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’ $).


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.

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