Liar Loans deals: business brokers and specialized franchise bankers

The lie in the government guaranteed loan: inflated future sales and 6 times value on assets (leasehold and equipment).

Predatory franchise lending program

1. An unsophisticated CDN buyer is steered by the broker to a specific Schedule 1 banker who can “make the deal happen”.
2. Industry Canada application form/logo used as bait, as credibility.
3. Loan paperwork is only ever seen by government auditors IF a claim is made.
4. Liar loans are never claimed as a loss to Industry Canada (above 3% interest, admin fees, $ above real value more than make up for reckless underwriting).
5. Deal is papered within 24 hours including compliant appraisal.
6. Bank’s money in; franchisee’s money in.
7. Money out of franchisee’s current account: a. to franchisor who pays broker and b. bank’s own treasury.
8. Sales never show up. Value of franchise on a cash flow basis is negative. Franchisees subsidize and burn through rest of life savings.
9. Franchisor manages the inevitable business collapse.
10. Bank’s receiver sells assets at 15% of previous value within 18 months to franchisor.
11. Consortium repeats steps (go to 1).

• see Andralex Food Services Inc. and Country Style Food Services Inc., Country Style Food Services Holding Inc., Jeff Young, Canadian Imperial Bank of Commerce, Sue Fedorink and Roger Noble

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The Apprenticeship of Les Stewart

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.

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.), TupperWars, SLAPP, 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 System, and
• LinkedIn

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