My Story of Franchise Fraud and Indentured Servitude

I loved seeing franchisees tell the FTC that franchising is like indentured servitude in their comments about the Franchise Rule. I told the FTC that once, too…. a couple years ago, in a letter I sent them about my case.

This chapter of my book explains the indentured servitude more clearly for those who haven’t experienced being a victim of franchise fraud. I dedicate this chapter to the many defrauded franchisees who have given years of their lives serving abusive people.

If you’ve ever listened to our podcast, you know that my co-host, Matt, is a trial attorney and that we discuss government, investigations, politics, and abuse. Franchising is a perfect topic for us, too, and we’ll get there soon.

But for now, enjoy my written words.


CONTEXT: This chapter begins right after my initial training at the franchise headquarters in Texas. In previous chapters I figured out that I’d been defrauded and I witnessed another unrelated crime. In this chapter I am facing the fact that the franchisors didn’t give me the training they promised before I signed the contract. This all occurred about one month after I signed the agreement.

The characters and names will make more sense when you have access to the full book.

THIS IS A DRAFT —- > improvements and the full book are on the way!

The plane ride home was infused with a deep sense of loss and disappointment. All I really wanted was some good, supportive people to work with — to help me make money. That was the whole reason I’d chosen the franchise industry in the first place.

I’d been sold on the dream of franchising: on the beauty of achieving the American dream through affiliating myself with a successful American business that would support me.

And instead I’d signed a contract with offenders.

I’ve already lived too many years in a bad relationship, I thought.

There was only one thing that was more important to me than the freedom that money would have brought me and my children, and that one thing, put simply, was my actual freedom — my own right to not ever have to associate with abusive people. I didn’t ever want to spend emotional energy worried about coming up with royalties for people who wanted me to be afraid that they might sue me.

Life’s too short to live like that, I thought. And I didn’t do all that work to escape the hell I used to be living in to sign a new contract with a new devil.

But, I had two obvious problems: first, of course, the contract; and second, I still needed to figure out how to make money. I wondered if I could be more like Carson… more quiet. I wondered if I could just stay at home and away from Langford Iris and make the franchise work. I was sure I could make money.

I bet that’s what most franchisees in this situation do, I thought. The writing is on the wall. The agreements give franchisors all the power. Horace doesn’t listen to anything I say and blames everything that goes wrong on me. Like clockwork.

But for $88,000! That’s a royal rip off! And royalties make this situation exactly like indentured servitude — but it’s indentured servitude that I purchased. That’s ridiculous. I can’t get away until I do my time. Franchising is the indentured servitude of the 21st century.

This was all exactly as the good retiring attorney in New Hampshire had warned me it would be. He’d taken one glance at the cover page of the Langford Iris agreement and he’d immediately known.

My mind wandered back to the conversation we’d had in his paper-cluttered office at the round oak table before I’d signed. “I’ve seen enough franchising in my day to know,” he’d told me. “The franchise will blame everything that goes wrong on you. It’s their strategy. It happens every time… like clockwork.”

And instead of listening to him, I’d trusted the FTC’s involvement and the franchise industry’s reputation of legitimacy. I trusted the government more than the man on the street, I mused. That was my mistake. It was the man on the street who was right. The attorney knew and I didn’t listen to his warnings.

In addition to the illegality, Larry’s veiled threats, and the good cop/bad cop strategies the co-CEOs evidently employed, I had a long list of other concerns about the inadequacy of Langford Iris’ training and support.

$88,000 is a lot of money. I figured I should get what I paid for.

Phase I training hadn’t been what Langford Iris had promised me it would be. One of my trainers had evidently quit, and the other trainer, my main one, had basically ignored me while I was in Texas because she was too busy working on making her own commissions.

To make up for the dissatisfaction I had expressed while in Texas, Horace had offered me things I didn’t purchase and that I didn’t want. I wanted what they’d promised before I signed the contract, not what they were giving me afterwards in an effort to make it appear as if I was getting what they’d sold me… I wasn’t.

