Franchising Needs Better Government Regulation

Discussion of legislation and political advocacy regarding franchising.

ZEES and Ineffective Regulation --- Coffee Beanery

D&R!

Think about it this way. The state UFOC must be in compliance with the FTC regulatory policy that was established by the FTC Rule in 1976 for the purpose, the FTC said, of making frnnchisors disclose ESSENTIAL (not Material) information on which the potential buyer, the ZEE, could assess the risk and rewards of the investment. In my opinion, the Rule was just an artifice produced to protect the franchisors from lawsuits for fraudulent inducement to contract and misrepresentation of the contract, etc. and the risk. Once a franchisee does due diligence on Item 20 AND signs the boilerplate contract, the subject of hiding or misrepresenting the risk of the investment is moot.

The FTC Rule DID NOT PROVIDE A PRIVATE RIGHT OF ACTION to those franchisees who would be injured by a franchisor who violated the terms of disclosure under the Rule. It was not the intention of the FTC to do this because they knew that such a private right of action for violation of the Rule would endanger Franchisor Networks. It is the franchisor networks who feed the economy and not the individual franchisee.

While the FTC set a "standard of care" for franchisors, they did not intend that franchisors would compensate franchisees who were injured when the standard of care was violated, and they didn't intend that Section 5 of the FTC Act would be brought into play and be used against franchisors.

The Little FTC Acts of the States appear to work against, or go beyond, regulatory policy as established by the FTC who has the authority under law to set regulatory policy.

As I told you before, I think your "case" posed a threat to the FTC regulatory policy and you had to be disposed of to protect federal regulatory policy.

Think about this!

on February 13th, 2008

UFOC and Regulators

Are falling down on the job. Paul has the idea right. Look at Maryland and The Coffee Beanery.

You would have thought that Maryland would have at least given this zors UFOC a second look. Instead The Consent Order discloses that CB conformed to Maryland's request prior to The Show Cause. In fact the 2005 UFOC the Order is refering to, is in violation of the FTC Rule as well as State Law. That 2005 UFOC had 14 cafes terminate the system, not of those terminated cafe owners had the correct home address or telephone number disclosed. CB had the correct information because it was received in Discovery.

Due Dilliigence is only as good as the information that is disclosed. It is zors like CB that lead people to think that regulators are only collecting a pay check.

It is one thing to disclose that the FTC or any of the States have not read the UFOC and cannot gaurantee any of the disclosure.

They should continue to say that investment is very risky and there are no laws to protect you should you be defrauded.

The arbitration clauses are also almost impossilbe to get out of. There is a seperate amendment that is signed as a seperate document in Maryland that discloses all violations of the Maryland Franchise Registration and Disclosure Laws will be heard under Maryland Law in Maryland Courts. Don't believe that one either.

As a matter of in that arbitration, is was disclosed that there was an earnings claim, 3 non-disclosed third party contracts and that Kevin Shaw has a Felony Conviction for Grand Larceny, but it did not have to be disclosed. It would be nice for perspective franchises to know that Kevin is an officer of the company, who likes other peoples property a little more then he should.

Had Maryland Law applied to this case, it would be an automatic recision and restitution. So much for contracts.

on September 16th, 2007

Federal Arbitrators?

I don't know where that one came from, but these arbitrators are from private companies. The American Aribitration Association, ADF, JAMS are three of the big ones.

This is big business not Federal appointed people.

Why do you think that the little guy only wins 3 of of 97 times? The little guy is not a repeat customer. The big guy is the one who feeds the beast

on September 16th, 2007

Z-rube

The answer remains the same. ENFORCE THE LAWS. Look at CB and Maryland and if you still don't know the answer then go talk to a franchise attorney. There has to be a punishment for breaking the same laws over and over again. One more time, Why was CB so comfortable registering the first UFOC after entering into The Consent Order? Rigulators don't read every UFOC that is registered but you would think this would have been a no brainer. Maryland is told the UFOC is in violation of The Order and CB amends the UFOC. SURPRISE it's still in violation. FIGURE IT OUT

on July 3rd, 2007

PRIVATE ACTION

It is not so in every state, but in TEXAS and some others there is a private right of action for violating the FTC franchise rule. Here's how it works. The TEXAS Deceptive Trade Practices Act provides that a violation of the FTC Rule is evidence of violation of the DTPA. The DTPA provides for treble damages if the violation is shown to be intentional, plus recovery of attorney fees. These claims can be brought in state court or, if there is jurisdiction over other claims, as pendant claims in a Federal Court action. TEXAS does not have a franchise investment act, but it has a Biz Opp Act and you can get the same result under the DTPA that you could get if there were a TEXAS franchise investment act. There is no government enforcement resource that is practically available, but that is also true where there are state franchise investment laws and true at the federal level too.  

