(false) Patriotism is the last refuge of a scoundrel.

September 16, 2010

Is preying on a military  family’s post-service vulnerability the sign of insincerity per se?

From a New York Times classified ad:

Come join a network that has pioneered and led the industry for 30 years. The UPS Store is the #1 Business and Postal Services Franchise for the 20th consecutive year (2010 Entrepreneur Magazine’s Top 500 Franchise List). The UPS Store is the #1 most popular franchise with veterans in the IFA’s Vet-Fran Program (2008 International Franchise Association). With over 4300 The UPS Store and Mail Boxes Etc. locations nationwide, our network continues to lead the market.

Baiting the Fish: Note how Cialdini’s “Weapons of Influence” are used to lure pensions and life savings capital:

  1. New York Times (authority of a traditional media outlet),
  2. Entrepreneur magazines’ Top 500 franchises (McMedia: authority for the unskilled and unaware),
  3. 30 years… (franchisor success means individual franchisees will succeed, see Dunning-Kruger above),
  4. Vet-Fran program (liking: acceptance, a member of the fraternity, endorsed/vetted by the “government”),
  5. International Franchise Association (expertise/authority, funded 100% by franchisors and their friends), and are especially
  6. vulnerable to the authority siren song from 2 directions: vivid, personal success born from supporting a strict command-control structure  while lacking the airy-fairy concept of discerning legitimate from illegitimate sources of authority.

Vets believe very strongly that people get what they deserve in this life (Just World fallacy) and would, therefore, strongly but heavily discount any non-authority based advice on a pre-sale basis. Going on “civvy street” is one of  life’s major transitions involving new/strange: work, employer, location, one/two incomes, schools, income levels, physical/mental challenges, diminished family/friend support.

Setting the Hook: The next marketing stage is an “exclusive” invitation to a very sophisticated, one-day seminar at head office (a “discovery day”). Just like in a gambling casino, these environments are very, very well thought-out, for one side’s benefit only. A real investigative journalist (John Lorinc) published an excellent description of this circus in a real media outlet (The Globe and Mail) in 2000. The Sure Thing describes the extremely effective individual and social psychology that allows predatory franchising to flourish in plain sight.

I’m glad to know great spirits like Peter Thomas or Carol Cross who, by making wise choices for their future, help me make mine.

Samuel Johnson 1709 – 1784

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The science of persuasion

August 28, 2010

Robert Cialdini‘s work is important to understand.

His 6 Weapons of Influence:

  1. reciprocity, (giving a United Way pin)
  2. scarcity, (limited quantities available)
  3. authority, (basketball shoes)
  4. commitment,
  5. liking  (Tupperware example) and
  6. consensus (social proof).

Understanding these techniques goes a long way to understanding franchising.


It is the nature of mortals to kick a fallen man.

August 27, 2010

An excerpt from Professor Melvin J. Lerner’s book, The Belief in a Just World: A Fundamental Delusion.

The central theme of the “Belief in a Just World” theory creates a rather chilling image of humanity. It begins by describing how we live in a society that tolerates the widespread suffering and deprivation of innocent victims. Then the evidence is added that, for the sake of our own security, we either avoid these injustices, or we add to them by finding reasons to condemn the victims. We do this for quite understandable reasons. We want to – have to – believe that our world is so constructed that terrible thing happen to people who deserve them because they were “terrible” to others.

When our behavior is described in this bald, dramatic fashion, it becomes clear how disturbing such knowledge must be to our self-image and to our sense of security. To the extent that the findings and the metaphorical description of the relevant processes are persuasive, then we must feel degraded. Not only is there the implication that we may be directly responsible for adding to people’s misery by our rejection, but the reasons for our actions seem not only selfish, but rather petty and simpleminded.

That is a very difficult pill to swallow, and an immediate reaction is that I am a much better and sensible person than that. I am not that selfish or callous, and certainly not so naive as to try to maintain a fairy-tale image of my society. Only a fool would try to pretend that it is a just world, and it would take a sick fool to condemn innocent victims in order to protect such a foolish belief.

It is with thoughts such as these that the exploration began. At its best, it took the forms of fascinating experiments, which served to clarify and elaborate the processes underlying this belief in a just world, an our reactions to victims. And if the analysis of these efforts is correct, they produced a completely unintended bonus as case studies of the motivations underlying the “Belief in a Just World” – as this belief appears in all of us, even social psychologists.

From Chapter 6, Reactions to the Belief in a Just World Theory and Findings: The ‘Nay-Sayers’

Ever noticed some of the most severe critics of “disgruntled” franchisees are other franchisees themselves? Most usually shown through contempt and thinly-veiled hostility but through isolation also.

Everyone’s internal tendency to blame the victim for their misfortune leads, in my experience, to the difficulties and quick dissolution of any franchisee associations, other than the lapdog advisory councils.

Aeschylus 525 — 456 BC


Can an empire be saved by shaming investors like Ariel Buk?

August 15, 2010

There are costs involved in maintaining investor confidence and commercial relationships. Some people need to learn to “take one for the team”.Ariel Buk and Sonia Karabin may need to understand that they should cool down, be quiet and go away about losing a $85,000 deposit on a non-existent Ontario, Canada franchise. They and, by extension, the many hundreds of other “failed franchisees” need to be taught their role in this confidence game by the industry stakeholders: take one for the team or risk being shamed.

