Marrying Your Franchisor

Posted Thu, 2008/01/31 - 00:59 by 20yearzee

The franchisor you marry may not be the same zor on your 10th anniversary.

You may wake up one day and wonder who that ugly person is in the bed next to you - they sure were good looking when you married them. This is why it is so important that you understand that zors have wide ranging authority to change just about anything connected to a brand, and zees have little to say about it. A zor can be sold to a company that wants to change the look and feel of an entire brand - and they can require you to spend the money to do so (even if you don't have it).

I've seen a recent situation where a new zor corporate owner decided it was time to change the corporate logo that had been the brand for over 20 years - a recognized logo that is known to just about everybody. (This guy may have been the guy behind new Coke years ago....I'm just guessing).

It will cost franchisees millions of dollars in an industry that has seen declining sales for almost a decade now. Franchisees arge that it will confuse customers and do nothing for sales, at a time when they are struggling. The response of the zor has been do it or you will be in default.

These franchisees married a good looking spouse, only to wake up to a monster 20 years later. They didn't change, but thier spouse did - and if you think divorce attorneys are expensive, try hiring a good francise attorney.

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127 Comments

Add DQ? by Guest

Submitted by Guest on Thu, 2008/01/31 - 19:36.

Don't know who exactly you're referring to, but I believe the Dairy Queen Zees are going through just such a scenario.

The physical assets that the ZEE owns are put at risk by Guest

Submitted by Guest on Thu, 2008/01/31 - 20:26.

It is in the nature of the binding and one-sided contract that ZEES sign, believing in love and profits, that eventually does them in.

A Franchisor Switch Not Always A Bad Thing by Guest

Submitted by Guest on Thu, 2008/01/31 - 20:44.

As a Quiznoose owner I'd love to see us bought out by a team of smart, dedicated professionals who know how to make money for the franchisees as wells as the corporation. If it was a bunch of thieves I don't see how we'd be any worse off than we already are - unless of course they had already mastered the Schaden playbook for ripping off franchisees and are smarter than the second stringers now running things.

No, not Dairy Queen ...... by 20yearzee

Submitted by 20yearzee on Thu, 2008/01/31 - 20:00.

but it really doesn't matter what industry it is in (in this case it's automotive service), the story is still the same, isn't it?

The devil you know by 20yearzee

Submitted by 20yearzee on Thu, 2008/01/31 - 21:00.

is sometimes the best devil. The next guy could be much worse!

A Bad Marriage by Guest

Submitted by Guest on Mon, 2008/02/04 - 07:56.

I don't name call like the poster above but I just can't believe how restrictive and one-sided that contract with Quiznos is. Outrageously high prices for everything from food to cleaning supplies that we have to buy, excessively high franchise and ad fees that we have to pay, and a whole list of examples where an expensive product is required for one slow-selling item - the $50 case of pepperjack cheese for the turkey sammie is just one example. This contract allows them to treat us as employees, gouge us, and gives us no recourse, legal or otherwise. Like most franchisees we know we're barely breaking even and consider this a very bad investment. My wife and I would like to urge anyone looking at Quiznos to rethink it. It's a life changing decision, and in our case, one that we would never make again.

the ups store by Guest

Submitted by Guest on Fri, 2008/02/01 - 21:32.

this scenario is all about mailboxes etc and ups.

You don't Know (what you don't know) by Guest

Submitted by Guest on Sun, 2008/02/03 - 18:36.

To the blind, everything is sudden. Just when you thought it couldn't get much worse in your journey, Boy oh Boy! (unskilled but also unaware) Please name one life experience where: * you risk past, present and future family earnings, * accumulated capital (self, spouse & family), * all known dimensions of health, * you get one shot (usually), and * any remedy is only accessible via parties that are repeat, expert game players who know way more than you will ever know (credence goods). I have yet to meet a former franchisee after 5 years that viewed any loss as primarily economic. Not one. Physical Pain is Nothing (existential) There is a suffering that is next-to-impossible to put into words. To allow the "Other" to seduce/betray, shun and then shame you into silence: A zombie's existence. Guilt rises and falls with the act: Shame is a self-selected, prison term. A return story is needed. These injuries are triggered, seemingly anew, over many years: remembered from father to son. Les Stewart

You are funny by Barbara Jorgensen

Submitted by Barbara Jorgensen on Sun, 2008/02/03 - 22:05.

True very true.

A Bad Marriage ---Love at first sight!? Zor arrogance! by Guest

Submitted by Guest on Mon, 2008/02/04 - 13:06.

So often it is "love at first sight" for the ZEE who believes in what he sees with his own eyes. He doesn't understand that a network like Quiznos who overseeds as a matter of policy knows that their franchise agreement protects them in court as long as they are in compliance with disclosure laws in the states in which they sell their franchises. Unfortunately, disclosure is NOT about protecting the ZEE and is always about protecting the ZOR and permitting them to sell their product without disclosing the present and past performance statistics of the individual first-owners of their franchise. When you really understand the arrogance and the guile of ZORS who tell you that you have to do your due-diligence investigation with current asnd ex-ZEES to determine the risk and rewards of the investment, you understand that government helps to set up the ZEES for the ZORS. Understand that anything you learned in your due diligence with these Item 20 references, whether true or false, has no legal significance and any damages you may suffer because you didn't learn the truth from them is proximate to their misrepresentations and NOT to the misprepresentations of the ZOR. The ZORS should be required to disclose unit performance statistice, past and present, to those investing in franchises but the government makes it possible for ZORS to hide this material information from unsuspecting new buyers of the franchise in the disclosure document. The red herring of the UFOC and the FDD is a disgrace to our democracy. It enables the franchisors to "steal" at will with immunity and impunity under the law.

THE UPS STORES... by Guest

Submitted by Guest on Mon, 2008/02/04 - 16:59.

HAVE AN ABUSIVE SPOUSE....FOR A FRANCHISOR...BUYER BEWARE!!!!!!!!!!!!!!!

Non Economic Losses by michael webster

Submitted by michael webster on Sun, 2008/02/03 - 19:37.

Les writes: "I have yet to meet a former franchisee after 5 years that viewed any loss as primarily economic. Not one"

I think Les is correct about this. Sadly, virtually all of my clients seek JUSTICE from our Court system which can only deliver money.

There are several websites devoted to recovering MLM participants, even one for advance fee victims - perhaps there needs to be a site for recovering franchisees?

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

I agree with thisl by Guest

Submitted by Guest on Mon, 2008/02/04 - 15:50.

This will not happen until zee's get thousands to fight. Start a big movement to change these laws. Go to Washington D.C. march and picket for new laws. That is the only way to fix this mess of zee's hurt. Remember the one who makes the most noise will be heard. Too many people are just wallowing in self pity and not willing to fight. It starts with our government who we elect to office. Laws can be changed with those who are willing to fight.

This is a biggy!!! by Barbara Jorgensen

Submitted by Barbara Jorgensen on Sun, 2008/02/03 - 20:18.

I have heard of former zee's suffering from depression, marriages fall apart, kids getting mad at parents, older zee's who can't get a job, zee's unable to get a job because of bankruptcy. Zee's losing their house or houses. They go from well to do to poverty. Big adjustment to go through. Heart problems getting worse . Zee's who never had high blood pressure suddenly has high blood pressure. And all I hear is things about due diligence. Have it ever occured to you that there are some things that you cannot cure after a zor messes over a zee? But those things don's matter-right? Only the bottom line.

Litigation takes a huge emotional toll, and by 20yearzee

Submitted by 20yearzee on Mon, 2008/02/04 - 01:31.

When a franchisee is at wits end, with no option left but the courts, they are usually in for a very tough lesson.

being right does not mean you will win.

