Why don’t we hear about franchise fraud in the news?
In 2017, when I first began interacting with leaders in the franchise-fraud resistance movement (that’s my name for it), someone said, “This is big. It’s so big that it ought to be in The New York Times.
Yes, it ought to be, but it’s not.
The public relies on courts and the media for information. Publicity and media are necessary to keep things honest. That’s why we have public court records in the United States. Our democracy depends on the transparency of the courtroom. The judicial branch doesn’t make its judgements in silence, but based on a record that is open to the public and reporters.
Yet the topics I blog about here at Stop Franchise Fraud aren’t covered by traditional media. It makes sense that traditional media ought to be reporting on such a big problem. One reasonable question readers may be asking themselves is, “If this is true, why haven’t I heard about it?” and “Why isn’t this in the newspapers?”
Welp. There’s a reason for that. Let’s think through the problems I’ve been using this blog to define:
1) Congress isn’t creating laws to protect franchiSEES due to franchiSOR lobbying.
2) The laws are written in franchiSORS’ favor. FranchiSORS win in court using contract law.
3) Congress has outsourced the problem to the FTC. The FTC has instituted a Franchise Rule to regulate the industry.
4) The FTC isn’t getting involved in the enforcement of its own Franchise Rule
5) The FTC isn’t updating the Franchise Rule to allow franchiSEES a private right of action so the rule can be privately enforced.
What that all means is that it’s time for traditional media to jump into the fray and let the public know what’s happening, using evidence from court records and franchiSEE stories to expose the problem. Then, with publicity and the pressure that publicity evokes, Congress and the FTC will resolve the problem to protect our economy and investors.
But the media doesn’t happen.
The answer is pretty simple. Traditional is dependent on advertising. Franchising plays a huge role in our economy. Lots of advertising dollars come from the franchise industry and any newspaper that spills the beans on this fraud and corruption risks losing its funding. Franchisors would pull the plug on advertising dollars.
Fortunately, we now live in an Internet age when not all media is dependent on franchiSORS.
This story isn’t going to hold.