This is a beef cow. Its ear is tagged to assign accountability if a steak kills someone.

October 1, 2010

Franchisees are not tagged, counted or valued in Ontario.

In all legitimate commercial activities,  If you want something you better count it. Can you imagine anybody not counting money in a bank? An auto industry without ISO standards?

cow People are More important than franchisee People

  1. Each cow is carefully counted, tracked, protected from disease,  and measured from birth to slaughter. There is sufficient regulation in place to protect public food safety. It is accessible for academic study.
  2. Franchisee are increasingly butchered for their life savings (bisons on the prairies).

Why should a government care about what an industry says when the elite refuses to maintain an independent, transparent method for tracking their franchise investors success or failures? This is particularly interesting when the Canadian Franchise Association, CFA suggests that they represent both franchisors AND franchisees which begs the fundamental existential agricultural question:

What half-assed farmer doesn’t bother to count their stock even though they have all the resources in the world to do so?

Mr. Cynical Bastard: It’s all about the flesh trade being passed off as a milking operation.

How anyone can legislate when there are zero credible quantitative measures to go by, is beyond me. The 1998 stats define the term “wonky”: the CFA simply takes the numbers the IFA commissions and divides them by “10” to Canadian-ize them. * This is the basis for overseeing/ignoring 40,000 (?) Ontario familys’ life savings.

* notwithstanding the fact that the U.S. has roughly 100 times Canada’s GDP and that there were, allegedly, 5,000 new lawsuits per year in Ontario  in 1998.

It’s enough to make a wolf smile.

Listen to a good Dr: Robert Hare says you should avoid subcriminal psychopathy and, if forced to deal with animals, keep them on a very short leash. That heaviness you’re feeling comes from a close encounter with what has been traditionally defined in Western society as evil.

As the majority of smart Ontario capitalists know after 4 decades of highly-publicized fraud:

Don’t rent any unilaterally changeable business model where your success or failure is never counted by anyone (eg. don’t fly on an airplane if a publicly accountable count of accidents is suppressed by the the airline trade association).

Double that when the “experts” want to trap in an ironclad  zero-sum situation (you lose, someone else wins) created by your own life savings (sunk cost).

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Salad Creations Canada: two time award-winning CFA franchisor?

August 9, 2010

Salad Creations Canada and the Canadian Franchise Association (CFA):

birds of a feather flock together.


Sotos LLP: The McDonalds of CDN franchisee lawyers?

November 27, 2009

I have learned directly, personally, in-their-armpits relationships from the best in franchising.

Ted Gorski, McDonald’s, CollegePro Painters, Nutri-Lawn, Tony Martin, Canadian Imperial Bank of Commerce, Sam Grange, John Lorinc, Paul Herminston, Katherine Swinton, Canadian Franchise Association, Country Style, Gillian Hadfield, Michael Webster, Jay Harris, etc. They’re all brilliant in their areas of expertise.

When I got into a corner and thought I needed legal help I hired the best I couldn’t afford. John Sotos was my on-and-off-again lawyer from 1998 t0 2000 and I learned a great many things from John and his partner David Sterns. Both John and Michael told me to look at and talk to the banks. Oddly enough, the first lawyer I talked to about franchising in 1982 is now a Ontario Superior Court justice in Barrie. I like lawyers but they’ve got to cover their rent too, you know!

Many franchisees want to fight.

That’s good…and bad at the same time.

Many franchisees think in terms of black and white; now or never; us/them.

That’s good…and bad at the same time.

Many franchisees would rather choose a “white knight” professional instead of a group of franchisees plotting their own course.

That’s not good…and really, really horribly bad.

The McDonald’s U.S.A. president described his corporation as a real estate company with an interest in hamburgers. Let me repeat: McDonald’s is a landlord (to franchisees) with an interest in fast food.

I learned that the economics of modern litigation is very similar.

  1. The franchise industry legal cash flows = 95% by franchisors,
  2. Once the retainer is paid any consultants are shown the door (only one expert, please),
  3. Franchisees are one-shot clients (v. repeat business for franchisors),
  4. Disclosure laws are a God-send for billable hours, and
  5. The industry has a very, very long memory for those that oppose it’s interests.

All lawyers are businesspeople that operate in a near-monopoly on certain words and concepts.

Learning these terms is not hard if you have (1) a learning tool and (2) a willingness to face some difficult facts.

Most let their emotions rule their decision making (ie. denial and fear) but in their defense, aren’t really conscious of doing so. They’ve been conditioned to be on their knees and look to Daddy for acceptance.

Education is the only way out.

WikiFranchise.org


National franchisor sales teams: Creating the Illusion of Respectability

August 19, 2009

GoodHousekeepingSealWhat do all these associations have in common with the Good Housekeeping Seal of Approval?

They are organizations controlled by franchisors that promote the sale of franchises into national jurisdictions.

  • That is all they do: sell.
  • There is no quality, at all, in what they do.

They also have, at best, voluntary Codes of Ethics which are almost never enforced.

In fact, some of the worst predatory franchise systems I have ever known, are long-standing members. It pays for them to join to bolster their credibility.

  • Do not be fooled: these members are NOT  a measure of investor worthiness.

In many cases, predators use this Mask of Respectability to disarm unwary potential franchise investors.

  • World Franchise Council: Enhancing the global Franchise Community Take a look.
  • International Franchise Association
  • Canadian Franchise Association
  • Franchise Council of Australia
  • Franchise Association of New Zealand
  • China Chain Store & Franchise Association
  • The Franchise Association of Southern Africa
  • British Franchise Association

As usual, I am always very pleased to debate any representatives from these organizations.

Or anyone from their financial institutions which buttress this facade.

WorldFranCouncillogoInternationalFranchiseAssociationCanadianFranchiseAssociationFranchiseCouncilofAustraliaFranchiseAssociationofNewZealandChinaChainStore&FranchiseAssociation

FranchiseAssociaitonofSouthernAfricaBritishFranchiseAsscoation


Earnings Claims in CDN franchising: $75,000 for 12 days work?

February 11, 2009

sipnsnackThis is an advertisement in today’s Toronto Star.

It is a listing under the “Franchising” section. At least 50% of the ad space in this section is hyping the Canadian Franchise Association’s upcoming The Franchise Show.

The Canadian Franchise Association bills themselves as “the national voice for Canadian franchising“.

Let’s see exactly what this alleged franchisor has to say for itself:

1. Earn $75,000 per year for 1 day of work per month. I guess that corresponds to $781.25 per hour (8 hours per day). Or if you wanted to work 2,000 hours per year, you’d be making $1,562,500 peddling branded drinks. This is what passes for investor protection in Ontario, more than 8 years after the passage of the Arthur Wishart Act (Franchise Disclosure).

2. Note how the extremely unknown franchise system trades on transnational brand titans such as Pepsi, Doritos, Lays, Red Bull, etc. This is a classic persuasion technique the confers legitimacy by associating with authority (this time, marketing or brand strength that “Attracts Customers like a Powerful Money Magnet!“)

3. It promises a system: it bundles locations with package. Why the heck at these revenue per hour figures doesn’t the franchisor just hire some flunky to stock the machines? This goes to the usual “turn key” proposition of a “proven system” that usually turns out to be nothing of the kind.

4. The flash “Now Launching in the GTA!” serves two masters: (a) it explains why no one has ever heard of Sip-N-Snack and (b) it lures those that want something new, special or up-and-coming. The phrase “This here poo-collecting franchise is the next McDonald’s…” is a related rhetorical come-on for the overly-trusting.

5. Placing the advertisement in the franchise section is intended to confer legitimacy or utilize social proof: other better-known franchise brands in the ads around this ad. This is important because this might well be the cheesiest fly by-night equipment business opportunity scam imaginable.

6. The total price point is important. At $16,995, if this were a total scam, very few investors would sue to recover their loses. The cops usually won’t investigate anything under $250,000 and the retainer for a lawyer is +$1,000. Like 99% of the defrauded, they won’t even report it to the local police and the Competition Bureau is a bloody lapdog.

7. Note the recognizable logo: Pespsi-Cola. And 5 exclamation points. This must be a hot deal!!!!! (Just because it is corny does not mean it isn’t really effective on a certain percentage of the population.) Fraud cuts across many socio-economic levels.

