Is a weak/any franchise law better than no franchise law?

October 31, 2010

In my opinion, no.

Why I believe this goes back a little ways.

No Law: In 1998, Mr. Ken Fong, McDonald’s Canada, VP and Corporate Counsel formed an industry  committee together to discuss ways and means to have industry disputes heard in other than the Courts. I attended as the founder and president of the Canadian Alliance of Franchise Operators, CAFO the 1st and only national franchisee advocacy group.

In Feb 1999, I was vigorously questioned by a couple of the 2nd Tier attorneys on the committee about my unwillingness to accept a “disclosure-only” law solution. The industry wanted a law to give an impression of order and oversight in what was seen as the “wild west of the business world”. They wanted what I subsequently defined as a McLaw: toothless legislation designed to protect the dominant parties.

It became apparent at that meeting that CAFO either:

  1. agreed with their desire for a McLaw or
  2. CAFO/Les was not welcomed at the meeting.

I quickly showed the work we had done on the corporate Identification of a proposed industry dispute resolution process, thanked Mr. Fong and shook his hand, and left the meeting.

McLaw passed: In June 2000, I sat with some other franchisees in the opposition guest gallery at the Ontario legislative assembly and watched the Canadian Franchise Association get the law they wanted: Arthur Wishart Act (Franchise Law), 2000.

However, the Ontario judiciary are not easily intimidated, black-balled  or threatened.

Judge-made law: Provincial court justices are smart, independent-minded (no elections) and not easily fooled. Since 2000, they have tended to assume that the Wishart Act was passed as a sincere piece of legislation and that its intent was to protect franchisees.

I listened to Chief Justice Winkler last year at the Ontario Bar Association’ Franchise Law Conference in Toronto and he was just great! He told the +100 attorneys that every justice knows the “deal” about franchising because they have all had franchisee clients before being called to the bench. One of the two attorneys at side seemed a little ill-at-ease.

I can hardly wait for Thursday to see what Ms. Debi M. Sutin (Gowling Lafleur Henderson LLP) and Ian N. Roher (Teplitsky, Colson LLP) as co-chairs will be presenting.

Record attendance again in 2010, I bet.

The Ballad of Ted and Liz Gorski

June 11, 2008

Ted and Liz Gorski were the first franchisees I knew. I was 13 and started working at their Barrie McDonald’s in 1972.

I remember with great fondness the chaos and friendships I made. They all revolved around the golden arches and the Gorskis. Liz would get all of the crew in a crisis state whenever a Winnebago motor coach showed up the Bayfield Street store. McDonald’s president George Cohon used to tour around in a McD winnebago.

I knew there was conflict between franchisor and franchisee since I was an All-Star fry guy. One day I came to work and saw some workmen taking carting away the large McD “lollipop” sign.

Mr. Gorski, what’s happening? Somebody is stealing your sign.

It’s okay, Les. It’s just Claude Neon and they’re just taking it away. Don’t worry: it’s just a disagreement with McDonald’s.

I worked off and on for the Gorskis through high school and was off to university in 1978. My first year results were not the greatest so it was natural for me to come to talk to Ted about it. He said he needed a manager trainee for the Orillia store #3254. By that time, he had three stores: Barrie, Orillia and Midland.

I started to work in Orillia and we had a great store: Triple A rating and a 30% annual growth rate when the breakfast program was being introduced. I went to the Basic Operation Course (BOC) and scooped Temgo Inc.’s first “Silver Hat” (course members vote on who they feel has the greatest leadership skills).

The Barrie store was even a higher volume store, routinely within McDonald’s Canada’s Top 10 with a dynamite management team lead by Tim Adair, Rob Clark, Bobby Dewar, and others.

The Midland store was another story.

It was very low volume and, seemingly unknown to Ted & Liz, the management was extremely weak. Glen Marling was the most difficult and plain strange manager I have ever met. A whiz at equipment but…

His assistant manager Randy was up to no good. As it turned out, he had a serious chip on his shoulder about Liz and was actually encouraging the crew kids to certify for a union.

I think it was only the second time in McDonald’s CDN history that a store was in the process of unionizing and, boy, did they react!

I don’t know the details, but by August 1980, Ted and Liz were no longer franchisees and I reported to McD field consultant. Within a few months I got to meet the new Orillia franchisee (Roy Pefrin) while Jim Blackwell got the Midland store. Head office kept the Barrie unit for themselves.

I have never talked about this to Ted and I doubt I ever will. But I do know that almost killed him.

Ted was pushy alright. He was the first president of a fledgling independent franchisee association. I do not believe McD Canada has had one since. I believe, because of his aggressiveness, Ted was denied the Collingwood store.

Fast forward to 1998, I was invited to contribute to a dispute resolution committee with Ken Fong, then vice president, legal of McDonald’s. He remembered Ted and Liz very well, even after 18 years.

Ted and Liz had one large cheque from the eight years or so they spent as McDonald’s franchisees. But Ted showed me that often money costs too much.

When I found myself in a tight spot in 1992 to 1998, I often thought of the great lessons Ted and Liz taught me. If anyone asks me, it was the Gorskis that they taught me how to treat people and to build a team.

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