Money grabbing sharks

A friend of mine sent me a discussion thread he’d found on LinkedIn.com, the social networking site for grown-ups.

Although I couldn’t see all of it, someone had become a little hot under the collar and started a discussion that went something like this:

‘Are all franchisors money grabbing sharks?’ I have edited this slightly, but you get the drift.

Most discussions like this don’t get much of a following, but this one had generated a fair few comments which, as far as I could tell, were split roughly 50/50 for and against the comment.

I read as many as I could (not being a member of the group) and it seemed to me that those who were in general agreement with the comment clearly didn’t understand franchising. They were describing all sorts of things, from truly rogue franchisors, to those franchisors who perhaps didn’t have the right systems in place, through to things that just were not franchising at all.

The problem with the pro-lobby was that those who trying to defend franchising also didn’t seem to know much about it so their arguments were unconvincing to say the least.

Things like (and I’m not joking) most franchisors are jolly nice people through to ‘There is a British Franchise Association, don’t you know, so everything is hunky dory in the world of the franchise industry.’

Now, I’m not saying there are no franchisors with shark like tendencies because I’m sure there are… in the same way there are bankers who look like Jaws, as well as IFAs, mortgage brokers, builders, doctors, etc., etc.

I would imagine (and here I have no empirical proof) that there are rogue franchisors probably in about the same proportion as there are rogue everything else’s.

However, I did find it very disappointing that there was a clear lack of insight into franchising and what it can be at its very best. And this was a group of, apparently, experienced business people.

This says 2 things to me.

Firstly, all of us in franchising need to get much better at explaining why franchising could be such an important part of the economy, creating, as it does, that middle ground between go-it-alone, no safety net self employment and corporate life… as well as being very important as redundancies rise and people look to start their own businesses – often those people who on no account be allowed to any such thing.

(Of course, that does pre-suppose that the majority of people who are actually in franchising also understand what it is!)

Secondly, this discussion also says that there needs to be a tightening up in the rules and then the application of rules regarding the relationship between franchisor and franchisor. There is some case law and the Law of Contracts, but there could well be a case for more.

After all, one of the most respected franchise industries (that of Australia) is governed very tightly by their Franchise Act… and disputes run at a much lower rate than here in the UK.

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