Knowledge is power for franchisees. (Special Report - Business Law).

Knowledge is power. And when it comes to franchising in Ontario, the more. store operators know about the pitfalls and legal traps of the industry, the more they can protect themselves from being scammed out of their investment, says a consultant for franchise operators.

Les Stewart, president and founder of the Canadian Alliance of Franchise Operators, says the franchising industry operates under its own set of rules apart from mainstream business. The self-described "skunk at a garden party" of the franchise industry has become a student of franchisor operations in Ontario by setting up his own consultant's business in Barrie. His mission is to give advice to franchisees in trouble and draw attention to the "tragedy behind the facade."

Like Sault Ste. Marie MPP Tony Martin, Stewart wants more bite put into the province's franchise laws to protect the investment and rights of franchise operators. The new Arthur Wishart Act was Ontario's first attempt to regulate the industry, but critics say the law does not adequately deal with the bulk of disputes between franchisees and franchisors. If a company is foundering or restructuring, it is always the franchisees that suffer, he adds.

Upon receiving termination notices, some operators opt to hand over the store's keys, while others cough up the money to stay in business. Some actually challenge it in the courts. Since their initial investment and life savings are trapped, in many instances franchisees keep operating at a personal financial loss when they could get a minimum wage job elsewhere and be better off, says Stewart. That is why he urges franchisees to organize into independent professional organizations to create a networking forum