Richard Solomonwww.FranchiseRemedies.com

Posted by RichardSolomon on June 13th, 2007

Are you TIF?

I miss your comments on here.

on February 14th, 2008

Franchising creates profits for ZORS and lousy jobs

Retail franchising creates great profits for franchisors and those who invest in franchisors and really lousy part-time jobs for the American people.

This is how they sell this coverup of the risk in the franchise industry to the government but this is really a disservice to the American people. Franchising jobs are not good jobs with a future.

Government and the IFA really have guts to use the franchise job statistics to protect the current regulatory policy. Someone should go to jail.

on April 5th, 2008

Pure crap with no basis in fact...

Item 20 Ranter - Don't you ever tire of posting the same tired old anti-franchising rhetoric. 

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on February 2nd, 2008

The truth

"To me, truth is not some vague, foggy notion. Truth is real. And, at the same time, unreal. Fiction and fact and everything in between, plus some things I can't remember, all rolled into one big 'thing.' This is truth, to me."

- Jack Handey

Lighten up everyone - its a holiday weekend.

Posted by Bubba Sparky on August 31st, 2007

So you have no direct experience in franchising whatsoever???

You just have opinion and anecdotal information that you rehash into the ridiculous commentary that you vomit out in large volume on Blue Maumau!

Posted by Truth in Franchising on August 31st, 2007

Who Is That Masked Man?

"This government subsidy of franchising is undemocratic...Think of slavery, child labor, women's rights, collective bargaining, etc...I am very serious about helping existing and future franchisees and if crapola will do it, I'm for spreading it." - Guest

Who is that masked man? It is hard to take a self-professed franchisee advocate seriously when he is masked in anonymity. You should at least register under a pseudonym. If you are hard pressed to think of a good name, here's a few suggestions:

I'm from the government and I'm here to help small business
Franchisee Savior
Anti-capitalist Man
Mr. Socialist

I wish you luck in getting someone to buy what you are spreading as an anonymous guest.

on May 6th, 2007

Throw out the UFOC

Amen & Amen-why don't Zors just have a document that simply says "You lose everything you own if your business fails."
The UFOC I recieved was a worthless stack of papers that simply meant the above.

on February 18th, 2008

Notice TIF?

that no one has responded to your post which is exactly what you are accusing someone else of spouting (armchair antagonist, spewing vitriole?) When are you going to wake up and actually contribute? You are so pro-franchisor that you have become a demonic advocate no matter what. We can accept your position, but your juvenile, rude, insulting and demeaning retorts are a turn-off to many readers and you are basically ignored, except by some pleading for you to turn it down and act human and yes, even compassionate when needed. Give it a try. Everyone here is not out to get you or reputable franchisors.

on February 3rd, 2008

Not Funny when Franchisees Drown in Debt and can''t feed their

Not funny when franchisees drown in debt and kill themselves like Bob Baber did and others who have been destroyed by their good faith in big American brands. If the head of the FTC could feel all of the pain that has been suffered by failed franchisees, he/she (haven't looked yet) would not survive this pain and would be in Hell or Heaven, or wherever, because the pain would kill him and all of those around him in his big, bureaucratic palace of the people.

Your cute and clever way with words doesn't disguise the truth and doesn't disguise that you are one of those who believe that Capitalism cannot co-exist with democracy and freedom ---if the true risk of franchising is disclosed under the law.

Are you suggesting that the failure rate of first-generation franchisees is not an essential and a material fact that should be disclosed under law to new prospective first-generation franchisees before the contract is signed.

