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Entrepreneurship Story; Over Regulation in Franchising Part I


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Jim and Sally run a successful auto Business, which they have built up over two decades and have expanded to three stores and many of their friends keep saying, "You should Franchise." They think about this for about five years read a few books, like "Franchising for Dummies," The "E-Myth", "The Franchising Bible" and many others on the shelves of the new big book store in town with the Coffee shop inside. They finally decide that it makes sense especially as they have friends and loyal employees who wish to be associated with them and even own the first franchises. So they set out to franchise. They visit an attorney since that says in all the books to do. Most books about franchising are, at least in part if not whole, written by S2D2s (lawyers: S2P2s; Self-Serving Parasites of Planet) anyway, so they take that advice and visit an attorney. The S2D2 explains the MUD and helps by charging them a good chunk of change; $35,000 to prepare a boilerplate document which is so complicated they could not do it on their own without years of study. They give the S2D2 (scoundrel) the money and they look at the document and start asking questions. They do not ask him about the price gouging laws that their state has after all the flooding from the remnants of Hurricane Ivan, although they feel severally violated in the outrageous costs to prepare the documents. After all there is some new shop equipment they need to test cars to stay in compliance with the latest smog certificates and they are not cheap either. So they ask some typical questions instead of why they had to pay so much.

"But Mr. S2D2, we want to be fair and give this and that assistance to the new franchisees, Bob and Margaret are long time customers of our shop and friends. Joe has been working with our company seven years and they want to buy the first franchises. The S2D2 explains that the Federal Trade Commissions Franchise Group is doing this for the consumer's protection. Jim and Sally understand this but what is all this about termination, litigation, arbitration or mediation? Why does it say we may give you this and that, of course we would support Bob and Margaret and Joe they are dear friends of ours and it is our name on the building, of course we are going to go out of our way to help them."

The S2D2 says, "yes, I understand that but this is for your protection too." Sally says, "great but, it sounds so vindictive and mean, why would anyone sign it?" The S2D2 says "there is much case law and history as to why these things are in these documents and they are to protect you, that what you are paying me for." Jim thinks to himself, we are paying you to pick a fight with our new franchisees and long time dear friends. Attorneys are A-holes. They are our worst customers at the shop and I will never forget that time a one-week temporary worker hurt his hand because he was not paying attention, then sued us. Even though it was on his way to work or so he said, we had to fight the case, we won but it costs us $17,000, gosh, I hate attorneys. Jim just gives a slight aggravated look and gazes towards the window over looking the river and much of downtown. How can anyone call what this guy does work?

So Sally looks at the cover page and the second page and the third and it says: "This sounds mean and ugly almost vindictive." The S2D2 says, "this is to protect you, franchising is very litigious." Sally: "But these are our friends." She looks at Jim and gives him a look, what are we getting ourselves into? The attorney also has an interesting look, a grin. Knowing that soon he will have much work defending them in lawsuits, he thinks to himself; gotta love these entrepreneurial suckers, so nave thinking they are going to do good in the world, help people get into Business and make money at the same time, living in a dream world, oh well thankfully they do exist, although I am noticing a decline in such folks over the years, but this is live bait, and I will make all I can while they still have money. The S2D2 then starts smiling as they leave. Knowing he can return the favor to some of his fellow attorneys nearby who specialize in divorce law and bankruptcy, etc. He has seen it before, good companies franchise and then the lawsuits, divorce and bankruptcy, he can smell it. He does not think more than a second or two that he and his S2D2 are the cause of all of it.

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