The Game of Franchising: Believe and Succeed

August 31, 2009

AndyKarufmanDid ya hear: Andy’s alive!

Yeah it’s true. Really.

Man on the moon and they still can’t commit to a reasonable expectation for cash flows?

Hey baby, Are we losing touch?

If you believe there’s nothing up my sleeve, then nothing is cool

Pseudos: from foolish stern to foolish bow.

Man on the Moon, R.E.M.

Mott the Hoople and the Game of Life. Yeah, yeah, yeah, yeah
Andy Kaufman in the wrestling match. Yeah, yeah, yeah, yeah
Monopoly, twenty one, checkers, and chess. Yeah, yeah, yeah, yeah
Mister Fred Blassie in a breakfast mess. Yeah, yeah, yeah, yeah
Let’s play Twister, let’s play Risk. Yeah, yeah, yeah, yeah
See you in heaven if you make the list. Yeah, yeah, yeah, yeah

Hey Andy, did you hear about this one? Tell me, are you locked in the punch?
Hey Andy, are you goofing on Elvis? Hey baby, are we losing touch?
If you believed they put a man on the moon, man on the moon
If you believe there’s nothing up my sleeve, then nothing is cool

Moses went walking with the staff of wood. Yeah, yeah, yeah, yeah
Newton got beaned by the apple good. Yeah, yeah, yeah, yeah
Egypt was troubled by the horrible asp. Yeah, yeah, yeah, yeah
Mister Charles Darwin had the gall to ask. Yeah, yeah, yeah, yeah

Hey Andy, did you hear about this one? Tell me, are you locked in the punch?
Hey Andy, are you goofing on Elvis? Hey baby, are you having fun?
If you believed they put a man on the moon, man on the moon
If you believe there’s nothing up my sleeve, then nothing is cool

Here’s a little agit for the never-believer. Yeah, yeah, yeah, yeah
Here’s a little ghost for the offering. Yeah, yeah, yeah, yeah
Here’s a truck stop instead of Saint Peter’s. Yeah, yeah, yeah, yeah
Mister Andy Kaufman’s gone wrestling (wrestling bears). Yeah, yeah, yeah, yeah

Hey Andy, did you hear about this one? Tell me, are you locked in the punch?
Hey Andy, are you goofing on Elvis? Hey baby, are we losing touch?
If you believed they put a man on the moon, man on the moon
If you believe there’s nothing up my sleeve, then nothing is cool

If you believed they put a man on the moon, man on the moon
If you believe there’s nothing up my sleeve, then nothing is cool
If you believed they put a man on the moon, man on the moon
If you believe there’s nothing up my sleeve, then nothing is cool
If you believed they put a man on the moon, man on the moon
If you believe there’s nothing up my sleeve, then nothing is cool

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Franchising was an imperial Empire

August 17, 2009

When you think about it, franchising uses a lot of military terms: conquer markets, roll out regionally then nationally, blitz the consumer, attack markets. The very term marketing “brand”originated, of course, with heraldry and military regalia.

BritishEmpire

Franchising had operated as a type of self-governed nation state that has traditionally been held together by British common law principles.

They acted as if they were above the law.

This ability to exercise coercive power is over, however.

By 1920, see above, the sun never set on the British empire.

An empire is:

a State with politico-military dominion of populations who are culturally and ethnically distinct from the imperial (ruling) ethnic group and its culture. Wikipedia

The franchising elite is what I have defined as Big Franchising: product franchisors, key business-format franchisors (lapdog peak associations), and the franchise bar. If you doubt the transnational of modern franchising methodology, I direct your attention to the World Franchise Council.

Franchising is an imperial empire because it gains its strengths from “domains of knowledge, beliefs, values and, expertise”. Wikipedia These near-religious beliefs are found in full-blown vigour at the International Franchise Association’s continuous cliche-ridden press releases (see SmartBrief).

In most empires, there is a visible difference between the rulers and the ruled such as skin colour, language, education, nationality, ethnicity, etc. Not so in franchising.

The differentiating factor is between the investors’ ears.

Awareness that franchising is a game designed to re-distribute wealth (not create it) is what separates the haves from the have-nots. That franchising is often a debt-induced form of servitude is what the “innocents” have not learned yet.

The British empire held control by exerting a monopoly on sanctioned violence via their military, colonial administration, police and courts. This was possible through misrepresentations and control of information.

  • Franchising has done the same via the franchise bar’s jealously guarded monopoly on franchise legal work and access to justice in the civil court system.

Franchising as a coercion-based empire is over not because digital information can now be shared (internet). There are many digital house negroes actively trying resist the inevitable.

