The Franchising Industry has taken some hits in the last couple of decades. Some came from onerous regulation and piss poor performance of agencies like the Federal Trade Commission's Consumer Protection Division's Franchise Group where some believe Steve Toporoff had done so much damage to the industry that he should resign in disgrace and lose his pension. Yet others applauded this gentleman's efforts for working with industry and lawyers to develop laws, which would keep the FTC in a referee position. Personally, I believe the former opinion is more appropriate and realize in hindsight that the damage that the FTC did under his leadership in the Franchise Group of the FTC led to the failure of some 4000-franchise companies between 1985 and 2001. The Federal Trade Commission now has not prosecuted or attempted to prosecute a franchise case since 2000 that I am aware of after botching a few and accusing one company of things they did not do. Luckily the franchise industry is somewhat self-enforcing simply by its nature. That is to say that if a franchisor does not make successful franchisees they will fail, due to lack of royalty payments from franchisees which are not profitable or out of business. Additionally the litigious nature of franchising has caused premature failures and there are simply so few franchises that enforcement is fairly easy with a simple phone call or an inquiry from a franchise law firm to the company on behalf of the franchisee who a disgruntled attitude or bona fide complaint. We need to fire all those in government regulatory agencies, which destroy or diminish entire sectors of our economy without regard to the realities of free markets. Additionally for such crimes against free enterprise we need to establish prison terms for these bureaucrats. So think on this in 2006. |