Technicalities, franchise law, trademark law, and the random order of legal actions make it unlikely that a zee will get the satifaction he might think is due.

Franchisors begin the fight with a significant advantage - the franchise agreement. From day one, the zee is at the bottom of the mountain, looking up at a massive climb to justice.

Winning is possible, but expensive, and will take more of your soul and spirit than you ever thought a battle could take.

For many, the battle is just too much to fight.

The playing field must be leveled so that franchisees can at least be a part of the game.

It takes money and power to lobby Washington by Guest

Submitted by Guest on Mon, 2008/02/04 - 16:12.

Of course, you are right. But, understand that those in the ashes of the fires in which they are burned generally have neither the money nor the power to lobby in Washington, DC. and buy a committee. Generally, destroyed ZEES have lost "Heart" and don't believe that they can do anything to change the laws and they can't afford to buy marching shoes. The nature of the contractual relationship between the ZEE and the ZOR, where the ownership is blurred to the public, and wherein the ZEEs take all of the risk for building the physical units means that current ZEES are silenced by the franchise agreement, and silent in what they perceive to be their own interests. If you haven't read the Coffee Beanery Case here on Blue Mau Mau, do this! Understand that these poor destroyed ZEES tried to bring their plight before the Congress with the hope that their "destruction" would help others. But, the special interests in Congress always fight any legislation or changes in the law that might adversely affect the economy. There is no money in justice for all and profits for the special interests are justified as serving the greater good.

That is compounded by the fact that... by RichardSolomon

Submitted by RichardSolomon on Mon, 2008/02/04 - 07:57.

franchisees who didn't get proper help in vetting the franchise investment in the first place, go about selecting their lawyer in the same low grade manner. They prioritize the wrong characteristics. They look for a free/contingent fee lawyer, which isn't there except in very rare situations usually not met by the franchisee's case. There are lawyers out there taking contingent fee franchise cases who really don't know what they're doing, so the situation never has a chance from the start. These bozos tell them the same things that the scoundrel franchisors told them - "I believe in your case. They done you wrong." The client doesn't know the questions to ask the lawyer any more than he knew what to look for and how to evaluate it when he bought the franchise.

It is a repeat of the franchise scam all over again.

The truth is that most franchisees that have a valid case lack the resources to fund it. Not only can't they pay a lawyer, but they can't pay for experts needed in the case (like damages experts - forensic accountants and often techincal experts in some relevant field) and they can't even pay for court reporters and deposition transcripts. Most of the bozo lawyers they resort to simply don't hire the experts.

Others still have some money, but don;t know how to select the right lawyer, so they end up fleeced of whatever else they have left by aa bozo lawyer who doesn't know what he's doing. A recent example of this is a "I just spent $ 15,000 for a lawyer to do research, and he told me to do nothing for at least a year" She's still open using the franchisor's trade identity. She is DOA in court, if she ever gets there. Continuing to use the franchisor's trade identity and doing nothing for a year is called waiver of the fraud and ratification of the franchise agreement. Remember those Maryland folks who did that in the Coffee Beanery case. You know what happened to them. Actually they were in even worse shape. They, upon advice of counsel (so they say), do nothing because they think the state government is gonna get their money back for them. Yeah right!

So they go through the agony of being fleeced all over again when, truth to tell, all that really is available for those who can't make the good fight is bankruptcy court.

It's sad, but that is the way it works. You have to know how to find the right lawyer. Here's how:

--http://www.franchiseremedies.com/articles024.htm

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Name the Best Choices by Darnelle White

Submitted by Darnelle White on Mon, 2008/02/04 - 13:26.

Do Diligence,

Heart-ache, depression, failed business, failed marriages. Never quite get over them. But I'm sure I speak for many in that life goes on.

Knowing what you know now, what three franchise concepts would you invest that would minimize your poverty and stress? Why?
What three franchises would most increase your poverty and stress? How so?

Don't have 27 cents?!! by Paul Steinberg

Submitted by Paul Steinberg on Mon, 2008/02/04 - 16:27.

Guest writes: those in the ashes of the fires in which they are burned generally have neither the money nor the power to lobby in Washington, DC. and buy a committee

Bunk.

If 10,000 franchisees each kicked in 27 cents per day, that would give you a million dollars per year. Kick in $2.70 per day and you got ten million dollars.

But franchisees would rather whine than pay 27 cents. And just for the record, when I owned a franchise I did support both my franchisee association and the AFA.

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

If you don't listen to anything else..... by 20yearzee

Submitted by 20yearzee on Mon, 2008/02/04 - 11:55.

please listen to Solomon's post above.

He has given you such great wisdom here, and I am a former franchsee that wants to stand up and tell all of you potential zees and those that are in trouble that this is the best advice you will ever get - and it was free.

And, no, I am not on Solomon's payroll, but I have "been there and done that" and spent hundreds of thousands of dollars paying for the experience.

I have experienced the pain of litigation, going in thinking we were going to win because our opponent was so clearly "wrong", and finding out it just does not work that way. I have had process servers show up at the front door of my home at 7 a.m. on Sunday morning because the other side so wants to use the power of intimidation.

Many franchisors have their own team of attorneys (either in house or out) that are experts on the franchise agreement and how to enforce it. Once you get into the courthouse, you will see all kinds of motions and arguments that are about the legal system, not about your case. You get to pay for those.

You also need to consider that once you are in litigation, any negotiations you have been involved in with employees of the zor are over. Many times, the zor turns the case over to its attorneys, and you will not see the zor employees again unless you are in the courthouse.

It is a roller coaster of emotions that will tax the sanest of folks, especially if you are trying to run your business (which may be in trouble) at the same time you are trying to figure out the legal process. Most of us are not prepared for this kind of pressure. You get through it one day at a time.

When you hire the right lawyer, the one that knows what is going to be thrown at you, some of the stress can at least be blunted with information. If the attorney is any good, they will have you well prepared for the enormous barrage of legal complexity that will be coming your way.

If you are going into battle, go with the best. Do not think that your family attorney, whom you have known for 20 years, is equipped to take you into war because you trust him or her. If they really care about you, they will talk you into hiring an expert.

Compounding the Pain of failure by Guest

Submitted by Guest on Mon, 2008/02/04 - 12:39.

In a culture where you are "nothing" when you have no money and where "money" is the one great value of the country that we all agree on, the damage that is done to the psyche of the failed and failing franchisee cannot be underestimated. The trip from somebody to nobody is a river of pain and it is true that marriages are destroyed and health is ruined because a failing business is long-term stress and strain that few survive without deep and lasting scars. We see in the suicide of Bob Baker of Quiznos how he was worn down and beaten, after fighting in court for years, by the forces and the law of franchise contracts that has nothing to do with fairness and justness to begin with. He knew he was defeated and he was sick in body and spirit and when ordered to "arbitration" in which the ZOR always wins, he had nothing left to fight for or to fight with. In retrospect, the franchisee always understands that they should have done better due diligence. But! franchisees enter into franchise agreements with great "good" faith that they will be successful and as Richard Solomon warns so often, they don't know the hard and dirty game that they will be playing. They don't know that the odds are stacked in favor of the franchisor and that federal regulatory policy supports the franchisors, and that in the big picture, they are merely logs on the fires of developmentr in the economy to serve the "greater good." I have great respect for Richard Solomon whose hard truth is hard to take. But, yet he tells the truth. Sometimes, the best hope for the ZEE who has been cleaned out or who is facing failure is to declare bankruptcy and start again sooner rather than later. Maybe a FREE check with a Debt Counselor like Jim Herst who posts on Blue Mau Mau helps to chart the escape ----but delay often only compounds the problems for the ZEES and compounds the pain for them and their families. The constructive fraud of our public policy and regulation that permits ineffective regulatory policy that allows franchisors to sell unviable frasnchise products to the unsuspecting public is the real problem that needs to be addressed.