The empire has ended because credible and honest sharing is happening here, a few IndFA sites  and at WikiFranchise.org.

All empires pass away.


Rumblings in Canada’s grocery elite: Sobeys franchisees go independent

July 20, 2009

CFIGPeterKnipfelCFIGlogoWikiFranchise.org often adds depth and perspective to a current media franchise industry article.

Let’s take a look at the decades-old, but next to invisible, war of wills within Ontario’s grocery industry.

Last week, the Canadian Broadcasting Corporation reported that Buy-local push prompts Ontario grocers to go independent.

The Toronto Star ran a story last Saturday called Meat cleaves grocer’s tie to Sobeys: Ex-franchisee goes independent to gain right to sell beef, pork, poultry produced locally about 5 Sobeys franchisees taking themselves independent in southwestern Ontario.

That doesn’t seem to be much of a story unless you start looking into the background of the franchisees involved. The current press spin (a desire for more local suppliers) is certainly not the whole story.

In the CBC story a Mr. Peter Knipfel is quoted as saying:

“We actually put it [franchisor non-authorized products] on our shelves because we felt it very necessary for it to be in our community, and that prompted that we get away from the franchise system, because it was not making them [Sobeys] happy,” Knipfel says. “I didn’t want to ruffle any more feathers, so we just decided to part company.”

Grocery franchisors in Canada ruthlessly control what products can and cannot be purchased in their franchisees’ stores. Vendor programs (rebates, kickbacks, allowances) are a very important source of income for Big Grocery in Canada.

WikidFranchiseWhen you search WikiFranchise.org for “Peter Knipfel” you get the following article: CFIG Public Hearing Testimony. It appears that Knipfel was the Chairman of the Board of the Canadian Federation of Independent Grocers in 2000.

He is quoted as their Chairman in 2000 as saying:

…With the consolidation today in the grocery industry and the control that the franchisor has over the franchisee as far as pricing and our profitability is concerned, we need some protection for some fair dealing with our franchisor…

Sure enough, when you hop over to the CFIG’s website Knipfel’s photograph (see above) is prominently displayed as the Feature Story scroll.

That a former Chairman of the CFIG is one of the defecting franchisees is an indication that this story has much more to it than the simple formation a group called the Independent Hometown Grocers Co-Op.

I created WikiFranchise.org to help non-insiders understand the hidden meanings within franchising.


Can technology create a tyrant’s World of Pain?

May 27, 2009

ColinmunroeI think so.

The music industry used to be dominated by a few despots that forced their will on recording artists. The contracts were massive and one-sided. Their monopoly was on marketing, talent development and distribution.

They ruled as if they would always be on top of the heap.

And then along came file sharing software and their empires seem much less certain these days.

They defended their “intellectual property” using methods from the industrial revolution.

They sued. And they sued. And then they sued some more.

The result? They just looked like morons and millions of songs still get ripped every day. Sure things are in flux but at least there’s diversity and innovation rather than mindless control.

When Colin Munroe can make his own music and sell it directly, the world has changed for everyone in the music industry.

This is a cool video. Welcome to a tyrant’s World of Pain.

World of Pain, Colin Munroe

A man on a bridge
a thief that is I
a boy with a dream
who’s ready to die
one of those days
and one of those fades away

There’s a house on a hill
and a house in a hole
the pride of the girl
the pride of the boy
and all in a day
the pride can be taken away
and all the streets are the same
when all you have is your name
you’re nothing more than you seem
and less than you dreamed you’d be, yea

Cause there is a time for joy
and a time for rain
a time for loss
and a time for gain, oh my
welcome to a world of pain

A beautiful girl
with diamonds for eyes
she’s all that you want
she’s living your life
but try as you may
your beauty will fade away
and its a sign in the sky,
a mark in the sand
a rhyme that you hear
but you don’t understand
fortune controlled you used to be given away,
and in this life it’s all the same, and all you have is your name
you’re nothing more than you seem,
and less than you’d dreamed you’d be
yea

Cause there is a time for joy
and a time for rain
a time for loss
and a time for gain, oh my
welcome to a world of pain
cause there is a time for love
and a time for hate
a time for you
and a time for me
oh my
welcome to a world of pain

But living is half the dream
and when its your time to die
its not what it seems to be
so take your time
whoa oh oh

Welcome to a world
cause there is a time for joy
and a time for rain
a time for loss
and a time for gain
welcome to a world of pain

Cause there is a time for love
and a time for hate
a time for you
and a time for me, oh my
welcome to a world of pain
baby don’t you cry
it’s better if you smile
welcome to the world


Sue the Leafs/NHL cartel in eMcKangaroo Court

May 10, 2009

nhlTorontoMapleLeafsThe law creates just outcomes only in some cases.

