As I mentioned before, Right to Associate is the “game changer” for intelligent groups of Canadian franchisees.
TORONTO, ONTARIO: MAY 17, 2017–TIM’S–Tim’s Horton’s location on Wyecroft Road in Oakville, Ontario, Wednesday May 17, 2017. [Photo Peter J. Thompson] [For Financial Post story by Hollie Shaw/Financial Post] //NATIONAL POST STAFF PHOTO
TORONTO — Tim Hortons franchisees who created an association to address their grievances with parent company Restaurant Brands International Inc. have filed an $850 million class action lawsuit against the company, the fast food operator is trying to intimidate its restaurant owners and force the franchisees who formed the group out of their restaurants.
And:
Les Stewart, an Ontario-based franchisee consultant, said the issuance of default notices to franchisees is highly unusual.
“This shows a predatory franchisor at its worst and it suggests (RBI) is taking a juvenile approach towards Canadian law,” he said. “It seems that they don’t understand the difference between a franchisee and an employee.”
It is not an easy legal road for master franchisors to take back healthy franchises, Stewart added.
“The Superior Courts understand how franchising works.”
I was pleasantly surprised to find out how discerning Superior Court Justices are about the David and Goliath, predatory nature of franchising.
I took John and Susan Kezios’s picture on the first day of the public hearings that resulted in the Arthur Wishart Act (Franchise Disclosure), 2000. Who knows…maybe one day our widows will will talk?
Costello: We both were brought up Catholic, I believe.
Springsteen: Oh yeah.
Costello: In my case the Catholic guilt part, I used up a lot more of the guilt than the Catholic bit.
Springsteen: You did well with that.
Costello: I worked on that angle for a while.
I got to say, for a Protestant from east Belfast, Van Morrison has a lot of the Holy Ghost in him. It’s like: He can just go and I’ve seen him sing his own songs, I’ve seen him turn into the kind of abandon that you only see in the great R&B singers, the great blues singers.
Springsteen: There’s the religious element of “I need to be transformed”. For some reason you need to be transformed into something other than what you are. Catholicism is good for shooting at you, straight into your head.
But it’s a funny thing. I look back and I have a lot of harsh memories of my childhood. It was very strict religion at the time, etc. and blah, blah, blah.
But at the same time it was an epic canvas. And it gave you a sense of revelation, retribution, perdition, bliss, ecstasy. When you think that was being presented to you as a 5 or 6 year old child. I’ve been trying to write my way out of it ever since, you know.
Public hearings into the franchise relationship. Four days of traveling public hearings: Toronto, Sault Ste. Marie, Ottawa and London. Ontario, Canada. Traveling public hearing: extremely rare, if not unheard of, under the Mike Harris government.
Approved by the former Ontario Minister Robert Runciman over a beer with Tony Martin at the Queen’s Park members’ bar. Two men who share a love of democracy as expressed in the Legislative Assembly of Ontario.
35 life stories told in 20 minute chunks to the Standing Committee on Regulations and Private Bill.
I had the tremendous honour of traveling throughout Ontario as before these life stories were twisted into the Arthur Wishart Act (Franchise Disclosure), 2000. I seemed to have made an impression on the politicians.
Of the current MPPs (107), I know 29 of them. One Minister since I was 17 years old. 45 minutes from my house to their House.
It happened once.
It can happen again.
— The Legislative Assembly of Ontario, looking north to the main doors, University Avenue, Toronto Ontario
The Acting Speaker (Mr. Jim Wilson): Pursuant to standing order 98, the honourable member has 12 minutes for her presentation.
HELENA JACZEK, MPP
Ms. Helena Jaczek: At the outset I would like to make sure that everyone knows that this bill, Bill 102, An Act to amend the Arthur Wishart Act (Franchise Disclosure), 2000, is co-sponsored by my colleague from Parkdale–High Park and my colleague from Parry Sound–Muskoka. I think that this type of collaboration is something our constituents expect of us. We know that in our ridings many people did not actually vote for us or our party and it is our duty to represent them in this House wherever we can. It has been certainly an interesting and very satisfying experience to work with my two colleagues on this particular bill.