I wanted $88,000 worth of dedicated personal training and a supportive committed staff ready to give it to me. Why else would I have agreed to pay a huge franchise fee and sign a dangerous contract? I didn’t want a gaggle of distracted recruiters taking a time out of their days here and there to help me because Horace told them they had to.

But I still had to figure out what to do.

Is it worth one more try to make this work? I wondered. No, probably not, I answered myself. You already know who they are and what they’re up to. But what else are you going to do? Your hands are tied, Anne, they have you. Langford Iris has you.

So, I wrote up a long email listing my smaller concerns to see what would happen.

And then, for whatever it was worth at the time, I used my background in psychology to interpret Horace’s response. I had no power: all I could do was use what I knew about offenders and abuse to gain more insight into Horace.

“I appreciate your perspective,” he wrote in reply to my email, “but I can list you a half dozen NEW NO EXPERIENCE firms at our conference in Vegas who do not have this feeling. I have not heard one issue from Carson.”

The me with a psychology background read his words and thought, first, he begins by falsely validating my perspective, saying that he appreciates it when he actually doesn’t. And then he immediately seeks to isolate me by telling me I’m the only one who has ever expressed any concerns.

As I read it, I completely understood that isolation is a common strategy used by offenders. And since this wasn’t the first time Horace had used isolation against me, his use of it again was no surprise. As I’ve said before, even though a psychology degree isn’t worth much, it’s worth something.

Second, I thought, even if he is telling the truth, which at this point I very much doubted, he falsely assumes that franchisees feel safe enough to come to him with problems. Considering the veiled threats I’ve already received, and the way I’ve been treated so far, it’s no surprise that people aren’t telling headquarters what they really think.

And as Margo and the rest of them already know, that’s what a truly anonymous franchisee survey would have been for, but that was a scam, too.

Third, I already knew that Carson wanted to be left out of it. Carson had told me that himself. Of course Carson hasn’t said anything, I thought. And he doesn’t plan to. He’s going to go home, stay quiet and try to make money.

I’m a very different person than Carson, I thought. I love Carson, but I’m not him. I’m me. He stays quiet, I speak up.

In my email I also complained that my main trainer, the person who was supposed to be giving me dedicated help to make calls, hadn’t actually helped me very much at all. I didn’t receive all the hours of support I was supposed to get, and while she was supporting me, she was multitasking.

To this Horace only responded, “I will simply share that Janice is TRULY LOVED and I have not had ONE complaint about her from one Langford Iris office or one Maxwell partner since she has been on our team years ago [SIC]. I could send dozens of emails with a sole purpose of bragging about her.”

Again, he uses the isolation strategy, I thought. And my point wasn’t that there was anything wrong with Janice personally, but that she didn’t give me the training you promised me she’d give me before I signed the contract.

I also complained that the employee who was supposed to give me dedicated personalized help with research (an important part of the job) had left the company. I had watched an online course, taken notes on the course and even studied my notes a few times before my first day of Phase I training, all to prepare for the beginning of the individualized time with him I was supposed to be buying with my $88,000 franchise fee. But then, when I arrived, that employee was gone and I received no research help at all.

Horace’s response to this complaint was, “I don’t know what help with research you want. Have you watched the actual research course?”

Yes, I had watched it; of course I had watched it. And I knew that the course was available for sale to the general public for somewhere around $299 because I’d talked to Margo about its availability before I signed the contract when Margo had assured me that franchisees received personalized one-on-one training in addition to all of the online training materials.

If I had only wanted a $299 online course, I wouldn’t have bought a franchise.

Horace then went on to write, “I don’t think the research you need is complex. You need companies, hiring managers, and candidates. All of them are on LinkedIn and you can see their public profiles.”

In other words, I thought, what you’re saying is that there was no reason for me to sign this agreement and give you $88,000 at all.

Subscribe on YouTube to Learn More