Freddy Crosses Over to the Dark Side…

It was all innocent at first.  Freddy borrowing money ($1,000) from Dr. Peter to start a sub shop.  Try as he did, Freddy couldn’t make it work.  Maybe two would work instead of one?  So Freddy labored all day and all night to become the quintessential entrepreneur.  But just as one didn’t work, two didn’t work.   Just like throwing your last wad of cash onto a single number at the roullette wheel, Freddy opened a third store.  Voila!  It worked.  Three was a charm!  After a number of years, Freddy knew there had to be a better way.  The hours were too long, payroll was tough and working to manage the whole mess was a juggling act at best.

So Freddy learned about the most lucrative business model ever conjured up by man – where you could use other people’s money to grow your business!  It’s called FRANCHISING!  So it was in 1974 that Freddy moved over to the dark side.  On the shirt tails of Ray K, Freddy started selling franchises to any and all who would show.  He especially loved immigrants who were entering the country with their life savings.  Freddy never told them his model wouldn’t work for just one store. But then, Freddy wasn’t running sandwich shops, he was selling franchises.  And should they figure it out, he could sell them more.  The ones that didn’t, could be sold to new marks.

Interestingly, the Reagan administration relieved the entrepreneurial establishment from common law and allowed arbitration to be the governing entity.  This gave Freddy and his band of merry con men the final authority on any and all contract negotiation and interpretation.  If things went wrong, the arbitration firm could be paid off.  And God forbid anyone sue Freddy.  Should that happen, Freddy simply uses their own royalty fees and vendor kickback monies to nail their puny little pitiful sorry asses to the unemployment line.  Don’t eff with Freddy or he’ll take you to the poor house in a body bag.  Who needs a mafia when one can use the government and one’s own money against him!

And so you have it.  The day the richest man in South Florida decided working to make a legitimate business was for the birds.  Taking advantage of the unkknowing and trusting immigrant and displaced corporate schmuck is a far easier way to become a billionaire and playboy.  And just remember Mr. Schaden, Freddy’s war chest makes yours look like a kindergartner’s piggy bank stash.

Bloody

Who Pays for TV and Radio Advertising?

Turn your television on and for a single hour, jot down the commercials you see on any of the major broadcast or cable channels (ABC, NBC, CBS, ESPN, CNN, etc.).  On major channels, there are three main categories of advertisers.  (Check the bottom of this post to find out what those three are.)

Though it cannot be proven, franchising advocates continuously quote that 40 to 50% of all retail is franchised.  (The data is owned by too many people and influenced heavily by pro-franchisor predatory bigots.) When you analyze the data of your one hour’s worth of major network advertising, it will become apparent just what the three verticals are that spend the lion’s share of advertising dollars with Madison Avenue agencies.

But that’s not the question or the purpose of this post.  The question is: Where is the money coming from?  First of all, some history.  McDonald’s ignored all conventional wisdom over three decades ago when they surpassed the 100 million dollar mark in advertising spend in a single year.  Most could not fathom the thought of such.  How did they justify it?  Simple, it wasn’t their money!  It is the money of hard working franchisees who pay exorbitant royalties to franchisors who spend it freely and with reckless abandon.  McDonald’s practices are truthfully depicted in in Fast Food Nation, author Eric Schlosser.  They pioneered the principle of going after your children, the pester power method.  But that again, is not the issue.  The real issue is that many franchises are B2B and not B2C.  Nearly all of the franchises that are offered at low entry fee are B2B.  These predatory franchisors have no intention of doing anything with the hard-earned  money they collect for advertising from your profits.  When asked the question of where that money is spent, or better yet when reading an FDD or UFOC, it is up to the sole discretion of the franchisor whether or not those funds are even earmarked for advertising.  Read an FDD and if you can even find the subject covered, you will see that the money can be used for advertising or any other thing the franchisor chooses.  Many simply use if to fund their playboy lifestyles.

So the next time you see David Brandon bragging that he’s giving money back to Main Street, don’t believe it.  He’s spending the money of the franchisees as though it is his.  When you watch a Subway commercial, remember that Fred DeLuca is the slimiest franchisor in the world, fighting more lawsuits than McDonald’s, Dunkin Donuts and Pizza Hut combined.  Fred gladly sells single franchises to unsuspecting immigrants (all they need is a pocket full of cash) when he couldn’t make it until he owned three!!!  When you see a Quiznos (seedy and poorly thought-out million sub giveaway campaign), know that Rick Schaden and his staff of flunkies approved the campaign and then fired the VP of Marketing (who came from telecommunications – how ignorant and cheap is Schaden for even hiring her) as a scapegoat.  (It’s only a matter of time until Quiznos loses the pricing game, thus driving all of their franchisees out of business.  Freddy D. has 6 or 7 times the number of franchisees, thus a war chest of over 400 million dollars a year at his disposal (pun intended).  Ricky hasn’t a chance of winning a price war.

So the next time you watch a Nascar race (if you can stand the fact they never learned to turn right;), count the number of advertisers who sponsor a car and then see how many are franchises.  Then realize that Ricky and Freddy and Davey are all spending 4 to 5 MILLION per car to put their brand on the hood of a race car!  That’s right, the hard-earned money of your relatives or friends or immigrants (who are unaware because they’re probably working 7 days a week just to make ends meet) is being spent so Ricky and Freddy and Davey can sit in the infield or in VIP boxes,  get special privileges at the expense of those who labor just to scrape by.

The three vertical leaders in advertising are auto, beverage and food.  (Yes, they are all franchised; GM not for long – they are soon to be owned by you and your Commander-in-Chief, who by the way, operates just like a franchisor.  He spends your money and you have absolutely not one damn iota of say in any of those decisions!)

Bloody

Steinfort Gone

Damn, real data does tell the true story!  (See previous Bloody post.)  Rumor has it that Ms. Steinfort has been let go.  On Bluemaumau, a recent anonymous commentor claims Ms Steinfort has been used as a scapegoat by Mr. Schaden.  I doubt that!  If one checks her background, one can tell that she doesn’t have a clue on how to market, nor a record worth putting into print (might be why her LinkedIn profile lists Level 3 as a restaurant concern when it’s a telecommunications company – and a very unhealthy one at that).  Feel free to comment if you have more info!