1. James Daw presents the story in yesterday’s Toronto Star article,  Ice cream dream becomes nightmare about Mr Buk’s experience with Piazza Gelateria and Café. This is shrewd. For example, Mr. Daw opines:

They [husband and wife] should have looked more closely at the business opportunity, and their decision to use mainly borrowed funds after Buk had lost his job.

They should have considered the minimum $300,000 cost of a lawyer to sue for a refund if things went wrong, and the chances of recovering anything from a relatively young numbered company.

2. Robert Cialdini lists authority as one of Six Weapons of Influence. My experience is that attorneys are given a  lot of authority by new Canadians. Many of us see past their pretensions, BS and fear. [Examples of authority.]

Ben Hanuka of Davis Moldaver LLP is quoted as saying:

“Very few mom-and-pop franchisees ever go to that length (of hiring experts to research a franchise opportunity),” says Hanuka. “It sounds too complicated to them.”

All it well with the world the reader is assured. Go back to sleep because these people get what they deserved. The blame lies with:

  1. the anonymous, individual “other” (mildly retarded immigrant scapegoat) deserved what he got (“your success follows from your blind obedience to authority” dogma)  and not that
  2. stakeholders align their self-interest in maintaining a facade of legitimacy: not a fake, or a Potemkin village scheme which has preyed upon identifiable groups, in plain sight,  since at least 1971.

Social Psychology-based Hypothesis: Elite stakeholders deflect systemic wrongdoing by using the largely-internal mechanisms of On Cooling the Mark Out by Erving Goffman (shame-humiliation effect) while using the public’s widespread fallacy of the Belief in a Just World, BJW (Melvin Lerner, retired University of Waterloo, Canada) in the country’s largest daily newspaper.

Every dying empire resorts to displays of public humiliation.

Why were people crucified in Jesus’ time?
Crucifixion was a Roman custom used on the worst malefactors and rebellious slaves. Judea was a tributary to Rome at that time. It is recorded by the Jewish historian Josephus that after the last rebellion of the Jews and the capture and razing of Jerusalem, the countryside was practically denuded of trees the Romans crucified so many. WikiAnswer

Detail: Crucifixion was often performed to terrorize onlookers into submission. Victims were left on display after death as warnings. Crucifixion was usually intended to provide a death that was particularly slow, painful (hence the term excruciating, literally “out of crucifying”), gruesome (hence dissuading against the crimes punishable by it), humiliating, and public, using whatever means were most expedient for that goal. Crucifixion methods varied considerably with location and time period…

While a crucifixion was an execution, it was also a humiliation, by making the condemned as vulnerable as possible. Although artists have depicted the figure on a cross with a loin cloth or a covering of the genitals, writings by Seneca the Younger suggest that victims were crucified completely nude. When the criminal had to urinate or defecate, they had to do so in the open, in view of passers-by, resulting in discomfort and the attraction of insects. Despite its frequent use by the Romans, the horrors of crucifixion did not escape mention by some of their eminent orators. Cicero for example, in a speech that appears to have been an early bid for its abolition,  described crucifixion as “a most cruel and disgusting punishment”, and suggested that “the very mention of the cross should be far removed not only from a Roman citizen’s body, but from his mind, his eyes, his ears.” Wikipedia

Humiliation is the most unpredictable, violent and destructive human emotion. It can result in many types of loss (see Bob “Bhupinder” Baber, WikiFranchise.org)


Evil in franchising? Look to the system not the individual

August 4, 2010

Social psychologist legend Philip Zimbardo makes an excellent point in this TED video.

He asks the question: Does evil reside primarily in…

  1. the apple (the individual),
  2. the whole barrel of apples (everything) or
  3. the barrel-makers (power brokers, the system, situation)?

I have concluded abuse within mom-and-pop franchising has evolved and resides mostly with the power elite: the franchise bar, the Fixers.

This is why modern franchising is Unsafe at any Brand.


Belief in a Just World, BJW: the fundamental franchising fallacy

July 22, 2010

Want to know the single greatest delusion that creates a misunderstanding of modern franchising?

Much greater than even the confirmation bias?

The Just-world fallacy:

…the tendency for people to believe that the world is just and that people therefore get what they deserve and deserve what they get.

Winning franchisees attribute their “win” to their goodness, hard work and skill:

If you have this belief, and something good happens to you, you may conclude that the world is just because you are a good person and so good things happen to you.

All franchisees blame the victim franchisee:

In the same way, when you see something bad happen to someone else, you may conclude that they did something to bring on this bad event. Otherwise, it would not have occurred since the world is a just place.

You see it at play every day.

Wikipedia discussion.


When high risk is disguised, franchise investors behave more recklessly because they are human beings

June 18, 2010

Perceived risk.

Big Franchising tries to minimize the public’s perceived risk of buying all franchises.

They:

  1. anchor their false legitimacy in “badges of authority” (FTC, banks, trade associations that claim to have a credible Code of Ethics or Ombuds program, justice system, toothless regulation and disclosure laws, government guaranteed loan programs, etc.),
  2. blame the fraud victims for their situation (ad hominem attacks),
  3. goes after military pensions by discounting worthless franchises (VetFran) and
  4. trot out the most blatant franchisee shills imaginable to hype foreign predatory systems.

Potential franchisees respond by buying higher risky offerings to satisfy their pre-existing tolerance for risks (see Target Risk: free online book by Gerald J. S. Wilde)

This is why franchising remains much, much riskier than independent businesses.

And getting riskier.

And without effective safeguards, franchising is Unsafe at any Brand.


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