The FranWad Manifesto
I recently thought I had a very bright idea. The idea was that Mike Webster, Paul Steinberg, Joel Libava and I ought to meet in Detroit on August 2nd to discuss putting together a really whiz bang franchise investment due diligence vehicle.
As the story goes/went, this facility would conduct extreme killer due diligence sessions for people who are about to sign franchise agreements and bet the farm on a franchise opportunity investment that they are ill equipped to evaluate for themselves and that their local business lawyers don’t understand either.
Unfortunately, the others whom I invited eagerly accepted my invitation to come to Detroit for the meeting. I hope they didn’t buy nonrefundable tickets, because I now am certain that this would be an expensive and losing venture, and that all their wonderful talents and skills would be no more than pearls cast before the undeserving.
Accordingly, I withdraw my invitation for August 2nd, and I believe I am doing all of us a big favor in making that decision. My reasons are approximately as follows.
We can’t go around the country putting on these franchise due diligence seminars, because if we were to do so in any state in which at least one of us was not a licensed attorney, our doing so would be subject to prosecution as the unauthorized practice of law, a felony in every state. I know that the franchisor constituency would be haranguing the state bars of every state in which we were not licensed to go after us for UPL violations. That would be expensive, a probable bad outcome for all of us, and a reputation damaging event that we don’t deserve.
To organize, promote and execute the operation plan of this project would be very expensive. Think of all the advance expenses we would have to provide resources to cover, and you will realize that none of us will probably wish to put up the money required.
I could live with these first two problems, but the third issue is the straw that breaks my back on this concept.
The third issue is that I see amongst the franchisee community an intense resentment at having to pay significant legal fees to obtain investment risk reduction that they believe they are automatically entitled to from the government and are not getting. People who believe that professionals ought to “step up” and provide protection for investment savvy deficient potential franchisees, either before or after they have been fleeced by crooked franchisors, seem to me to be the heart of the constituency we would be trying to help. Accordingly, I seriously doubt that franchise investors would pony up from $ 500 to $750 plus the cost of attendance at the due diligence seminars. Try as I might, I cannot bring my self to believe that franchisee wannabes who won’t pay for competent due diligence now would suddenly start doing so because we four made this program available.
Mike Webster made a very cogent comment last year that what I have in mind has to be a great deal more “cost friendly” in order to get franchise investors to avail themselves of it. He is right. In my own due diligence practice, the turndown rate is over 80 %. People want to pay $ 200 to have some lawyer – any lawyer – “read the contract”. Every failed franchisee did just that – limited his due diligence costs to just a few hundred dollars. Then they can’t understand why they didn’t get competent help and ended up losing everything they have in this world. The 20 % that see what I am saying about the need for competent pre-investment due diligence don’t get fleeced. The 80 % who are just too damn cheap get slaughtered and end up in bankruptcy. Webster was right and I was wrong.
I have decided to just continue representing those investors who will pay for killer due diligence, and to let the rest of them take their lumps. I aint their babysitter, and I’m not going to invest in trying to change their perception of risk management.
I apologize for getting folks excited about what ought to have been a great idea. I no longer have any faith in it, and I have decided not to try to convince other lawyers to make an investment in it. Sorry folks. When we next meet, I’m buying.
Solomon, your resounding contempt for franchisees....
...has rarely been more blatant. Among the appropriate comments might be the one about not being so judgemental 'till you've had the chance to "walk a mile in their shoes."
Purging Contempt
Well, actually this announcement or retraction demonstrates resounding contempt for Joel, Paul, and myself.
Fortunately, Mr. Solomon has promised to purge his contempt wrt to Paul and I.
Apparently, Joel is out of luck - but I still promise to review his book by August 1st - otherwise I have to purge my contempt in a manner most horrible.
Michael Webster PhD LLB
Franchise News
Solomon and contempt for franchisees
I will read anything he posts. I agree that most of the lawyer types on here seem a little impressed with themselves and uncaring at times.