In franchise law, the justice is delivered to those that control access to the Courts and the political process. Only franchisors and large franchisees have that clout.

The latest proof of this policy and law bias, is that the NHL and the Toronto Maple Leafs should be sued in an Ontario Superior Court for their unfair dealings, racketeering and extortion activities.

That won’t happen because franchising and especially sports franchising is a monopoly game played by insider credence good cheaters.

But: Why not try the bastards in a virtual Court room? I propose a McKangaroo Court to ease our pain. A mock trial for a phony form of competition (ie. sports franchises).

Hockey Maniacs: In southern Ontario, pro hockey is a God. The Toronto Maple Leafs have been able to sell out every game for over 40 years by providing, at best, a fitfully mediocre product (eg. a competitive sports team). Think of the Big Auto before Toyota and Honda showed up.

The Leafs owner’s are monopoly players in the world’s most lucrative hockey market. A normal fan can only dream of attending a game with their kids anymore.

Jim Balsillie has been trying to bring another professional hockey team to southern Ontario for some time now. His most recent attempt is to offer over $200 million to rescue the Chapter 11 Phoenix Coyotes and move them to southern Ontario, Canada.

But other 30 NHL owners (franchisees acting like franchisors, 25 which are U.S.-based cartel) have other ideas. And the encroachment  kickback to the Leafs and Buffalo Sabres is extortion: plain and simple.

The Globe and Mail reports on legal action, taken by the current owner of the Phoenix Coyotes in an article, NHL acting like ‘illegal cartel’, Coyotes charge:

“The NHL is excluding competition and restraining trade in [the United States and Canada] through the application of unreasonable restrictions in its constitution and bylaws, which are preventing the relocation of the Coyotes from Phoenix, Ariz., to Hamilton, Ont.,” said the lawsuit filed yesterday in Phoenix.

The suit also takes aim at Maple Leaf Sports and Entertainment [MLSE], which owns the Toronto Maple Leafs, alleging it has colluded with the league for years to preserve “market power” in the Greater Toronto Area. Prohibiting relocation deprives hockey fans of “increased competition, lower prices, higher quality and more variety,” the suit alleged. WikidFranchise.org citation

Remember: monopolies are “bad” because they creates market inefficiencies and distortions that are manifested in these very real and pernicious anti-competitive practices:

  1. Predatory pricing,
  2. Tied buying,
  3. Short- or forced-shipping,
  4. Encroachment,
  5. Economic conspiracy and
  6. Refusal to deal and exclusive dealing.

Alan Eagleson a disbarred agent/NHL power broker is THE poster boy for all credence good experts to this very long-suffering Leafs fan.  Wikipedia, WikiFranchise.org

Argument: The Arthur Wishart Act (Franchise Disclosure), 2000 governs all franchise commercial relations in Ontario, Canada.

  1. MLSE is acting as a “franchisor’s associate” under Section 1.1 (“franchisor’s associate, a. and b.).
  2. As a “franchisor’s associate”, Wishart treats MLSE is treated as if it were the franchisor (the same duties and responsibilities as the “normal” franchisor, in this case, the NHL).
  3. Section 3 creates an obligation by all parties:  “a duty of fair dealing in its performance and enforcement.”

I think the citizens of southern Ontario deserve to have their pro hockey fix met by the appropriate franchising corporations.

The Maple Leafs and the NHL  show their contempt for their real customers (ticket holders) by continuing to run their robber baron scam. For these offenses, they deserve to be sued.

And I bet there some CDN hockey nut franchise legal beagles that’d love to write up the arguments.

In this way, the problems that non-billionaire business format franchisees endure can be explained to the public while showing where the real weasels live.


forever Jung and Half-formed boy Predators

January 28, 2009

calvinhobbes1Why won’t these little worms just grow up?

Enough is enough, already.

Yes, we know you’re tough and smart. We know the gym class shower room was demeaning. And yes pulling the wings off flies does hold some amusement value.

  • But seriously: Get some help in the second half of your life.

There are some people (mostly male) that think the worst of people, are never satisfied with any accomplishment and would rather kill something rather than share a little bit (let alone collaborate).

  • They’re so emotionally shut down and compartmentalized that all that’s left is fear and anger.

It’s been my experience that modern franchising is practiced by fearful men who lack the confidence and maturity that should have been formed during their boyhood. They’ve never learned to trust themselves, mask their inadequacies with arrogance and accumulate wealth but are unable to enjoy the use of those resources.

