Oz national Franchise Inquiry

July 7, 2008

Deanne de Leeuw has been a very effective advocate for the problems that afflict Australian franchise investors. Her efforts should be commended and supported by everyone because franchise law is truly an international affair.

Similarly, BakersDelightLies.com deserves everyone’s appreciation, as well. Without focusing efforts and co-operating, franchisees will never be able to utilize the information that is available which can be used to counteract the overwhelming economic advantage of the adversary.

God is not on the side of the big battalions, but on the side of the best shot. Voltaire.

Blue MauMau is an important resource for those wishing to increase their knowledge about franchising. Deanne posts there to keep North American readers informed. I would encourage every national group to do this. If you want help, talk to those who have decades of experience.

The national inquiry notice was posted on Blue MauMau recently: Australian Government Announces Inquiry into Franchising. This is the entire posting.

On 25 June 2008 the Australian Federal Parliament Joint Standing Committee on Corporations and Financial Services resolved to inquire into the Franchising Code of Conduct and related matters.

This follows the recent State inquiries held in Western Australia and South Australia.

The terms of reference are:

The Committee is to inquire and report on the operation of the Franchising Code of Conduct, and to identify, where justified, improvements to the Code, with particular reference to:

1. the nature of the franchising industry, including the rights of both franchisors and franchisees;

2. whether an obligation for franchisors, franchisees and prospective franchisees to act in good faith should be explicitly incorporated into the Code (having regard to its presence as an element in paragraph 51AC(4)(k) of the Trade Practices Act 1974);

3. interaction between the Code and Part IVA and Part V Division 1 of the Trade Practices Act 1974, particularly with regard to the obligations in section 51AC of the Act;

4. the operation of the dispute resolution provisions under Part 4 of the Code; and

5. any other related matters.

The Committee invites submissions by 12 September 2008. The Committee will report by 1 December 2008.

Please send submissions to corporations.joint@aph.gov.au or by post to –

Committee Secretary
Parliamentary Joint Committee on Corporations and Financial Services Department of the Senate
PO Box 6100 Parliament House
Canberra ACT 2600

Emailed submissions should include full name, address and phone contact details so that they can be verified.

For further information please contact the committee secretary on (Australia) 02 6277 3583 or at corporations.joint@aph.gov.au

Oz McLaw is important because this is the first national legislative push since the formation of the Blue MauMau Web 2.0 community. The world’s resource [both sides] will be looking down under and applying whatever pressure they can to forward their interests.

Political Childlike Thinking: Some people believe that simply telling their story on paper or in person to a politician is enough to get an effective law [ie. a lack of knowledge is the problem and the truth will, by itself, win out]

  • It isn’t. It never has been. And it never will be where modern politics is a brokering of competing interests.

The disciplines of social science such as political science and law are about power as much as physics is about numbers.

Politicians and regulators know infinitely more than you know and will still do nothing, even after the blood runs out of the media reports. 40 years of North American experience proves it. Trying to shame or out-muscle Big Franchising is a fool’s game.

Better Risk Assessment: The solution is the development of an educational tool that would digitize the knowledge of a 20-year franchise law expert inside an expert system software program.

The reaction of the franchise bar proves that this approach will solve the abuses by accurately showing the breadth and depth of business risks of investing in a franchise.

If the risks were accurately revealed to you before you signed:

Who but a fool would sign a contract that gives the franchisor a License to Lie, Cheat & Steal ?

Benefit: Over 1,500 documents [so far], from around the world which have been indexed to teach. A franchising Google.

Cost: Free to anyone who wants it.

Interested? Give me your physical address and I’ll mail you a CD with the Access 2000 file [30 mb]. Want to write some code to take this onto the web for everyone?: drop me a line. Let’s Wiki.

Advertisements

The Apprenticeship of Les Stewart

May 17, 2008

Justice is one of the four Cardinal Virtues.

My research clearly concludes that the last place for franchisee family investors to find justice is via any franchise bar/legal system.

franchising

Background and unique qualifications:

