On January 12, 2017, Representative Keith Ellison, a democrat from Minnesota introduced The Fair Franchise Act of 2017 to the Senate and the House of Representatives in the 1st Session of the 115th Congress. Ellison is a member of the democrat farmer-labor party (a central-left party in Minnesota), an attorney, and is currently serving as the Attorney General of Minnesota.
The Fair Franchise Act of 2017 is 40 pages long and its purpose was “to establish minimum standards of fair conduct in franchise sales and franchise business relationships, and for other purposes.” (pdf version of bill)
The 115th Congress met during the last weeks of Obama’s presidency and the first two years of Trump’s presidency. As Wikipedia puts it at my current reading, “Several political scientists described the legislative accomplishments of this Congress as modest, considering that both Congress and the Presidency were under Republican Party control [1][2][3][4].”
“According to a contemporary study,” Wikipedia continues, “‘House and GOP majorities struggled to legislate: GOP fissures and an unpopular president frequently undermined the Republican agenda. Most notably, clashes within and between the two parties strained old ways of doing business[2].”
In its first statements, the Act succinctly lays out the problem we are still facing today.
What I am saying is not new. It is not rocket science and it is not unknown.
I was not present at the 115th congress. I assume the chaos of American politics got in the way of this important Act.
And I also assume, since the International Franchise Association is currently lobbying against Senator Cortez Masto’s new bill which is much more modest and only seeks to increase transparency and ensure that franchiSEE investors have the revenue information they need before taking out taxpayer-backed SBA loans, that the International Franchise Association also lobbied against the Fair Franchise Act of 2017.
But the Federal Trade Commission’s regulations aren’t working.
REGULATIONS THAT EXIST IN WRITING BUT AREN’T ENFORCED:
The purposes of the Act are to:
If the International Franchise Association and its franchiSOR members really followed their own ethical standards, the IFA would not be lobbying against any of this legislation. None of the legislation would be needed if franchiSORS could “self-regulate” (the IFA has ‘self-regulation’ programs) and do the right thing without being compelled (screenshot taken on 8/3/2019).
But humans are selfish. They want money.
And in the franchise world, since just about everybody’s “doing it” (committing fraud), just about everybody does it. The franchiSORS don’t call it fraud, though. (of course not!) They tend to blame any problems on the franchiSEES.
Ask just about anyone in the industry, they’ll tell you that franchiSEES who got defrauded didn’t do enough research before they signed a contract. In my world, in the world of psychology, we call that “victim blaming.” We call that “abuse.”
For all intents and purposes, it appears to franchiSEES before they sign the dotted line that the Federal Trade Commission is doing enough to regulate the industry when actually, it’s not.
The people making money off the scheme don’t talk about the fact that some IFA franchiSOR members have negative net growth and only a minority of franchises have a net growth rate worth even considering investing in.
Considering the poor state of the franchise industry and the pervasive fraud that threatens the United States economy, costs the taxpayer, and makes it difficult for franchiSEES to pay employees fair wages, the IFA and all the franshiSORS who make verbal claims that they are ethical and upstanding should support Senator Cortez Masto’s new bill and get on board behind an act like the Fair Franchise Act of 2017.
By taking these actions, they could follow the IFA’s Code of Ethics.
Considering the current situation, saying “We don’t like regulation” is on par with justifying thievery.
A while back I learned that you can best judge a person by what they do, not what they say they do. The same goes for organizations and certainly for franchiSORS. If you’re a franchiSOR and you’re really one as ethical and upstanding as you say you are, if you’re truly prepared to expand your business using other people’s money, prove it: Support Senator Cortez Masto’s bill.
1. Lee, Frances E. (July 31, 2018). “The 115th Congress and Questions of Party Unity in a Polarized Era”. The Journal of Politics. 80 (4): 1464–1473. doi:10.1086/699335. ISSN 0022-3816.
2. Binder, Sarah (2018). “Dodging the Rules in Trump’s Republican Congress”. The Journal of Politics. 80 (4): 1454–1463. doi:10.1086/699334. ISSN 0022-3816.
3. Pearson, Kathryn (January 1, 2017). “President Trump and Congressional Republicans: Uncertain Teamwork in the 115th Congress”. The Forum. 15 (3). doi:10.1515/for-2017-0033. ISSN 1540-8884.
4. Edwards III, George C. (January 1, 2017). “No Deal: Donald Trump’s Leadership of Congress”. The Forum. 15 (3). doi:10.1515/for-2017-0031. ISSN 1540-8884.
