Hail and Farewell

…it is quite clear that patterns on abuse, or even anecdotal reports, are not prerequisites to the movement toward franchising laws; in many of these countries, the record is totally lacking in any evidence of such conduct.

Continental Franchise Review
December 31, 1998

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Hail and Farewell
Philip F. Zeidman

In my final column last year (“For Whom the Bell Tolls,” CFR, 12/19/97), I ventured a “grim year-end prediction”:

We will continue to experience the growth of governmental interference until franchisors everywhere comprehend that legislation anywhere is potentially a threat to them.

It is without a sense of either satisfaction or vindication that I reflect upon the accuracy of that prediction. In 1998 alone, we have seen legislation, proposed legislation, or new developments regarding existing legislation, affecting franchising in –

* Australia
* Canada (Ontario)
* China
* Romania
* Spain

… and, one suspects, in other countries from which the report have yet to be received.

If one examines that list of countries, it is impossible to discern any pattern to explain the appearance or development of franchising laws: some have developed economies, some developing; some have significant franchising activity, some none; some have franchise associations, some none. In short, it appears that no prediction can safely be made as to which soil conditions will prove to be most hospitable to franchise laws.

As the holiday festivities approach, perhaps it is appropriate to sound some sober warnings about the days ahead: it is quite clear that patterns on abuse, or even anecdotal reports, are not prerequisites to the movement toward franchising laws; in many of these countries, the record is totally lacking in any evidence of such conduct. Puzzlingly, it is also clear that the presence of an association of franchisors does not necessarily lead to a lowered likelihood of franchise legislation.

Why? Do franchisors not appreciate the threat? Do they not have an understanding of the legislative process? Have they not developed the potency necessary to defeat these proposals?

Whatever the explanation, perhaps we must simply recognize that franchisors alone cannot be relied upon to protect their own interests. The time may have come to look to these other elements of society who are also threatened by excessive regulation – franchisees, who will find their growth limited and their options constricted; governments whose tax revenues are jeopardized and whose targets for job growth can be thwarted. As the millennium nears, franchisors need allies, internationally as well as domestically. The message is a stark one: We’re all in this together.


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Risks: Investments in franchising will stop & be lost if law passed, Alpha Male attorney, Fear mongering to clients increases industry fee market, International Franchise Association, AFA, Canada: An American Perspective, Psychological denial, Hubris, Close ties: IFA & CFA, General counsel, IFA, Franchisors want the minimum regulation they can get away with, Sincerity, United States, Canada, Australia, Romania, Spain, China, 19981231 Hail and

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