Is confidence in all franchising past the Tipping Point?

March 19, 2010

The CEO and president of the International Franchise Association, IFA announces his retirement.

And then their board of directors announces that it’s looking for his successor?

  • Hello…does anyone talk to each other on the premiere franchisor-dominated trade association any more? Nobody cared on the board of directors enough to do anything until Matt Shay went public?

Don over at Blue MauMau makes a great point in his Importance of succession planning.

It is a healthy sign when a board of directors is strong enough to carry out one of its most fundamental jobs, making sure there is a leadership successor.

In the hidden world of the board room, it is a rare outward sign of possible cronyism or a weak board when it has not carried out this function. A vacuum of leadership in a trade association can be disconcerting to its membership. It can be an incredible opportunity for competitors.

The IFA announced yesterday that it has hired an executive search firm—probably with “urgent”, “critical” and “HELP!” stamped all over the job description packet—to find a suitable candidate to replace its outgoing CEO, Matt Shay. He has given his month notice, April 16.

I added my two cents worth in Excellent point on Leadership continuity.

I suggest every half-baked, local not-for profit plans for their leaders’ recruitment, training and inevitable replacement. Leadership planning is the core competency of any boy scout troop let alone the “brain trust” of everything that goes bump in the night in franchising worldwide.

It seems the IFA Board is in crisis. A crisis, I suggest, that has been triggered by almost no new sales or re-sales in a recession (contrary to past cycles). They denied it first, got angry at scapegoats, bargained with Uncle Tom social medias, sulk/in a funk and then will be dragged unwillingly into accepting a new, higher-quality business model (see death stages).


The elite’s catching on: their dinosaur practices has pushed the industry past the Tipping Point with investors’ confidence.

And they realize they are powerless because the internet’s reputation mechanism lacks an off switch.

John Q. Public investor is waking up (becoming conscious) to the fact that modern franchising is Unsafe at any Brand.

  • This is very good news for franchisees wanting to co-operate with each other and good faith franchisors.

Not so much for the opposite: house negro franchisees and predator franchisors.

1.7 million Brothers can’t be wrong: Unsafe at any Brand

February 1, 2009

For 32 years I have been carrying around this type of card in my wallet.


Another 1.7-million Catholic men are doing exactly the same thing,  at this very moment in several countries. We call each other Brothers.

They like me are Knights of Columbus. We are men who choose to live their lives in support of these principles:

  1. patriotism,
  2. charity,
  3. unity and
  4. fraternity.

We are not only a service club or some goofy society with a secret handshake. We do not forget what happened when we rode the goat. There is nothing to be concerned about from even the least of our Brothers: unless you’re wanting to harm someone.

You may not know me directly, but I imagine everyone reading this post, knows someone like me.

Let them know from me that they shouldn’t let anyone buy a franchise. I will explain in detail to them but You’d grab some stranger if they were about to step in front of bus, wouldn’t you?

I was a Columbian Squire for four years before becoming a Knight.

Columbianism started with a young priest wanting to help Irish widows.

forever Jung and Half-formed boy Predators

January 28, 2009

calvinhobbes1Why won’t these little worms just grow up?

Enough is enough, already.

Yes, we know you’re tough and smart. We know the gym class shower room was demeaning. And yes pulling the wings off flies does hold some amusement value.

  • But seriously: Get some help in the second half of your life.

There are some people (mostly male) that think the worst of people, are never satisfied with any accomplishment and would rather kill something rather than share a little bit (let alone collaborate).

  • They’re so emotionally shut down and compartmentalized that all that’s left is fear and anger.

It’s been my experience that modern franchising is practiced by fearful men who lack the confidence and maturity that should have been formed during their boyhood. They’ve never learned to trust themselves, mask their inadequacies with arrogance and accumulate wealth but are unable to enjoy the use of those resources.

They act-out as if they were european dragons or worms (from the old English): like Smaug of The Hobbit fame: only hoard and destroy, are master hynotists, believe themselves to be invulnerable (although they are not), have a dry but cruel sense of humour with an “overwhelming personality”; their Achilles’ Heel is always hubris: overweening arrogance, superbia.

They try to deny part of their nature but it keeps popping up, especially when their Divine Right to Decide is questioned by lesser mortals.

One Model: Within every individual, there are two forces, world views or archetypes at play: every male has within him a female side, and every female has male characteristics within her.

Carl Gustav Jung identified unconscious forces called anima and animus.

  • anima is the unconscious feminine component of men and
  • animus is the unconscious masculine component in women.

Jung believed that the anima and animus act as guides to the unconscious unified Self, and that forming an awareness and a connection with the anima or animus is one of the most difficult and rewarding steps in psychological growth.

Jung reported that he identified his anima as she spoke to him, as an inner voice, unexpectedly one day.

Often, when people ignore the anima or animus complexes, the anima or animus vies for attention by projecting itself on others. This explains, according to Jung, why we are sometimes immediately attracted to certain strangers: we see our anima or animus in them. Love at first sight is an example of anima and animus projection. Moreover, people who strongly identify with their gender role (e.g. a man who acts aggressively and never cries) have not actively recognized or engaged their anima or animus.

Jung attributed human rational thought to be the male nature, while the irrational aspect is considered to be natural female. Consequently, irrationality is the male anima shadow and rationality is the female animus shadow. (Analytical Psychology)

When a half-formed male is seriously confronted, he becomes unglued: screaming, cursing, the issue becomes a life-and-death struggle against the Questioner. I’ve seen this type of tantrum up close and you tend not to forget the experience. I think every franchisee has experienced this.