I do believe that as brilliant as he is, Richard sometimes intentionally uses a 2x4 to get someone's attention when a soft word would do. Some of us need a wake up call, some of us have already had it and need real help and even reassurance as opposed to the feeling that everyone is piling on the one that is down.
Society and Lawyers have done little over the years to diminish a natural distrust of each other. It is probably natural that due to similar educational experiences, sometimes the opposing attorneys seem to relate better to each other than to the clients. It is easy for the plaintiffs attorney and the defendants attorney to fall into the mind set of "I get paid either way" and to seemingly look with disdain on their clients.
I cannot offer a solution to this, but I do feel this is the way it is, the way it has been, and the way it always will be.
The educational institutions of this country need to step up to the plate and sponsor the kind of concentrated fast track education about franchisee due diligence that Richard has suggested, and their must be a way to avoid the debacle of unlicensed practice of law issues.
Just my humble opinion, I will continue to read what the attorneys have to say here and try to avoid having long toes when they get blunt.
Two points. Business is
Two points.
Business is business and best approached from a detached, non-emotional perspective.
What you view as contempt is simply the likely observation of logical mind.
Secondly, if Richard became emotionally committed to every case, every client he would bear a level of stress that would greatly diminish the likely duration of his productive legal career as well as likely diminish his overall life span.
If you think your circumstances are rough, imagine emotionally committing yourself to franchisees who have lost everything time and time again, day after day, week after week, year after year for decades.
If you review Solomon’s actions, it appears likely he uses his very aggressive attitude toward corrupt zors as a coping mechanism due to the residual effects of emotional commitment to clients. Stated differently, no matter how hard he likely tries to remain detached human nature makes accomodation residual psychological effects.
My observation and my observation only.
FuwaFuwaUsagi
Meh...
It is simpler for me to just think of Solomon as a lecherous, yet sagacious, curmudgeon. If you are forced to litigate, I always go with ornery.
Re: Solomon, your resounding contempt for franchisees....
I disagree Guest!
Solomon certainly has contempt for stupidty, but I would consider him for representation and advice. He seems to understand that franchisees "don't know what they don't know" and he likely can help them.
The Truth Shall Set You Free!
TIF
tif Doesn't Know
"Solomon certainly has contempt for stupidty (sic)...."
Learn to spell, "stupidt." Momma troll bought you books and sent you to school, and all you did was eat the pages out of the books.
The next bunch of FranWads whom I will hold in contempt will be
those who invest in the newest FranWhack opportunity, PINKBERRY.
Founded by a failed restauranteur and a saloon bouncer, it claims to have all of Los Angeles agog about the franchise possibilities.
If God is telling you that you have too much money and need to be chastized, go to www.Pinkberry.com. Bring your checkbook. Don't even think of doing any due diligence on a concept that is this hot, or you may miss out on going bamkrupt.--
When you have lost everything, you can come back here and whine about what a rude bastard I am and how you would have hired me to keep you from this diasater except that you don't ever want to be represented by somebody like me. HAVE A NICE DAY!
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
La La Land Fever
Uh, has anybody actually read the financial statements for this "opportunity"?
Best of luck for those who are challenged by grade 5 arithmetic.
Michael Webster PhD LLB
Franchise News
Re: The next bunch of FranWads whom I will hold in contempt will
Solomon is right regarding Pinkberry as an investment, however they are not accepting franchise applications at this time according to their website. Addtionally I looked on CALEASI for their franchise renewal and it is not posted which could mean either they did not renew or the Depart. of Corps is behind on posting the filing.
My opinion is that yogurt is over and it is a product not a business concept!
The Truth Shall Set You Free!
TIF
tif Approves
While trying to determine if his can really held Shinola or whatever, tif slobbered, "Solomon is right regarding Pinkberry as an investment,....."
Ooh, tif, you are so smart to determine that Solomon is right. We are so glad that you gave his statement your approval. What would we ever do without your fawning proclamations? I believe the water is down and that you can safely get back under your bridge. Be a good troll and go.