They act-out as if they were european dragons or worms (from the old English): like Smaug of The Hobbit fame: only hoard and destroy, are master hynotists, believe themselves to be invulnerable (although they are not), have a dry but cruel sense of humour with an “overwhelming personality”; their Achilles’ Heel is always hubris: overweening arrogance, superbia.

They try to deny part of their nature but it keeps popping up, especially when their Divine Right to Decide is questioned by lesser mortals.

One Model: Within every individual, there are two forces, world views or archetypes at play: every male has within him a female side, and every female has male characteristics within her.

Carl Gustav Jung identified unconscious forces called anima and animus.

  • anima is the unconscious feminine component of men and
  • animus is the unconscious masculine component in women.

Jung believed that the anima and animus act as guides to the unconscious unified Self, and that forming an awareness and a connection with the anima or animus is one of the most difficult and rewarding steps in psychological growth.

Jung reported that he identified his anima as she spoke to him, as an inner voice, unexpectedly one day.

Often, when people ignore the anima or animus complexes, the anima or animus vies for attention by projecting itself on others. This explains, according to Jung, why we are sometimes immediately attracted to certain strangers: we see our anima or animus in them. Love at first sight is an example of anima and animus projection. Moreover, people who strongly identify with their gender role (e.g. a man who acts aggressively and never cries) have not actively recognized or engaged their anima or animus.

Jung attributed human rational thought to be the male nature, while the irrational aspect is considered to be natural female. Consequently, irrationality is the male anima shadow and rationality is the female animus shadow. (Analytical Psychology)

When a half-formed male is seriously confronted, he becomes unglued: screaming, cursing, the issue becomes a life-and-death struggle against the Questioner. I’ve seen this type of tantrum up close and you tend not to forget the experience. I think every franchisee has experienced this.

  • It can be a franchisor, a lawyer, a politician: it doesn’t matter (see Big Franchising).

Irrationality is the shadow side of an unbalanced psyche and it gets played out in volcanic bursts of rage. Innocent questions are heard by the child as if you were trying to kill them. (And in a psychological sense, you are: you’re calling them to put aside their childish ways.)

  • In franchising, this acting-out these man-boys, empowered by iron-clad agreements that are the same across all systems,  have the 100% unilateral right to bankrupt you and drive you into a mental hell.

All of the rights are on one side: for mom and pops, franchising is Unsafe at any Brand.

After the honeymoon is over and you’ve signed on for multiple, self-reinforcing monopoly relationships, your economic gender assault can occur with very little warning or defence.

Calvin and Hobbes


The Fixer: Getting professional thieves out of Trouble

January 6, 2009

fixtweedProfessional criminals have always relied on  The Fixer.

He is someone of high political, economic and career influence who solves a professional thief’s problem for a fee.

Secrecy and deceit are required because of the extra-legal nature of some of the work.

A historical example of The Fixer would be  William M. (Boss Tweed) Tweed of Tammany Hall. [see above]. Tammany Hall, likened often to a machine, ruled the City of New York from 1790 to to the 1960s.

People wonder why franchisors, franchise bankers, sales agents, the franchise bar, etc. can get away with [almost] bloody murder. A study of history of professional thievery can provide some hints:

The professional thief generally has a record in the Bureau of Identification as long as your arm, but after most of the cases “dismissed” or “no disposition” is entered. This is due to the thief’s ability to fix cases.

In order to send a thief to the penitentiary, it is necessary to have the co-operation of the victim, witnesses, police, bailiffs, clerks, grand jury, jury, prosecutor, judge, and perhaps others. A weak link in this chain can practically always be found, and any of the links can be broken if you have pressure enough. there is no one who cannot be influenced if you go at it right and have sufficient backing, financially and politically.  p. 82

Professionals within franchising make more money by fixing problems (sabotaging valid claims) than they do by solving them (reducing opportunism). It’s that simple: Less money is deducted from the theft when you fix a case, even after paying The Fixer’s fee. It is very easy for a franchise legal expert to lie to complaining investor [Credence good cheaters]. The lawyer knows that he is not under any legal duty to tell the truth until a solicitor-client relationship is created. And the proof is in the pudding: In 10 years, I know of no franchisee-lead case that would be considered a success by the investors themselves.