Totalism: Loading the Language by Guest

Submitted by Guest on Mon, 2008/02/04 - 15:29.

"The language of the totalist environment is characterized by the thought-terminating cliché." "The most far-reaching and complex of human problems are compressed into brief, highly reductive, definitive-sounding phrases, easily memorized and easily expressed. These become the start and finish of any ideological analysis." "Totalist language then, is repetitiously centered on all-encompassing jargon, prematurely abstract, highly categorical, relentlessly judging, and to anyone but its most devoted advocate, deadly dull: in Lionel Trilling's phrase, "the language of nonthought." "For an individual person, the effect of the language of ideological totalism can be summed up in one word: constriction. He is, so to speak, linguistically deprived; and since language is so central to all human experience, his capacities for thinking and feeling are immensely narrowed." and "The totalist environment draws a sharp line between those whose right to existence can be recognized, and those who possess no such right." - Thought Reform and the Psychology of Totalism, Robert Jay Lifton http://www.rickross.com/reference/brainwashing/ brainwashing19.html#Loading%20the%20Language Les Stewart

knowing what I know now! by Guest

Submitted by Guest on Mon, 2008/02/04 - 15:38.

It is obvious. First I would do the sniff test. Take my time. Never listen to the Zor because they have their main interest at hand. Wait a year to get to know what the Zor's company is really about. It like considering marrying someone that you do not know. Signing a franchise agreement is a commitment. If the partner is bad and abusive you are stuck. They make it difficult to divorce them. If I had known what I know now I would have never married into the franchise concept. It is too one sided. In the beginning they only show you their good side. After you sign you have signed your life away. Anything that is assoiciated with Quisno's or their former has been's would tell me never to do business with them. Never, never invest in any franchise unless you know them to be ethical and are looking for you to be a success. (Like they said in the beginning if we are not a success they wouldn't be successful too.) This is a lie. They don't care if you succeed. They are in the business of selling franchises and not making people successful. They already have your money and they will proceed to say "Next!" Any fitness concept is a bad investment. There is just not enough people to support your business that are disciplined. Franchise lawyers are very busy these days. That is why I know many people are hurting like me. Our only hope is those that are hurt will fight and get the government to make new laws to protect the investor from all the lies bad zors tell us to entice us to sign. The key is stop the people who are hurting people.

True! Paul! But we are talking about two different issues! by Guest

Submitted by Guest on Mon, 2008/02/04 - 17:16.

I certainly agree that there would be some really effective relationship legislation if all franchisees would kick in 27c a day to buy the ear of the Congress. First, however, I think that the FTC should clean up the UFOC and make the franchisors disclose the known performance statistics of the units in the network. But, in the relationship issues, it is about organizing. And, in the nature of the contractual relationship, the relationship is designed to mandate that the franchisee deal one-on-one with the franchisor who has dealt himself all of the aces. It is only lately that Franchisors realize that they may have to recognize ZEE Associations but the ZEE Associations are still bound by the contracts of adhesion that their members have signed. The whole idea of franchising is to avoid unions and protect the capture of cheap labor and capital that maximizes profits for the franchisor. It's a catch 22. You ought to read "Beguiling Heresy" which is where I get a lot of my truth!

Whining? by Guest

Submitted by Guest on Mon, 2008/02/04 - 18:04.

Zee's are left in the state of desperation. Many have never been in this situation before. It boils down to how is someone whose never been put in a situation that looks hopeless deal with it? They feel violated to the ultimate degree. Unless you are in this situation or experience something like this you never really understand. It is like when a women is raped do you understand to the fullest what has happened to her? You have to be put in that situation before you understand it. The zee has been lied to and no longer trust the zor. Remember whose money was lost. What I've learned is the zor tells the zee he or she has their own business. Another lie. In reality it is the zor's business other wise why would the zor have a one sided UFOC? Only winners in a franchise is the zor and the lawyers!!!

"But franchisees would rather whine than pay 27 cents." by Guest

Submitted by Guest on Mon, 2008/02/04 - 23:37.

I was never aware of the $.27 fund when i was a franchisee -- what would that be again? does it exist? Did it ever occur to you Paul that perhaps most franchisees are busting their arses to keep their heads above the water and have neither the time nor the aptitude to organize such an endeavor? Your comments have always been cogent - you lost me on that one. Sleep Tight.

They do lose.. by jd

Submitted by jd on Mon, 2008/02/04 - 12:46.

Guest states:

'when ordered to "arbitration" in which the ZOR always wins'

I'm sure that the TES franchisee and Sona franchisee would beg to differ that zor's always win in arbitration. If you have a good case and have a qualified attorney, they might actually win it for you.

Profession psychic numbing by Guest

Submitted by Guest on Mon, 2008/02/04 - 13:53.

I admire anyone such as Richard who can continue to deal with this carnage, day-in and day-out; year-in, year-out. To maintain your humanity, sanity, functionality, and sense of humour: Quite a trick. Cheap at twice the price. 'I came upon the idea...in trying to understand what Hiroshima survivors were describing to me. They would say such things as, "the bomb fell" -- or they would describe the experience they had: "I saw this array of dead and dying people around me. And I saw everything, but suddenly I simply ceased to feel anything."...It was as though the mind was shut off. And I came to call that psychic numbing.' - Robert Jay Lifton, PhD http://globetrotter.berkeley.edu/ people/Lifton/lifton-con3.html Les Stewart

To make this easier to understand.... by RichardSolomon

Submitted by RichardSolomon on Mon, 2008/02/04 - 15:46.

when asked who he intends to vote for, the common man says: "The Democrats want to steal my guns and the Republicans want to steal my porno movies. There is no one left to vote for." --

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Bad job numbers bring out the Predators in Franchising by Guest

Submitted by Guest on Mon, 2008/02/04 - 15:48.

The FTC has declared OPEN SEASON for hunting for "marks" on the Internet. Lots of poor souls looking for jobs provide a big pool of potential prospects for ZORS. Things will only get worse and we have to hope that Veterans won't be marching on Washington to curse our leaders for honoring them with The Patriot Express Loan Initiative. The troops pay the ultimate price for poor intelligence and poor regulation by their government policy makers.

But here's the problem by Bubba Sparky

Submitted by Bubba Sparky on Mon, 2008/02/04 - 18:35.

Why did you accept a one sided UFOC? Why did you sign a one-sided franchise agreement? What did your franchise lawyer tell you about the terms? Was there enough information provided to your accountant for them to make an estimate as to when you would start seeing a return on your investment?

This is not akin to rape. Here you were presented with a disclosure agreement that either disclosed enough or did not. You were presented with a franchise agreement with terms heavily skewed in favor of the zor. Despite all this, you signed, and acquiesced to the terms. Rape implies nonconsent. With your signature, you consent. NOW, it may have been a bad and horrible decision for you to have signed, or you may have even been mislead because the zor did not disclose required material information, etc; however, you cannot reasonably say that this is similar to rape. While you may feel that the zor may be ripping you a new one with the one-sided terms, given that you signed the franchise agreement, this is more an indication of zee masochism than rape by the zor. In the event that you were misled, hire the most ornery skilled lawyer you know to get your pound of flesh. However, if your complaint is that the zor placed a store right next to you when you knew, or should have known, that the zor had a contractual right to do so (or rather that you did not have a right to prevent them from doing so), then this is a bit disingenuous.