Re: tif Approves
Is that all you've got Flaming Cowardly Guest Troll?
You'll have to do better than your last couple of trollish posts to prove whatever in the heck you're trying to prove!
The Truth Shall Set You Free!
TIF
The FranWad Manifesto
May I humbly suggest that while you all discuss the idea, the agenda, the tropical & alluring locale of this aborted meeting, you are overlooking the real pearl here. I refer, of course, to the title:
The FranWad Manifesto.
It is one of the great titles of all time - it reeks of genius, boldness, magic, and more than a little Jameson. I don't know what it is or is destined to be, Richard... A bestselling nonfiction masterpiece, an epic movie, a one-man play or even a list of typewritten demands for the release of hostages, but it could be your legacy.
It has the sound and feel of the classics: Mein Kampf. War & Peace. The Wapshot Chronicles. The Federalist Papers. The Franwad Manifesto. In the Kitchen With Dahmer. A Confederacy of Dunces. Franchising in the Economy. The FranWad Manifesto....
I'm fairly certain thefranwadmanifesto.com is still available if you act fast.
More than a little Jameson
God how I love the sound of that!--
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
Satire
Yeah, satire might move mountains where reason fears to tread. Also got pretty good legal defences.
Michael Webster PhD LLB
Franchise News
Power of Rhyme
I don't know about satire but rhyme is downright powerful. Here's my top rhyming quote that moved mountains and a jury:
RE: Wason Effect recovery
or confirmation bias is in need of a cure. Before I read it here I wasn't even aware of such 'illnesses'. Hell, maybe a cold shower will do the trick after all I know of a few other misguided issues it can cure.
In a business contract I ask these questions:
1. What is in it for me.
2. What is in it for the other party.
3. How will we both benefit from this. (Will we both benefit from this)
I thought I had all the right answers.
Richard, when I go to my doctor and have certain particular issues, he will point me to the correct specialist who handles those issues. When I went to see an attorney with my franchise questions, why didn't he do the same?
Maybe I didn't ask the right questions?
If I fit into the 99.99% of the people category, I am obviously not alone. It seems that getting this great idea of yours to those people in need is the obstacle yo'all need to solve.
John Q Public
John Q, he should have done that
The canons of ethics of every state bar provide that when a client comes to you with a matter about which you are not experienced/familiar/competent, you are to tell him that this aint what you do well and assist him to find another attorney.
Unfortunately, when you go to a $ 200 attorney, he usually needs the money too much to send you to someone else. and he probably isn't that familiar with the ethical requirements either.--
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
re: re: due diligence
Michael,
Knowing what I know now - no. We did some investigation, but not the level of due diligence you talk about. While finishing the deal they told me I needed someone to co-sign. Of course this was after they had my non-refundable franchise fee. I told them forget it and walked away. After a few days they reconsidered and allowed me to proceed. This of course left a bad taste in my mouth, but with a signed agreement I thought I was in to far to turn back.
While touting to be a partner in business, they never lived up to that expectation. I approached this like a business deal. We would work as partners to build the brand. As the brand grew, the negotiating powers would allow us to enjoy more savings on essential goods. I learned the hard way my maturity in business dealings was not where it needed to be.
Fuwa Fuwa Usagi,
Really, I honestly thought I was an average Joe! There are good honest people out there. I must be living near most of them.
RE: Your due diligence expos are a great idea. One must just figure how to get over that first obstacle. Every day we get bombarded with franchise ideas. I am sure they spend millions on advertising. Almost as much as credit card offers. The public could really use this stuff. I think a sponsor would be an excellent idea. Now who would be willing to support something like this? Something that would help protect the public from the white-collar scum? Colleges hold seminars on a variety of things. Maybe they can hold a business-dealing seminar focusing on franchising and open to the public? With an interesting media idea to back it up, I think it may work. Just remember, there are thousands of people like me who have no clue about the franchising world. They listen to all the dog and pony shows with enthusiasm just to get sucked in. How can you reach those masses? There is your million dollar question.