  • It can be a franchisor, a lawyer, a politician: it doesn’t matter (see Big Franchising).

Irrationality is the shadow side of an unbalanced psyche and it gets played out in volcanic bursts of rage. Innocent questions are heard by the child as if you were trying to kill them. (And in a psychological sense, you are: you’re calling them to put aside their childish ways.)

  • In franchising, this acting-out these man-boys, empowered by iron-clad agreements that are the same across all systems,  have the 100% unilateral right to bankrupt you and drive you into a mental hell.

All of the rights are on one side: for mom and pops, franchising is Unsafe at any Brand.

After the honeymoon is over and you’ve signed on for multiple, self-reinforcing monopoly relationships, your economic gender assault can occur with very little warning or defence.

Calvin and Hobbes

Newsflash: Lawyers will squash human rights to protect future earnings

October 16, 2008

A current Blue MauMau headline seems to scream: ABA Lawyers Teach How to Silence Franchise Blogs.

Ho hum

This is an annual lovefest on the latest and greatest ways to legally protect those that profit from screwing mom and pop business investors around the world (Oct 15 – 17, Austin, TX, USA).

A workshop for franchise attorneys will kick off this week on how franchisors can hush unwanted voices on the Internet. The workshop is entitled “New Media Threats – Responding to Cyber-Attacks” and will be held at the 2008 American Bar Association Forum on Franchising. The Forum on Franchising is an annual meeting in which franchise attorneys gather to discuss developments in franchise law.

And further:

The description of “Workshop 13” is completely and unabashedly concerned with covering up confidential information from franchisees and customers that the franchisor does not want released on the Internet.

With over 95% of the legal fees being paid by franchisors and those that profit from the current form of institutionalized indentured service (in debt bondage), this is freaking news?

  • Sorry, people. Joe Lunch Bucket is way ahead of the alleged experts on this one.

When I asked Lanny (a retired truck driver who was a landscape customer of mine) what he thought of franchising, this is what he said:

It’s a little dodgy, isn’t it?

You’re right, Lanny.

Selling Poo-filled franchise systems likely 100% Legal

August 20, 2008

Michael Webster brings up a good point in his article Can You Sell an Unproven System as a Franchise? It is worthwhile looking at Janet Sparks’ original report in Franchising Times.

When discussing a pending Colorado lawsuit, I tend to agree with Michael’s prediction:

I believe that the law in this area will turn out to be, in essence, that you can franchise any piece of poo, as long as you “disclose” in tricky legal fashion that you are a piece of poo.

It is of course a stupid law that would protect investors in franchise systems [franchisors] by allowing any old piece of poo to float through the system – but such is the dedication to the power of disclosure laws, much like the efficient market hypothesis, our regulators and legislature will continue to allow indentured servitude as long as it properly disclosed.

This is the state-of-the-art of legal protection in the home of franchising. And they are very aggressive in advocating for this lack of accountability for franchisors around the world.

Michael again:

I think that Seid‘s position is legally correct, [franchisors have zero duty to provide a proven system] even though both immoral and absurd.

But that is the problem prospective franchisees face – any piece of poo wrapped in a franchise agreement, and FDD can be sold for hundreds of thousands of dollars to the unsuspecting public who believe that they are buying a “proven” system.

Disclosing you are a worthless piece of poo is all the protection that Big Franchising is willing to give you.

Go ahead and choose your Type of modern franchise [see Bristol Stool Chart, above]. Or…

  • For Mom and Pops, Franchising is Unsafe at any Brand.

If you knew how to separate the pepper from the fly poo, you’d start your own business and not share an industry rife with “proven” psychopaths. [social predators: lack of conscience & empathy, glib, bullying, violence]

Study those who Engineer the Trap

June 28, 2008

A senior solicitor with the New Zealand law firm Buddle Findlay made a very accurate observation about investing in a Kiwi businesses.

The solicitor (Kelly Foley) was quoted in a terrific little article by Tina Law at called Subway franchisee faces bankruptcy.

“The Subway chain follows standard New Zealand business practices,” Foley said.

Whenever I see professionals offering exceptional information, I will be sure to point it out to my loyal readers.

Why not give the article a quick read and see what you think of Ms. Clements’ situation? I assure you there are perfectly rational reasons [sunk costs, risk aversion, decision making biases, heuristics, persuasion, etc.] why so much capital was re-distributed since 2005.

This type of failure happens every day in franchising.

  • The contract gives the legal right to lie, cheat and steal the moment the 1st one was signed. [They knew it; she did not].
  • The capital was simply moved across the table over a relatively short time.

Disclosure: I lost $135,000 in 18 months in a stupid landscaping deal. Not proud of it but not ashamed for falling into a well-designed trap either. I’m the one with an M.B.A. [Master in Blind Ambition], had run 5 independent businesses before, took 6 months to complete due diligence at PriceWaterhouse, achieved 24% of my sales projections over 4.5 years, flamed-out at trial, paid the lawyers and then went bankrupt.

I’ll be coming back to this article because it shows how churning can happen to extremely intelligent, hard-working and rational franchisees.

  • You decide: Wanna invest your life savings in any New Zealand franchise?

[Oz? U.S.? U.K.? Canada?]

Am I am bitter? Sure; a bit but that still doesn’t mean I can’t have thought some of this stuff through after 10 years. Rx: Overconfidence Effect, Cognitive Biases

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