Franchisor-fronted, franchise bar-controlled and franchise banker-enabled associations fit the sociological definition of Organized Crime

June 22, 2012

The rules are well-known and ruthlessly enforced in associations like the IFACFA, BFA, and FCA.

The price for defecting from the group is very high.

Organized Crime
Ashley Crossman

Definition: Organized crime is a social system distinguished by a complex structure resembling a formal organization rather than a loose-knit collection of criminals. Criminal organizations have a hierarchical power structure, a complex division of labor that includes a management system, a formal system for keeping records, and clearly articulated rules that everyone is expected to follow. As criminal organizations become more complex, so do the varieties of crime they engage in. Some criminal organizations are even organized as franchises, much like fast-food restaurants.

Source: Guide

It is a lot more complex than a traditional Cosa Nostra model.

Closer, perhaps, to an international cyber crime organization, trading  in intellectual properties and industry best (worst?) practices (see Cyber-capos: How cybercriminals mirror the mafia and businesses).

It’s the behavior, not what you call it that matters.

MBE, The UPS Store executive behind bars

February 24, 2009

I started looking closely into franchising in 1998.

One of my first big system investigations was Mail Boxes Etc., MBE. Since then, that system has morphed into The UPS Store brand and can be followed on Blue MauMau’s thread called The UPS Store, Tales of Gore.

The photograph above is of the president of MBE Canada Michael Martino. He was chairman of the Canadian Franchise Association, CFA and spoke at the International Franchise Association’s, IFA 46th annual convention in 2006.

In December 1998, Martino appeared as a part of an article by John Lorinc in Canada’s monthly national business magazine (The Report on Business). Lorinc, an award-winning  journalist, wrote a very interesting 1995 book called OPPORTUNITY KNOCKS: The Truth About Canada’s Franchise Industry which is still available on used book websites. I recommend picking it up.

The accompanying article was called The Sure Thing: Peter Thomas thought he’d bought into a can’t-miss franchise. That was $170,000 ago.

Here is a pdf of the article, courtesy of my Information Sharing Project archive.

Doug Forster took the photograph. We both agreed that franchise executives, as a general rule, should not allow themselves to be posed behind bars.

  • Especially when you read the contents of the article.

Peter and I were sitting beside each other in the Legislative Assembly of Ontario when our first franchise law was passed in 2000.

I sometimes wonder what happened to Peter and to Mr. Martino over the last 10 years.

Anyone know?

UPDATE: A direct link to Lorinc’s article is now available on I’ve also lost touch with Peter since the Ontario franchise law was passed. Hope he is well.

IFA: Oversight good for U.S., bad for AUS

September 29, 2008

Big Franchising‘s primary mouthpiece is certainly flexible.

As an example, witness a current press release from the International Franchise Association (IFA) commenting on the amended bailout to Wall Street entitled The Franchise Industry Applauds the Government Rescue Plan.

1. This is in support of government’s increased oversight and will reward those engaged in unfettered corporate predatory behavior in a trillion ways (at least, in US$).

“The addition of crucial oversight and taxpayer safeguards strengthens the plan,…”

2. On the other hand, notice how 12 days ago the IFA was warning (threatening?) Australians that they should not change (READ: increase or improve franchise industry oversight) or all hell would break loose (Blue MauMau: Washington Trade Lobbyist Warns Against Changing Australian Franchise Law).

  • So, it appears, what is good for the U.S. hen is bad for the AUS rooster?

Some logical bridges:

  1. effective oversight of financial institutions is good but the same for franchising is bad,
  2. the illusion of oversight (because God is in the details of any deal) is always good (able to fool all of the people…),
  3. when you praise one country put your talking head’s name to it but don’t when you threaten another,
  4. in the age of globalized markets, what is good for the U.S. is bad for AUS,
  5. the Australian government needs to come up with some cash to bail out their banks, or
  6. sales of franchises are so pathetic that the IFA is running around like a chicken sans their head.

Former U.S. Secretary of Labor and economics professor Robert Reich mentioned on CBC radio on the weekend that this is not a financial crisis: it is much worse (it’s a crisis of trust or confidence). In my opinion, Reich’s blog is a reasonably unbiased source of commentary in viewing the farce of U.S. banking oversight unfold.

  • The IFA are experts at the management of confidence.

United States of AUS: McTurkeys come to their Senses

September 17, 2008

Late breaking AUS Franchise news via Blue MauMau.

The International Franchise Association, IFA has instructed the Commonwealth of Australia on which laws they should and should not have.

McTurkeys instinctively renounced their citizenship and assumed the posture most likely to please Big Franchising‘s head office.

In a predictably subtle grasp of international and constitutional legal matters, an unnamed IFA source is quoted in an article called Washington Trade Lobbyist Warns Against Changing Australian Franchise Law), that:

The International Franchise Association, a Washington D.C.-based lobbying group representing mainly franchisors, is warning Australian parliamentarians debating a tightening of the country’s franchise laws that laws requiring registration of franchisor disclosure documents are outdated and burdensome. The organization also warns that recent removal of foreign franchisor exemption will dampen U.S. firms’ interest to expand into Australia.

The IFA, which represents less than 1/3 of U.S. franchise systems, came out firmly in favour of a disclosure regime.

In a related story, when reached for comment on the fact that

  1. the IFA had taken over her law-making authority, and
  2. her former colony would henceforth be called the United States of Australia,

Elizabeth II, the nominal head of state and Sovereign of Australia responded with her characteristic degree of pith:


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