Are you suggesting that is okay for government to permit the failure rate to be obscured under regulation and that the lack of due diligence with a $4,000 or $5,000 attorney who might or might not point out to you that the transfers were failures and that the franchise was a high risk investment is
OKAY. Franchising is lucrative for attorneys as well and many attorneys have a conflict of interest between their need to eat and pay their mortgages and your need to KNOW, that works to the disadvantage of franchisees who due their diligence with general attorneys, and with some specialist attorneys, as well.

I'm Okay but I don't think you are Okay! Better do a little "due diligence" on your character, my friend!

on July 6th, 2007

I respect myself --I am not bitter--- I have seen the light!

When you can respect yourself, maybe you can try refuting some of my objective statements with your version of the truth.

You just want to sell franchises and hide the truth of the risk and the DEAL. If the eye of the needle were as large as the community swimming pool, you wouldn't make it, my friend!

on September 4th, 2007

Patriot Loan program built on the backs of Vet's Kitty Cats

New unverified and unsubstantiated reports of missing FranVet appilicant's kitty cats have surfaced here on Blue meow meow and the rumor has it that certain pro-franchisor forces are holding the kitty cats hostage so that the Vets will be forced to sign unfair contracts of adhesion that will force them to ultimately lose all lawsuits in arbitration.

Help us free the kitty cats by calling franchisors and demand that they release all Vet kitty cats being held.

on July 7th, 2007

Congratulations on registering an avatar...

Now we can get to know you better. 

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on February 3rd, 2008

First are the sacrificial lambs. --No Government Regulation

Yes! You got it right. The ZORS contemplate in the terms of the self-serving contracts that your assets will be THEIRS and your debt will remain YOURS if you never make it to breakeven and can't service your debt.

They know that they can get third parties to make low offers on your tangible assets if you have a Home Equity Loan and that the long-term lease that means thousands of dollars of debt will induce you to give your franchised business away to a second-generation franchisee to get out from the long-term debt of the lease, and, perhaps, to save yourself from bankruptcy, etc..

If you are actually in default, the franchisor sends someone into the bank to make a small offer for the assets, and the banks uually take these small offers and collect on the collateral or the SBA guarantee, etc.....and most of the franchise agreements have co-terminus lease-franchise clauses that means that you are squeezed from all sides and have NO recourse but to fail in silence.

on February 3rd, 2008

actually...

actually that question was posed first to you by fuwa and you chose to ignore it and instead turned it around as a question posed to the 'ranter'.

on January 2nd, 2008

IF YOU DON'T PROVE IT, IT JUST AINT SO

Accusations aint proof! You con't prove anything in here. You can only prove it in court/arbitration.  If you don't wanna arbitrate, don't agree to arbitrate. No one holds a gun to your head to make you sign agreements.

And I have no sympathy for people who claim they are defrauded and then go about remedying that in the same moronic manner that they used to get into the difficulty in the first place.

Calling me names doesn't prove your point - if you even have a point. When you go buy a pig in a poke, it's a pig. If you can't tell a pig from a business investment, you aint ready for the business world. If you're too cheap to get good help and you make a mess of everything, that's no one's fault/problem but yours.

Them are facts, and them facts won't ever change, no matter how many meals you miss.

Richard Solomonwww.FranchiseRemedies.com

Posted by RichardSolomon on July 7th, 2007

Disingenuous Invitation, Dale, but Thanks!

If predatory capitalism had not been regulated by government to provide protection for individuals under our laws, we would still have "child labor" and "exploitation of workers" and "slavery" and many other evils. Collective bargaining as practiced by individuals as a whole with legal representation, unions or associations, are absolutely essential in Capitalistic Democratic Republics to prevent the Republics from becoming fascist Corporate structures.

Your Grandfather told you a lot of truth, Dale, and so did my Grandfather and my Daddy, who told me you can't depend on the goodness of the owner and the boss to give you a living wage if he doesn't have to, whether he's a Christian or a Jew, and that if one man's profits are another man's grief, that was the way of things. My Grandfather and my Dad believed in collective bargaining and in unions because, of course, they weren't born to money and had to earn a living the best way they could.

Government exists to protect the American people from enemies inside and outside of the country and not to protect Corporations inside and outside of the country at the expense of the individual rights and liberties of individual American citizens.