Before you sign, determine if you can live with the terms. Get clarification on the ambiguities. Find and talk to their franchisee association. Get a local zee drunk and talk to him about the system. Once you have signed, you have accepted and agreed to abide by the one-sided terms. Any argument about how unfair the terms are after you have already signed it will be dismissed by the judge as irrelevant.

Work the math by Paul Steinberg

Submitted by Paul Steinberg on Sat, 2008/02/09 - 03:42.

Works out to about $100 per year.

As to time and aptitude to organize, that's why there were organizations like the AFA and AAFD. When there was a real chance of passing relationship legislation and AFA was having some success, franchisees barely supported the AFA; once legislation stalled the support dried up quickly.

Zees will have influence on Capitol Hill when and if they choose to pool their money and political clout. For an example of how that model succeeds, look no further than the IFA.

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

Correction " Zor almost always wins. " by Guest

Submitted by Guest on Mon, 2008/02/04 - 18:32.

Sorry JD, forgot my modifier! You have done research, JD, on UFOC's. Couldn't you do some research on the Dwyer Group Franchises and see how they stack up? This would be a public service and you will get stars in heaven.

Enough already Item 20 Ranter by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 18:34.

There are some great opportunities for people, veterans included, to build franchise businesses. They should take their time, perform due diligence and choose wisely.

Your anti-franchising campaign is beyond reason.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Bubba, the Item 20 Ranter defies logic and reason by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 18:40.

The Item 20 Ranter's arguments are built on heaps of emotion, his own broken dreams and too much Red Bull.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Rape is in the eyes of the Beholder! by Guest

Submitted by Guest on Mon, 2008/02/04 - 18:43.

What kind of implant did you get in law school? You won't talk about the constructive fraud of the UFOC that paves the way for the contract of adhesion ----that the franchisee believes is boilerplate and not in any way negotiable. An industry that is built on guile and deceit and the exploitation of the trust of citizens in their government and fellow men deserves to be attacked. The problem is that you don't see the problem and excuse yourself with that old "due diligence" shit.

Getting existing franchisees drunk and... by RichardSolomon

Submitted by RichardSolomon on Mon, 2008/02/04 - 20:09.

then asking them about the realities may be the best due diligence suggestion you wil ever hear, especially if you don't hire a real lawyer to help you sort it all out.--

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

If you read carefully by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/02/05 - 16:27.

I didn't say it was similar to rape. I only said you can't understand the situation fully unless you have been raped. You don't know how the zee feels unless you are put in their situation. The truth is our zor never explained exactly what due diligence is in the franchise world. You don't know what you don't know. Our lawyer never explained this to us. If nobody explains it how do we know what it is? In our franchise many people never really understood how far due diligence should go. I've gone to business meetings and I remember one instructor say, "Why do people buy franchises? For a system!!!" We all believed we were buying a proven system. It wasn't a proven system. The proof is in the pudding. Way more failing clubs than successful ones. Today the Zor is changing things. I admit our zor was a bad zor. Other wise we wouldn't have closed.

Item 20 Absurd Premise Once Again by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 18:50.

Franchisors expect prospective franchisees to read and fully understand the agreements they sign.

If the prospect performed due diligence they would know that the franchise agreement is negotiable and they would learn many other useful things.

At a minimum prospects should google "Item 20 Ranter" and read all these threads on BMM.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Sorry by jd

Submitted by jd on Mon, 2008/02/04 - 18:50.

I won't do your research for you on the Dwyer Group. You have the same access i do.

Plus, where is your research that Zor's almost always win in arbitration? And who is to say that they wouldn't win in a court of law. I believe most of the regular attorneys on BMM stated that R&D would've lost in court as well based on the facts that were given.

Oh, and i have other public service and experiences to share, but there are reasons that I'm not, mostly because I don't want to have 20 different 'guests' responding and not knowing who is saying what. In my opinion, it makes it difficult to have a serious discussion. And most of the things i would say would probably benefit the zee side.

Constructive Fraud by michael webster

Submitted by michael webster on Mon, 2008/02/04 - 20:42.

Guest writes: "that the franchisee believes is boilerplate and not in any way negotiable."

Today I was talking with a lawyer from one of the premier franchisee law firms in Canada. He has been retained to do a simply transaction, but one in which the prospective franchisee instructed him - on the advice of his franchise consultant- not to read the disclosure documents!

These are the type of franchisees who actively court getting the big flying f***.

The franchise agreement is not like the consumer adhesion - there is a great deal of information available should you pay for some one to explain it to you.

Get good help, or go home.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Calling somebody out yet again? by Guest

Submitted by Guest on Mon, 2008/02/04 - 23:24.

Name five franchises -- better yet, name three franchises. 1) McDonalds 2) 3) i gave you your head-start again. Proceed to slander me. Sleep Tight.

You were raped! by Guest

Submitted by Guest on Tue, 2008/02/05 - 16:40.

You thought you were buying a proven system and the known risk of rhe investment is proven by the fate of the first-owners, in terms of how many succeed and how many fail. ZORS are allowed by government regulation to throw seeds out there in the form of franchisees and hope that they catch and germinate. If 50% do and 50% don't, maybe they can still survive if enough of the 50% who fail are taken over by second generations franchisees who have as better chance of bringing gross sales to breakeven for the franchisee because they got the business for nothing. I know what you mean but I maintain you were raped because we were raped by government and the franchisor who use the good faith and the cheap labor and capital of franchisees to maximize profits and stimulate the economy.

JD, say it isn't so... by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 18:55.

You won't seek your reward in heaven and do the research for the Item 20 Ranter?

Additionally JD, are you tellling me that you might have information that may be of benefit to the franchisee side of the equation and you are withholding it, shame, shame, shame.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

No, JD! I have tried to research but can't find anything! by Guest

Submitted by Guest on Mon, 2008/02/04 - 19:07.

The failure of TIF and you to come out here with research to confirm the investment worthiness of the Dwyer Group is troubling. I am the Item 20 Ranter and didn't realize that I am on GOOGLE under that name. I have to thank TIF for acting as my agent. You once indicated on Blue Mau Mau that you knew how the ZORS could disclose the past and present performance statistics of their units ----but you won't share this! Why?

Bull Hockey by Guest

Submitted by Guest on Mon, 2008/02/04 - 20:41.

"Franchisors expect prospective franchisees to read and fully understand the agreements they sign." Not true, Franchisors expect that prospective franchises will be fooled by the rhetoric and not understand the agreements. If prospective franchisees truly understood the imbalance of power, no one would sign. My god, Truth in Franchising sounds like the ultimate oxymoron.

But! Michael! You make my point for me! by Guest

Submitted by Guest on Mon, 2008/02/04 - 22:32.

Apparently the franchise consultant told the franchisee that the agreement was boilerplate and that it would cost $$$$$ for the attorney to read it, etc.. and that it would be a waste of money because the agreement couldn't be changed anyway. I'm sure that the consultants do this all of the time. Perhaps, it would be good if governments mandated legal reviews and due diligence before the sale of a franchise to a franchisee by a franchisor. Attorneys, then, would have a fiduciary duty to their clients to vet the offering and to negotiate the contract and bad franchisors would be weeded out in the process.

Go baby go!!! by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 23:47.

We've had this back and forth before and where did it get you? The same place it will get you this time.

Now be a good little Sleep Tight and register anonymously here at BMM.

Sleep tight, Sleep Tight!

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Thread Moved by Mr. Blue MauMau

Submitted by Mr. Blue MauMau on Tue, 2008/02/05 - 09:06.

A thread about eBay Reputation System, UFOC, Item 20, etc. has been moved here to the government regulation thread.

This is an American Tragedy!!!! by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/02/05 - 16:56.

