Not just 7-11, but pretty much what all franchises do, one way or another. 7-11 does it a bit more blatantly, other franchises are ever so more subtle and in the process suck more life out of the franchisees.
But, its important to understand what happened here exactly.
When Franchisees sign a contract with 7-11, its not a "investment" or "purchase" contract. Its a rental contract, with a big chunk of the payment going towards renting the goodwill.
What this means is that just like when you rent a house and you pay say 20K a year, you dont get back that money when your contract ends, in the same way when you become a franchisee with 7-11 and you spend something like 80K-100K per year for the 10 years of the contract, you are not entitled to getting that money back. Different words, same result.
There are additional layers of complexity. You can be allowed to renew the franchise at the end of the term for a percentage of the original fee. But the company can refuse to renew. You can also sell your franchise to someone else. But the company reserves the right to prohibit the sale.
These conditions are in black and white in the franchise contract, and yet people who buy these franchises dont pay attention to what they are signing. They never question what the worst case risks are. People tend to look at contracts only from the "sunny day" scenario.
Like I said, some other franchises are much more subtle and more predatory. I was talking to a franchise owner a few years ago, for a really lovely cafe franchise which we used to love to go to and the owner was a very nice lady. After a couple of years we could see that she was constantly stressed and the quality was suffering. When we talked to her, she told us how the franchise agreement included "periodic refurnishings etc" and she hadn't paid attention to it. But every 2-3 years the parent company would force them to upgrade their furnishings, costing upwards of 100K each time, which would effectively eat into the profits they were able to make.
Eventually she quit the franchise and thats when we realised the dangers of signing a franchise agreement without fully understanding what your signing up for.
These are all various forms of "daylight robbery", but its all part of the system. This is how control is maintained over the society, through small businesses.
My wife and i and another couple got an invitation to Orange Park FLA back in the 90's for a free three day stay food/drinks at the bar all free to tour and listen to their TimeShare spiel.
Walked into a large room with tables full of people and Agents signing them up,evan saw some open briefcases full of cash,so we sat down and he started telling all you get and how you can trade off for different destinations around the country for a weeks stay,so i start asking the agent can we sell to whoever we want ,ANSWER no,has to be approved by us,i say ok,who pays the yearly property taxes,he says you do,i tell my wife get the checkbook and let's get the fuck outta here.
My wife got us a "free vacation" as a consolation for something. Doesn't really matter what. We went and sat through the pitch. Wifey was really interested, but I talked her down. On the way back home, right outside the resort, was a real estate office that specializes in getting people out of timeshares. They were selling the older division timeshares at 90% off the price of new ones. I'm sure the 10% was kept by the broker for finding somebody to take over the timeshare obligations. People were literally trying to give them away. At that point, she finally got it.
Youtube is typically on if I'm home awake or asleep, but I don't watch news there unless linked from here. I have a myriad selection of topics I like. Precious metals, cycling, music, expat, etc...
In the Philippines 7-11 store are popping up everywhere, destroying family owned micro-stores called Sari Sari stores. These stores buy retail and sell for a small amount markup. Most just have a walk-up grate they sell threw and often have only a small selection of goods. The government doesn't crack down on the small shops because they pay retail which includes the 12% sales tax. Many of these Sari Sari stores sales are only selling a few dollars a day in merchandise.
In low wage countries, transportation becomes expensive, even if you have your own motorcycle or car. When you make 10 bucks a day 1.25 for a liter of gas is expensive. These little stores sell small amounts of products. 1 egg, 1 gram of salt, a sachet with a small amount of toothpaste, shampoo, laundry soap, etc...
Not only does the money subsidize the family, often a stay at home wife or granny is the clerk, but the customers can get things they need from their neighbors. School children get a long lunch break and go home for lunch or buy from the little shops across the street from the schools.
7-11 will build a store and slowly choke out the little shops.
I recommend people visit a poor country of their choice to see what life is like for the working poor.
These little stores have plenty of other problems... Copycats, giving credit.... How do you tell Aunt Martha she can't have something on credit when she babysat you for free and changed your diaper?
These are little businesses with no working capital as they spend what they make today for food and inventory.
Not just 7-11, but pretty much what all franchises do, one way or another. 7-11 does it a bit more blatantly, other franchises are ever so more subtle and in the process suck more life out of the franchisees.
But, its important to understand what happened here exactly.
When Franchisees sign a contract with 7-11, its not a "investment" or "purchase" contract. Its a rental contract, with a big chunk of the payment going towards renting the goodwill.
What this means is that just like when you rent a house and you pay say 20K a year, you dont get back that money when your contract ends, in the same way when you become a franchisee with 7-11 and you spend something like 80K-100K per year for the 10 years of the contract, you are not entitled to getting that money back. Different words, same result.
