Ray Borradale: Australia’s favourite and honoured franchisee

Advocates are made by predators.

I owe my franchisor, Nutri-Lawn, a lot.

Maybe Midas taught Ray something.

He continues to contribute by writing on Blue MauMau.org where his comments ring true.

It started with an iPhone in the colonies

Then we blogged/wiki-ed.

Then they converted the first franchise into collective agreements.

[Brian Gable, The Globe and Mail]

Career advice from Ray & Carol

Dear Carol and Ray,

People are spreading rumours that I am an untrustworthy, obsessed and unbalanced person.

Should I write a book or continue to be black-balled?

Signed,

Les

Why is Mark Bryers, former franchisor & attorney smiling?

Because he knows white-collar laws are a farce.

Under Kiwi law, there is insufficient evidence for the Serious Fraud Office, SFO to press criminal charges although 3,000 New Zealanders have lost $80 million of their life savings via the Blue Chip franchise system.

1. Blue Chip escapes SFO noose
2. Shock as SFO decides not to lay Blue Chip charges
3. SFO says insufficient evidence for a criminal prosecution of Blue Chip

Bryers was sentenced in May for over 1oo commercial offenses for which he pleaded guilty. The sentence?: 75 hours of community work and a $37,500 fine. (Blue Chip boss sentenced – but avoids jail)

Not too surprising when governments treat a law enforcement agency as a political sacrificial lamb.

Ray Borradale from Australia notes on yesterday’s FranchiseFool post:

… I do like New Zealand’s approach to franchising.

Nothing complicated – don’t even tell anyone its buyer beware and then keep the location of the mass grave a secret. Economic efficiency and the grace to not worry people before its time to send them to that other place. Bewdiful …

Unmarked economic mass graves.

Plague victims on Venice island

What Mark Bryers did was substantially the same as every franchise system does frequently/sometimes/selectively does. Bryers ambition was larger and his time frame was shorter. That’s the only difference.

I quote Ray because Bryers is now Australia’s responsibility.

U.K. franchisor leaders record a new ethical Low: Hard-selling to the recently Unemployed

Talk about stealing a guy’s life savings when he’s down.

And when I thought I had heard it all and that franchise hustlers would do anything for a sale.

Now word out of Liverpool that their franchisor-only trade association, British Franchise Association, BFA is hard-selling directly to recently laid off UK workers, via their former employers.

It’s like a scene out of the movie, GlenGarry Glen Ross, totally hardcore, old-school boiler room ABCs (always be closing):

We’re adding a little something to this month’s sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? [Holds up prize] Second prize is a set of steak knives. Third prize is you’re fired.

Lie. Cheat. Steal. All In A Day’s Work. Source

It reminds me of the ambulance-chasing personal injury lawyers forcing their business cards into the hands of people lying in the street from a car accident.

• And this if from an association that claims to be “Promoting Ethical Franchising“.

Obviously, what I (or the British public) consider to be ethical business behaviour may not be what the BFA brain trust considers to be fair game. The 2 characteristics of an ideal franchisee are: Did their cheque clear and Can they fog a mirror (alive)?

The story (Franchising could be your next career move) is a little awkwardly worded but these are the most flagrant lies that support this propaganda piece:

1. franchising is a lower risk than non-franchised businesses (proven to be false),
2. a BFA franchisor is less risk than someone who is not a member (not proven),
3. the BFA is a benevolent society doing a public service (they serve their members’ interests),
4. franchisees fail only because of their sloth or stupidity (fraudulent systems?) and
5. the BFA represents both franchisors and franchisees (only franchisors).

All of these assumptions are false and dangerous. The BFA executives are either incompetent or knowingly perpetuating a cruel fraud, this time on the newly laid-off Brits.

• You will be preyed upon when you are at your weakest time in your life.
• Unemployment is an excellent time to buy into a phantom dream (In business for yourself, not by yourself; Be your own Boss) because you want so much to believe it (mortgage, kids, debt, etc.) you are temporarily a very shitty decision maker.

I know. I signed my franchise agreement two weeks before my unemployment benefits were to run out in 1992. BTW: an Ontario Justice said in 2000 that I had done the best due diligence she had ever seen but still lost $140,000 in 4 years, being sued, bankruptcy.

Another veteran but anonymous observer, Lionel Hutz PA, picked up the story and wrote about it on Blue MauMau under the following banner, BFA Wants Unemployed to Buy a Franchise. Lionel leads in with:

The British Franchise Association, the counterpart to America’s International Franchise Association, is directly approaching companies that are laying off employees, to persuade those newly unemployed to buy a franchise from one of their franchisor members.

Lionel goes onto say and pose a most relevant question:

Note the false claims that franchised businesses have higher success rates, and the assertion that British Franchise Association members must “meet the strict ethical and business criteria.” I wonder if the BFA has ever expelled a franchisor for bad franchising conduct?

