 $.
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.
What franchisor sends this message to the retail market?
Is it in acting in bad faith by destroying all existing Lick’s franchisees’ equity?
The franchise bar, with perfect foreknowledge, will take what is left of their money in what will be (in the end) a hopelessly futile attempt at legal justice in Ontario. Talk to your premier and your small business loan provider not your a franchise lawyer.
Thanks to our friends down under.
Mr. Richard Cunningham spoke very professionally and accurately for the franchisor- and supplier-only association.
Mr. Tony Martin, MPP was a key player in asking the right questions which helped clarify how much contempt each stakeholder had for the democratic process. There were five expert witness spots in the 4 days of travelling public hearings that resulted in the Arthur Wishart Act (Franchise Disclosure), 2000. The subcommittee gave the CFA one of those slots. The complete record of testimony can be found on WikiFranchise.org.
Mr Martin: I’m following up on the question that Richard [Patten, MPP] asked a few minutes ago in terms of who you’ve actually kicked out of the association. I’m led to believe that, in fact, you’ve only revoked the membership of one and that was Pizza Pizza. Is that correct?
Mr Cunningham: I’m not at liberty to say, I believe. That would be privileged information of the association and I don’t think it’s appropriate to make any of that public here.
Mr Martin: You’re not going to give me any numbers even?
Mr Cunningham: No.
Mr Martin: Then just to query as to the membership in your group and who you speak for, I’m led to believe that you have 220 out of about 1,300 franchise systems in the country. Is that correct?
Mr Cunningham: I don’t what the date of that paper is, but our franchise member list is just over 300 right now because some of our member companies, like CARA, for example, would have eight brand names.
Mr Martin: And 80 of your members are lawyers, accountants or consultants?
Mr Cunningham: Correct.
Mr Martin: Also there are some big systems-and we heard from one of them today-that don’t belong to your association. Do you have any auto dealers?
Mr Cunningham: No.
Mr Martin: Do you have any food stores?
Mr Cunningham: Yes.
Mr Martin: How many?
Mr Cunningham: One chain.
Mr Martin: Petroleum stations?
Mr Cunningham: Yes, Petrocan.
Mr Martin: What about hotels and motels?
Mr Cunningham: Yes, a number of them.
Mr Martin: You made a statement earlier about the information I shared with the committee that the perception out there is that there’s lower risk by going into a franchise than the independent small business route. I have a study that suggests that’s not the case that the incidence of failure in franchising is greater than in going the independent route.
Mr Cunningham: I don’t know your study so I can’t comment on it.
Mr Martin: It’s a study called Survival Patterns among Franchisee and Nonfranchise Firms Started in 1986 and 1987. I can give you a copy of the report. It was reviewed by Ms Susan Swift from our legislative research branch, and it’s actually quite interesting. It has a number of findings that I think maybe your association might find worth looking at because it challenges very seriously the contention-and I suggest it’s something that needs to be perhaps looked into further. If we’re offering franchising in the country as a more secure way to get into business, particularly in an environment where there are a lot of people who are being restructured and walking around with severance packages looking for someplace to invest them and they are thinking that franchising is a bit more risk-free than actually setting up an independent business, then we may be sending them down a road that will result in stories such as the ones we’ve heard over the last two or three days here.
Mr Cunningham: Can I respond to that?
The Vice-Chair: Go ahead, sir. We’re just about out of time here now.
Mr Cunningham: Even if these statistics are out there, and as people are being told that franchises are more successful than non-franchises, the disclosure is going to give them the information and the ability to contact people in the system. If they call up XYZ system and talk to 10 of the franchisees and they say, “I’m not allowed to associate,” “I’m not making any money,” “I’ve been in this business five years and I’ve lost money,” or “I’m not in the system any more because I lost my life savings,” I think that in itself is going to tell those people, regardless of what any statistics are, not to buy.
Mr Martin: The problem is, though, that a lot of the people that they should actually talk to have signed confidentiality agreements and they can’t talk.
Mr Cunningham: They wouldn’t be able to do that, though, with this disclosure legislation.
The Vice-Chair: Richard, thank you so much for your time today and for the presentation you left with us.
March 6, 7, 8 and 9.
Public hearings into the franchise relationship. Four days of traveling public hearings: Toronto, Sault Ste. Marie, Ottawa and London. Ontario, Canada. Traveling public hearing: extremely rare, if not unheard of, under the Mike Harris government.
Approved by the former Ontario Minister Robert Runciman over a beer with Tony Martin at the Queen’s Park members’ bar. Two men who share a love of democracy as expressed in the Legislative Assembly of Ontario.
I had the tremendous honour of traveling throughout Ontario as before these life stories were twisted into the Arthur Wishart Act (Franchise Disclosure), 2000. I seemed to have made an impression on the politicians.
Of the current MPPs (107), I know 29 of them. One Minister since I was 17 years old. 45 minutes from my house to their House.
It happened once.
It can happen again.
— The Legislative Assembly of Ontario, looking north to the main doors, University Avenue, Toronto Ontario
It’s only fair to both sides and will stop the continuing carnage.
Independent franchisee associations, IndFA and their consultants should be treated as if they were individuals within a franchise agreement.
Dr. Gillian Hadfield: Amend the Bill to include mechanisms for low cost enforcement of the rights and obligations. Mechanism could include permitting franchise association/class standing in civil litigation; dispute resolution mechanisms including mediation that would operate outside the civil litigation system. SUMMARY OF RECOMMENDATIONS, BILL 33 – Franchise Disclosure Act, 1999, Legislative Assembly of Ontario, Canada, March 31, 2000
— Justice, Plaster model created by Walter Allward between 1925 and 1930 and used by stonemasons in the construction of the Vimy Memorial in France. The figure of Justice leans her forehead against a sword hilt.