There are two types of people within the business format franchise industry:
- those that know [have awareness] that franchising is a con game that pays out like a crooked roulette wheel [pre-determined payoffs to maintain the illusion of a level game] or
- those that think it has primarily to do with franchisee hard work, pre-sale due diligence, etc.
The complication is that Class #1 include:
- control next to 100% of billions of investments,
- allies of the greatest authorities in every country and internationally (ie. the state, banks, franchise bar, etc.),
- legions of graduates from the world’s best universities (education must mean adherence to the truth, right?),
- the most handsome (and therefore presumed good),
- and have all the trappings of financial success (which #2 assumes that they will be successful by association).
The few former #2 who have become traitors to Class #1 (ie. aware but not profiting from the status quo) and are stilll talking are cranky, paranoid, broke, rude and cynical.
An accurate observer, however, concludes the following: Financial failure or success in business format franchising is mostly luck.
- But you get a chance to pull the slot machine’s arm, right? Make you feel luckier, doesn’t it?
- It re-distributes wealth; it has long since stopped creating wealth [90% of the time this statement is 100% true; the 10% where it is false has nothing to do with skill, it has to do with luck).
There are winners but, despite the spin, they have the skill involved in picking the winning lottery ticket. Don’t tell me about the 30 year McDonald’s franchisee: they don’t make those agreements anymore.
BS Differentiating Characteristics
1. Intelligence: Notwithstanding the name-calling, those that lose at franchising are often the smartest ones in the orientation class. The ones forced to the wall often are the ones that realize the game, after they sign and try to rally the troops. Communication skills, persistence, credibility and curiosity are the a sure ticket to franchise bankruptcy.
2. Lack of Adequate Pre-sale Due Diligence: simply an excuse for industry apologists using hindsight bias to force silence via shame. Believe me I’ve met lots of “successful” franchisees who did zero due diligence. Everyone admits that DD is impotent against franchisor opportunism which is played out in 1,001 seemingly random ways.
3. Laziness: Franchisees work like hell and only usually collapse when they hit their own personal wall of mental, physical and financial limits. It takes a long time to learn this foreign language (franchise jargon).
4. Most success is within Franchisee’s means to Control: Almost all of the decision making is taken via the franchise agreement. Tough to argue both sides of an argument at the same time (ie. Franchisee is 100% responsible while franchisor has 100% control of assets). So one-sided that some franchise agreements have been declared an employee:employer relationship by U.S. state Courts and labour departments.
5. Deceit, Gag Orders, Shame, PR, Failure to Acknowledge: Why does the industry spend so much time controlling information (gag orders, use of shame, SLAPPs, 3 Wisemen on Blue MauMau, counterspin, undue legislative influence, lobbying, etc.) when they could simply commission credible academic research to prove that franchising is a legitimate business?
Their failure to fund (which they can clearly do) and hand over information to independent researchers indicates that they want to suppress [not advertise] independent, verifiable, accurate success rates. They are, in a sense, judged guilty by the actions that they choose to avoid.
- #1 know that their dominant position is fueled by a crap shooting machine, at best.
That you have yet to join that class, speaks of your level of awareness. That’s all.
- Persist and continue to ask very simple questions and you will have your eyes opened. And you can teach everyone in your family, too. [Each person knows 250 people so they say and that there are only 6 degrees of separation between all of us on this planet.) OR
- Refuse to challenge the conventional wisdom, and continue to be cannon fodder (and descendants) for V2.0.1 of the next scam.