Is a Franchisee of less value than a calf?

August 28, 2009

CattleTrackingIt seems that way.

When franchisees fail, many other people take a hit, too.

Some of these externalized losses are:

  • employees (wages, severance),
  • customer prepaid deposits (goods & services),
  • federal income & sales taxes,
  • workers’ compensation payables,
  • provincial sales tax remittances,
  • electrical utilities,
  • product and equipment suppliers,
  • landlords,
  • banks,
  • relatives (love money), etc.

These over-and-above the direct devastation on the franchisees’ financial, relationship and physical health must reach into the multiple millions of $ every year.

Where’s the Beef?: In Canada, every young cow is tagged as they leave their herd of origin.

This is a very good thing because if you don’t track potential problems, you can never solve them.

Are Franchisees Tracked?: Nope: 0 per cent. Not one of 76,000: Anywhere.

No one (other than their franchisors) knows when a franchisee becomes ill and dies. They stay fairly tight-lipped about those numbers. Four of the provincial governments that have specific franchise laws, don’t care enough to compel the industry to track their own investors in any independent way. Same in the U.S.

No one cares about the health or sickness of 40% of retail sales. A Canadian industry with:

  1. 76,000 mostly family investors,
  2. 760,000 to 1,140,000 employees,
  3. $90 billion annual sales, and
  4. a staggering $3.8 – 15.2 billion invested (mostly franchisees’ $).

Source

People and industries keep track and count what they value.

Once signed, your life holds no interest to any steakholder.

Other than the bankruptcy trustees.


Will GM dealers continue to lose at the Blame Game?

June 19, 2009

GMlogoThe way things are going,  the answer seems to be a resounding “yes”.

In an important Blue MauMau article, Texas-based legal veteran Richard Solomon asks what will be The New General Motors Franchise Model?

He defines the background:

For many years, GM dealers have, through sound business practices, made fortunes for themselves and their families. During this period, the anything but professional grade people at GM have watched the dealers thrive while they frittered away the revenue at their end through sloth and ineptitude. Up to now the GM management philosophy has been “God will provide.”

They are wrong. God does not reward sloth and ineptitude. General Motors is in bankruptcy. It is now announcing a new dealership franchise model. These are the same people who brought the company to its current circumstances. They believe that the dealers have been stealing from them and that dealer opportunism is to blame for the current circumstances, not their stupidity.

So after blaming their employees, GM is turns to blame their next-least vulnerable partner: their dealers.

Richard, as usual, spells the challenge out clearly:

Will the GM dealers spot that this is what is in store for them? Will they just sign on the dotted line and march into franchise financial hell as did the franchisees of so many other franchise systems?

In the past, auto dealers were in a privileged position.

Now, unless they act, they’ll be just like the other pathetic business format franchisees that inhabit the twilight pizza, coffee and dog poo-picking up industries.

  • This is precisely the challenge that the Canadian grocers failed at historically.

Without resistance, this fate is in store not only to GM and Chrysler, but to all of the auto dealers.

  1. Dealer opportunism (defined as self-interest with deceit) as the primary problem when compared to manufacturer/franchisor incompetence?

That the dealers let the public/shareholders believe this nonsense is beyond belief.


man smart, Women Smarter: Defining franchisee illness

March 17, 2009

carpentersWhen I was growing up, no one knew about eating disorders as a class of medical problems.

It was only through the suffering of many (mostly women) that society and the medical establishment has recognized things like bulemia nervosa and anorexia nervosa.

Karen Carpenter raised awareness by her death at age 32. Many psychiatric conditions are left untreated, women disproportionally between the two genders. You cannot treat a cluster of behaviours until it is defined.

I believe franchising failures are such a powerful, life-altering  force that it not only can, but predictably does, trigger serious illness.

The human body and psyche has limits and when those are exceeded, the mind/body systems deteriorate. These affects are usually acted out through major relationships as well as lack of sleep, danger to self/others, occupational adjustment problems, etc.

I have seen many franchise people who have had to deal with depression, violence and suicide.  I think the answer is to organize into a form of geographically-based chapters to keep touch with each other.

I think women are strong enough to do this type of work although I recognize that there are male partners that can help too. Everyone is busy but I think like other traumas, it’s often better dealt with in a peer-to-peer mode.

This is why I think a Partners in Franchising chapter should be formed.

Every human being requires security of person and a minimum economic stability. Without those basic conditions, your mental and physical health is damaged.

To be maintain mental health, you need:

  1. a job,
  2. a home and
  3. a friend.

Only the generous know that the helper receives much more than the “weaker one”. We regain our strength by helping others heal.

That’s how we are wired as humans. Only the deluded and those that profit from misery think otherwise.

Man Smart, Woman Smarter, Carpenters

Let us put man and woman together
And see which one is smarter
Some say men but I say no
The women got the men like a puppet show

Aint me, its the people they say
The men are leading the women astray
But I say, its the women today
Are smarter than the men in every way
Thats right! the women are smarter
Thats right! the women are smarter

A little boy sat down and cried
An old man passing asked him why
He said I cant do what the big boys do
Old man sat down and he cried, too

Repeat 2 x


Partners in Franchising: Families protecting families

March 16, 2009

cwlFranchises are very often family businesses.

Franchisees have never been alone in evaluating, operating or problem solving a franchised business. The greatest abuses are heaped on family businesspeople.

Legally, they are on the hook for 50% of the results anyway.

It seems to me that they need to be equal partners in decision making, too.

It has been my experience that franchisors are incapable of dealing with partners: They simply freeze, unable to deal with a strong, family-centred person. Men are easy to con and weave dreams. Women are much more grounded.

The most powerful relationship experts and discerning individuals, are women.

With  a minor amount of education (see WikidFranchise.org) they are much, much more able to screen the BS than any man. Men smart, Woman much much smarter.

Partners are also excellent caregivers and God knows some franchise families need a little TLC and someone to talk to. We all know of people that have suffered too much.

I am interested in starting this discussion (and rapidly getting the hell out of the way) of the most powerful group in franchising (period):

Partners in Franchising

Let John or I know what you think. We need strong leaders coordinating communication and political action in every North American city by the end of the year. Australia too.

I think there should be way more baby carriages on national capitals or in Senator’s offices.

Think about it: Think about a franchise version of the CWL.

  • But with a dislike for bullies.

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