John Q Public
Well, John Q,
They don't need to know how to do pre investment due diligence. They do need to know to get on the Internet and do a search using the words "franchise lawyer". They will find the people they need. When they call lawyers who show up on that search, they need to ask whether the lawyer they are talking to specialises in franchise pre investment due diligence.
If they don't know how to do that, they are not qualiified to be investors at all. There has to be some minimal level of smarts to do this. The access to competent resources is easy. But you have to at least go ask for "franchise lawyer". The lawyer you need may not be in your home town. That makes no difference. Location of counsel is not an issue in this work. DUH!--
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
Due Diligence
Richard, Paul, Mike, Others,
I am who some of you call the uninformed shopper, the average Joe, John Q Public. Yes I too had a franchise. I did what I thought to be good due diligence as did countless other fellow franchisees I came to know over the years. I read most of the UFOC, called existing franchisees as well as new franchisees, visited a few in their stores and discussed some ‘nature of the business’ questions. Hell, I even had an attorney look at the FA for me. Was he a ‘franchise attorney’? Nope, but he gave me some information that I used to make my final decision which ended up being the wrong one. The information like ‘most of these FA’s are all the same’.
Richard, I think you have a great idea on this killer due diligence stuff. Since I should have been a client of yours before my purchase (but was not), I know this all to well. The only advice I can give you with this killer due diligence is some real crafty advertising. Not just an ad or pamphlets, but some advertising with a zing. The Ghost Buster stuff of the 21st century. Perhaps you could call it the Franchise Buster Due Diligence Squad or the Elite Franchise Fraud Detectors. Perhaps something else with an acronym like the hundreds the government uses. R.E.D.D. F.L.A.G. (Receiving Elite Due Diligence from Franchise Lawyers Assistance Group) O.K., that’s a reach, but you get my point.
I can see that getting the word out is the single largest obstacle to overcome. Either way, keep up the brainstorming and good luck. Some day it may pay off.
John Q Public
Re: Due Diligence
Wow, let me be the first to commend you on the adult attitude you have displayed in regard to your business venture. It is not often we hear from someone who displays the level of maturity you have.
I wish you the very best in your future endeavors.
FuwaFuwaUsagi
John Q Public
John, in your investigations did you ever a) state to yourself what would be deal killer, and b) then look for it?
My guess is that you didn't, and like 99.99% of people you were unable to avoid what social psychologists call the Wason Effect, or confirmation bias.
Michael Webster PhD LLB
Franchise News
John Q, I bet you that
I make clients recove from the Wason Effect - or whatever theorists call being sold a load of crap -in one minute.
Everyone in here who knows me knows that I am brutally blunt about things I firmly believe in, and that I can disabuse you of false notions about franchise investment in a very short New York minute.
I never molly coddle clients. I belkieve that if you try sugar coating your due diligence presentations, you are only feeding them the same crapola that they hope to hear. They need to hear it like it really is. Thw Wason Effect doesn't mean a damn thing in my due diligence sessions with my clients. Hold 'em under the cold shower right fromn the git go.
This aint no tea party. It's grand theft and financial assault. These thieves will slime and oil their way through their presentations, telling people what they hope to hear. Only tough love works with the mesmerized globs of quivering protoplasm.--
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
Recovery
Richard writes: "I make clients recove from the Wason Effect - or whatever theorists call being sold a load of crap -in one minute."
With your 80% turn down rate, you are not being effective in combating the Wason Effect. The 20% who do hire you are probably seeking some sort of dis-confirmation.
Michael Webster PhD LLB
Franchise News
I disagree
The 80 % who don't hire me never get a taste of the "drill". The turn down rate is over price.--
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
Perceived Value
Richard, you aren't getting turned down over price - but perceived value. (Which is also way lowering your rates would make no difference)
The perceived value is low amongst the 80% group precisely because they are caught in the grip of a confirmation bias, and only want to pay or someone else to bless the deal.