I’d also like to recognize in the west members’ gallery some supporters of the bill: Les Stewart, the founder of the Canadian Alliance of Franchise Operators, and Detective Fred Kerr, the corporate fraud manager for York Regional Police’s major fraud unit.
…
The Legislative Assembly of Ontario
Toronto, Canada
September 23, 2010
Franchise freedom of speech and association in Canada, circa 2004.
Two pages of a Record of Motion filed in the Ontario Superior Court of Justice by Michael Shell and Drazen Bulat on behalf of their client, Tupperware Canada Inc. on September 23, 2004.
– and-I voluntarily closed down the “TupperWars” section of CAFO‘s website in response to this challenge (see context). This happened days after we (for the first time) sent out a series of emails to U.S. franchisees/distributors.
We received zero requests to stop the emails from franchise investors.
[John O’Toole] Can you suggest one thing within the framework we’ve defined that would improve – not totally correct; we’ve passed that, we’re not astronauts – but one thing we could do that would make a real impact on these 40,000 victims, self-imposed victims in some cases? What could we do?
Mr Stewart: Outlaw gag orders. Outlaw gag orders.
Confidentiality agreements encourage opportunistic franchisor behavior because they conceal bad behavior to unsuspecting current and future financial market investors. They are a very large source of imperfect investment information.
Silence puts gold in only the pockets of those proposing these “agreements” that are tethered to the franchisee’s life savings.
More corrosively, they operate internally the same way a false prisoner confession works.
This is particularly true of ones that converted employees to franchisees.
That changes once franchisors listen to their bankers explain how much they both can make (ie. interest kickbacks) if they leverage as many franchisees to the teats.
The primary control method of newer (maybe more formally educated?) franchisees is debt. Hundreds of thousands of supportable debt, if the franchisor who controls their gross margins, lets them service their debt.
It’s ugly:
prime plus 5% (“love to give a better rate but it’s unsecured, don’t you know“),
immediately callable (demand loan = short leash),
plus personal guarantees up the wazzo (“just need the missus to okay the paperwork…“), but
secured by NOTHING but the franchisor”s “good faith” (ok as long as the present management stays put but all deals are off if…).
If you want to unlock the chains, start asking your “preferred” lender some questions (on a public blog, btw) about their lending duty under the Bank Act.
If I had a million dollars I would invest it in the franchise industry but not in a conventional sense.
Three types of groups:
Advisory Councils: There to give the illusion of participation and to reward collaborators. Lipstick on a pig.
Independent Franchisee Association, IndFA: one-vote, one-franchisee, subscription-funded, mostly short-term and knee-jerk reaction. Doomed to fail because membership penetration rate seldom above 15% nationally (aborts maturing of indigenous franchisee leaders). Great pre-trial cannon fodder for the class action franchise bar (only publicly traded targets). Only a tiny fraction of valid claims ever emerge from half-formed programs retarded by a constant burn-out of continuously begging franchisee cannon fodder leaders despite the initial Year 1 dues leveraging to 3 to 4 times for every franchisee. Fundraising ballbusting forces IndFAs into class action lawyer’s arms. A interim form of franchisee ghettoization for amateur organization men: strictly chop-down-the-orchard-for-firewood thinking. Underfunded at $1,000 a store.
Attorneyless Franchisee Networks: pay-as-you-go “common members” (min. $2,000 per year) plus “preferred equity holders” (ie. current franchisees, in and out of system, angel investors). Investing (pre-set ROI, timeframes) available to 100% current members one year after initial formation. Realistic budget for national: $500,000 over two years. Plant-an-orchard mentality where franchisee leadership development can continue long enough for self-governance to incubate. True franchisee control with consultants and lawyers as sub-contractors. Overcomes credence good cheating (legal and industry) by creating a market for second opinions. Power has shifted to less than 5% of franchisee involvement because of the internet and increasing levels of franchisor paranoia.
Franchisee collaborators or house negroes should (but won’t) pay attention as they have the most (marginally) to lose.
Posted by Les Stewart 
FranchiseFool.com 