Could franchise bankers also act as gangsters?

July 10, 2012

Are Canadian franchise bankers capable of engaging in “cartel-style anticompetitive corruption” in their $100-billion sales per year marketplace?

Every current or former Canadian franchisee who has had a Canada Small Business Financing loan may want to ask themselves some questions. My posts at  FranchiseBanker.ca (specifically: Banker “everybody is doing it” corruption admitted in the LIBOR scandal) might help frame your thoughts.

Without the Canada Small Business Financing program, many fewer deadbeat franchises would have been sold in the last 20 years.

Industry Canada asked me to jot down my concerns a few years ago.

Franchising Opportunism, a 20 page non-technical paper,  was the result.

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My project work in franchising

April 28, 2011

There was no map or rule book in testing the limits of the industry.

By nature, these were all unreasonable actions from the conventional viewpoint.

To me, they were just taking one step ahead of the other.

Not bad.

[At Play]


Franchisors are cowards, through and through

February 6, 2011

They pee the rug when confronted with competence.

Scavengers of what’s left of the near brain-dead and character-challenged.

Franchise bankers are the brains and they stay well under their rocks.

[this isn’t happiness]


If you lost your money, Call your franchise banker.

October 27, 2010

Get smart.

Who do you think teaches new franchisors or amateurs like David Scenna (Hookers and Booze: Your tax dollars at work) franchise money management?

D’oh.

Your franchisor is nothing much more than a rodeo clown.

  • The brains behind the outfit are the franchise bankers. Only a fraction of the government loan losses are claimed because accurate reporting would queer the deal. They self-finance the used franchises via compliant equipment appraisers on the front end and their captured bank receivers on the other (exit franchisee into bankruptcy.
  • See 2005 details.
  • Crapola franchises.

Last time I checked, +80% of Canada Small Business Financing program loans were done via these people below. Why not give them a call and ask them for a 10 minute interview?

Bank of Nova Scotia
Mr. John Dykeman
Ms. Irene Thomson
National Franchise Programs
Phone: (877) 252-6088 Toll Free
http://www.scotiabank.com/franchising
franchising@scotiabank.com

BMO Bank of Montreal
Mr. Steve Iskierski
Senior Manager, National Franchising Services
Phone: (416)927-6026 / (877)629-6262
Web: http://www.bmo.com/franchise
steve.iskierski@bmo.com

Canadian Imperial Bank of Commerce, CIBC
Mr. Charles Scrivener
Director & Head, CIBC Packaged Loans Group
Phone: (416) 980-3225
http://www.cibc.com
charles.scrivener@cibc.com

Royal Bank of Canada
Mr. Paul DaSilva
National Franchise Market
Phone: (416) 974-8299
http://www.rbcroyalbank.com/franchise
paul.dasilva@rbc.com

TD Canada Trust
Ms. Irene Law
National Manager, Franchise Banking
Phone: (866) 871-2178 / (416) 307-9270
http://www.tdcanadatrust.com/franchise
irene.law@td.com

Source of contact information


Free riding on the authority of the state

October 12, 2010

The notion that people need to believe in and trust in their institutions is not a naive, child-like or stupid idea. It’s an evolutionary imperative because humans are social beings.

Our survival depends on a reasonable expectation of the basic trustworthiness of the officers and offices in our instituations.

A modern complex post-industrial knowledge economy requires a high-trust environment. Fairness of opportunity is the business governments are in: not passing laws that enable the the creation and cover-up of consumer swindles.

A country, a provincial parliament or a police force are not a brand.

Franchising as a bully arena is most readily seen when they start to push around people we elect to represent us.

See this coat of arms?

Canada stood for something at one time. People sacrificed a lot (continue to die for, in fact) a principle, not to enable federally regulated financial institutions to drive the lending getaway car.

See this one?

The Legislative Assembly of Ontario: hear the other side. It’s designed to remind us of something. We as citizens are diminished when its taken 40 years to prove that powerful commercial interests can deny the need for, then flip-flop in 2000 when they need a sales boost and then flop-flip(?) saying that any more pre-sale disclosure would “give a false sense of security” for investigating future franchisees.

Oh, please.

And this one…

When fraud coppers have to continue to turn away franchise victims (wives of some of their own “brothers”, even), it reduces the trust we have in the value of all police enforcement activities.

When the legitimate authority of the state is debased, we are all diminished.


How hard is it to report franchisor crime in Canada?

June 23, 2010

Not that hard really.

You can do it online at RECOL.ca:

Reporting Economic Crime Online (RECOL) is an initiative that involves an integrated partnership between International, Federal and Provincial Law Enforcement agencies, as well as, with regulators and private commercial organizations that have a legitimate investigative interest in receiving a copy of complaints of economic crime.

A few of my clients have done it to interesting outcomes.

It’s completely confidential, free and is like getting a PhD in how corporate Canada really works. In my experience, coppers know how franchising’s absolute power corrupts absolutely.

Sunlight is said to be the best of disinfectants.

Other People’s Money—and How Bankers Use ItLouis Brandeis 1856 – 1941

Criminal investigations of publicly-traded franchise systems (especially those operating in a near-monopoly) are by their nature, a just pursuit.

All you have to do is sign in.

Maintiens le droit –Defending the Law


Franchise lenders are swill

June 17, 2010

Some systems hardly have any franchisee debt.

This is particularly true of ones that converted employees to franchisees.

That changes once franchisors listen to their bankers explain how much they both can make (ie. interest kickbacks) if they leverage as many franchisees to the teats.

The primary control method of newer (maybe more formally educated?) franchisees is debt. Hundreds of thousands of supportable debt, if the franchisor who controls their gross margins, lets them service their debt.

It’s ugly:

  1. prime plus 5% (“love to give a better rate but it’s unsecured, don’t you know“),
  2. immediately callable (demand loan = short leash),
  3. plus personal guarantees up the wazzo (“just need the missus to okay the paperwork…“), but
  4. secured by NOTHING but the franchisor”s “good faith” (ok as long as the present management stays put but all deals are off if…).

If you want to unlock the chains, start asking your “preferred” lender some questions (on a public blog, btw) about their lending duty under the Bank Act.

Franchise bankers: a breed apart.

A little more sensitive than you run-of-the-mill doofus franchisor: don’t like being fingered for loan pushing, collusion or predatory franchise lending.


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