Thomas Carlyle talks to all the superficially successful, faux-pro franchisee lawyers.

If what you have done is unjust, you have not succeeded.

Some wisdom that’ll likely be lost on most self-satisfied franchisees.

Shirtsleeves to shirtsleeves in 3 generations.

Andrew Carnegie 1835 – 1919

Tim Hortons franchisees will win if they establish their right to exist collectively.

As I said a couple of years ago, it’s the crucial but incomplete Right to Associate provisions of the franchise law that are key.

But be quick: Statement of Claim, trial and then appeal.

Ditch the lawyer if he/she delays.

Coverage:

• Tim Hortons franchisee group accused of leaking information, served notices of default
• Ex-Tim Hortons CEO denies giving confidential information from rogue franchisee group

 

Robert Reich understates the risk of private equity piracy for largely franchised corporations.

Yes: employees get cut and they make it “lean and mean”.

BUT the real  gravy for PE experts, like Warren Buffett, is clawing back franchisees’ operating margins, capital investments and even their personal net worth.

My Canadian and U.S. franchisee friends at Tim Hortons/3G Capital may want to pay attention to Dr. Reich.

Meanwhile, CDN and U.S. taxpayers pick up the tab.

See: ‘He copied us!’ Warren Buffet’s Dairy Queen ‘rips off’ Subway

Franchising relies on excellent information management.

My son and I are interested in pursuing other consulting sector work.

Since 1998, we’ve established an international reputation for excellence in business data analysis. Our initial research has been in the business format franchising sector, centred on FDDs.

While we continue to pursue other commercial and non-commercial consulting clients, those parties interested in purchasing control of our franchise industry capability can contact:

Mr. Les Stewart MBA

Midhurst Ontario Canada

705 737-4635 Office

705 627-2242 Cell

LinkedIn, WikiFranchise

Will “brand strength” or hard fought-for legal provisions likely preserve Tim Hortons franchisee, staff, supplier and communities relationships?

In 2000, Tony Martin asked Tim Hortons VP Nick Javor which of their franchise agreement terms protected franchisees when a merger happens.

In his public hearing testimony which lead up to Ontario’s 1st franchise law, Mr. Javor seems to suggest the “brand” is strong enough. He was silent on the contract provisions needed.

Mr Martin: I don’t think there’s anybody who’s suggesting that there aren’t good franchise systems around, and certainly Tim Hortons presents at this time as one of those good systems, for all the reasons you’ve laid on the table here today. What you have we want for all the systems, because when a system goes sour, as you suggest in the Pizza Pizza case, you’re all painted with the same brush. That’s unfortunate. It affects a good business relationship and ultimately probably affects the franchisee the most because they’re the most exposed and vulnerable.

My concern is when good systems get sold, and that’s happening. There’s a trend today where the bigger guy eats up the smaller guy and the relationship changes. We had that experience here in Sault Ste Marie where Provigo bought out Loeb and wiped out two of our best corporate citizens overnight. They slept in their stores for two weeks to protect their interests. That’s how difficult that was.

We’ve heard that 241 Pizza has just bought out Robins Donuts. What happens if tomorrow Pizza Pizza buys out Tim Hortons? Do you have anything in your agreement with your franchisees that protects them in that instance?

Mr Javor: That’s a very good question, Mr Martin, because this is the day of mergers and acquisitions. This is the business strategy of a lot of folks. I would answer your question with perhaps a description of our franchisee relationship. I think successful franchisors and chains and brands get successful not by accident but because of the hard work and everybody’s focused on a mutual goal. The mutual goal in our organization, and other franchisors who have been privileged to be as successful as us, is clear: to deliver customer service and realize that the way we get excellent customer service is by having franchisees who are committed to that. We have a strong culture of excellence and commitment. I think it would be very difficult for a new ownership group to come in and absolutely take away what’s taken us 30 years to earn and to grow together with our franchisee ownership.

The fact that we involve our owners a lot in our business at the advisory board level and committee level that I mentioned earlier I guess is a testament to the strength of that commitment we have to ourselves in the marketplace, and that is bigger than the contract. It takes many years to change cultures at corporations. Those of us here who have been in private business over the years understand that. Truly, yes, the top of the house or the CEO and president help set the tone – that’s well-documented research – but also when you have a strong commitment at the grassroots level in your community, where your franchisees are absolutely actively involved in supporting your community, because they know where their bread is buttered. It’s not downtown Toronto, it’s all the communities where we have stores in our particular chain across the country.

I honestly think that when a merger and acquisition comes along the strength of the brand will come through based on these types of commitments and relationships.

Mr. Javor and Tim Hortons were active in the spirited behind-closed-doors debate of the proposed amendment to the Arthur Wishart Act, Bill 102 in 2010: here, here and MPPs seek anti-swindling law for franchises.

Mr. Nick Javor, LinkedIn

Knowledge is not for knowing: knowledge is for cutting.

What strikes me is the fact that in our society, art has become something which is related only to objects and not to individuals, or to life. That art is something which is specialized or which is done by experts who are artists. But couldn’t everyone’s life become a work of art? Why should the lamp or the house be an art object, but not our life?

Michel Foucault 1926 – 1984

For Canadian franchisees, there’s gold in the hills of unfair industry practices.

The Ontario courts have put real teeth into the Arthur Wishart Act (Franchise Disclosure), 2000.

Common industry practices are more and more being considered unfair or offensive to right to associate. The Justices are willing to award real cash to improve the vulnerable partys’ practical plan for improvement (proportionality), access to justice, and behaviour.

One example is timothy’s Coffees of the World Inc.: $50,000 award for franchisor’s breach of good faith duty. How many franchisees are in your system?

However, these claims must be mined, extracted and refined most usually within a functioning, patient independent franchisee association, IndFA.

Franchisees need outside, non-legal help to learn about these matters. IndFA leadership needs to be nurtured and supported in the next-to-unknown franchise power area. There is a role for the elite franchisee bar that’s developing in  Canada but the cannot develop franchisees from the ground-up. For sustainable gains, franchisees have to do it themselves (but with some help).

This is what IndFA  business consulting is all about.

To nurture efficient and effective franchisee-led collective gold mining through patient negotiation and litigation, if necessary.

Can you imagine yourself as a member of a union?

An independent franchisee association is the only way to work toward justice.

It may, however, require you to think beyond a 5th grade level.

Much of your pain is self-chosen.

And a woman spoke, saying, Tell us of Pain.

And he said:
Your pain is the breaking of the shell that encloses your understanding.
Even as the stone of the fruit must break, that its heart may stand in the sun, so must you know pain.
And could you keep your heart in wonder at the daily miracles of your life, your pain would not seem less wondrous than your joy;
And you would accept the seasons of your heart, even as you have always accepted the seasons that pass over your fields.
And you would watch with serenity through the winters of your grief.

Much of your pain is self-chosen.
It is the bitter potion by which the physician within you heals your sick self.
Therefore trust the physician, and drink his remedy in silence and tranquility:
For his hand, though heavy and hard, is guided by the tender hand of the Unseen,
And the cup he brings, though it burn your lips, has been fashioned of the clay which the Potter has moistened with His own sacred tears.

— The Prophet, Kahlil Gibran, Alfred A. Knopf, 1978, p. 52-4