The fixer acquires his position with professional thieves by service. He tries to maintain a batting average of one thousand. Not all of them can do this, but their record is so good that the thief feels secure if a regular fixer is on the case. [Blonger, the Denver fixer for confidence men, had the reputation of not having one man sent to prison in twenty years under his protection.] p. 88

Modern franchising runs on political and economic influence. Our Australian friends are simply the latest who have been wised to that reality. Again, from the past:

Fixing is a mixture of finance and politics. It is primarily a financial transaction, bought and paid for by everyone concerned. But it is made possible by politics and often involves political favors as well…For the thief, fixing is almost always a financial transaction…from the point of view of coppers, clerks, and bailiffs, fixing is primarily a financial transaction…The prosecutor and judge are probably handled with more finesse.  p. 98-9

I have already used a tree as an analogy for Big Franchising (vast weight of organism is below ground: iceberg). Modern franchising has a visible and invisible nature (Overworld :: Underworld):

From the point of view of the fixer, also, this is a financial transaction. One fixer said to a thief: “Everything I get is bought and paid for, just as you pay me. No one gets any political or other favors.” The fixer can operate only if he has the consent and good will of those who are politically powerful. he may get a start on the basis of old friendships, but he can keep his position as fixer only if he kicks in. He must turn over to the political barons the larger part of what he gets from the thief, and his standing is determined by his reliability in dealing with them. p. 100

Thieves of nominally independent corporations (ie. franchisors, lenders, sales agents, legal, supply, etc.) would NEVER act with such arrogance if it were not for The Fixer’s protection racket. The weakest link is always the franchisee who 99% of the time goes away thinking they had a one-off bad luck with a cartoon-character type of franchisor thief. They are satisfied to receive 10% of their own money back and remain in silence via shame and contract. Professional franchising practitioners are, however, experienced and shrewd students of human nature.

No thief ever expects to have the bad luck to run into a case that cannot be fixed in some manner. This conclusion is not formed because of he thief’s conceit but because of his knowledge of the weaknesses and limitations of the average citizen and public official. p. 106

National franchisor associations act as a forum for coordinating Overground and Underground activities. The Fixer usually enjoys a very influential role such as Chief Counsel or Chairman of the franchisor controlled association. The Fixer is a lawyer because solicitor-client privilege harbours his clients’ extralegal activities. Politicians who are very often lawyers, know their political career is short and are not foolish enough to destroy their future legal earnings by crossing a mandarin partner of the some of the most influential and aggressive internationally-based, multi-line law firms.

It is sometimes believed that he fixer is the general boss of the thieves. This is an error. The function of the fixer is to get thieves out of trouble, not to control them. He often gives some advice to out-of-town professionals, after agreeing to take care of them. p. 107

The Fixer runs a monopoly on the most lucrative and industry-challenging cases [national, well-funded franchisees group or class-actions) while allowing the tactical fixing to happen to Tier 2 law firms who are seen as franchise experts within the franchise bar. The Fixer operates a protection racket that has the appearance of a law practice.

There is in every large city a regular fixer for professional thieves. He has no agents and does not solicit and seldom takes any case except that of a professional thief, just as they seldom go to anyone except him. The centralized and monopolistic system of fixing for professional thieves is found in practically all the large cities and many of the small ones. p. 87

Source: — The Professional Thief, Chapter 4: The Fix, The University of Chicago, 1937 [my emphasis]

I am at a serious disadvantage when discussing the subterranean nature of franchising. I am not a member of that brotherhood and have only caught glimpses of behavior that has piqued my interests over the years.

  • Professional thieves and modern franchise executives function in a similar way, in so much as they are primarily profit-making activities that need to manage risks and returns, under stealth.

They are highly energetic, charming, some exceptionally well-educated people who hold 2 conflicting ideas in their heads: They know they prey upon society but also want not to be an enemy of the state (which as profiting from crime, they surely are).

  • This internal, unresolved conflict (cognitive dissonance) accounts for their bullying, arrogant, irritable, defensive and plain mean behavior. They can’t ever quite buy their acceptance into respectable society.

They:

  1. possess highly migratory and portable special skills (especially persuasion, and communication),
  2. rely primarily on on-the-job training (often passed down from father to son, mentorship, tutelage),
  3. are highly congenial and supportive of other professional thieves (including competing trademarks, are compelled to warn and bail out even those they personally dislike),
  4. steal in a full time, planned and methodical manner,
  5. converse privately in a highly-specialized language (argot: legalese, mumbo-jumbo)
  6. achieve recognition for competence from other peers (who you know is important),
  7. operate in a very rigidly adhered to code of behavior, and [above all else]

8. particularly loathe anyone that (a) would inform “squeal,” or “squawk” and/or (b) has yet to lose their integrity.

They inhabit a modern version of The Waste Land or purgatory. Their only defense is confusion and attempting to degrade those impertinent enough to hold up a mirror to their face.


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