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In looking around the world for effective ‘good faith’ and ‘access to dispute remedy’ anywhere it exists, especially given that Australian states are moving to franchise legislation, I’ve ended up at Canada Bread.
Canada does not appear to have the solution that Australia now has on the table with the role of the Commissioners for franchising, or even the tribunal system coming out of the VCAT model now on the Queensland state agenda. But Canada does offer franchisees considerably greater access to class action remedy.
It seems that where implied good faith in the US cannot override abusive contract clauses the Canadian explicit obligation combined with far more accessible class action status gives Canadian franchisees the opportunity for remedy and redress. The biggest obstacle still exists – franchisees.
Canada Bread is an illustrative case study of extreme power abuse and the will of franchisees to enlist lawyers but to essentially operate their own action. It seems the immediate danger facing many Canada Bread franchisees is not the franchisor. Those who fail to drive their individual claims through the class campaign demanding franchise relationships based in good faith will be churned in the short or long term. This giant is seemingly determined to take contractual abuse to another level targeting potentially around 1,000 franchisees.
But the real Canada Bread power play is to deny franchisees accurate, timely information about their business. Ultimately the conflict hinges on that denial of information and CB’s leverage of that power to deny.
CB franchisees have one customer in Canada Bread and that customer through a maze of differing payment schedules to its thousands of customers withholds the information that would allow franchisees the opportunity to verify what they are paid, where it all goes wrong and how they must be able to present their business to accountant and legal advisers as prescribed under Canada Law.
It seems the NBN has enlisted forensic accountants however; the maze is so elaborate that only a vague picture has been determined. The deliberate denial of financial information creates Canada Bread’s franchisee slave trade by ensuring franchisees cannot sell and they will be forced into renewed contract clauses that ensure CB franchisees will be screwed until they fail.
After years of diminishing franchisee profit and growth in terminations Canada Breadare now in renewal mode with ‘take it or leave it’ franchise contracts with renewal terms considered to ensure further destruction of franchisee return on investment.
Now that is my distant view of what is obviously a huge and complex franchise system in dispute and yet it seems CB utilizes many of the universal tactics of withholding critical financial information, increasing franchisor profit to the detriment of franchisees, encroachment referred to by CB as ‘route re-engineering’, and attempts to promote division between franchisees.
My take from Jeff Leflers Blog and through the National Bread Network communication to the franchisee network the core issues at Canada Bread one only needs to consider a 30 year Canada Bread veteran who recalls the days when the franchisee return amounted to 30c in the dollar but had now been incrementally squeezed down to often less than 10c in the dollar with a corresponding increase from 5 days a week effort to 7 days per week. After a century in business
The attached PDF, ‘It’s your business. Now it’s your decision", outlines not only the urgency but the opportunity for franchisees when there is clearly zero good faith. The Canadian Bar is listening and has been for some time.
|Canada Bread Decision_2011.pdf||103 KB|