June 4, 1997 3:10 pm
Hi, Lance Winslow, Car Wash Guys, International, 5699 Cannon Road, Suite # 310, Agora Hills, California 91301, phone number 888-927-4489.
I had an interesting situation happen the other day. I am a franchisor. I had an aerospace worker who had been laid off about 4 months prior. As you know in this country not a lot of people save. They have some credit card debt and some other things and they didn't have a whole lot of savings. So what eventually happened was they were two months late on their mortgage. They had one kid in college and one kid starting next year. They had a mini van that kept breaking down on them. The husband had a BMW that was leased and they wanted it back. And he was just trying to save his credit, charging up even more credit card debt.
In any case, we were trying to put this deal together as quick as possible, but then the 10 day rule got in the way. We couldn't really do much about it because we had to wait 10 days before we sold him the franchise.
Well, it turned out that by the time we went with Phoenix Financial to put the leasing through to buy the franchise, the second payment that he missed on his mortgage showed up on his TRW and killed the deal. Now he moved into a rented house and he is filing bankruptcy and his kid will have to try to get student loans. It doesn't look like he is going to be able to. So we are going to put him to work as a manager on one of our mobile trucks because I am in the mobile car wash franchising. But it looks like this was a total disaster for this family. And I have to blame the 10 day rule because had we been able to sell him a franchise, he would have had the money to take care of his obligations and catch up on his mortgage, but he wasn't able to because of your 10 day rule. You ruined this person's life.
Now we sell turnkey franchises. That means that we get all the volume and the route and all the customers before the franchise starts through what we call a "Bonsai and Blitz" marketing mission, which averages about $8,500 to $10,000 a month worth of gross sales. That is our goal. We can't write it anywhere and we can't promise it to anybody, but we always. . . .that's what we do. A lot of our routes is even pre-existing.
But what I am finding out is because of the 10 day rule and slowness of SBA loans and things like that, you guys have really taken these rules and . . . . And what franchising is all about is helping people buy a piece of America so they can own their own business and really enjoy their American dream. Whatever their American dream is. I mean it can be anything. It is a free country. It's freedom of speech and freedom to dream. But if you take that away from someone, are you really helping or hurting.
What about a 5 day rule. Five working days. I mean, the only other persons that has 10 day rules is the insurance company, for their free look. I am just thinking that maybe this 10 day rule is maybe something someone dreamed up a long time ago that might be for the securities industry. I don't think it really belongs . . . .