Michael Webster PhD LLB
Franchise News
You may be right, Michael; or you may just be too complex for
my view of it.
If they come to me because they read the materials on my website - which is what they usually say - they know I am extremely skeptical. When they don;t hire me, it's always after a discussion of the cost.
I think my web site materials somewhat refute the notion that they come to me seeking confirmation and not skepticism.--
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
Richard: In your experience
Richard:
In your experience have the people who come to you for your killer due diligence people who have in their view already exhausted their own due diligence course of actions(in other words think they have a real winner already), that may have already included other business professionals (accountants etc, depending on how you define professional) or have they done little work on their own?
My very limited experience based on offering the free vetting service, was that the sweeping vast majority of people coming to me already thought they had done a thorough vet, and wanted to know my opinion seemingly for confirmation. I know several had already run the concept by their accountant, did cash flow statements etc and were really, really nasty if I happened to point out the deficiencies in the system they were considering. It generally was phrased around what they had already spent, and I seemed to further antagonize them when I mentioned the "franchise process" is generally designed to promote a emotional bias centered around the idea assets that you effectively lose 100% of the investment you have made in terms of time, energy, and monetary of if you walk away. Stated diffidently the angst you feel when you think of backing out is the result of carefully designed and orchestrated effort. You will fee this way because the deck was stacked that way in the first place.
So I am curious, if part of the reaction is, I already did this and that, and spent this and that, and you want what, to tell me I am a fool or if it is something else yet again.
Curious,
FuwaFuwaUsagi
"Never underestimate the power of stupid people in large numbers."
They have done very little
They have gone on line; visited some of the stores; spoken with some franchisees; and not much else. I thing they don;t want to spend money on more than one professional.
It is my feeling that they are really in a hard set cash hoarding mode at this point. They fear running short of money before hitting black ink.
But Michael is right that they can;t imagine that the guy who was so kind and helpful is really trying to pick their pocket. That's a hard adjustment.--
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
Trust but Seriously Verify
People simply underestimate the amount of serious sharks in the franchise waters.
People overestimate, now, the amount of serious sharks in the new car market.
There is a lesson there.
Michael Webster PhD LLB
Franchise News
Michael, on further reflection, I think I have a more complete
answer to your question about cost versus Wason Effect, at least in my instance.Unlike other lawyers, I put a large amount of material on my website that specifically informs a visitor about the issues; how I see them; and how I believe they can be traps for the uninitiated.
Before they call or email me, they are vastly more informed than if they had gone to any other attorney's website. Few attorneys put out more than their degrees, publications by title only - in journals no consumer will ever read - and their honorific association memberships. In short,. I am very careful to put out there for all to see a huge volume of plainly stated useful information. I also urge them to take it to their own lawyer if they don;t choose to hire me, and maybe that way their lawyer can do a better job for them than he would had he not seen the material.
Because of that, when potential clients call me, they have a better idea of what to expect - compared to the tombstone content of the websites of other attorneys.
Belinda says that I give tooi much away. Maybe she's right, but this is the way I do it. I don't think I've suffered because of what I put out there for free, as it were. I also think that because I do know what I know about this business, I have a moral obligation to mentor others. The materials on my website are my way of making some payback for my good fortune.
--
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
Franwads and More Information
Richard writes: "Before they call or email me, they are vastly more informed than if they had gone to any other attorney's website."
It is not the ones call, it is the ones who don't. The Franwads that cannot bear the fact that their chosen dream is a piece of junk.
These people don't need more information - they need cognitive therapy first. Because, you just might be a franwad if you didn't read the FDD, and you are definitely a franwad if you did and are not an experienced franchise attorney.
Michael Webster PhD LLB
Franchise News
Wason Effect
My guess is that you didn't, and like 99.99% of people you were unable to avoid what social psychologists call the Wason Effect, or confirmation bias.
Michael Webster PhD LLB
Franchise News<<
Michael, Bingo, In a few words you have identified the problem.