Ralph Nader showed the American people how some American Corporations would calculate the death of Americans with respect to their bottom lines in the failure to remove unsafe automobiles from the market. It has only been through the efforts of Ralph Nader and other Consumer Protection Groups that the American consumer has been protected from the instincts of predator corporations who will put profits before human life.

Franchising, as practiced today, without revealing the true risk of the product being sold, is really a disservice to the American Public.

Americans would still buy franchised business opportunities at a 20% risk, if this risk were disclosed under state regulations and the States and the Federal Government would have clean hands. Shouldn't the banks and the SBA and the American Tax Payers be interested in the true and actual failure rate of first-generation franchisees? Or, isn't this relevant?

It is hurtful to know that government condones the hiding of the risk and that they have provided themselves with deniability through the DEAL that was made with the Franchise Industry that permits the selling of unviable business opportunities to the public ---and now to our returning Veterans from Iraq with The Patriot Express Loan.

If the true failure rate of the first-generation franchisees is disclosed to these returning Veterans, and they want to take the risk involved, this would be wonderful and many would no doubt be successful. But many of these veterans will not do their due diligence with killer due diligence attorneys and will end up being destroyed when they invest in some of the vehicles for fraud on the SBA Registry.

on July 7th, 2007

Dwyer Group ----View from the Top

It is nice to know and PR will get you everywhere ---especially in Texas.

But, what about the franchises that they sell?

Are the franchises that they sell good franchises that provide a high success rate for the first investors in the franchises?

Is the view from the bottom of the pyramid the same as the view from the top?

Since they are concentrating on the military community, it would be patriotic for Dwyer to get their unit performance statistics on first owners out here for all veterans to see.

on February 4th, 2008

Blame Canada II

Paul;

It is my impression that the FTC Staff would actually welcome a change in the law which would allow a private cause of action to be attached to the FTC Rule.  In my opinion, this would have been a useful legislative change.  The FTC is hamstrung by their budget with respect to enforcing the FTC Franchise Rule for anything for than simple Biz Op frauds.

But I don't disagree with your observation that the current state of American law will not give rise to a private cause of action a breach of the Franchise Rule.  Only in Canda, pity.

Bubba;

The "annexation" of Ontario by the FTC Rule is a unique legal experience.  I can think of no other statute which has been transported from either Canada or the US to the other country.  I think that the FTC staff opinions will have considerable weight in Ontario.   I also think that the how Ontario treats the AAFD Standards viz section 3 of the Franchise Disclosure Act -good faith and reasonable commercial standards- may well prove important for both franchisees and the AAFD.

Bob;

Thanks for the video!  Great catch.

Michael Webster PhD LLBMisleading Advertising Law

Posted by michael webster on May 17th, 2007

Privacy Laws and UFOC References

When ex-franchisees leave the system as either a transferee or as a terminated franchisee, do the franchisors have the right under the law to publish their names, home addresses and home telephone numbers in the new UFOC's without the permission of the ex-Zees?

on May 18th, 2007

Threats to Franchisee Advocates

Juan,An excellent question and a very relevant one to anyone who opposes the franchise industry's interests. My clients and I have dealt with several threats and actual violence over the last 9 years. I'm a little reluctant to get into too much detail for obvious reasons but can share a few pointersTell at Least One PersonAnyone who has concerns, no matter how silly they seem, should tell someone and document the matter. Feel free to contact me off-BMM if you feel comfortable. Sometimes it is very difficult ask family to carry this weight.Duty to Police Enforcement: To Inform [not Judge]You very likely have no background in investigating threat allegations. Contact local police agencies and get a report number. Let them decide and you'll be quite surprised what they already know [informally] about franchising. Better safe than sorry.Duty to Politicians [others]You are the primary target but those that threaten want to alter other people's behavior, mostly. Reduce your risk and notify your congressman, senator, attorney general, etc. by email. They have a legal obligation to receive and retain your correspondence. You'll be surprised to find out how sensitive they are about the suppression of appropriate franchise laws (see Regulatory Capture).High Risk GroupI have several published articles that show examples of franchisee advocates receiving threats. I'd be happy to furnish them and my favorite involves the word scum. Summary:

  • tell those in authority (and keep them informed),
  • ask for advice from those that have experience,
  • document, document, document, and
  • inform and cooperate with investigators.