  • Franchise Industry in Ontario (Canada): franchisee families 40,000 (76,000), employees 400,000 to 600,000 (760,000 to 1,140,000), investments $2 to 8 billion ($3.8 to 15.2 billion), and annual sales $45 to 50 billion ($90 billion), Source
  • twice a franchisee (Arjay Painting and Nutri-Lawn, Midhurst, ON),
  • a franchisee’s crew Barrie and 1st assistant manager, Orillia 3254, McDonald’s Canada (B.O.C., Silver Hat, & AAA, 1972-80),
  • general BA, 1983, Western University and MBA, 1987, Ivey Business School, London, ON,
  • Budget analyst, Victoria Hospital, London, Ontario, (acute care regional teaching hospital, 3,500 FTEs, 1988-92),
  • founded the Canadian Alliance of Franchise Operators, CAFO, Canada’s 1st national franchisee association, Midhurst, ON 1998-present,
  • SLAPP 1.0 (Strategic Lawsuit Against Public Participation): sued to silence: Nutri-Lawn‘s then owner, The Franchise Company (FirstService Corporation), represented by David Sterns and John Sotos,
  • SLAPP 2.0 sued for faxing 150 U.S. Tupperware distributors a website invitation and Toronto Star article while representing 7 former CDN Tupperware distributors, (Tupperware Canada Inc.), TupperWarsSLAPP, represented by Brian Macleod Rogers,
  • took my franchised lawn care business independent in 1998 (Lawn Depot),
  • represented myself at an injunction hearing, franchisor unsuccessfully sought to enforce their non-compete clause, Barrie, ON, 1999 (Justice Paul Herminston, Barrie), favourable outcome,
  • 5 day civil trial, (Justice Katherine Swinton, Toronto,  May 1999) and lost $134,000 unfavourable outcome,
  • unpaid policy analyst for Mr. Tony Martin, NDP MPP, Sault Ste. Marie, ON 1998 to 2001 (provincial, federal politician),
  • expert witness at public hearing which lead to Ontario’s first franchise law, Toronto, ON (Arthur Wishart Act (Franchise Disclosure), 2000),
  • created the Information Sharing Project and submitted unsuccessful project proposal to the Ontario Ministry of Consumer and Commercial Affairs in 2003 (digital teaching, due diligence and business risk assessment tool; early form of WikiFranchise.org),
  • identified and wrote a paper on Predatory Franchise Lending to Industry Canada, 2005 (18 month investigation: bank, consultant, franchisor, Office of the Privacy Commissioner of Canada, Minister of Finance, RCMP Commercial Crime Unit, OBSI, FCAC, PMO, etc.),
  • case preparation for a +$6-million civil law suit based on predatory lending principles (2005, Oudovikine),
  • Stewart has been featured in the Globe and Mail, Toronto Star, National Post, CBC, PORFIT magazine, Continental Franchise Review, and Wall Street Journal, media contributor, 1997 – present,
  • contributed to the Prince Edward Island, Ontario, West and South Australian franchise inquires,
  • Blue MauMau contributor: 459 posts (since Oct 2007),
  • founded and editor of FranchiseFool.com weblog: 1200 posts, 277,713 views & 777 comments (since Feb 2008, Accessed April 26, 2018),
  • founded and co-editor of WikiFranchise.org: a no-charge wiki that assigns corporate and personal reputations more accurately and durably via indexed already-published articles and documents: 208,821 unique visitors, 331,676 visitors, 1,283,386 pages, 2,229,354 hits and 65.8 GB bandwith (since Feb 2009, same),
  • endorsed Bill 102, An Act to amend the Arthur Wishart Act (Franchise Disclosure), September 23, 2010,  Legislative Assembly of Ontario (start @ 1440),
  • attended the International Association of Franchisees and Dealers annual conference, Indianapolis, 2010,
  • pre-trial development of large-scale group and class action legal actions,
  • independent franchisee association: leadership development, creation, training, pre-trial case legal case development (National Bread Network: Maple Leaf Foods/Canada Bread 1,000 CDN Dempster’s franchisees, leader’s blog, case preparation for a +$300-million class action law suit based on good faith, right to associate and mental distress ($50,000 award for one franchisee, 2008-2012),
  • FranchiseGrade.com: The Authority on Franchising, developed data collection methods and hierachy structure and custom reports based on U. S. Franchise Disclosure Documents, FDDs, Les Paul Stewart Consulting: work has been featured in Businessweek, Entrepreneur, Inc., and the Wall Street Journal. 2004 – 2005,
  • Dr. Gillian K. Hadfield: Problematic Relations: Franchising and the Law of Incomplete Contracts, The Price of Law: How the Market for Lawyers Distorts the Justice Systemand
  • LinkedIn

Information Sharing Project: Collecting franchise articles

May 1, 2008

I have created something called the Information Sharing Project, ISP. I would like to demonstrate how I collect documents for it.

The ISP is a digital collection of newspaper and magazine articles having to do with franchising. There are also public documents such as public hearing testimonies, emails etc. that I think have educational value.

Example:

Let’s take a look at today’s Blue MauMau article from a real media pro, Janet Sparks. The article talks about the misfortunes of a New York city multi-unit franchisee of Dunkin’ Donuts.

Go there now and read it. (It’ll be worth your while…promise).

Once I see an article such as this one, I process it various ways. One of the major value-added services, [cringe] is that I assign a series of Keywords or Franchise industry-specific behavior descriptors. They’re sort of like tags or indexes.

For example, these are the Keywords I chose for this article:

  1. Raining litigation,
  2. Indentured servants,
  3. Private-equity financing buy-and-flip,
  4. Immigrants as prey,
  5. Franchisee-on-franchisee opportunism,
  6. Race,
  7. Termination of franchisee, single,
  8. Build up the business so they can take it,
  9. Re-sale value set by franchisor,
  10. Re-sale or transfer store through franchisor to new franchisee,
  11. Re-sales as a profit center,
  12. Offered much less than market value of franchise,
  13. Penalty applied without explanation,
  14. Stock market pressures make franchisor push system sales higher and higher,
  15. Initial public offering, IPO,
  16. Pump-and-dump scheme,
  17. Resale permission unreasonably withheld

This is how I chose to analyze franchising:

  1. I look for documented patterns in behaviors,
  2. add my industry expertise by showing what is the same (integration) and what is different (differentiation) in these micro-franchise case studies,
  3. index them for relevant decision making-based searches, and
  4. translate them in a common language (digital, indexed) to be used
  5. anywhere in the world.

Simple, eh?

  • Ever been done before? No.

%d bloggers like this: