FranNet's Top Franchisors Need Review

I wouldn’t be here if my gut didn’t tell me there has been more ugly experiences swept under the carpet than anyone can imagine.

Just a snippet; from 3 [then] unconnected people involved in 3 different franchise disasters that were each subject to a small piece of media came endless contact from franchisees sharing similar experiences from hundreds of different franchise brands. Then those 3 came together and attracted others who were foolish enough to have also attracted similar contact for the same exposure reasons. Then there was contact from pockets of others trying to work out how to do something ‘to right the terrible wrong’ as they attempted to put the pieces together and work out what the hell they were dealing with.

The numbers of brands represented kept growing and growing. Admittedly there was [are] a sizable proportion of complaints received where the franchisee had been his own worst enemy and others where it was simply stupid franchising by all involved [but still damaging].  But for the most part we were coming to identify basic common causes [along with a massive array of colourful variations of individual experiences].

They are those most written about and they’ve become the secret add-on cornerstones of much of franchising. You’ve got your ‘group purchasing benefit’, ‘proven systems’, ‘known brand’, ‘experienced support and training’ and ‘support of fellow franchisees’ and over there in the shadows lies ‘mandatory purchasing abuse [on ‘up to and including’ everything] that alters and destroys the original franchisee financial model’ and its holding hands with ‘end of term systems’ that remove renewal and resale from the table for obvious reasons. Admittedly there are specialities almost unique to certain brands that haven’t quite caught on as mainstream traditional abuse processes.

Franchising began with the first 5 cornerstones but the latter 2 are today for many systems the dominating speciality in an industry where scum now know they can mostly do whatever they like and get away with a blessing.

I have an old [criminal] lawyer friend that naively opened his big mouth about franchising at its worst on national television and spent the next 2 years on the phone non-stop, running around the country doing this and that, adding brand after brand to a list of dangerous investments, while he headed toward his eventual breakdown and bankruptcy. That saw him sitting locked in his apartment never answering the telephone or the door and refusing to open his email.

If I only start with the first mentions of abuse in franchising in the 1976 federal inquiry [Aus] reports I have to surmise that we know very little about the numbers of numb franchisees who have been badly or somewhat burned by their franchising experience and where most had the good sense to walk away and watch from a distance as the carnage continues.   

I’m very happy for those franchisees who have something to work with, and for. They may be those who grasp the tangible benefits of IndFAs and rightfully live happily ever after.

What the hell is an ‘outlier’? I need to know if I’ve got it and if there is a cure.

Michael, I can see so many benefits, away from conflict issues, for franchisees prepared to fund associations to deliver those benefits. The challenge is to stir the imaginations of the market while counter forces resist the potential change to franchising from the success of associations. I might be wrong but I now see initial small incremental growth for associations but a growth that should be unstoppable.

Les; It’s early here OK  ... I’m allowed a little madness with my caffeine. So here goes my due diligence mad thought for the day.

Cycling is big in Australia. Always has been. Over a decade ago the authorities realized people were falling off the bloody things and hitting their heads. Some became smarter for the knock but many suffered terrible damage.

So governments looked at the free market and the cost of cycle trauma and decided that it was impractical to force manufacturers and retailers to attempt to force people to buy, and wear, a helmet when they purchased cycles.  New Laws were passed and police were set forth with the capacity to fine cyclist offenders caught without helmets.

I would be happy if franchisees found to have failed to pursue effective due diligence were scooped up and severely fined; or better still, lock them up for their own good as we would someone with any other mental incapacity that would see them harm themselves. As a potentially huge government revenue stream and/or social consciousness need we might see some interest in prime target networks to raid.  Round em up and ship em out!

Perhaps that reform could be the central demand for our next Aussie drive toward another bloody franchise inquiry. Just a thought! To date ‘good faith’ dealing just hasn’t caught on.

And quote of the day: ‘A piece of advice always contains an implicit threat, just as a threat always contains an implicit piece of advice.’  From Spanish writer José Bergamin surprisingly not writing on franchise operations and practical strategies.