8. If this is a scam, the money is quickly sent away; well beyond the reach of any litigation or police investigation. Con games are well-thought out beforehand and the three-card monte table is quickly folded up.

9. But still if 10 people bite, that’s an okay return on investment for the franchisor and it keeps the revenue wheels turning at The Toronto Star, too.

10. Canada is a well-known white-collar crime incubator as recently portrayed by the CBC Marketplace in Buying into the pitch to become rich. In all confidence games, more than 50% of the marks are good for a second fleecing.

Any comments, particularly from those knowledgable about business opportunity frauds are welcomed.


Trade Show activism: Counterspin the Lies on their Selling Field

February 11, 2009

franchiseshowThis ad appeared in today’s Toronto Star.

Just a few points:

1. Contrary to the heading, you do not “buy” a franchise. You sink cash into this type of business opportunity and hope to achieve a salary and ROI over the life of your license of using the trademark using a promised “proven system”.

2. Small business is always a lot harder than you’d ever think. It takes years to develop the technical, management and decision making skills to be a success. Often the cash burn rate in franchising is so great that you never get to see profitable times: You simply flame out too early.

3. Your first contact with a trademark franchise system should never be at  a trade show. You are at a very big disadvantage at a trade show: they control the atmosphere, appear much more successful than they actually are and give the false sense of being in a group of profitable businesses.

Big Show costing Big Dough: National franchise associations such as the Canadian Franchise Association rely very heavily on the revenue that these shows deliver. These types of shows are ground-zero in the subtle and not-so subtle art of persuading mom and pop investors that the next franchise will make them a millionaire.

In 1998, I showed up with a CBC television crew to the fall CFA show. We handed out pamphlets warning attendees, intercepted the minister as he was exiting from his franchisor rah-rah speech (the last time an Ontario minister showed up, I think) and barged our way into the trade show to get some grip-and-grin footage with thinly smiling salespeople.

  • The CFA and their supporters were not amused.
  • Everyone pays a lot of money to bamboozle the next chump.
  • They certainly don’t need anyone coming to piss on their parade.

Their carefully planned PR news puff piece, was turned inside out: Toronto viewers instead saw a be careful of the predators out there story instead.

I guess it was predictable that Dan Farmer of the Royal Bank of Canada would insist that I never show up at another franchise trade show if I wanted financial support for the Canadian Alliance of Franchise Operators. I kept my word although I never saw $1 from any of the 5 banks that financially underlay all Canadian franchising.

In 1998 we had to convince a television editor to assign a reporter, a videographer, record, edit and then air the results. Tough getting media attention because franchise fraud is pegged as a niche audience item.

A little over 10 years later, someone just needs to:

  1. slip a digital camera in their jacket,
  2. record a few clips,
  3. use free edit software,and
  4. create and post YouTube video (I’ve already reserved a FranchiseFool channel, btw) that shows examples of how franchise salesmen openly lie at a trade show because the franchise agreements that give them a License to Lie, Cheat and Steal (kudos to Blue MauMau) from mom and pop investors.

U.K. franchisor leaders record a new ethical Low: Hard-selling to the recently Unemployed

January 26, 2009

the_bfaTalk about stealing a guy’s life savings when he’s down.

And when I thought I had heard it all and that franchise hustlers would do anything for a sale.

Now word out of Liverpool that their franchisor-only trade association, British Franchise Association, BFA is hard-selling directly to recently laid off UK workers, via their former employers.

It’s like a scene out of the movie, GlenGarry Glen Ross, totally hardcore, old-school boiler room ABCs (always be closing):

We’re adding a little something to this month’s sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? [Holds up prize] Second prize is a set of steak knives. Third prize is you’re fired.

Lie. Cheat. Steal. All In A Day’s Work. Source

It reminds me of the ambulance-chasing personal injury lawyers forcing their business cards into the hands of people lying in the street from a car accident.

Obviously, what I (or the British public) consider to be ethical business behaviour may not be what the BFA brain trust considers to be fair game. The 2 characteristics of an ideal franchisee are: Did their cheque clear and Can they fog a mirror (alive)?

