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Alternative Dispute Resolution (ADR)

In franchising, mediation and arbitration is used very infrequently as an alternative to court. The main reason is that the franchisor is more than happy to rely on their economic dominance by outspending the impoverished franchisee. Why would a franchisor do anything when they’ll win the war through attrition in the end? Mediation and arbitration can also be used to cynically scout out the opposition’s case.

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Arbitration

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Alternate Dispute Resolution

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Paul Steinberg's picture

Role of franchipedia

MauMau has several sections, and while conclusory statements and advocacy are appropriately put on the Blog and the Comment sections, I would suggest that the Franchipedia section entries should present information which is (1) factually accurate and (2) presents all viewpoints.

The "A" in ADR is for "alternative", not "alternate."  I think that by "used very infrequently" you actually mean to say "used very frequently."

As to the substance: ADR has both good and bad aspects, and the implicit assumption that litigation is more advantageous for the franchisee is not necessarily true. In addition, the implication that ADR is always more expensive for the franchisee is not necessarily true.

Les Stewart's picture

Favourite Keynes quotes

These are some of my most welcomed aphorisms of John Maynard Keynes.

I'd rather be vaguely right ­ than precisely wrong.

Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.

Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.

In the long run, we're all dead.

There is no reason why we should not feel ourselves free to be bold, to be open, to experiment, to take action, to try the possibility of things. And over against us, standing in the path, there is nothing but a few old gentlemen tightly buttoned-up in their frock coasts, who only need to be treated with a little friendly disrespect and bowled over like ninepins.

I tend to approach business problems from a business perspective and use a best case scenario approach (v. some idealized model).

The test of any micro- or macro- approach is simple: Does it tend to

  • increase or
  • decrease the average participation in a community?

Does it give or take from a community made up of sincere members?

Les Stewart, MBA :: industry analyst
www.cafo.net :: FranchiseFool :: the Wise say No

Good Information

I think this is good information for this site so post often because your post will disappear. I can see where you could be helpful in helping franchisees settle debt on leased and purchased equipment etc.. used in a franchised business, but you can't negotiate home equity loans or 403 loans, or leases, can you?
So often, in the DISTRESS sale, when the franchisee is trying to get out from under the personal guarantee on the lease and the franchise, and also avoid bankruptcy, they are willing to sell their assets for much less than they will owe to vendors to get out from the personal guarantee on the lease and the franchise.
Your service, then, would be invaluable in that this would probably be cheaper than having an attorney at $200 per hour solve the problem, or is your percentage greater than an attorney's fees.

Les Stewart's picture

Thanks for the Correction(s)?

Paul,

Yes. Alternative rather than alternate.

No. I meant what I said. Formal ADR is, in my experience, used very infrequently (maybe 1 per cent) when compared to

  • litigation (perhaps 2 per cent) or
  • collapse, giving in, abdication, surrender, capitulation (97 per cent).

Back out the Advocacy?
Paul, I find your criticism odd from several directions.

  1. I don't remember seeing a statement that franchipedia claimed to have a monopoly on impartiality or was the definitive encyclopedia. Considering the overwhelming franchisor hype, a little push back is too much, ya think? Surely, the reader will weigh all the biases before making their decision.
  2. So you're saying that: although there are plenty of franchisor focused definitions existing, you object to a franchisee-informed definition on Blue MauMau? Okay.
  3. This post went up on Jan 4, 2007: +4.5 months ago. A little spring housecleaning?
  4. I did not post this: Mr. Blue MauMau did from a listing of several terms from my pre-existing definitions from a Glossary section of www.cafo.net. He had asked me to add the rest of the terms but I hadn't gotten around to it yet.
  5. No one claims this is journalism: It's a weblog. Let's have the truth of the postings be evaluated by those that know their a*7 form their elbow. No one is forcing anyone to believe anything, that I can see.
  6. The media tradition of presenting both sides has its drawbacks. You see this all the time: First we interview the father of the murdered wife and, to be perfectly equal (but inherently unjust and unfair) then we interview the husband who killed her.
  7. In my mind, Blue MauMau will survive if it is teaching and shared-experiences focused. Strongly (sometimes intentionally, for teaching purposes, over strongly stated) opinions are needed to break through the industry information clutter, misrepresentations and equivocations.
  8. Most viewers are businesspeople, not lawyers. Let's not be the next Dance Band on the Titanic.

Overall
I believe Blue MauMau should be consistent in language, tone and vocabulary with the majority of franchise investors. There are lots of other arenas for the hype, isn't there?

This is not brain surgery. These are franchise business case issues where batting  600 is  a huge accomplishment. Let's not turn this into a snob- or snooze-fest.
 
I would suggest that nitpicking contributors will, over time, make Blue MauMau a much less interesting and thought-provoking place to hang out as posters (the few that identify themselves) decide to take their volunteer manhours elsewhere.

My experience is that crossing every t and dotting every i is great if you're a CPA but will  bore most entrepreneurs to death.

Riding down after the battle and taking runs at the survivors is not my idea of building communities. But what the heck would I know?

