Franchise self-regulation urged

A few bad apples – or sour franchise operations – can give a whole business method a bad name…Wiseman argued too many franchisees have more in common with indentured servants than with entrepreneurs and “one way or another, this industry must be cleaned up.”

The Toronto Star
November 15, 1994

Franchise self-regulation urged
John Deverell

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A few bad apples – or sour franchise operations – can give a whole business method a bad name.

But the Canadian Franchise Association says the industry can regulate itself and wants governments to appoint the group as watchdog of all franchised businesses. The association earlier this year refused to renew the membership of Pizza Pizza after a survey of franchisees was critical of the business

“We are really focused on self-management,” association president Richard Cunningham said yesterday during a Toronto conference.

He said the association opposes a recent Alberta law that sets out disclosure rules designed to protect naïve investors from predatory franchisors. The group is even more alarmed by a similar bill proposed at Queen’s Park on Halloween by Durham West MP Jim Wiseman.

Wiseman argued too many franchisees have more in common with indentured servants than with entrepreneurs and “one way or another, this industry must be cleaned up.”

The risk, said Cunningham, creating unnecessary barriers for all new franchise projects in the process of trying to curb unethical franchisors.

He said the Alberta law creates reporting costs of $40,000 per franchisor and is keeping some promising organizations, and jobs, out of the province.

Cunningham suggested that government instead require franchisors to belong to his association, for a maximum fee of $1,600 a year, and let the group police the industry.


Risks: Canadian Franchise Association, CFA, Pizza Pizza, Indentured servants, Tobacco-industry-type defense Frenzied lobbying, No numbers to back up dire predictions, Mandatory membership in associations, Fox to guard henhouse, self-regulation, Sham of self-regulation, Canada, 19941115 Franchise self-regulation

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