Les Stewart, MBAIndustry Investment AnalystFranchiseFool.com :: the Wise learn to say No

Posted by Les Stewart on March 28th, 2007

Item 20 Ranter why don't we get the IRS to help with Item 20?

Maybe they can take the tax returns of all franchisees and calculate the performance across franchising , by segment, then by individual brand and publish the results online at www.IRSfranchisingperformance.com/statistics/2007?

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on February 5th, 2008

eBay, Trust, PayPal

How do millions of money and products change hands every day without collapsing from free riding or fraud? These aren't really spot transactions: The majority of trades are multiple small business-to-consumer.

Same way: structured reputation systems.

How did they overcome the theft problem when importing tea? Trade guilds.

The franchise industry obstacles are a loss of power to some and a gain in power to other groups.

Technically, a no-brainer.

Les Stewart

on February 5th, 2008

Staff grateful to franchisees

" with luck, happy staff MIGHT be able to return the favor" !!!!??????? are you out of your mind?
we paid big money for this franchise and now we get something in return only if we are lucky. what planet are you from?
This is extortion.

on February 21st, 2008

Michael, I agree that

Michael,

I agree that post-sale franchisor opportunism is the proverbial "skeleton in the (franchise) closet".

In franchising, the due diligence is similar to what the Dr. says to the widow:

"The operation was a complete success but your husband died. But on the plus side, he's a fine looking corpse."

"The Other"
Everybody works hard. Everybody does their best. Stuff happens. Slaughterhouses can look like day cares. Somebody's gotta work the mop.

THIS is the Solution?
"I will study and sign my lotto ticket much more thoroughly and take much longer to choose my numbers. And when I need help, I promise to choose 1 of the 3 of the hundreds of thousands of..."

And if anything goes wrong...well,...(hmmm) you know, Item 19 was empty all along: It said so right on Blue MauMau/LaFalce/UFOC/FTC/cigarette package/et al.

You saw that allusion on the internet on one site on one day, didn't you?

Oh...there you go! Mystery solved.

Step right up...

Les Stewart

on February 5th, 2008

Give it up! The Zor only has to disclose:

what is on the UFOC from the beginning of the year. In my opinion this gives permission to lie to the potential zee. Like I said before the laws are in favor of the zor. The government only looks at the zee's decision as a bad business choice. In my opinion non-disclosure is a lie. The zor has no responsibility to be honest. The UFOC is one-sided. And yes my lawyer failed to tell us anything. Unless you have majored in college in business you will have the full scoop of things you need to know to start your own business. After all the truth is the zee doesn't own his own business. Even though the zor we were involved with said so. Any zor that will not put his words in writing- and again I say in writing is a bad zor. Run do not walk away from him. The real rich seek ways of using other people's money to invest. You've heard of the perfect crime. This is the perfect crime. The bad zors rob from the good zee's. And I mean good because they have to have something going for them if they can buy a franchise. The zor has the government's permission to use other's to build his business. (And it is his business not your's.) The Zor only abides by the UFOC. I call it a perfect crime because the bad zors do lie and take advantage of the the good zee's. The most important thing we can do is inform the public about what due diliegence means in the franchise world. Hopefully by understanding what due diligence means the zee will do it and be saved. Capitialism only works in an ideal world of people who follow the golden rule. Unfortunately the zor only has his eyes on money. To most business people they have eliminated the word ethics. The zee wants to make money too. In my personel case I do not want to make money at some esle's expense. Business use to include the word ethics. Not anymore. I believe the bad zors have the killer instinct. And boy do they kill people's dreams by ruining them financially.

on February 5th, 2008

Fairness Arbitration Act is THREAT to franchisors

I think you have to accept the fact that the Industry of Franchising will fight this attempt to give franchisees the option to address the courts.

Mandated arbitration, that keeps franchisees from the courts and that does not arbitrate violations of the Rule or the UFOC aa fraud in law protects franchisors from charges of fraudulent inducement and saves their networks.

It is obvious that D&R were misled because they weren't provided information in Item 20 of the UFOC by way of references who had failed with the Cafe Concept. D&R had no way of finding out that the CB Cafe was a failed concept insofar as its performance record was concerned.