Les Stewart, MBA :: industry analyst
www.cafo.net :: FranchiseFool :: the Wise say No

One Day Les, you too will know truth!

Rationality is the recognition of the fact that nothing can alter the truth and nothing can take precedence over that act of perceiving it.

Ayn Rand, Atlas Shrugged
US (Russian-born) novelist (1905 - 1982)

Alternative Dispute Resolution

Thank you for response to my 'guest'input. My experience as a debt negotiator goes back to 1963. My organization stands ready to listen and counsul any one having business debt problems, always without obligation on either side! I can be reached at [email protected]

Paul Steinberg's picture

Eye on the ball

Well, we disagree.

A definition should be neutral, both on principle and for rhetorical effectiveness--when you start out on the extreme end of any argument, a lot of the audience you seek to persuade will discount your position in its entirety; they won't take the trouble to pick out the wheat from the chaff.

The larger issue is that we differ in what we seek to achieve. There are persons on this site who cheer-lead for franchising, and persons on this site who are unrelentingly negative.

I pay a lot more attention to those who take into account the opposing argument and understand that people of good will may have opposing viewpoints.

I have nothing against calling out zors for bad behavior. And I have nothing against telling prospective purchasers the bad with the good.

You had bad experiences with franchising, as have I.  But franchising, like most things in life, is more shades-of-grey than black-and-white. And anyone who has run a business knows to keep their eye on the objective.

I am not sure whether your objective is to improve franchising or to eliminate it, but either way I suspect that persuasion is best achieved by a logical presentation which is as factually accurate as possible.

Nuetral Definition in Franchipedia

What is a neutral definition of "churning" that could be placed in the Franchipedia?
Are you suggesting that definitions will vary as to the bias of the person writing the definition?
I, personally, was very happy to find the definition of "Churning" when I first started to research "franchising".
My experience was that everything I saw seemed so positive and happy and it wasn't until I read Les Stewart's definitions in his franchipedia that I felt that someone understood our pain and understood what was going on this industry.
I'm surprised, Paul, that you seem not to understand that it is difficult to be positive about negative experiences and if you are to help anyone to escape the negatives of franchising, your message must be negative.
Maybe, to solve your concerns, Mr. Blue Mau Mau will have to do as the dictionary does and have more than one meaning for those words and terms that are used in franchising. Mr. Blue Mau Mau could toss a coin to see which definition was listed first; i.e., the franchisee's definition or the franchisor's definition.
Would this solve the problem?

Alpha and Omega

In the end, every thread on this board on every topic on this board... ends with "churning."

And in keeping with our new tradition, I will respond as a "Guest" by praising the awesome brilliance of intellect which is the posting that I previously put up (oops, the posting which Paul Steinberg put up).

Obligatory closing:
Franchising is the work of the forces of Satan untied with the greedy capitalist franchisors who are engaged in the vast churning conspiracy to steal the funds of innocent franchisees with the assistance of the government.

FranSynergy's picture

Merriam & Webster state:

The concept is quite clear as defined by Merriam-Webster: 

Main Entry: def·i·ni·tion
Pronunciation: "de-f&-'ni-sh&n
Function: noun
Etymology: Middle English diffinicioun, from Anglo-French, from Latin definition-, definitio, from definire
1 : an act of determining; specifically : the formal proclamation of a Roman Catholic dogma
2 a : a statement expressing the essential nature of something b : a statement of the meaning of a word or word group or a sign or symbol <dictionary definitions> c : a product of defining
3 : the action or process of defining
4 a : the action or the power of describing, explaining, or making definite and clear <the definition of a telescope> <her comic genius is beyond definition> b (1) : clarity of visual presentation : distinctness of outline or detail <improve the definition of an image> (2) : clarity especially of musical sound in reproduction c : sharp demarcation of outlines or limits <a jacket with distinct waist definition>
- def·i·ni·tion·al  /-'ni-sh&-n&l/ adjective

If the BlueMaumau Franchipedia is to be taken serious as a reliable resource then it must be as Paul has explained Neutral and Factual.  Improvement in franchising can not be accomplished with further division of Franchisee's and Franchisors definition's.  It must be the definition as used in Franchising.  Nothing positive comes when franchisees and franchisor point fingers at one another.  Growth and Prosperity for both franchisee and franchisor occurs when the two work together, the exact opposite occurs when they do not!  As in most communities a common language greatly contributes to working together.

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!

Neutral

The definition of definition does not require neutral.  Expressing the essential nature is a requirement and explaining or making definite and clear is a requirement.  The stigma associated with churning cannot be removed by a crafted definition.  Transfers not caused by the churning nature of a franchisor should not be labeled as such.  The indifference of a franchisor about the success of its franchisees can result in a simple failure of a location that is not churned.  That indifference would ultimately lead to limited franchise growth if not failure of the franchisor.

Ha ha, evil ha

Yes, but you forgot that every time a franchisor gets a franchisee to sign a franchise agreement, a kitten dies. 

That is the most brilliant work of genius I have ever seen, showering us with the yummy goodness of rampant anti-franchising zeal. 

