Mark Connolly Public Hearing Testimony

…Have you read Bill 33? Mr Connolly: No, I haven't read it. I was just told about the hearings.

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Legislative Assembly of Ontario
March 8, 2000

Public Hearing Testimony
Ottawa, Ontario, Canada
Mr. Mark Connolly, MBE franchisee

Standing Committee on Regulations and Private Bills
1st session, 37th Parliament

FRANCHISE DISCLOSURE ACT, 1999
Consideration of Bill 33, An Act to require fair dealing between parties to franchise agreements, to ensure that franchisees have the right to associate and to impose disclosure obligations on franchisors

MARK CONNOLLY

The Vice-Chair: Our next witness will be Mr Mark Connolly. You have 20 minutes, Mr Connolly, including questions. The floor is yours.

Mr Mark Connolly: I most certainly won't take 20 minutes. I have to get back to work. We're in the process of training somebody new.

I am Mark Connolly. I am a two-franchise storeowner for Mail Boxes Etc here in the Ottawa area. We just took over our second store on January 13. I have to say that when I started in Mail Boxes Etc-it was five years ago-they had just opened up in Quebec. I'm originally from Montreal. I walked into one of their stores and I was blown away by the service I got and the whole atmosphere.

When I started investigating the franchise of Mail Boxes Etc, it carried on. I was blown away by the way I was treated. I was very impressed with the amount of information I was forwarded about the decision that I wanted to get into of buying a Mail Boxes Etc store. I made that decision five years ago this week. I had a store open within three months and the rest is history. I've bought my second store. I think franchising is great. I think full disclosure is a necessity. I had everything disclosed to me.

Hearing the last gentleman, I can believe the horror stories that are out there. I have heard some horror stories. In our own system we have a few horror stories as well. I would like to attribute these not to the franchisor but to the individual franchisee. Franchising is not for everybody. Owning a store is not for everybody. If you're not a people person, you won't succeed. That's not to take away from the previous gentleman.

That's about it. I think full disclosure is a necessity and I think that Bill 33 is an excellent bill.

The Vice-Chair: Questions first of all from the PC caucus.

Questions

Mr Raminder Gill (Bramalea-Gore-Malton-Springdale): Mark, thank you for coming here. I just want to find out: In this original experience you had five years ago, was there anything negative in the disclosure documents they gave you-marketing documents, whatever you want to call them? Was there anything you might have been alarmed about but you said it's OK, you still wanted to make that decision, or was it all glorified and you still-

Mr Connolly: It was certainly all glorified. The presenter we had at the initial franchising seminar that I went to-the fellow's name was Ron Weston, a very dynamic speaker, a tremendous man-cut to the chase, saying: "This is what our franchise is about. If you're interested, pursue it. If serving the public and serving business people is not for you, leave the room now. Don't get involved."

In the secondary material that was given to us after we had initially said, "Yes, we are interested in Mail Boxes Etc," there was a pro forma statement given to us with regard to sales per year. That was all open. I have to admit that my own store went above and beyond those figures.

I've been in retail ever since I graduated from university. I am a people person. I'll be handing out my business cards afterwards, so you're all welcome to come to visit me.

Yes, it was glorified, of course. It has to be glorified, I think, to sell franchises.

Mr Gill: You said that in your system some people have failed.

Mr Connolly: Yes.

Mr Gill: In your original presentation, did they mention that?

Mr Connolly: Yes, they did. They mentioned I believe a 2% failure rate, either 2% or 5%. It goes back five years ago. Since then, we've more than doubled the number of stores we have in Canada. Mail Boxes Etc is a worldwide chain, and I'd like to believe a very reputable worldwide chain. That's my stand.

The Vice-Chair: Madame Boyer.

Mrs Claudette Boyer (Ottawa-Vanier): Thank you for your presentation. You knew what you were coming to say. I guess you were coming to tell us that you are in favour of Bill 33.

Mr Connolly: Yes, most certainly.

Mrs Boyer: But you think that disclosure is a very important issue in this bill. If you've read or heard about Bill 33, is there any other fact that you would like to bring in? Do you think that it goes far enough? Do you think it should be stronger in the statements that we make in the bill?

Mr Connolly: With regard to being able to network among franchise owners, associating with franchise owners, we've always had that. In our franchise agreement we must belong to an advertising association of our peers. So on a monthly basis we're getting together, discussing not only advertising but our sales, the good things about the franchise, the bad things about the franchise, how we can collectively get together to improve the franchise. We've always had that, so I don't know the other side of the coin. I've always had it, and that's why I feel that any franchise that is not offering that, it's as though they're not only holding back information; they're holding back their franchisees from being successful. You've got to have a peer group, and to hold somebody back from joining a peer group, there's something wrong with that. So yes, we should be able to associate with our peers.