The story (Franchising could be your next career move) is a little awkwardly worded but these are the most flagrant lies that support this propaganda piece:

  1. franchising is a lower risk than non-franchised businesses (proven to be false),
  2. a BFA franchisor is less risk than someone who is not a member (not proven),
  3. the BFA is a benevolent society doing a public service (they serve their members’ interests),
  4. franchisees fail only because of their sloth or stupidity (fraudulent systems?) and
  5. the BFA represents both franchisors and franchisees (only franchisors).

All of these assumptions are false and dangerous. The BFA executives are either incompetent or knowingly perpetuating a cruel fraud, this time on the newly laid-off Brits.

  • You will be preyed upon when you are at your weakest time in your life.
  • Unemployment is an excellent time to buy into a phantom dream (In business for yourself, not by yourself; Be your own Boss) because you want so much to believe it (mortgage, kids, debt, etc.) you are temporarily a very shitty decision maker.

I know. I signed my franchise agreement two weeks before my unemployment benefits were to run out in 1992. BTW: an Ontario Justice said in 2000 that I had done the best due diligence she had ever seen but still lost $140,000 in 4 years, being sued, bankruptcy.

Another veteran but anonymous observer, Lionel Hutz PA, picked up the story and wrote about it on Blue MauMau under the following banner, BFA Wants Unemployed to Buy a Franchise. Lionel leads in with:

The British Franchise Association, the counterpart to America’s International Franchise Association, is directly approaching companies that are laying off employees, to persuade those newly unemployed to buy a franchise from one of their franchisor members.

Lionel goes onto say and pose a most relevant question:

Note the false claims that franchised businesses have higher success rates, and the assertion that British Franchise Association members must “meet the strict ethical and business criteria.” I wonder if the BFA has ever expelled a franchisor for bad franchising conduct?

Ray Borradale, a very effective Australian franchisee advocate and mouthpiece chips in with:

AFA, BFA, IFA and FCA read from the same book.  This is symptomatic of franchisors; good and bad – and it is dangerous.  I note the reference; “educate people about the many benefits of buying into a franchise” with contempt.  Where is the education about risk and due diligence?  This unbalanced marketing of franchising is not new and BMM has covered many similar stories. It is misleading and deceptive but it appears to be accepted by authorities in every country. [I would add the CFA to Ray’s list of talking heads.]

Remember: Franchising is practiced identically around the world. Some countries know about the dark side of franchising and have developed national spokespeople to combat the propaganda. Some countries (like the U.K.) do not know.

IN CONTRAST, note the level of discernment found in this Australian headline of January 26th (care of Franchise-Chat.com), The Franchising Trap:

The Australian dream of becoming self-employed can be the path to financial security, but it can also go disastrously wrong.

For years franchising has been viewed as a reliable, somewhat less-risky option for small investors looking to start their own business. But the 500-plus complaints received by the Australian Competition and Consumer Commission every year arising from disputed between franchisees and franchisors show that franchising is often not the easy entry to business that some people think.

In the U.K. there is a greater danger than is faced by franchise investors in Australia.  Aus does not have a small business government guaranteed program, but the U.K. does.

  • A guaranteed loan program can be misused to fuel franchise fraud. I wrote about it in Canada, I know that that it is happening in the U.S. and also in the U.K.’s aptly named Small Firms Loan Guarantee Scheme.

Heads up to these other countries that have a similar loan guarantee program for small business (Canada CSBFA, U.S. SBA 7(a), and U.K. SFLG):

  1. Korea,
  2. Japan,
  3. European Union (Netherlands, Denmark, Belgium, France & Germany),
  4. Indonesia,
  5. Malaysia,
  6. Nepal,
  7. Philippines and
  8. Taiwan.

Every country gets the type of journalism that it is willing to accept from it’s traditional media outlets. This type of breathless and mindless regurgitating of franchising propaganda is almost never seen in the U.S., Australia or Canada anymore. It was pushed out by volunteer franchisees getting on the back of its nation’s business editors.

  • These blatant lies will continue as long as they are not shot down by a small group of knowledgeable, experienced and vigorous group of Web 2.0 U.K. warriors.

Their basic training can begin once they choose to speak out.


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