People work all their lives and than legally get raped. The problem will only get bigger especially since the baby boomers are getting older. Our zor claimed our market was baby boomers. Truth their market is the baby boomers. All good targets to be financially raped!!!! TIF- Thanks for educating us on what due diligence is and really getting us into the mind of a Zor.

Item 20 Ranter can't find is butt with both hands... by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 19:48.

Item 20 Ranter Quote - "The failure of TIF and you to come out here with research to confirm the investment worthiness of the Dwyer Group is troubling."

Answer - Not my job to prove Dwyer Group investment worthiness!

Item 20 Ranter Quote - "I am the Item 20 Ranter and didn't realize that I am on GOOGLE under that name. I have to thank TIF for acting as my
agent."

Answer - You're famous and didn't you know?

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Why by jd

Submitted by jd on Mon, 2008/02/04 - 20:12.

is it mine and TIF's responsibility to determine the worthiness? I have never paid for any of the research (outside of PACER) that I've presented on here, so anything that I could find, you could find. Plus, one person might succeed with the Dwyer group and the next might fail.

I'm not going to spend time writing my experiences and not know who I am talking to. Plain and simple.

Item 20 Ranter is wrong once again... by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 21:50.

We actually expect prospects to read and understand what they sign. We expect them to successfully complete their training. We expect them to read, understand and use the operations manuals.

Oh and most of all we want them to act like adults who are responsible for their actions.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

???? by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Mon, 2008/02/04 - 22:38.

Guest:

What country do you live in?

Curious,

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

I do not care by Bubba Sparky

Submitted by Bubba Sparky on Mon, 2008/02/04 - 23:11.

what someone else tells me to do, if I am presented with a 100 - 200 page disclosure document, I will read it. You know why? Because my house matters to me. Because my retirement matters to me. Because the stability of my family's future is paramount.

If you do not like the terms, and do not believe that the agreement can be negotiated, DO NOT SIGN. If you sign, complaining about it afterwards is stupid. The government is not going to "mandate" legal review and due diligence - the burden of taking care of yourself is on your shoulders and your mommy's, not the government. If you are cheap, and use that as an excuse for not making adequate efforts to safeguard your investment, well, you got what you paid for. If you think that it costs too much to vet the system and sign up without doing any due diligence, you are asking for it, and if it ends up costing you in the end, it is as much your fault as the fault of the shady zor. If all you bring to the table is your lack of due diligence, it is hard to muster sympathy.

Sometimes bad things happen to good people. And for those people, sometimes there is a remedy. Sometimes they can be made whole...sometimes not. But failing to do what is necessary to take care of your own best interests, because it "costs" too much or whatnot...that is the height of stupidity. Bottom line, if you can not afford due diligence, what makes you think you can afford cost of the franchise initial investment? Walk away - it is not worth the risk. Franchising is not mandatory.

Franchisee and Attorney by michael webster

Submitted by michael webster on Mon, 2008/02/04 - 23:26.

Guest writes: "Apparently the franchise consultant told the franchisee that the agreement was boilerplate and that it would cost $$$$$ for the attorney to read it, etc.. and that it would be a waste of money because the agreement couldn't be changed anyway. I'm sure that the consultants do this all of the time."

The majority of consultants don't want a prospective fee -ie franchisee- listening to some cold sober hard advice. That is why they tell the mark not to talk with a lawyer.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Thanks, JD for your estimation of failure rate Dwyer by Guest

Submitted by Guest on Mon, 2008/02/04 - 22:03.

I guess the CPA estimation that four out of five small businesses fail within five years applies to franchising but these statistics are not shared with new prospects. If it is true that "one person might succeed with the Dwyer group and the next might fail" the odds are 50-50 for new franchisees, huh! Is this what you are saying, JD. As an accountant, you know that past and present performance statistics of the franchised individual units presents a material fact that should be disclosed under law. I've told you many times. I am not opposed to franchising if the known risk of the investment is disclosed to the new buyer. If a potential franchisee wants to buy with a 50% or 60% chance of success, more or less, as suggested by the fate and the success or failure of other first-owners of the franchise, so be it.

Re: Item 20 Ranter is wrong once again... by Guest

Submitted by Guest on Mon, 2008/02/04 - 22:29.

TIF, that is a crock and you know it. And who is this "we" you are talking about? Who appointed you spokesperson. Hell, you admit that you are not the same truth in franchising as the web site by that name. You elude to we like you are a franchisor or a lackey employee of a franchisor, yet you are afraid to tell us which one. You can spout your vitrol from the roof tops, just don't expect anyone to believe you. By the way, I am not the item 20 ranter as you like to label anyone who states an opinion that you don't like. So, Mr. Truth in Franchising, how about a little truth from you.

Re: Item 20 Ranter is wrong once again... by Guest

Submitted by Guest on Mon, 2008/02/04 - 22:29.

In a country where four out of five small businesses fail in the by Guest

Submitted by Guest on Mon, 2008/02/04 - 23:03.

I live in a country where four out of five small businesses fail in the first five years and where retail franchising with average ten-year contracts is promoted as the solution to a good and stable economy, and a solution to surviving recessions. I live in a country where the banks and the lenders and the corporations look to short term solutions to guarantee profits and to create the appearance of financial stability, while destroying the financial stability of the middle class. Not too long ago you blamed the sub-prime market crisis on the "liberals" who pushed the government and the banks to loan money to people who should have never qualified in the first place to buy a home, and didn't fault the lack of due diligence of the banks and the lenders who greatly profited from the "packages" of mortgages that they sold to private investors. You lost me then! You have opined many times that you have never seen a retail franchise offering where the reward would in any way compensate for the risk. I understand that you stand "outside" of those stupid people in large numbers that you would never underestimate.

TIF's Expectations by michael webster

Submitted by michael webster on Mon, 2008/02/04 - 23:31.

TIF writes: "We actually expect prospects to read and understand what they sign."

This is one of the hardest things for franchisors - how do they know or document what the prospects actually read or understood.

How does the franchisor determine that the franchisee actually do reasonable due diligence?

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

I would love to see some prospective franchisee by 20yearzee

Submitted by 20yearzee on Mon, 2008/02/04 - 23:58.

with a nice clear tape recording of a franchise consultant telling a prospect not to consult an attorney.

I would then send that recording to Solomon, sit back and watch the fun.

Ranter by jd

Submitted by jd on Mon, 2008/02/04 - 22:34.

You state:

'I guess the CPA estimation that four out of five small businesses fail within five years applies to franchising but these statistics are not shared with new prospects.'

Um, it's on the internet, if you are getting into business you should be doing all of the research you can. Don't you think you should look up things like that?

Yes, I said one might succeed and the other might fail. So, just like you failed at The UPS Store the next person might succeed. How about you hire an accountant and pay to have that survey done on how many franchisees fail. I'm sure others here would like to read it. I'm sure that there are many others that would criticize it because of the assumptions made. There is no true definition of success or failure. One person might consider $50k owners benefit as a success, whereas the next might consider it a failure, in their own minds. You even stated one time that there was no way in hell you were giving UPS a copy of your final financial statements. So, tell me how do they calculate success/failure without that? You make it seem like it's so easy to determine that percentage, and it's not.

Now, this is way off topic, and I'm sure I speak for others in asking you, why do you always veer off topic on every article? Yes, BMM move this because it has no bearing on 'Marrying Your Franchisor', and this is why I don't write blogs/articles, because the meaningful discussion of the topic gets sidetracked pretty easily.

Okay knucklehead... by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 22:56.

I am what my profile states a "Franchise development executive with a growing and successful company. My posts made on this website are my personal opinions."

I have no idea who operates the website with same name as my BMM avatar and don't care.

