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Franchise Companies Come and Go

Each day we hear of companies entering the franchising industry. This is good news for America, right? Well, yes and know. Yes, because franchising is the closest thing to the spirit of free enterprise as any other method of doing business and because franchising offers small business people advantages that they would not normally have in pursuing their American Dream. However it is unfortunate but true that the average Franchisor failure rate is 5:1 in five years. Meaning they are gone out of business in that short amount of time. This is horrific news really. Why is this? Well most often it is due to over regulation, junk lawsuits, under capitalization or greed. Having played in the franchising industry I have seen it all.

Recently I had, had enough of the crap of beating my head against the wall, sure the money is excellent if you have a good concept and we certainly do; www.CarWashGuys.com ; but we found it was easier to make more money and keep more by not growing thru franchising. In franchising you can grow faster, in a 4-year period we went from 4 states to operations and franchised outlets in over 23 states. My point is that there are just too many lawyers and regulations for one to actually believe that anyone in government actually believes in free enterprise, to think they do is a bogus notion indeed.

In our company we are not currently offering franchises to the public. Our focus is to set up company owned units across the US and eventually the world and since I have retired the team will have to do it on their own, sure a few phone calls here and there for moral support or advice, but it just is not worth dealing with that level of bureaucracy and over lititigiousness. We may franchise in other countries but the United States being regulated by the Federal Trade Commission has their heads up their asses and it makes no sense in America anymore. Generally this business decision was made due to many following factors, some of which are listed below:

Sarbaines Oxley Law and Accounting Reporting Cost Increases,

Over Regulation in Franchising and Litigation,

Multiple State Franchise Registration Laws Out of Sync,

Disclosure Laws Hurting Company Proprietary Information,

Required Disclosures which Might Help International Terrorists,

Disclosure Laws, which Require the Giving Out of Personal Information About Franchisees.

Litigiousness of Franchising and Absence of Tort Reforms in the US and Canada,

Higher Profit Margins for the Company Running Our Own Units,

More Efficiency to Corral Our Competition,

More Latitude to Take on New National Account Business,

Better Service Standards for Current and Future Car Wash Customers,

More Control of Business Model and Less Red Tape

We have chosen a new strategy along the lines of a Starbucks, Home Depot, Enterprise Rent-A-Car, Federal Express type scenario where we can exert more control and less red tape to insure higher standards and smoother business operations. Regretfully this does impact the small business community, franchise model and those who dream of owning their own franchise business. Over regulation usually does hurt the little guys and stifle competition and creates barriers to entry.

We are not the only franchisor who feels this way and if the failure rates for franchisors in our country are 5:1 it would behoove new entrants to the franchising industry to think long and hard before getting into the franchise game. If you do not have a million dollars going in, you should not go. If you have not proven your concept in many markets over various business cycles forget it. Additionally you may want to look at alternatives to franchising, because with all this over regulation you are not going to have any fun doing it. Think on this.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

In The News:

The resupply mission will carry around 6,400 pounds of cargo for research.
Japan’s Hayabusa2 spacecraft successfully released a small capsule on Saturday and sent it toward Earth to deliver samples from a distant asteroid that could provide clues to the origin of the solar system and life on our planet, the country’s space agency said.
A New Mexico artist collective is taking responsibility for the stainless steel monoliths mysteriously cropping up around the world. 
Two classified reports from the Pentagon's task force used to "detect, analyze and catalog" UFOs have been leaked, one of which includes a photo of an unidentified silver “cube-shaped” object.
After years of extensive research and not understanding why coho salmon were dying after heavy rains, scientists believe it's linked to a chemical found in automotive tires.
BEIJING (AP) — China said Thursday its latest lunar probe has finished taking samples of the moon’s surface and sealed them within the spacecraft for return to Earth, the first time such a mission has been attempted by any country in more than 40 years.
A fireball that rattled windows and was felt from southern Ontario to Virginia midday Wednesday is widely thought to be an asteroid, experts believe.
Life does not exist on Mars, but a new study suggests that if there were aliens on the Red Planet in its past, they may have lived "far below" the surface.
The space object that was captured by Earth's orbit is indeed a rocket booster from the 1960s, NASA confirmed.
The third strange monolith, possibly made of stainless steel, to appear out of nowhere all across the world was found Wednesday in California.

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