Ray Borradale, a very effective Australian franchisee advocate and mouthpiece chips in with:

AFA, BFA, IFA and FCA read from the same book.  This is symptomatic of franchisors; good and bad – and it is dangerous.  I note the reference; “educate people about the many benefits of buying into a franchise” with contempt.  Where is the education about risk and due diligence?  This unbalanced marketing of franchising is not new and BMM has covered many similar stories. It is misleading and deceptive but it appears to be accepted by authorities in every country. [I would add the CFA to Ray’s list of talking heads.]

Remember: Franchising is practiced identically around the world. Some countries know about the dark side of franchising and have developed national spokespeople to combat the propaganda. Some countries (like the U.K.) do not know.

IN CONTRAST, note the level of discernment found in this Australian headline of January 26th (care of Franchise-Chat.com), The Franchising Trap:

The Australian dream of becoming self-employed can be the path to financial security, but it can also go disastrously wrong.

For years franchising has been viewed as a reliable, somewhat less-risky option for small investors looking to start their own business. But the 500-plus complaints received by the Australian Competition and Consumer Commission every year arising from disputed between franchisees and franchisors show that franchising is often not the easy entry to business that some people think.

In the U.K. there is a greater danger than is faced by franchise investors in Australia.  Aus does not have a small business government guaranteed program, but the U.K. does.

• A guaranteed loan program can be misused to fuel franchise fraud. I wrote about it in Canada, I know that that it is happening in the U.S. and also in the U.K.’s aptly named Small Firms Loan Guarantee Scheme.

Heads up to these other countries that have a similar loan guarantee program for small business (Canada CSBFA, U.S. SBA 7(a), and U.K. SFLG):

1. Korea,
2. Japan,
3. European Union (Netherlands, Denmark, Belgium, France & Germany),
4. Indonesia,
5. Malaysia,
6. Nepal,
7. Philippines and
8. Taiwan.

Every country gets the type of journalism that it is willing to accept from it’s traditional media outlets. This type of breathless and mindless regurgitating of franchising propaganda is almost never seen in the U.S., Australia or Canada anymore. It was pushed out by volunteer franchisees getting on the back of its nation’s business editors.

• These blatant lies will continue as long as they are not shot down by a small group of knowledgeable, experienced and vigorous group of Web 2.0 U.K. warriors.

Their basic training can begin once they choose to speak out.

Shocking franchisors into good behavior

People tend to behave better when the costs of misbehaving are increased.

As reported at Blue MauMau on December 28th, Bakers Delight is planning to sell more stores in the face of massive controversy (Bakers Delight Plans 150 New Franchises).

To wit:

Entangled in 2008 with government hearings over unfair franchise practices, franchise owner litigation, rumors of financial problems and the recent failure of its attempt to enter the U.S. market, Baker’s Delight remains undaunted. The Australia-based firm announced today that it plans to sell 150 new franchises in Australia, New Zealand and Canada. The statement did not specify when it plans to achieve this.

A well-known Australian franchise windmill tilter, Ray Borradale adds to the posting:

This would explain why the anti-Bakers Delight franchising website [www.bakersdelightlies.com] was purchased from the ex-franchisee who assisted to expose the reality of franchisor behavior and franchisee failures and did enormous damage to the brand.

Mr. Borradale goes on to make an offer that most unsettled former franchisees might want to consider:

I would suggest Roger Gillespie [BD’s CEO] doesn’t appreciate that the removal of that web site will do little to find him all his new franchisees; rather, it will increase efforts to ensure he continues to have major obsticles to contend with.  Roger is kidding himself.

He should learn from Midas; it don’t go on for ever baby. How many web sites does he want to buy?  Perhaps ex-BD franchisees can get their money back from Roger through a new entrepreneurial effort setting up sites and selling them back to him at $200k a pop?

Any BD people can contact me if they want some assistance.  It takes a huge effort for 24 hours and then a lot of money; less than $200 will get you started. [my emphasis]

An interesting idea: a few (dozens?) of websites and blogs, each watching, collecting documents and recording a specific franchisor’s every move. Providing and sharing information based on the [almost] no cost of the internet.

Using the network effect of the internet to short-circuit opportunism via former franchisees who are out to make a buck.

• Private law ordering or digital vigilantism [depends on your viewpoint].
• Hundreds of copy-cat anti-this trademark system, anti-that trademark systems?
• Standardized indexing of a www web of national trademark nodes?
• Organizing to defuse a type of organized crime [but on an electrical platform unlike the law which is strictly lead type].

Reflecting franchising’s unique strength (duplicatabiliy) onto a technology that can condition franchisors into good behavior [operant conditioning: voluntary fair dealings at the end of a cattle prod]. Interesting.

• But, my God, where will it end? With just one AUS franchisor?

Maybe yes. Maybe no. The new year promises to be very interesting.

PS: This is a secret so don’t tell anyone. Homework: Start collecting everyone’s home email for future bulk emails.