Huis: A Solution for the Murky Waters of Franchising

On my last news assignment I had a sort of epiphany. The answer to the murky waters of buying and operating a franchise in America is the Chinese hui. That revelation came after a long drive with little sleep.

What is a hui, you ask?

A hui is a Chinese business association, a sort of Rotary Club on steroids of the kind that create the amazing Hulk. It is a local chamber of commerce that is restricted to one's own dialect and village area. Members know each other and their family back home. The object is to help one another get rich.

Discriminated against, and in hostile developing countries in which it was difficult to determine a good investment from a bad, overseas Chinese thrived through their huis.

"Phooey on hui. Who needs old huis in modern America any way?", you might ask.

We do. This little known type of organization may just offer the holy grail to the murky waters of knowing what franchise to buy.

I participated in a few hui business associations of overseas Chinese in Southeast Asia. I also saw the old hui meeting houses as a youth in Hawaii. Back then I called them "hooeys". Then as an adult I learned two dialects of Chinese and realized their proper pronunciation. In Cantonese—wui and in Mandarin it is hwei. The word connotes the act of  meeting or associating. Sometimes it is translated as society, such as the Ming Lee Society.

There are the famous and mighty merchants of Chaozhou, a small region in Guangdong province, China. Then there are the Hui of Fujian, who were famous for their thriving business communities stretching far and wide outside of China. There were also the Sheunde overseas Chinese and so many more.

When there is a lack of a transparent market and where locals discriminated against the Chinese, the huis thrived. So much so that overseas Chinese dominated the business community throughout Southeast Asia, sometimes to the resentment of the locals.

Where basic information on earnings of a company and where bad behavior was easily swept under the rug to take advantage of the Chinese, huis excelled in giving their business members a leg up through better intelligence.

How?

Well, hui members are like family. A member might ask over a cup of tea in a round table discussion, "Ah-Chung, you have sources there, how much does this company really make?" Or he might query, "Aiyah, what is the real scoop about Gudang Garam tbk? I am thinking of partnering with them."

Fellow members would be brutally frank in their answer. There was little propaganda. After all, a job is just a job, but the hui consisted of family, your own unique language dialect (there are thousands) and one's own local culture and support structure. Giving out bad information for short-term gain was not worth the consequences.

The society would gradually gather terabytes of information (that's a lot in computer terms) that a lone investor would really not be able to discover on their own. Not in those environments.

The society took care of its own.

If a member gave out bad news, well, his reputation would shrink. If he gave out b.s. on purpose for his own short-term gain, he might be dinged something awful. Something terrible in such a small society. The management of reputation was taken seriously because the long-term repercussions for losing one's reputation impacted one's pocket. Business opportunities and support networks that were so needed in a hostile environment could dry up.

Turn now to the 21st century.

I have seen with my own eyes an independent franchisee association that has performed this same function. It is thriving and protecting its members, training them, gathering them in socials, and opening up investment opportunities. Its members seem to have a higher level of understanding of the playing field compared to those who are outside - of what companies are fair and a handle on how much can be made.

This organization is a modern hui and is an example of the potential power of an independent franchisee association. From small roots, they have now grown into a major supplier of investors and operators for an industry segment. (I won't name names here but you can bet I'll be looking more at them and others to report what I find.)

Enter another player, albeit one that is limited to information.There is a new technology that allows the networking and crowd sourcing of intelligence. It provides an online reputation management system just in case there are members of the club who want to give you bum propaganda. The new technology can include people from outside the same dialect and village. It is called a social networking platform for business.

We have a name for it—Blue MauMau. It is open to all.