The State of Maryland treated it as a substantive "administrative?" violation of their UFOC and negotiated a rescission that favored the CB and would not have saved R&D from bankruptcy but did keep CB in business --even in Maryland.

Both the Maryland AG and the Courts and the Arbitrators ignored the fact that the CB Cafe is a failed concept that should be pulled from the market. No steps have been taken to remove CB from the SBA Registry.

What does this tell you. You are a victim of Regulatory Policy that favors the ZORS and their systems and you are a calculated sacrifice to the fires of development in the economy. The FTC and the IFA are very comfortable in bed and the law surrounding franchising is the warm blanket that keeps them safe and comfortable in their union.

on November 5th, 2007

No you're some other cowardly guest poster...

who doesn't register anonymously and doesn't know the difference between attacking a person versus their position.

Sleep Tight!

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on January 6th, 2008

JD is Disingenuous ---SEC Rules

You know, JD, that the success of the franchisor is not affected by the failure of the individual franchisee as long as the individual franchisee's assets continue to serve the franchisor and his profits. Please! don't con me.

This blurring of identities is useful in financial reporting and this is why we had the article on The UPS Store that worked to hype the The UPS Store and UPS Stock. Hopefully, this will be investigated by somebody!

on September 5th, 2007

RE: SEC & Saks

Saks turned itself in when they restated earnings based on their own internal investigation.  The SEC didn't find the error, Saks did.  Oh, and it was settled without admitting or denying any wrongdoings. 

on September 5th, 2007

Yes! I wonder about Saks Inc.

I always wondered about Saks Inc. who were instrumental in setting up Winona Ryder for the City government and the retailers to protect the Civil Recovery Programs for Shoplfting. I hope the FTC socks it to them but I would be surprised.

When the FTC and city and state governments permited the licensing by the City Police Authorities of privately -paid -retail- loss prevention personnel with limited police powers, the stage was set for the legalized extortion of civil recovery for shoplifting to be paid to the corporate retailers.

While it is against the law to extract money by threatening a criminal prosecution, it is perfectly legal when the government does it for the retail corporations through the use of our city police and the courts.

on September 5th, 2007

Could not agree more BUT

One answer to your question is that all of these franchisors make sure that they have top-notch high-pressure sales teams in place to sign people up using all kinds of shady tactics. Yes, shame on me for signing the UFOC but shame on the company for mis-representing themselves. I know a lot of people, including myself, who bought into these concepts before they exploded in the past few years and oversaturated the market in many states while increasing the initial investment to unaffordable proportions and we all spoke to current owners and they were for the most part very happy at the time. Cold Stone for example has had major issues since 2002 but has continued to sell a model that they know does not work. Now we are just starting to see the fallout from that mistake. Sadly, it is the franchisee that ultimately suffers. Hopefully there will be some changes in the law to protect the public.

on August 24th, 2007

Les, I believe that some things should be left to us to decide

My problem, Les, is that I've had it up to here with regulations. While I understand that most states license certain professions, and that the FDA stamps meat for public consumption, I really resent the idea that a business investor has to be hand-held by the government. My true feeling is this: if one is so naive as to not engage a lawyer, an accountant, and so on, when buying a business, then they somehow deserve the outcome. If a person cannot read a website, meet people and then conduct a modicum of due diligence, then how can they put the blame on others? (Oh, well I guess we have enough politicians to show us the way.)

I know that some will argue that franchisors (IFA) and lobbyists may have given the upper hand to that side, but in all fairness, the SEC has its regs in place too, but it's my problem if the stocks I buy tank. Anyway, I tend to accept my errors and not call my Senator's office if an IRA goes backward. 

In the same way, I think I have the right to decide if I'm going to wear a seatbelt, but the police don't agree and will gladly give me a ticket if they catch me. So, I wear it now and accept that I don't live in a free country anymore. I fought for it to be free - but I lost. The insurance lobbyists got their way for their clients and there is nothing I can do about it. So, my bottom line is that I lean toward freedom and independence and I really try to accept responsibility for my errors, but I don’t get to run anything except my own life, and even that has its limitations (imposed by both me and my Big Brother).

