Sotos LLP: The McDonalds of CDN franchisee lawyers?

November 27, 2009

I have learned directly, personally, in-their-armpits relationships from the best in franchising.

Ted Gorski, McDonald’s, CollegePro Painters, Nutri-Lawn, Tony Martin, Canadian Imperial Bank of Commerce, Sam Grange, John Lorinc, Paul Herminston, Katherine Swinton, Canadian Franchise Association, Country Style, Gillian Hadfield, Michael Webster, Jay Harris, etc. They’re all brilliant in their areas of expertise.

When I got into a corner and thought I needed legal help I hired the best I couldn’t afford. John Sotos was my on-and-off-again lawyer from 1998 t0 2000 and I learned a great many things from John and his partner David Sterns. Both John and Michael told me to look at and talk to the banks. Oddly enough, the first lawyer I talked to about franchising in 1982 is now a Ontario Superior Court justice in Barrie. I like lawyers but they’ve got to cover their rent too, you know!

Many franchisees want to fight.

That’s good…and bad at the same time.

Many franchisees think in terms of black and white; now or never; us/them.

That’s good…and bad at the same time.

Many franchisees would rather choose a “white knight” professional instead of a group of franchisees plotting their own course.

That’s not good…and really, really horribly bad.

The McDonald’s U.S.A. president described his corporation as a real estate company with an interest in hamburgers. Let me repeat: McDonald’s is a landlord (to franchisees) with an interest in fast food.

I learned that the economics of modern litigation is very similar.

  1. The franchise industry legal cash flows = 95% by franchisors,
  2. Once the retainer is paid any consultants are shown the door (only one expert, please),
  3. Franchisees are one-shot clients (v. repeat business for franchisors),
  4. Disclosure laws are a God-send for billable hours, and
  5. The industry has a very, very long memory for those that oppose it’s interests.

All lawyers are businesspeople that operate in a near-monopoly on certain words and concepts.

Learning these terms is not hard if you have (1) a learning tool and (2) a willingness to face some difficult facts.

Most let their emotions rule their decision making (ie. denial and fear) but in their defense, aren’t really conscious of doing so. They’ve been conditioned to be on their knees and look to Daddy for acceptance.

Education is the only way out.

The Ballad of Ted and Liz Gorski

June 11, 2008

Ted and Liz Gorski were the first franchisees I knew. I was 13 and started working at their Barrie McDonald’s in 1972.

I remember with great fondness the chaos and friendships I made. They all revolved around the golden arches and the Gorskis. Liz would get all of the crew in a crisis state whenever a Winnebago motor coach showed up the Bayfield Street store. McDonald’s president George Cohon used to tour around in a McD winnebago.

I knew there was conflict between franchisor and franchisee since I was an All-Star fry guy. One day I came to work and saw some workmen taking carting away the large McD “lollipop” sign.

Mr. Gorski, what’s happening? Somebody is stealing your sign.

It’s okay, Les. It’s just Claude Neon and they’re just taking it away. Don’t worry: it’s just a disagreement with McDonald’s.

I worked off and on for the Gorskis through high school and was off to university in 1978. My first year results were not the greatest so it was natural for me to come to talk to Ted about it. He said he needed a manager trainee for the Orillia store #3254. By that time, he had three stores: Barrie, Orillia and Midland.

I started to work in Orillia and we had a great store: Triple A rating and a 30% annual growth rate when the breakfast program was being introduced. I went to the Basic Operation Course (BOC) and scooped Temgo Inc.’s first “Silver Hat” (course members vote on who they feel has the greatest leadership skills).

The Barrie store was even a higher volume store, routinely within McDonald’s Canada’s Top 10 with a dynamite management team lead by Tim Adair, Rob Clark, Bobby Dewar, and others.

The Midland store was another story.

It was very low volume and, seemingly unknown to Ted & Liz, the management was extremely weak. Glen Marling was the most difficult and plain strange manager I have ever met. A whiz at equipment but…

His assistant manager Randy was up to no good. As it turned out, he had a serious chip on his shoulder about Liz and was actually encouraging the crew kids to certify for a union.

I think it was only the second time in McDonald’s CDN history that a store was in the process of unionizing and, boy, did they react!

I don’t know the details, but by August 1980, Ted and Liz were no longer franchisees and I reported to McD field consultant. Within a few months I got to meet the new Orillia franchisee (Roy Pefrin) while Jim Blackwell got the Midland store. Head office kept the Barrie unit for themselves.

I have never talked about this to Ted and I doubt I ever will. But I do know that almost killed him.

Ted was pushy alright. He was the first president of a fledgling independent franchisee association. I do not believe McD Canada has had one since. I believe, because of his aggressiveness, Ted was denied the Collingwood store.

Fast forward to 1998, I was invited to contribute to a dispute resolution committee with Ken Fong, then vice president, legal of McDonald’s. He remembered Ted and Liz very well, even after 18 years.

Ted and Liz had one large cheque from the eight years or so they spent as McDonald’s franchisees. But Ted showed me that often money costs too much.

When I found myself in a tight spot in 1992 to 1998, I often thought of the great lessons Ted and Liz taught me. If anyone asks me, it was the Gorskis that they taught me how to treat people and to build a team.

<span>%d</span> bloggers like this: