As a former franchisor, co-author of a popular book on franchising and owner of one of the highest traffic websites in franchising, I often get asked the tough questions on the franchising industry. Not long ago, a former franchisee emailed me and said that franchisors use the franchisee's capital to expand their business brand names and then when they are no longer needed they treat them like sacrificial lambs.

Well, I certainly never considered our franchisees sacrificial lambs, they were my friends, team partners and we were in business to win, together. When a company expands rapidly in the market place, it pays to have fully vested partners, rather than employees, that is where I see the strength and why I chose franchising.

Many franchisees we setup ended up costing us money - 50% of the franchise fee was used up in marketing, 75% in administration, 25% more in costs associated with over regulation, and lawyers. We lost money on the franchise fees. The royalties over time is how you make money in franchising and that only happens if franchisees are successful because, they have to make money to pay the royalties.

So, if you point your fingers at me, I would not be surprised if I were you that I might hand you a mirror. Now realize, I am talking about me, not many of the Corporate Franchise systems, which I often became disgusted with. Many great franchise systems out there, many are just selling people a job and a dream and working them to death as cheap labor. That was not me, that is why I joined the AAFD and became a board member.

A legitimate franchisor will not make money unless the franchisees make money, if they are a churning organization, I ask why do they exist? Because of the laws and rules and regulations allows them too. Without that the free-market would send them packing.

L. Winslow is an Economic Advisor to the Online Think Tank, a Futurist and retired entrepreneur http://www.worldthinktank.net Currently he is planning a bicycle ride across the US to raise money for charity and is sponsored by http://www.Calling-Plans.com and all the proceeds will go to various charities who sign up.

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