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toolsThe difference between the Licensee and Franchisee is clearly spelled out in the Tasti D-Lite UFOC or FDD.
Here is what is going to happen. There are approximately 45 licensees in Manhattan.
None of these licensees are listed in the FFD, under item 20. Counsel for Tasti D-Lite convinced the regulators that it was not necessary to list these licensees as franchisors.
Tasti D-lite plans on opening 44 "new" stores in New York. That means they plan on converting all of the Manhattan stores.
That is going to be the pitch: You might as well sign the franchise agreement, get $5,000 towards the cost of your renovation because if you don't we will just put a franchise right next to you. (Oh, and by the way -the poor franchisee schmuck's territory allows this.)
You are going to be given a short period - roughly a month to make this decision to convert or not.
You will not be given adequate costing figures about the cost of conversion - you will be told about all the wonderful advertising that is now coming your way.
You will not be told exactly how much of a mark up there is on supplies, other than a 5% kickback on paper supplies.
You will be rushed to make a decision. Join us or fight us as competition.
You will immediately lose 7% of your gross; which will pale in comparison to you new supply costs - which will kick in a year from now.
You will immediately lose the ability to offer other goods -this lack of choice will only become apparent in 1-2 years, once all the suppliers have been locked up by the franchisor.
Many of you will be encouraged to finance the conversion upgrade with promissory notes. To make things "easy" for you.
10% of you will unconditionally hate conversion, and will be derided.
10% of you will unconditionally love conversion, for you have the heart of a shill.
The rest will look around to see how the others are leaning. The shills will win converts, and then silently sell their stores at the peak of frenzy to get in on the latest New York craze.
Most of you will convert because a) you will be rushed to make a decision, and b) you will come to believe that "you might as well do it now" to avoid head on competition. And you will be wrong, so very wrong.
Michael Webster PhD LLB
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