A 12 year franchisee-franchisor court battle (more acurately ‘battles’ plural) may finally be coming to a close in favour of the little guy as described in this recent article in the Globe and Mail.
In addition, it looks as if franchise legislation may soon become a reality in BC
But what is often not discussed in all of these positive changes is the trail of destruction that occurs leading up to these payouts. Depression, divorce, and bankruptcies are just some of the items in the list.
In the past, the game has been quite simple for the franchisor. They not only usually have deeper pockets than their franchisees, but they also often have their own ‘errors and omissions’ insurance which essentially allows them to pay a relatively small deductible and then let this insurance pay for a lawsuit that might be the result of an ‘error’ or an ‘omission’.
But the Franchisees do not have the liberty of purchasing ‘Protection Against Errors and Omissions Insurance’ insurance to level this field. The Franchisee is forced to fight the battle on their own. Yet the whole reason they are even trying to fight, is usually because they are losing or have already lost all their money!
The only option that a Franchisee can do is what the Dunkin’ Donuts team did – organize a group and/or class action lawsuit. This way they can split the costs at least and prove that it’s not just one noisy Franchisee that is upset but the majority.
Something stinks here and change cannot come soon enough.