You on the other hand are nothing since you cannot be bothered to register anonymously here at BMM.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

The government is not your mommy or daddy... by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 23:08.

It is you that is reponsible for you.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Capitalism is as capitalism does by Bubba Sparky

Submitted by Bubba Sparky on Mon, 2008/02/04 - 23:32.

Businesses fail. Your socialist utopian agenda, while chewy and full of flavor, is not realistic. If it was only three out of five that fail, would that be acceptable? Or would it be two out of five? Regardless, someone's life will be in shatters because they gambled and lost. That is business, be it franchise or otherwise. Nothing is guaranteed. Franchising is not a gold mine. For every McDonald's, there is a UPS fiasco.

These banks you fault - they also lost. The people with crappy credit, who took out interest only loans, etc. - they believe that because they are in their home that they have fulfilled their dreams of owning a home. No. They did not do their due diligence. They were only paying interest. The principal never decreased. Only in a few isolated Bizarro World scenarios is this is a viable option. This is simply not practical for the masses - but they bought into it because it catered to the immediate gratification of their emotional impulses. And because, from a lender perspective, it makes sense to string someone along that will, in all likelihood, never get to the point where they are impacting the principal, the banks thought this was a veritable untapped treasure trove. The banks gambled that this could be done in vast numbers and that they could manage any fallout and still pull out ahead. They lost. Too many defaulted, the system collapsed, and the banks were unable to control the outcome. The idiot consumers that wanted a house at any cost lost as well. You would blame the banks. I blame them both.

The same analysis applies to approaching a franchise system. If you do not know how to vet a system, get someone who does. Google is your friend and mine. It is no longer that difficult. Amazing how easy it is to get to this website "after" your franchise is going down the tubes. Where was the search before you signed on board? I know you are bitter. I can even understand it. But direct your frustration to a productive end. Ranting endlessly about increased government is not the solution.

Reply #1 by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Mon, 2008/02/04 - 23:49.

It was written:

I live in a country where...

My reply:

So are you going to name the country or not?

Curious,

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Re: TIF's Expectations by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 23:53.

Webster says - "How does the franchisor determine that the franchisee actually do reasonable due diligence?"

Answer - We don't. However we do make it easy for folks to perform due diligence.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

TIF isn't associated with that website. by Guest

Submitted by Guest on Tue, 2008/02/05 - 00:02.

He just stole their name. TIF's got a right to conceal his employer/identity just like we've got a right to conceal ours. If you said the stuff that he says on this board, would you want to disclose your employer? Not if you wanted to keep your job you wouldn't. TIF is a partisan hack but he's smart enough to know to conceal his identity and employer lest he risk a quick termination. TIF probably has a large proportion of digruntled franchisees in his system that feel the system and he have ripped them off -- sounding off on this board is his way of venting a little steam against those franchisees in his system that didn't perform their due diligence.

Reply #2 by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 00:19.

Guest writes:

You lost me then!

In relation to the following:

Not too long ago you blamed the sub-prime market crisis on the "liberals" who pushed the government and the banks to loan money to people who should have never qualified in the first place to buy a home, and didn't fault the lack of due diligence of the banks and the lenders who greatly profited from the "packages" of mortgages that they sold to private investors.

My reply:

1) The Government coerced lenders to loan to people who were not credit worthy

2) Private investors and institutional investors have the onus to investigate the securities themselves.

I, personally purchased one 100K lot to theoretically smooth my portfolio, as an evaluation. Note I limited my exposure and held it as an evaluation. Anyone else, including institutions could have done the same. There is no tenet of prudent investing that states you should invest a large portion of your assets in an untested asset class.

This is analogous to the new commodity indexes. While theoretically they should be very beneficial to a portfolio, it will take decades to evaluate them. So, as much as I would like to put 25-30% of my portfolio in them, prudence dictates I limited my exposure to 1-5%.

However if you recall from that thread, I pointed out the reason for the undue exposure by institutional investors was that the Government had interfered in the bond market by diminishing the quantity of long term bonds available for purchase relative to the historic quantity.

It was written:

You have opined many times that you have never seen a retail franchise offering where the reward would in any way compensate for the risk.

My reply:

Let's be clear, there are caveats.

1) Because I have not had the exposure does not mean one does not exist (then again the Loch Ness monster may exist)

2) It was in reference to an "investment" - see my post on what is an investment.

It might surprise you to know I have counseled more than on person to pursue a franchise opportunity. However, they met a demographic profile who stood to benefit immensely form the franchise opportunity and had few alternatives available to them outside of the franchise opportunity. Stated differently these were not investment opportunities, rather very clearly buying themselves a "job" that offered superior remuneration opportunities then that which they could logically yield in the marketplace.

Regards,

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Reply #2 by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 00:28.

Guest writes:

You lost me then!

In relation to the following:

My reply:

1) The Government coerced lenders to loan to people who were not credit worthy

2) Private investors and institutional investors have the onus to investigate the securities themselves.

It was written:

You have opined many times that you have never seen a retail franchise offering where the reward would in any way compensate for the risk.

My reply:

Let's be clear, there are caveats.

1) Because I have not had the exposure does not mean one does not exist (then again the Loch Ness monster may exist)

2) It was in reference to an "investment" - see my post on what is an investment.

Regards,

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

The Accountant from Mars by Guest

Submitted by Guest on Mon, 2008/02/04 - 22:40.

I hope you are successful when you tell the IRS that there is no true definition of success or failure, JD!

Item 20 Ranter may hail from Elbonia? by Truth in Franchising

Submitted by Truth in Franchising on Mon, 2008/02/04 - 23:56.

I will check with Scott Adams and let you know if I get a response.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Making it easy means...... by 20yearzee

Submitted by 20yearzee on Tue, 2008/02/05 - 00:01.

TIF says" we do make it easy for folks to perform due diligence".

Could you explain what "making it easy" means?

Thanks

Re: TIF isn't associated with that website by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:14.

Sleep Tight says - He just stole their name.

Answer - Untrue the phrase is generic and not under copyright.

TIF's got a right to conceal his employer/identity just like we've got a right to conceal ours. If you said the stuff that he says on this board, would you want to disclose your employer? Not if you wanted to keep your job you wouldn't. TIF is a partisan hack but he's smart enough to know to conceal his identity and employer lest he risk a quick termination.

Answer - My posts here are my personal opinions.

TIF probably has a large proportion of digruntled franchisees in his system that feel the system and he have ripped them off -- sounding off on this board is his way of venting a little steam against those franchisees in his system that didn't perform their due diligence.

Answer - Pure folly and baseless conjecture.

Sleep tight, Sleep Tight!

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Thanks FuwaFuwaUsagi-----A good job but not an investment! by Guest

Submitted by Guest on Tue, 2008/02/05 - 12:16.

I respect you and your truth. Especially, I respect the fact that you have never pushed franchising as an investment, and you understand that most retail franchises are sold to those who are looking for a job opportunity. You provide me with the opportunity to again stress that the capital that the job hunter invests is generally not discretionary money that can be lost without doing great harm to the investor. Because this is "bread and butter money" that the potential franchisee invests to buy the job, a franchise should be regulated even better than securities are regulated by the SEC. Now, the new target of the franchisors is the VET population and their families. The malice of a "status quo" that exploits and targets the naive and inexperienced to maximize profits for the franchisors and to stimulate the economy is disgusting.

Off Topic - CDO's by michael webster

Submitted by michael webster on Tue, 2008/02/05 - 13:50.

Fuwa writes: "I pointed out the reason for the undue exposure by institutional investors was that the Government had interfered in the bond market by diminishing the quantity of long term bonds available for purchase relative to the historic quantity. "

Ya think that Moody's had nothing to do with the excess? Slapping AAA on every CDO, no matter what sort of p**p was in the tranches?