If 99.99% of the people are unable to avoid the Wason Effect, then it is
high time this be addressed as a disease and suitable treatment be formulated.
Today, business classes tend to dwell on the benefits of franchising, following a proven plan, the power of centralized buying and branding, and totally ignore the down sides and abuses.
Beyond that, many potential franchisees have been down sized by corporations and desparately want to believe in something.
I believe that what Richard had suggested is not only marketable, but desparately needed. The typical potential franchisee does indeed tend to take the FTC disclaimers with a grain of salt, looks at the litigation section of the documents and assumes that the cases listed are a small percentage and actually sees that as a good sign, not realizing how many failed zees have cut and run without litigating and
the folks in the business tend not to tell them the bad parts.
As an existing franchisee, telling the bad does not help you continue, sell or get out. In fact, if you tell the truth, you will never be able to sell many of these businesses.
Wason Effect - Its Avoidance
Guest writes: "If 99.99% of the people are unable to avoid the Wason Effect, then it is high time this be addressed as a disease and suitable treatment be formulated."
Actually, it also well known, how, in general, to counter the Wason Effect.
On a number of tasks where the penalty for failure is crystal clear, people avoid the Wason Effect and the confirmation bias.
For franchising investigation seminar, the skill would be identifying franchise disasters in a similar crystal clear manner.
Once you had people's attention, then you could continue with the real homework.
But the skill would be in the first stage - turning people's heads away from the puffery and to the evidence.
You are also right about existing franchisees tell the whole bad story, not going to happen.
Michael Webster PhD LLB
Franchise News
Well known?
Probably less well known to those most in need of knowing!
I am in no way trying to start a fight with anyone. I would even like to have a cordial relationship with my franchisor, I just will not roll over and play dead to get it.
I truly hope, somehow the concept of which we speak does get picked up, expanded upon and embraced by those most in need of it.
The Franchise Seminar
Richard, if you are still going to be in Detroit on August 2nd, I suggest that it makes more sense to hash the business plan out then. In a private cacus.
While you raise some interesting problems, there is nothing here that cannot be solved or at least experimented with on a minimal budget.
There are thousands of prospective franchisees yearly who want to know what they have to do investigate a franchise prospect - ordinary lawyers are of no help in sorting out the real from the fake. Even if the lawyer knows that the opportunity is a piece of p**, he/she might not be able to communicate it properly.
There is a relatively simple business model here that will work, because it has already been used successfully by a number of people for investing in public companies.
So get yourself up to Detroit and start talking sense.
Michael Webster PhD LLB
Franchise News
Michael, Paul says he's coming to Detroit on Friday, 1st August
He bought a non refundable ticket and has decided to make a mini vacation of it.
He and I are set to have dinner together Friday evening. If you would care to drive over and join us that would be wonderful. I know the three of us would have a grand evening, and I hope you will allow me to host dinner.
--
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
Mini Vactation
We will see you both in Detroit, then.
Michael Webster PhD LLB
Franchise News
Wonderful
Please coordinate with Paul and lets definitely have a very great dinner - just people with good hearts and good minds talking about whatever moves us - propelled with good food and wine.--
My cell phone is 832 721 1891
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
I'm done with this, Michael
Anyone who wants killer pre investment franchise due diligence can find me on the Internet. The others can just do whatever it is that they do.--
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
Richard, I am disappointed
that you made the decision you did. With all due respect, it appears that you were a little short on your own due diligence when you iniated the idea without checking out the things that you now use as reasons for aborting the attempt.
While I cannot really disagree that what you have brought up are real
issues, I do question the assumption that prospective franchisees would not cough up the prerequisite amount for a useful seminar.
