In franchising law we have what we call a 10-day rule, which in laymen's terms goes something like this; The prospective franchise buyer must receive the (UFOC) Uniform Franchise Offering Circular for ten business days before any monetary compensation is given to or collected by the Franchisor. Sounds like a good idea right? Well, it is very problematic for willing buyers and sellers to operate under such constraints of trade. One of the proponent reasons for this law is that the UFOCs are generally about 200 pages long and that is a lot to read and the government regulators wish to make sure you take it to an attorney first. Currently the Federal Trade Commission is reviewing all the rules in franchising and determining whether we need more over disclosure and which kinds of stipulations to add to the franchise rule. Typical isn't it adding minutia on top of already over loaded and cumbersome disclosure?
I would like to comment first on the 10-day rule. I agree that if such a rule is to remain in play that it should be a number, which is easy to figure out, due to holidays, state holidays, semi-holidays, which are different. If you are going to keep the cooling off period rule, then two weeks in a better idea for clarity so I concur with the commission on this thought. However I warn the commission of leaving the rule in place, I believe the rule should be lowered to one week if not entirely and immediately dismissed. Why? Well because the consumer does not really want any more barriers to buying a franchise. They do not like the 10-day waiting period, which ends up half a month with holidays. They do not want to go through a long sales process. They want instant gratification and they want to start their new career/business and embark on their new chosen lifestyle. All these regulations have complicated the issue and made it tougher to buy franchises, all to the frustration of the consumer, the economy and jobs in our country.
Tell me did anyone ever take a survey of the sales process and large documents of given out during their purchases to existing franchisees and ask them what they think of the whole mess, which has been created to supposedly help them? Has the Federal Trade Commission done this? NO, of course not. Yet, I cannot think of a franchisor, which does not constantly survey their end users of the franchised outlet for the desires and events leading to a sale of goods or services and on all those surveys they always ask the same things. Did you feel that all your questions were answered, were you happy with the buying process, were your needs met, etc? Why doesn't the Federal Trade Commission ask real franchise owners what they think of all the paperwork, large documents and rules? Simply taking the information from lobbyist groups of franchisee advocate rabble-rousers will not do it. Taking Internet complaints will not do it. Ask the actual franchisees already in the systems, the good franchisees, which follow the system. By making more rules you are actually hurting the franchisees, lengthening the documents and impeding the process of allowing franchising to fix America's problems thru simple real world free market fundamentals. DAH! This causes new case law, more stipulations and boilerplate phrases all adding to the length and complexity of the documents, agreements and buying process and thus only helping the S2D2s.
The ten-day rule was taken from the life insurance industry. I cannot understand why a person can go out and buy a new Turbo Porsche for $200,000 and it is a done deal. Recenssion of contract period is only 3-days. Apparently the Automobile industry has a stronger lobby? Let's get real. This is a dumb law? Who got the wild hair up their butt in the first place, can anyone remember why we have that rule in franchising or who put it there? It does not belong there in the modern day of business at the Speed of Thought. We allow people to gamble away entire life savings at casinos without a ten-day peak at the future, why the arbitrary rules in franchising? We are the greatest industry in the world, providing jobs, innovation, and efficiencies to a world, which needs more Umph! We are looking at problems of global recession, yet here in the states we are our own worst enemies impeding the flows of commerce? Why are you impeding our cash flow with the 10-Day rule? Why are you causing franchise buyers anguish when they are trying to juggle finances and timing is an issue in the qualifying for financing of the franchise?
We need to completely re-think our over regulation in the franchising sector immediately.
Lance Winslow - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/ |
No comments:
Post a Comment