Taking your sarcasm for what it is, I am concerned about the future of this site.  Rather than attempt to converse about practical or effective means of combating the potential perils of franchising, every post inevitably ends with "churning."  Yes Item 20 needs to be fleshed out more.  Is it going to happen in the near future?  Likely not.  So rather than come up with a mechanism to best decipher what is disclosed in the interim or even to determine which organizations are making the best headway with addressing this issue, the most logical solution is obliviously to disgorge the same diatribe ad nauseum.  Throw in a dash of ad hominem attacks on anyone who has the temerity to question the gospel of "All paths lead to churning," and voila!  You have the "truth" about franchising.

There are some things that I disagree with Paul Steinberg about (not that he would care), but I do admire his ability to be passionate yet fair about both sides of the franchising spectrum (high praise indeed coming from one who lives in a van down by the river).  I do not understand why one would oppose his idea that an "encyclopedia" of franchising terms should be neutral and conclusions about franchising be predicated upon logic and reason.  Perish the very thought!

I think some important dialogue and information is conveyed on this site; however, to me, recently there has been a growing trend to drown out opposition with vociferous regurgitation and unreasonable attacks, rather than win them over with logic and reason.

 

Franchising and Satan

Thank you for your melodramatic last paragraph that may be closer to the truth than all this "praise Capitalism" and "praise greed" that you people throw out there to avoid any real discussions about the negatives of franchising, and the failure of the government to regulate franchising in both the interests of the franchisor and the franchisee.
What is your definition, Paul, of a neutral franchising term?

FranSynergy's picture

The 'C' Word & Neutrality

Defining Neutral:

not engaged on either side; specifically : not aligned with a political or ideological grouping <a neutral nation> 

I stand by definition should be neutral; otherwise it becomes what might best be described as an individual's or entity's personal 'Glossary'.

I do not believe that the 'C' word was being used in this discussion.  Factual definitions are not intended to remove the stigma associated with the word being defined.  The definition of RAPE does not nor is it intended to eliminate the stigma associated with the word. 

I do agree, and it bears repeating, (I'll Paraphrase): Franchisors who are indifferent to the success and failure of their franchisees may profit in the short term, but sustained success is far out of their reach! 

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!

All that talk! Neutral Franchising Terms

Bubba --- You are in good form tonight. But all that talk and nothing constructive about neutral franchising terms! What is the definition of a neutral franchising term? How does one get neutral conclusions about franchising that are predicated upon logic and reason? Whose logic and reason?
I think you were just happy I posted amd missed me.

FranSynergy's picture

Bubba...

Bubba, glad to see you've become a REGISTERED - Dues Paying - Card Toten BlueMaumau Member!!!! 

Your Post was Sad (kittens); Funny (Showers of Yummy Goodness); and otherwise....

FACTUAL, RIGHT ON, ON TARGET, DEAD ON, CORRECT, POSITIVELY ACCURATE!!!!!

I was however surprised to learn that you've moved out of the Tent, and into a VAN.  You probably have a much better view of the river now, with the elevated status of the van.

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!

What about the forum's need for more churning discourse?

I'm jonesing for more churning talk! I've gotta hunger that just won't be stop without more of that churning mojo.

A Kitten Dies or a Fat Cat Meows

You got that wrong Bubba! Everytime a franchisor gets a franchisee to sign one of those one-sided, self-serving, unconsciounable contracts, A FAT CAT MEOWS and celebrates in his litter box.

Paul Steinberg's picture

Neutral definition

The definition was of the term "Alternative Dispute Resolution". ADR is an alternative to judicial (court) resolution. Period.

Beyond that, there are pros and cons to ADR. For example, ADR is often much more expensive (con) but can enable the parties to discuss and resolve matters not capable of judicial resolution (pro).  ADR can provide for the private resolution of disputes so that you don't air dirty laundry in public files that are in many cases available on the Internet for eternity (both a pro and a con).

There are also a lot of misconceptions about ADR, including the one put out by the IFA spokesman last month claiming that the IFA favored ADR since it meant less money for lawyers (not true), or the idea that the arbitrator must follow the law (not necessarily true), et cetera. All of those things would be properly discussed in a balanced presentation of what ADR is about.

On Franchipedia, we should take into account both sides, even if we don't agree with the other side.

As to "churning"... well, we've kind of talked that one to death, and since I stayed out of that one so far, I'm not going to stir the pot. My comment was directed to "ADR" and not to "churning"

This one's for Bubba, my idol and his nemisis "Guest"

Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns--or dollars. Take your choice--there is no other.

Ayn Rand, Atlas Shrugged
US (Russian-born) novelist (1905 - 1982)

Guest this is for you, my gift...

America's abundance was not created by public sacrifices to "the common good," but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes.

Ayn Rand

Thank you! Ayn Rand's Philosophy

She said her philosphy was the "concept of man as a heroic being with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only abosolute."
But I'm sure she didn't intend to license people to steal!
This is my gift to you!

You are certainly no Ayn Rand

Maybe you should read her books?