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

No the government is not our mommy or daddy! by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/02/05 - 16:37.

In our case we paid money for a proven system. They said they would help us find a sight. End result we got shafted. Many of the Zee's expected help from the Zor. We felt abandoned. It was- take our money then run. Not a good zor. If our lawyer would of told us the UFOC was one sided we would of stopped. What your saying is the Zor has no responsibility. And if they fail it is totally the zee's fault. That is what I got from our zor. If we fail it is our fault. They matched the UFOC totally one sided.

IRS don't care by jd

Submitted by jd on Mon, 2008/02/04 - 23:04.

IRS don't care if you succeed or fail, they just want to make sure you do things by their rules and pay the appropriate taxes, although their rules can be interpreted in many different ways in some cases and you can 'negotiate' any settlement, trust me I had clients that went through IRS audits.

Plus, you may succeed under IRS rules, and fail under GAAP.

Re: Making it easy means... by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:07.

We send them a printed copy of the UFOC/FDD in advance of their discovery day visit and we review the document on the telephone beforehand as well.

As you may or may not know some franchisors only give the prospect the UFOC/FDD at discovery day. Which is ridiculous.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Scott Adams by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 00:11.

Scott Adams...??? The old adventure game creator?

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

uh oh. now you've done it. by Guest

Submitted by Guest on Tue, 2008/02/05 - 00:29.

No one tells TIF what to do. I'd also like to hear the answer to that question. Hopefully we will get one. Sleep Tight.

uh oh. now you've done it. by Guest

Submitted by Guest on Tue, 2008/02/05 - 00:31.

No one tells TIF what to do. I'd also like to hear the answer to that question. Hopefully we will get one. Sleep Tight.

You're right, it is conjecture by Guest

Submitted by Guest on Tue, 2008/02/05 - 01:13.

But i bet i'm right. You come here to vent as a ZOR just as there are ZEES like myself who found this site and now stay here for the information found here as well as (and i'm speaking personally now but i'd guess there are other franchisees like me that feel this way) the value found in sharing similar experiences. You probably have several franchisees in your system that complain of their predicament and you're probably sick of having to listen to their complaints. Boy are you sick of stupid franchisees. You think that when they come to you for answers that instead they should be looking in the mirror to find the answer to their problems eating at their business. You can't complain to your internal staff as you're an 'executive' and it would look bad. A web site forum is a safe alternative to vent. I understand. Again, strictly conjecture -- I have no proof whatsoever that the above describes TIF. But if i were a betting man i'd bet that i'm right. There has to be a particular source of his venom. To TIF, the notorious 'Item 20 Ranter' rantings are not just business - it's personal.

Item 20 Ranter rhetoric is disgusting by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 12:36.

Let me tell you something about the truth. The truth is not owned by any one person and we do not have individual truths.

What you proclaim are great truths are no more than statements or other people's opinions and your incorrect interpretations of what others post that agree with your warped sense of the world.

These things you worship as monuments to the truth are mostly the antithesis of the truth. In essence you would not know the truth if it bit you on the ass.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

why are you surprised? by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 16:30.

Michael:

Hmmm...sort of surprised here. Why would you trust Moody's or any rating agency? They have a history of downgrading after the stock market has already discounted the change in default risk in the stock price.

Allow me to expand here with "opinion". Moody's is a lot like IBM. You wil lnever get fired form your job if you document the reason you invested or purchased xyz is because Moody's or IBM said it was ok to do so. That is why they exist, they know it and so does every one in the industry. They are simply "CYA".

Today the market is down strongly. I pay subscription fees to various rating agencies and economic advisory services. Do I blame them for the fact that today I am down Hundreds of thousands since the beginning of the year? No, I am in charge of my own course in life. It should would be nice if I could tell my woman that the reason we are not getting a new car this year (we drive a 1994 and 1999 respectively) is because I took “xyz’s” advice, but the truth is “I am the one who screwed up”. In my opinion you are a darn fool if you rely on anyone unless you have fiduciary relationship and they have enough E&O insurance to cover your losses

Do I agree that Moody’s exasperated the problem, sure. But the culprit is a well known one: “lack of due diligence”.

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Amen!! by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2008/02/05 - 16:45.

It is disgusting!!!!

job vs investment by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 21:10.

It was written:

I respect you and your truth.

My reply:

Thank you, it is nice of you to say so.

It was written:

Especially, I respect the fact that you have never pushed franchising as an investment, and you understand that most retail franchises are sold to those who are looking for a job opportunity.

My reply:

Hmmm...interesting. If I was a wagering man, I would guess that most retail franchises are SOLD to people who think of it as a investment and do not see themselves "working" at the store beyond the first few years.

I have now interviewed of 100 franchisees and I have yet to uncover a single one who envisioned having to work the store after more than a year or two.

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Have you had any significant litigation from your zees? by 20yearzee

Submitted by 20yearzee on Tue, 2008/02/05 - 00:12.

and if you have, would you entertain questions about that litigation from potential franchisees?

RE:Scott Adams by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:18.

Dilbert!

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

You give them a UFOC? by Guest

Submitted by Guest on Tue, 2008/02/05 - 00:33.

That's "making it easy"? LOL. ROFLMAO. Sleep Tight.

Wrong one more time Sleep Tight! by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 01:23.

You should get a consolation prize for playing.

The Truth Shall Set You Free!

TIF

P.S. However all this sure seems to be personal for you!

The Truth Shall Set You Free!

TIF

What is the truth? by Guest

Submitted by Guest on Tue, 2008/02/05 - 13:32.

Geez, you take hypocrisy to a whole new level. If the 'Truth will set you free', what is that Truth? Quit calling out other people on questions you yourself won't answer. Sleep Tight.

Getting to TIF --- He is worrying about my ass! and the by Guest

Submitted by Guest on Tue, 2008/02/05 - 14:20.

PAIN in his ass! I'm getting to him! Truth is a matter of facts that suggest truth. Spiritual truth is, of course, an individual matter that brings its own rewards to the truth seeker. The fact is that you have NO truth TIF and thus you never do anything but try to bite me on the ass. You do draw attention to my posts and I thank you for this. I forgive you. Everyone has to make a living and franchising is a tough way to do it and attend church or temple on Sunday. Jesus or Buddha or Allah or our other Gods could not and would not produce the UFOC which works well for the God of money and his followers. Franchisees could only be sacrificed for something greater than money if franchises were sold out of heaven by the Gods with UFOC's. Facts: l. Item 20 in the UFOC is imprecise and because it is imprecise it is open to a false interpretations and impressions concerning the transfers and the reasons for the transfers. 2. Michael Seid, in an article for Entrepreneur, explained the possible interpretations for Item 20 and why it is confusing to investors. His explanations reinforced the status quo of possibly presenting and inducing false impressions in Item 20 concerning the transfers. 3. Item 20 gives government deniability as to churning and turning of failed units because government regulators do not know the reasons for the transfers in ZItem 20. 4. Item 20 puts the entire responsibility on new franchisees to perform due diligence through the interview of present and past franchisees provided in the UFOC who have no legal obligation to provide this information to new buyers of the franchise. 5. Through, Item 20, Government arrogantly invades the privacy of the references and provides itself deniability while excusing the franchisor who is selling the franchise to the public from providing any of the past and present performance statistics known to the franchisor to the new buyer. 6. Government and franchisors know that any information that is provided by the Item 20 refencess concerning the risk or the success of the investment in the franchise has no legal significance and, in reality, works to protect the franchisor from charges of fraudulent inducement to contract through hiding the risk or falsely hyping the rewards of the investment. 7. Item 20 has been described by attorneys as merely an overview of the expansion and the contraction of the franchise network. 8. This overview presents a false picture of the viability of a franchise investment to the new investor because expansion suggests viability of the franchise product to the new investor franchisee. (Expansion can be achieved by eating the flesh of first-owners of the franchise. Cannibals hide in the dark shadows of franchising and franchise regulation. This is the dirty little secret of franchising,) 9. The FTC has been told by experts in the franchise industry that Item 20 is dishonest and that it is silly to mandate 22 Items of Disclosure and continue to give franchisors the option to disclose or not to disclose through Item 19. 10. Item 20 is an artifice. Thou Shalt Not Steal ---through guile nor deceit and the advantage of the power to write the rule of law.

