Why is Oz investigating franchising?

July 19, 2008

Seems like a stupid question with a profoundly dead-nuts simple answer: Because franchisors are black-hearted bastards willing to pry the last nickel from a dying widow’s hand.


But let’s hold our perfectly understandable emotions for a moment. I’ve had that response but have worked my way through that.

A few questions, though

  1. Do you think franchisor alone are smart enough to put together such a sophisticated, all-at-once machine?
  2. Do you think your national banker or lawyer is any less ruthless in getting their way, when push comes to shove?
  • Or, maybe, part of the franchisors’ role is to be a scapegoat for the real but hidden economic powers?

I’m pressed for time right now so I will be coming back to this topic but let me throw out an idea or two as I snatch a few moments away from moving my son back to university for the fall.

I think:

1. Oz politicians mean to investigate “franchising” really mean looking into little franchising [and not Big Franchising]. They want a superficial look a the visible fall guys instead of a systematic inquiry into the complex commercial arrangements I have defined. They only want bewildered, traumatized franchisees asking naive questions about things they will fake ignorance of. The politicians know all about franchising’s unfairness: this is a PR stunt to create another useless oversight process that will keep the abuses off the front pag

2. The real strength of modern franchising is in the Franchise Bar. Let’s call Oz’s King Rat lawyer and make him answer questions. These litigators do not like being asked questions by a well-prepared politician [assisted by a smart, good looking franchisee advocate]. See here the 2000 testimony from the Canadian Bar Association – Ontario.

3. Big Franchising is all about wealth re-distribution. The bankers and lenders are professionals with a statutory duty because lending is a credence good. They are a self-regulated industry whose lap-dog regulators run a dog and pony show of trapping and defeating complaints, How about inviting 3 or 4 of the franchise bankers to explain specific franchisee loans and patterns as they contrast to what I have seen in Canada.

  • Sure, the bank robbers are a nasty bunch. Guaranteed
  • But who exactly is driving the getaway car? [that’s franchising’s strength and its greatest weakness: its Achilles’ Heel]

If you want a solution, follow the money.

If you want to float down Big Franchising’s river, do as you’re told, talk your brains out and be happy with what they give you.

  • You are being played like a violin [again]. Wake up for God’s sake.

Anyone with any imagination can see this and knows the only rational response to this facade is to:

  • create a digital Big Franchising kangaroo Court with rules designed to broaden the inquiry .

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