The problem as I see it, as one of those that did not do adequate due diligence is that there was no one out there offering it in a even semi-convincing way. Most attornies seem to take a cursory look, tell you it is a business decision and not offer you an alternative to spending thousands on full blown research, and it becomes obvious that you would be paying as much for their learning experience as your own. It seemed, back when I was looking that the choice was a quick read for a couple of hundred or an open ended multi thousand dollar commitment with no real sense of the direction. Certainly, you can say the client should control the scope and cost, but too many times neither the client nor the lawyer really has a clue where to start, how to set the objectives and budget the process.
I do believe what you had suggested had a lot of merit and that some group should get together and pursue it. It is short of like the automobile, a lot of experts said it wasn't practical, thank god they did not prevail. In spite of the present energy issues, I think we are better off then we would have been. Visions of walking between shoulder high piles of horse poop etc.
You certainly have the right to change direction, I just hope that someone with foresight and the stamina to follow through to overcome the true obstacles does decide to champion this concept. Like many things, I think the word would spread, perhaps slowly but surely, that the investment of the modest money and time to attend one of these seminars would be warranted!
Stamina
Guest writes: "The problem as I see it, as one of those that did not do adequate due diligence is that there was no one out there offering it in a even semi-convincing way. Most attornies seem to take a cursory look, tell you it is a business decision and not offer you an alternative to spending thousands on full blown research, and it becomes obvious that you would be paying as much for their learning experience as your own.
It seemed, back when I was looking that the choice was a quick read for a couple of hundred or an open ended multi thousand dollar commitment with no real sense of the direction.
Certainly, you can say the client should control the scope and cost, but too many times neither the client nor the lawyer really has a clue where to start, how to set the objectives and budget the process."
The correct way to do this is with an opt in subscription model, homework, and marking.
I don't know if I have the stamina; I get bored every 25 years and have to change topics.
Michael Webster PhD LLB
Franchise News
I'm disappointed too - more than you
I've been preaching loudly for higher quality due diligence for years as the only realistic approach to the prevention of franchise sales fraud.
You are probably right that the effort needs a sponsor, someone other than just a few lawyers digging into their own pockets and taking the risks for people who won't fund the protection of their own self interests.
You are certainly right that it needs lots of promotion - and that is also expensive.
If an organization were to put on these seminars and invite capable speakers to come speak at them, the unauthorized practice of law felony problems would vanish. To date only the IFA has such resources, and they certainly are not going to sponsor effective due diligence coaching, as that would eat into the sales of those who join the IFA.
Somehow, the IFA Code of Ethics just isn't being observed by most new franchisors. Integrity is an orphan at the IFA when iti comes to sales tactics.
Lord knows that Alvin and the Chipmunks, a/k/a the AAFD, aren't capable of doing anything like that.
You may be right in saying that it would be better had I never raised the prospect of such a group. Oh well. --
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
The Arrogant Type
That was a good read FuwaFuwaUsagi,
Now how would you discribe the other 80% of franchise owners?
On a serious note, I bumped into some of those "I am the Boss" types over the years. They do seem to run forward with their eyes wide shut.
Too bad
I thought you were on to something big.
I know of many seminars in real estate that people pay alot to attend. You would think people would pay good money to make sure they learn how to protect themselves in the world of franchising. Like my husband said when I told him you were going to do this he thought it was great.
How about advertising your due diligence services Richard? You can have people who have been hurt by bad zors testify to how serious doing business with a bad zor is.
I am very sad to hear this.
Wise move!
Wise move old war horse. May I ad a question? Have you ever recommended a franchise based on your many years in franchising. I believe that most franchise pros don't understand the true definition of franchising (Franchisism). Good positive subject for discussion.
Don B
I have over the years recommended many franchises
Over the years I have gotten to know some very good folks who were franchisors. I was the lawyer who did Little Caesars first UFOC and registration back in 1974. I have known the Illitch family for a very long time. Mike's daughter, when she was in law school, worked in my Detroit office with the notion that she would be their in house attorney. These were and are great people - fine people - and many people have made a lot of money as their franchisees. They have had their rough moments over the years. Who hasn't. But on the whole, these are good folks.