Credit Rating Agencies by michael webster

Submitted by michael webster on Tue, 2008/02/05 - 16:38.

Fuwa writes: "Hmmm...sort of surprised here. Why would you trust Moody's or any rating agency? They have a history of downgrading after the stock market has already discounted the change in default risk in the stock price. "

Have you read Frank Partnoy's 1999 article on Credit Ranking Agencies?

Can you access this WSJ article on Rating Firms and Subprime.

I want to be on the same page before responding.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

RE: Have you had any significant litigation from your zees? by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:22.

Answer - No very little.

20yearzee asks - "and if you have, would you entertain questions about that litigation from potential franchisees?"

Answer - We would discuss concluded matters.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Sleep Tight, I'll repost my post just for you to read once more! by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:39.

We send them a printed copy of the UFOC/FDD in advance of their discovery day visit and we review the document on the telephone beforehand as well.
As you may or may not know some franchisors only give the prospect the UFOC/FDD at discovery day. Which is ridiculous.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

No hypocrsiy... by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 13:51.

The truth is plan to see, you just have to set your bias aside, pay attention and before you know it you'll be set free.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

He'll deny it to the end... by Guest

Submitted by Guest on Tue, 2008/02/05 - 14:45.

but i think there's some Truth to what you are saying here in the sense that i think a lot of your posts (you're the Item 20 guy, right?) cause TIF to almost involuntarily project bile and venom back at you -- he takes your posts very personally. I'm guessing he does so because somewhere, deep down inside of him, you're touching a nerve that he knows exists in his own career. Maybe not to the extent that you've spoken of on this site (i'm not an absolutist when it comes to my position on franchising), but there is some degree of what you're posting about here that resonates with TIF and he's scared to death that it does because it could shatter his professional raison d'etre. Of course, I could be entirely off-base here and it turns out the guy instead is just a jerk and nothing you are saying resonates with him. Of course we'll never find out.

Michael: I will read it, but by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 17:00.

Michael:

I will read it, but anything from WSJ is suspect at best.

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

It has been so long since I signed a franchise agreement by 20yearzee

Submitted by 20yearzee on Tue, 2008/02/05 - 00:31.

I was wondering how far a zor would go in dicussing litigation with a zee doing his due diligence.

If you were asked by the zee if there had been any litigation filed not disclosed in the agreement, and there was such litigation, would you disclose that to the potential zee?

and that makes it easy for them to do due diligence? by Guest

Submitted by Guest on Tue, 2008/02/05 - 00:55.

Stop it your killing me! LOL. ROFLMAO. Sleep Tight.

TIF by Guest

Submitted by Guest on Tue, 2008/02/05 - 16:06.

says that the truth is plain to see,you just have to set aside your bias and before we know it we will be set free! This is nothing more then TIF's reality and every now and then he visits us in the real world. TIF, the next time you visit us in the real world hang around long enough to set aside your bias and I'm sure you will come to know what the rest of us have already figured out, "If as- holes could fly you would be a 747."

Michael... by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Tue, 2008/02/05 - 17:11.

Michael:

Does this accurately reflect what you are attmepting toget on the same page with me?

But credit-rating firms also played a role in the subprime-mortgage boom that is now troubling financial markets. S&P, Moody's Investors Service and Fitch Ratings gave top ratings to many securities built on the questionable loans, making the securities seem as safe as a Treasury bond.

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Re: It has been so long since I signed a franchise agreement by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:39.

20yearzee says - If you were asked by the zee if there had been any litigation filed not disclosed in the agreement, and there was such litigation, would you disclose that to the potential zee?

Answer - The UFOC/FDD is the only disclosure we would make.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Re: and that makes it easy for them to do due diligence? by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:58.

Yes it does Sleep Tight.

Sleep tight, Sleep Tight!

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

You are trapped by your own self deception... by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 19:37.

Your personal attacks notwithstanding, you simply do not see the world as it is; a dangerous place where you are responsible for your well being and your decisions.

Once you cease to embrace victimhood the veil of self deception will be lifted.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Same Page by michael webster

Submitted by michael webster on Tue, 2008/02/05 - 21:42.

Yes.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Indulge me a few more questions, if you don't mind by 20yearzee

Submitted by 20yearzee on Tue, 2008/02/05 - 00:45.

Let's just say your potential franchisee is making his rounds interviewing your current franchisees. As he makes the rounds, he begins to hear that there is a huge dispute brewing between the franchisor and franchisees that may affect the business. He hears from others that you, as a franchise executive are right in the middle of this.

If the franchisee asks you about this, how would you respond?

That's a nice mantra to hide behind. by Guest

Submitted by Guest on Tue, 2008/02/05 - 20:35.

So if i'm standing on the sidewalk tomorrow and a car jumps the walk then proceeds to strike and seriously injure me, is that my fault? So if i'm going in to the hospital to have my right leg removed, i sign a negligience waiver prior to going under the knife (because they won't do the procedure otherwise), and in the morning wake up to find my left leg gone, is that my fault? There are instances in life where the actions of others affect one's own outcome. When it comes to franchising, the law states that that is not the case. Common sense dictates otherwise but common sense is not King in a court of law. Thus, everyone needs to follow the self-reliance/due diligence mantra (as you've smugly pointed out). I 'get it', ok? That may be the law, but that doesn't make it right. Sleep Tight.

given that - my opinion has not changed... by FuwaFuwaUsagi

Submitted by FuwaFuwaUsagi on Wed, 2008/02/06 - 00:25.

Michael:

Given that it is an accurate reflection, my opinion has not changed. The rating agencies are well known to be that which I described: useful for CYA purposes.

It is still incumbent on an investor to perform due diligence. As I mentioned I believe the exception is when their is a fiduciary relationship and a lot of E&O insurance. An I would still remain skeptical.

FuwaFuwaUsagi

"Never underestimate the power of stupid people in large numbers."

Re:Indulge me a few more questions, if you don't mind by Truth in Franchising

Submitted by Truth in Franchising on Tue, 2008/02/05 - 00:55.

20yearzee asks - "Let's just say your potential franchisee is making his rounds interviewing your current franchisees. As he makes the rounds, he begins to hear that there is a huge dispute brewing between the franchisor and franchisees that may affect the business. He hears from others that you, as a franchise executive are right in the middle of this.

If the franchisee asks you about this, how would you respond?"

Answer - Depends on the situation and you don't provide enough detail in your hypoythetical. In any event I've never been in a situation like the generic one you describe.

The Truth Shall Set You Free!

TIF

The Truth Shall Set You Free!

TIF

Sub Prime Lending by michael webster

Submitted by michael webster on Wed, 2008/02/06 - 00:31.

Fuwa;

We will continue this discussion.

I am of the opinion that in these bubbles it is fruitless to look for a 'moral' bad guy.

But I will move this discussion out of here.

Michael Webster PhD LLB
Franchise News

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Marrying Your Franchisor

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