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This is what makes me angry. Here we have a WSJ ‘How To' dealing with franchisee success.
‘Sometimes, franchisers are to blame. Franchisers may be inexperienced themselves, a situation often found in very small systems. Or they may expand too aggressively, rendering them unable to service franchisees.' Now that is as close as this article gets to the reality that franchisers can be at fault and when they are the franchisee carries the cost anyway.
This is another publication that screams out; 'be careful but franchising is safe - consider this - consider that - you'll be right'.
There is no mention of the deliberate scams that exist in the franchising industry and there are definitely no warnings that if you fail, or just upset a franchisor, you do stand to lose everything. That is what makes me angry - media omissions - half the franchise story rolled out continuously lead people to adopt a ‘rose coloured glasses' perspective of franchising that diminish the importance of effective, detailed, broad, ‘killer' due diligence and ignores the very serious level of risk.
I am having a shot at WSJ but I could as easily have dug up something similarly flawed from almost any media outlet. Hell; government provided information does the same thing.
While the author of this article makes some good points and he is promoting franchising; his/her omissions support scams franchising. Government refusal to support programs to effectively educate franchisee prospects support scams in franchising.
Here are some examples of subliminal messaging and omissions:
London Times: ‘The legal franchise agreement is the foundation of the relationship between franchisor and franchisee. The main aim is to help the franchisor protect the reputation and integrity of its brand. But it is there to protect franchisees, too.' Seriously? Franchise contracts to protect franchisees? Rubbish!
Financial Post - Canada: ‘The key advantage, particularly in this economic environment, is that franchisees have less to risk, the overhead is low since it's a home-based business and startup costs are a fraction of buying into a traditional store-front business.' At least here there is mention the ‘R' word.
The Australian: ‘... we need the Australian Competition and Consumer Commission to perform better. Thankfully, they have recruited well with small business expert Michael Schaper now in the team.
I also believe federal Small Business Minister Craig Emerson is up for making a good franchise system great.' This suggests that franchising has effective regulation and protection. But it is another franchising lie!
Dynamic Business: ‘The time and effort saved on having to establish a business could in some cases be worth two-to-three times the franchise value ....... It goes without saying that a successful franchise will have already done the work for you."
‘More multi-millionaires have emerged from grabbing opportunities in a down market than when times are good. In short, franchising is stronger than ever and remains a great business option for those looking to "buy their future" and control their destiny.' Readers should note that the FCA website states that they posted this on April Fools Day 2009. Now that is appropriate.
What they don't tell you: ‘Working until they die, divorces, losing homes, going bankrupt, having to start all over at age 65, widows losing money from the money their deceased husbands left them, depression, never being able to help your children through college, not being able to afford having your grandchildren over because you can't feed them. Not being able to do anything. Not being able to have heat if you live in cold weather. The list is endless.' What they don't tell you - the list is endless.