I have also represented franchisors whose franchises I would never recommend, for all the well known reasons. The reasons I wouldn't recommend investing with them are the reasons they ended up needing my trial capabilities in the first place. I don't mind representing awful people. Their money spends just like the money of the righteous. Have I ever made a difference in their perspectives on how to deal with people? Probably not. Leopards don't change their spots.
I see franchise deals that are good in my estimation even though I don't know the principals.
Whether I recommend investing in their franchises, however, also depends upon who my client is. Some are suitable and some are not. I vet the client as well as the franchise being offered.
My present tense concerns are that there are now so awfully many scam franchises out there, and that the investing public has no way to distinguish between the real and the not real.
Can I change that? Probably not. I can help those who respect the value of what I do. The rest - well - what can I say that Mr BMM would allow? Since I can't do a half ass job for a few hundred dollars and live with myself; and since I won't undersell what I can do that is meaningful, there is no alternative but to let the people who have no respect for value take their punishment. They are the future population of Blue Mau Mau, the inheritors of the circumstances of the Quiznos, Cuppy's, Coldstone Creamery and fitness franchisees we see in here now. That's what makes Blue Mau Mau an evergreen tree, an annuity for Mr BMM.
Lord, I do like having rich friends.--
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
I think this all simply
I think this all simply ties back to the mentality of the “average” person who is attracted to franchising. Most that I have met go into franchising with a chip on their shoulder. They are going to “be the boss”, “chart there own destiny”, “be beholding to no man”, and of course to start this endeavor of independence they do so by sucking the pipe of a franchisor. To say these are confused individuals who have mastered the art of self-deception is an understatement (and yes this post is going somewhere).
What I have noticed along with this arrogance attitude comes a host of performance related problems that revolves around the “I am the boss” attitude. For one there often is a reluctance to do the little things that you otherwise have to pay to have done, thus wasting precious capital of a most likely under funded enterprise, because after all you are the boss. Then there is the down stream inflection to the unfortunate employees, you know those peons that actually do the work. And then “the boss” loudly gripes they cannot find good employees. This attitude also infects what should be the actual franchise vetting process. For some reason the “I am the boss types” seem very, very reluctant to spend dime one on due diligence services and franchise vetting by qualified, experienced professionals. I have seen this time and again over the past couple of years. I have recommended on several occasion that people seek out Solomon’s, among other’s, services only to get the most venomous retorts when I suggest that the would be boss actually spend money on something of substance. I say substance, because if you look at many franchise offerings you will find that a good portion of build out cost is useless branding fluff that contributes nothing to the bottom line, does not leverage human capital or provide an economy of scale opportunity. But “I am the boss” types never seem to notice that a large portion of their expenditures is for economically worthless branding tripe.
My observation is most of the people who are attracted to franchising and seek it out are self selected personality types. And unfortunately for them, the self selection characteristics lead to their own demise. Many come in with an attitude that they are owed something, that their meager expenditures to get into what often is a economically ridiculous value proposition masquerading as a business, entitles them to “success”. The zor owes them this, the employees do that, the evil landlord this, those bastard lawyers that, they tend to view the world through jaundice glasses and never seem able to accurately reflect the reality of the world.
I am sure with corporate refugees as a result of globalism we will see a rise in the number of “I am the boss” types entering franchising only to find themselves in dire financial straits. Part of this will be the result of the leveling effect of globalization and part of it will be their fault for squandering precious capital on egotistical fantasies of their own self importance and refusal to acknowledge and adjust their lifestyles to coexist in a changing world. But invariably their biggest down fall will be the reluctance that comes from the self important boss who refuses to pay fair market value for the services of business and legal professionals that could save them from their own egos.
FuwaFuwaUsagi
"Never underestimate the power of stupid people in large numbers."
Self-rightious prig or self-serving smartass know-it-all
We never know where FuwaFuwaUsagi really comes from. He has refined the art of speaking out of both sides of his mouth.
Never estimate the power of malicious people in small numbers who get together to pat each other on the back and line their own pockets.