Cleveland, Ohio— Canadian franchise attorney, Michael Webster, (a writer for a franchise news website) launched an almost blistering attack on a post about researching a franchise, that Cleveland, Ohio franchise consultant Joel Libava wrote in 2007. Libava-The Franchise King®, says it’s time for “a franchise fight…”
As I was checking my Google Alerts this morning, I came across a rather interesting post that got me a little riled up. In it, Michael Webster, a franchise attorney in Canada, slammed one of my franchise research tips……for no apparent reason.
Please keep reading this, as it’s not really about me-it’s about certain people in my industry that try to create problems that aren’t even there…and would-be franchise owners getting talked out of their dreams before they get far enough to make their own decisions.
Franchise Fight: Paranoid Canadian Franchise Attorney Lobs Lame Attack
If you’ve been following me for long, you know that I’m a rather skeptical guy. I’m pro-franchise, but I’m not always pro-franchisor.
I love the business model of franchising, and I encourage folks that are out of work, or who hate their career tracks, to at least look into franchise ownership as a career alternative.
Important Franchise Research Tip
Call existing franchisees. It’s a real simple, and helpful suggestion. As a matter of fact, in my online franchise course, I suggest going even further; call former franchisees, too!
Webster disagrees with my research technique for some reason. Here’s what he said about my suggestion;
“This point immensely bothers me. Although often repeated by franchise attorneys and salespersons, it is flatly false.”
So, if I understand Webster correctly, he’s suggesting that would-be franchise owners not call existing franchise owners of the concepts that they’re looking at. (Why would anybody want to call the folks that already took the risk of buying into that franchise, and are living it and breathing it everyday?)
Webster goes on to say that, “cold contacting franchisees, especially in a faltering or failing system, will produce little or no valuable information. Franchisees will be suspicious that it is really the franchisor calling, perhaps looking for a good territory to encroach upon.”
C’mon. A franchise’s corporate headquarters calling its franchisees secretly? (OK. Maybe I’ll give a little on that one. There’s that case of some Dunkin’ Donuts franchisees being spied on.)
But…in all the years I’ve been doing this, I’ve never had a current franchisee, or a would-be franchise owner tell me that this was happening, or was even suspected of happening.
He goes on with his bizarre analysis of my franchise research suggestion:
“Knowing that someone with ten years in the system wouldn’t buy a franchise again may be utterly meaningless for your situation.”
Here Comes Some “Legal” Advice
According to Webster, “one cannot legally rely on the information gathered, which is presented outside the FDD.”
The FDD, is a fact-filled document that you get from the franchisor. It has very detailed and important information. It’s data. It’s important. But, all the data included won’t matter if you can’t “see” yourself being successful as a franchise owner in that particular business. The only way to find that out is to call, and even visit, existing franchisees.
It’s Time For A Theoretical Math Lesson
This is where Webster freaks me out;
“There is an easier way to calculate franchisee sentiment. Look at Item 20 in the FDD and do this simple test. Treat all transfers as business failures, and then calculate your chances of success. Anything north of 10% is likely to be too risky for most.”
So, now Webster has to get all “geographical” in his “don’t talk to existing franchisee’s” diatribe. North of what? (By the way, Item 20 of the FDD lists all of the current and closed outlets of the franchise you’re investigating.)
I have not seen a more paranoid anti-franchise rant in a long time. That’s because I don’t visit the BlueMauMau site as much as I did, a few years ago. (Like never)
The owner of the site, Don Sniegowski, called me when he first launched the site. He asked me to contribute my expertise, along with some content and discussion, to help him get things going. I did.
Unfortunately, Don’s allowed things to get out of hand. It used to be a pretty good site to learn about both sides of franchising, and I’m all for that.
Now, it’s nothing more than an anti-franchising website/blog, and a lot of really hateful and bizarre stuff is regularly posted in the comment section there.
What Happened To Webster?
In Michael Webster’s case, he used to kind of support me. For some reason, he dislikes hates franchise consultants/brokers, (I used to be a broker) so maybe that’s part of his reason for trying to tear apart my franchise research techniques.
Folks, if you’re seriously considering franchise ownership as a way for you to get where you want to go, ignore the advice of anti-franchise-franchise attorney’s, and start calling (and visiting, if possible) franchisees of the franchise chain you’re thinking of investing in.
Michael Webster is just plain wrong. It’s not like I’m the only one who strongly recommends calling franchisees.
The SBA Must Be Wrong
Maybe Webster should go after the SBA. (United States Small Business Administration)
Here’s one of their many suggestions for researching franchises;
“Visit or phone as many of the current and former franchisees as possible; ask them about their experiences. See for yourself the volume and type of business being done.”
They have several other terrific suggestions on their website.
Entrepreneur Magazine® Must Be Wrong, Too
An easy target for Webster to lob an attack on would be the folks over at Entrepreneur magazine. They’ve only been around for 25 years or so, giving would-be franchise owners and entrepreneurs valuable advice. In one of their articles, an franchise expert suggests that, “once you’ve thoroughly grilled the franchisor, you’re ready to chat up franchisees. After establishing a rapport, you’ll want to ask hard questions–but in ways that the franchisee will feel comfortable answering.” Rest of article
The FTC Is Wrong, Too The United States Federal Trade Commission is the arm of the US Government that is there to protect consumers. They’re our watchdogs, Michael.
Are you suggesting that the folks over at the FTC are wrong when they suggest to US consumers that they should, “look for contact information for current franchisees and franchisees who have left the system within the last year; talking to them may be the most reliable way for you to verify the franchisor’s claims. Visit or phone as many of the current and former franchisees as possible to chat about their experiences, and the volume and type of business they’re doing.” Here’s a few more valuable franchise research posts.
The real answers will come from existing and former franchisees.
Don’t let folks who hate franchisors in general, steer you away from investing in a franchise.
In other words, don’t let someone talk you out of your dream of business ownership. If the data that you’ve collected is positive, and the opportunity feels right, go for it.
This is your dream.