Mrs Boyer: I understand the point. What you're doing is good. But do you find that Bill 33, the legislation that will be coming up, and that's why we're doing these hearings, is going far enough as far as protection both for the franchisee and the franchisor?

Mr Connolly: Can you define "far enough"?

Mrs Boyer: Have you read Bill 33?

Mr Connolly: No, I haven't read it. I was just told about the hearings.

Mrs Boyer: So you were just coming here to say that disclosure was very important.

Mr Connolly: Most certainly.

Mrs Boyer: And then, yes, protection is important.

Mr Connolly: It should be paramount.

Mrs Boyer: You're in favour of saying that the protection should be both for franchisees and franchisors, for both parties?

Mr Connolly: For both parties, yes. I think if there's full disclosure, it would protect both. My situation has been a very positive situation with my franchisor, so I don't know what some of the other stories are. I don't see how a franchisor could be damaged by a franchisee, however, short of them selling off their stores.

Mrs Boyer: Thank you.

The Vice-Chair: Mr Martin.

Mr Martin: I must say up front that I'm happy for you, that your story has been successful and hopefully will continue to be.

Mr Connolly: Let's hope, store number two. We hope to get store number three eventually.

Mr Martin: That hasn't been the case for a whole lot of people, including the presenter before you. The Canadian Alliance of Franchise Operators and myself have documented two tomes of stories that have appeared in the press over the last seven years in Ontario alone, 4,600 families who have been damaged by a franchise relationship.

In fact, one that I'll point to involves Mail Box Etc, if any of you brought your stuff with you. I know it's heavy to carry around. But it's tab B-31, and it's the story of a Peter Thomas, who actually sat in on the hearings in Toronto on Monday. He didn't get on the list because the list was too long. He lost his business. He claims it was primarily because he was sold a location that had no parking for him and it turned out to be a failure because of that. He wasn't told that before he got into the business. That little piece of information would have made all the difference for him. He lost $170,000 and now he's struggling with cancer, he's on chemotherapy, and some of that is driven by the stress of this whole circumstance. He's been threatened. He was threatened particularly when he went to the press with his story, over the phone. His life was threatened, and it's just not a pretty picture.

If your company should get sold, and that's happening every day now-we just heard the other day that 241 Pizza bought out Robin's Donuts, and I suggested a scenario to the Tim Hortons gentleman when he was before us in the Soo yesterday. If Pizza Pizza, for example, which has this terrible reputation, continues to have a franchisor who was criminally convicted in Florida and is now continuing to operate in Ontario, bought out Mail Boxes Etc, is there anything in your contract to protect you? And is there anything in legislation that you think we should be doing, in an instance such as that, to make sure your investment was protected?

Mr Connolly: I would certainly hope there is some legislation to protect me. In my own franchise agreement, which is signed with Mail Boxes Etc Canada, I would have to reread my franchise agreement to see if I am protected. It was five years ago that I read that. That's a horrific thought, if somebody came in and bought us out. Presumably we would still maintain our same name-

Mr Martin: I would hope so.

Mr Connolly: -and carry on the same business. My philosophy has always been that I am my own boss. I drive my store; I promote my store; I do everything to get the customer into my store. I have the backing of Mail Boxes Etc, with the name and with their nationwide marketing as well. If somebody came in and bought the name Mail Boxes Etc and started dictating certain rules and regulations, I am hopeful that my original franchise agreement would save me, because that is the agreement I signed.

Mr Martin: Check it out, because in my own town we had a couple of grocers who were model corporate citizens, Loeb. You had them here in the Ottawa area too, and you probably remember the story. It was in the mid-1990s. Provigo bought out Loeb and they lost their stores overnight. They literally slept in their stores for about two weeks while they negotiated an agreement that at least gave them some return on the investment, the work and effort and goodwill they had built up over a number of years.

But I'd go back and read my agreement if I were you, and get some advice on it, because that's the day in which we live. We're here today considering some legislation that might protect people like you who are hard-working, dedicated and committed, and just want to be successful business people. Thank you very much.

Mr Connolly: Let's hope all the legislation gets put into place so we can sleep at night.

The Vice-Chair: Mr Connolly, we really appreciate your time this morning. Sorry to have kept you waiting; we were a little bit behind schedule.

Mr Connolly: That's fine. I've got another two minutes of parking left.

The Vice-Chair: Thank you for your participation.

Copyright © 2000
Office of the Legislative Assembly of Ontario
Toronto, Ontario, Canada

This document is a verbatim copy of this witness’ oral testimony. To review the original transcript: http://www.ontla.on.ca/web/committee-proceedings/committee_transcripts_details.do?locale=en&Date=2000-03-08&ParlCommID=1&BillID=&Business=Bill+33%2C+Franchise+Disclosure+Act%2C+1999&DocumentID=19724#P212_90070

Copyright (c) 2000
Office of the Legislative Assembly of Ontario
Toronto, Ontario, Canada


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