Franchising and fear: Most franchises are red organizations. What do I mean by red? I mean that FranchiSORS use fear to control their franchiSEES.
FRANCHISING AND FEAR:
Learn more about red organizations and the Laloux culture model [1] to understand why franchises fall into the “red” category.
FranchiSORS use unjust contracts and fear of litigation and loss to maintain control over their franchiSEES. FranchiSORS could support legislation that would change the status quo, but they lobby against it.
WHY FRANCHISORS WIN IN COURT:
An Introduction to the LaLoux Culture Model:
Over time, across the course of history, as humans have created and developed large organizations, different organizational paradigms have emerged. In his seminal work, Reinventing Organizations, Fredric Laloux explains the human organizational paradigms.
Laloux calls the two most primitive organizations “red” organizations and “amber” organizations. Both have centralized power structures.
A red organization is led by a leader who inspires fear in enemies and compliance among group members. The authority figure commands people and establishes directions that people must follow. Laloux’s metaphor for a red organization is a “wolf pack.” Examples of red organizations today are the mafia, street gangs and tribal militias.
Over time, humans progressed from “red” tribal organizations to “amber” hierarchical organizations like the Roman military and the Catholic church. Amber organizations have stable leaderships built around leaders’ status rather than prowess. Those at the highest levels exert strict control over those at lower levels. The organizations have longterm stability and use set processes and formal roles and various levels of their hierarchies. While the leaders of these organizations are still behaving within the organizations in an egocentric manner, they are not necessarily using fear of physical harm to gain compliance. Most public schools, governments and traditional churches operate as “amber” organizations.
Laloux’s third-tier organizational paradigm is called “orange.” “Orange” organizations emerged during the age of reason when entrenched “amber” organizations didn’t have the flexibility to adapt to changing conditions. Orange organizations are meritocracies, offering all participants the option to compete based on merit rather than status. Laloux uses the machine as a guiding metaphor for “orange” organizations and leaders at the top of “orange” organizations develop strategies and objectives that lower-level participants carry out with some level of freedom. Status in “Orange” organizations is based on achievement.
Laloux’s fourth tier organizational paradigm is represented by the color “green.” Rather than focusing on meeting organizational strategies and objectives set by leaders, “green” organizations focus on culture and truly empowering all members regardless of hierarchical level. They make decisions based on shared community values and seek high-engagement from everyone. All organizational members get to share in decision making and decisions are made by consensus. “Green” organizations emerged when individuals sought more meaning than is available when working as a cog in an orange organizational machine, constantly working to use one’s own skills to meet the objectives of the leaders.
Gathering consensus can be time consuming and is sometimes impossible. It is beautiful and idealistic, but sometimes it isn’t all that realistic. Green organizations can max out due to the difficulties inherent with finding consensus. They can also burn out due to the tendency for humans to use hierarchal structures to simplify organizational processes. Ben and Jerry’s Ice Cream and Southwest Airlines are examples of functioning “green” organizations.
Laloux’s “teal” organizations are emerging as people figure out how to work together without hierarchical structures. Teal organizations develop organically with new members self-affiliating with the organizational system and contributing their own work to reproduce organizational patterns.

[1] Laloux, F. (2014). Reinventing Organizations. Nelson Parker.