There are additional layers of complexity. You can be allowed to renew the franchise at the end of the term for a percentage of the original fee. But the company can refuse to renew. You can also sell your franchise to someone else. But the company reserves the right to prohibit the sale.
These conditions are in black and white in the franchise contract, and yet people who buy these franchises dont pay attention to what they are signing. They never question what the worst case risks are. People tend to look at contracts only from the "sunny day" scenario.
Like I said, some other franchises are much more subtle and more predatory. I was talking to a franchise owner a few years ago, for a really lovely cafe franchise which we used to love to go to and the owner was a very nice lady. After a couple of years we could see that she was constantly stressed and the quality was suffering. When we talked to her, she told us how the franchise agreement included "periodic refurnishings etc" and she hadn't paid attention to it. But every 2-3 years the parent company would force them to upgrade their furnishings, costing upwards of 100K each time, which would effectively eat into the profits they were able to make.
Eventually she quit the franchise and thats when we realised the dangers of signing a franchise agreement without fully understanding what your signing up for.
These are all various forms of "daylight robbery", but its all part of the system. This is how control is maintained over the society, through small businesses.
My wife and i and another couple got an invitation to Orange Park FLA back in the 90's for a free three day stay food/drinks at the bar all free to tour and listen to their TimeShare spiel.
Walked into a large room with tables full of people and Agents signing them up,evan saw some open briefcases full of cash,so we sat down and he started telling all you get and how you can trade off for different destinations around the country for a weeks stay,so i start asking the agent can we sell to whoever we want ,ANSWER no,has to be approved by us,i say ok,who pays the yearly property taxes,he says you do,i tell my wife get the checkbook and let's get the fuck outta here.
Oh man, timeshare. It was one of the biggest scams. At one point I was really worried that my parents might end up signing up, luckily they didn't.
I havent heard that name in a long time, its amazing how scams can move so fast.
My wife got us a "free vacation" as a consolation for something. Doesn't really matter what. We went and sat through the pitch. Wifey was really interested, but I talked her down. On the way back home, right outside the resort, was a real estate office that specializes in getting people out of timeshares. They were selling the older division timeshares at 90% off the price of new ones. I'm sure the 10% was kept by the broker for finding somebody to take over the timeshare obligations. People were literally trying to give them away. At that point, she finally got it.
Great comment. When I read the post, I wondered "Didn't people read the contracts?"
Make nonfranchise small businesses great again.
Is this not what happened to the original bricks-and-minifigs owners? I read that they had less than 24 hours to leave.
And then the new owners took that man's collection?
Have no idea. Never heard of minifigs.
IT's all over youtube. Lots of people talking about it.
https://www.youtube.com/watch?v=tbEYUSYhLgQ
No wonder, I don't go to Youtube unless someone links it for me. LOL.
Watching it now.
I've been following the story. What a rabbit hole! Tricks and ManyFibs is not likely to survive this shitstorm.
Right.
Youtube is typically on if I'm home awake or asleep, but I don't watch news there unless linked from here. I have a myriad selection of topics I like. Precious metals, cycling, music, expat, etc...
I see. I only go there to listen to music but the commercial really distract.
Yeah, Hate those, but I won't pay them for a subscription,
Me neither.
Oregon is always protecting the bad people.
Those friggin' legos hurt when you step on them barefoot....heh
Most of the 7- 11 here in oklahoma,have switched to circle k or one of the many others.
Now I see why.
The management is retarded.
Yes. 7-Eleven used to be so prominent everywhere.
In the Philippines 7-11 store are popping up everywhere, destroying family owned micro-stores called Sari Sari stores. These stores buy retail and sell for a small amount markup. Most just have a walk-up grate they sell threw and often have only a small selection of goods. The government doesn't crack down on the small shops because they pay retail which includes the 12% sales tax. Many of these Sari Sari stores sales are only selling a few dollars a day in merchandise.
In low wage countries, transportation becomes expensive, even if you have your own motorcycle or car. When you make 10 bucks a day 1.25 for a liter of gas is expensive. These little stores sell small amounts of products. 1 egg, 1 gram of salt, a sachet with a small amount of toothpaste, shampoo, laundry soap, etc...
Not only does the money subsidize the family, often a stay at home wife or granny is the clerk, but the customers can get things they need from their neighbors. School children get a long lunch break and go home for lunch or buy from the little shops across the street from the schools.
7-11 will build a store and slowly choke out the little shops.
Wow, they abandon ship here and go to 3rd world countries and choke out the little shops. Evil.
I recommend people visit a poor country of their choice to see what life is like for the working poor.
These little stores have plenty of other problems... Copycats, giving credit.... How do you tell Aunt Martha she can't have something on credit when she babysat you for free and changed your diaper?
These are little businesses with no working capital as they spend what they make today for food and inventory.
I know it. I have been to lots of poor countries. Last was Peru.