Simply put: for me, less is more.

Nick Bibby is a franchise consultant and principal of the Bibby Group.

Posted by Nick Bibby on February 6th, 2008

Man what a fool you are Item 20 Guy...

You mean you actually believed that someone would buy into your crap? You are more stupid than I thought.

Ariel

P.S. Maybe I'll buy a churned UPS Store?

on September 7th, 2007

Why they don't let lawyers advertise

...a review of the contract is not reading back to you the contract. Minimally it involves a review of what you think the deal is, what you are relying upon and whether the differences are so large that you should get out of the deal. Second, even if you are not entitled to a UFOC, you need to review it to get the relevant information out of it. And there are about eight other steps...

A complex, time consuming, invaluable service they name a "contract review."

But a simple contract review they name a "Fair Franchising Seal."*

Now I see why they don't let you guys advertise.

Sean

* I know, you call it an "accreditation," but the drunken liar in me made me stretch it.

 

Posted by Sean Kelly on March 31st, 2008

Actually

guest states:

'Anyone reading this story and most of all Franchise Attorneys, should be able to read this case and understand the need for Reform.' 

Didn't the franchise attorneys on this website say that they really didn't have a case and it was a loss before ever stepping into the room for arbitration, because they didn't 'tender' the franchise back?  Instead they continued to operate as a CB even though they felt that CB had committed fraud.

on February 22nd, 2008

HELL NO! DON'T GO! You were robbed! Coffee Beanery

I agree with you! I admire you!

But, I maintain that it is Federal Regulatory Policy that ZORS be subjected ONLY to Rescissions by the State that permit the ZOR's Network to continue to stand in the economy after the Rescission is negotated between the ZOR and the State. The Rule does not provide a private right of action for violation of the Rule.

Understand that it was not the intent of the FTC that ZORS would compensate ZEES for any misrepresentations that came about through violations of the Rule or the State UFOC's, that must be in compliance with the Federal Rule.

Under the present state of the law and regulatory policy, franchisees are a CALCULATED sacrifice to standing up ZOR networks. It is the ZOR networks who feed the economy and individual ZEES who fail because they bought an unviable concept have no recourse under the law ---BECAUSE of Federal regulatory policy that overrides state law under the Commerce clause.

The premise of "double jeopardy" is brought to State Rescissions for violations of the UFOC's and once a Rescission is negotiated by the State with the ZOR, that is the only bite out of the Apple for the Zees who are offered a Rescission. Obviously, a franchise rescission is different than a normal rescission under contract law for misrepresentation or fraud and franchisees are not made WHOLE because this could tear the ZOR network down.

Is the purpose of the State little UFOC's only to litigate actual violations and breeches of the contract itself and NOT to deal with misrepresentation or fraudulent inducement to contract?

You were betrayed but did Dale Cantone intend to betray you. Did you call him up and ask him? Does he not answer your letters? Should the Attorney General of the United States and the Department of Justice look into this matter? Would they or do they routinely protect regulatory policy that protects the regulated?

It may be that you will be sacrificed to immoral regulatory policy and technicalities of the law as a warning to other ZEES in Coffee Beanery and other unviable franchise concepts. All ZEES will soon know and understan that they have been offered a deal in Rescission that they can't afford to turn down, and that only a breach of the actual terms of the contract will be heard in any later arbitration after rescission.

The Rule of Law often protects injustice for those who haven't enough money to influence the law in their favor. You remember how you were attacked in your Congressional testimony. Remember how this Representative tried to blame your plight on your failure to do due due diligence, etc... Regulation is all about protecting the franchisor from charges of misrepresentation of their agreements and not about protecting ZEES.

Your case comes too close to revealing th3e real intent of the Rule! We are not attorneys; we can criticize the law and try to make it better in terms of justice in representative democracies. Attorneys are the only citizens who are not held responsible under law for ignorance of the law unless they are the subject of malpractice suits from their clients. Understand that attorneys like Harry Rifkin and Paul Bland are in the minority because they fight a status quo surrounding franchising that has been resistant to change since the Rule came into being in the late 1970's.

I am with you. Keep up your good fight but KNOW what you are fighting against.

on February 22nd, 2008

So what do they do?

Your business has gotten to the point where you can't pay the rent. You've marketed and marketed and soon there is no money left to do effective marketing. I know of zee's out there who are $30,000 in arrears on their rent and still open. Is that wise? You know you've done all you can do. What's worse is you've used your last dime on the business and now is srambling to get enough money for food and gas. What do you do?l

on February 7th, 2008

Time to tell the Truth Item 20 Ranter...

Why should anyone believe or value anything you have to say?

When will you come clean? At one point in you posting history you claimed to be a churned failed UPS Store franchisee and then you subsequently changed your story.  

The Truth shall set you free.

TIF 

Posted by Truth in Franchising on September 8th, 2007

Eric, Is that you from MBE

Eric,
Is that you from MBE in San Diego?

on September 8th, 2007

Again you are the Idiot Item 20 Ranter

There must be more than 800,000 franchise contracts here in the US.

The government is not your mommy or your daddy and no one has to buy a franchise.

As an alternative to franchising people can start their own businesses and in fact they can become a franchisor.

So Idiot Item 20 Ranter don't go way mad, just go away you bore me.

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on November 10th, 2007

Quizno's Nothwithstanding

Let's bust the myth that there was a by gone era when all a person would do is shake another's hand and that would negate the need to incorporate the agreement to a written contract.

If a man's word is his bond then the man won't mind reducing his words to writing and sign his name next to them in a contract.

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on November 10th, 2007

This is about your integrity Item 20 Ranter

You have in your prior posts led folks to believe you were a churned failed UPS Store franchisee and in subsequent posts you have said you were not.

No one cares about your specific identity, however people want to know the Truth about you.

Posted by Truth in Franchising on September 8th, 2007

The Geek Squad

Too bad The Geek Squad is a corporate owned chain instead of a franchise.

Craig

on January 19th, 2008

'Sleep Tight' you fail to understand...

Les Stewart and the Item 20 Ranter promote anti-franchising rhetoric and it is time for them to put their money where their mouths are and state their positions clearly.

If they cannot name franchises that are worthy of prospective buyer's consideration then it is obvious that they hold the opinion that there are no good franchises in the marketplace. This kind of absolute position is certainly their right, but it is foolish given the great succes many franchisees have had. Ultimately it is a question of their credibility.   

My position is clear, I think that there are numerous franchises that are worthy of consideration and plenty to avoid. I don't promote any particular franchise since I sell them (one concept).

'Sleep Tight' - Where do you stand on franchising and franchises? Is franchising a force for good and are there any worthwhile franchise concepts in the marketplace?

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on January 22nd, 2008

A rule of the Game

You can bring your own balls to the game but Mr. Blue Mau Mau is the umpire and makes the rules and calls the "outs."

Anyone who wants to continue the discussion can go to the Political Activism and Government Regulation Forum.

What are we talking about now ---Spudster and Potatoes or Coffee Beanery? ---or whether an Attorney is a better due diligence choice than an Advisor???

I once told Mr. Blue Mau Mau that all threads eventually return to the cause of so much of the discussion on Blue Mau Mau ----due diligence and success or failure of franchising, etc.. because the topics concerning success or failure in franchising cannot be separated from the effects of the regulation or, rather, the lack of effective regulation of franchising.

20yearZEE and TIF and others brought up the subject of changing the terms of the contracts and the fact that the contracts are negotiable -----and the progression to government regulation and the UFOC was natural and not out of place in the thread, in my opinion.

But, like Romney, I'm suspending my campaign, but only until tomorrow. I'm still waiting for Paul Steinberg's excellent study "Beguiling Heresy" A Study of the Franchise Relationship, to be posted on the Internet so that I can refer all cheated and failed franchisees to it and all new franchisees to this book. Also, I highly recommend Richard Solomons copywrited essays on franchising for brutal truth about how the game is played and won mostly by the franchisors. Michael Webster's site and writings are also a source of honesty on franchising. I miss Les Stewart's "Franchise Fool" that revealed the nature of franchising to exploit asnd cheat.

All these people above have been my teachers and because they deal in facts and truth most of the time, they have led me to my unhappy conclusions about the deal the FTC has made with the FTC. In reality, they should bear some of the responsibility for my rantings.

on February 7th, 2008