ALB 3. Tiffany Cianci and the Strip-Mining of The Middle Class

ALB 3. Tiffany Cianci and the Strip-Mining of The Middle Class
On Vimeo and the usual audio platforms.

Tiffany Cianci’s nightmare began when a billionaire-backed private equity firm executed a hostile takeover of her franchise. As RFK Jr said after talking to her, “Nationwide, private equity firms are using dirty tricks and forced arbitration clauses to gobble up the last frontier of the American economy: small businesses and the middle class. But they can—and must—be stopped.”

When Tiffany organized resistance to what the new owners wanted to do, they spent millions of dollars forcing her into bankruptcy and spread lies to destroy her as an example. She and her family continue to fight (going to the New York Times, the New York Post and Washingtonian Magazine). She describes how the middle class is being strip-mined of its wealth.

One person can make a difference. The firm was supposed to buy a dozen businesses in the last two years. Exposure of their practices dissuaded many businesses from going with them. Only one has been bought, and their former president or CEO, Tiffany said, was indicted for fraud and no one else would buy them. “A match made in hell.”

Private equity firms are buying up huge percentages of businesses in different regions, in many adjoining states, for instance HVAC and plumbing. They retain the old, trusted names but raise prices in them all. Customers shop around but find the same higher prices everywhere. Then the controlling firm forces the companies to accept less out of the prices paid, squeezing the service company as it squeezes the customer

Transparency laws are needed. Forced arbitration hides bad conduct. Hundreds of thousands of small businesses are fighting for their lives in secret arbitration and no one knows about it. Many private equity firms impose on franchisees astronomically expensive forced arbitration to settle disputes, mandatory confidentiality, and a mandatory non-disparagement clause. Communities don’t see how their small businesses are being squeezed.

Tiffany can tell her story because the firm was found guilty of defamation, freeing her to restore her name. Every day she talks to politicians at the US Capitol about America’s 785,000 franchisees and how they have personal guarantees in their agreements, and most of their SBA loans are retirement-backed small business loans, meaning they risk losing everything, their savings, retirement, and their homes by the abusive and predatory practices people either don’t know about or can’t talk about.

Tiffany has testified before Congress. She speaks to the FTC. She speaks to the press and does podcasts. She has a TikTok channel, @TiffanyCianci, where she does TikTok Town Hall, where she speaks to political candidates about these issues, which she also posts on YouTube, @TiffanyCianci. See more at Linktr.ee/tiffanycianci.

There needs to be a Congressional investigation into this, and legislation. Franchises should come with warning labels about their failure rates. “26% of Subway franchise loans have been defaulted on. About 17% of Firehouse Subs’ loans have been defaulted on. A bunch of dental services franchises [same thing].” They should have warning labels. But instead, the SBA keeps churning out the loans. That’s how middle-class wealth is being syphoned away. The SBA has been corrupted for these purposes. It’s not building the middle class. Lloyd: “The SBA should be called the Big Business Administration.”

If you’re struggling with forced arbitration as a small business owner, you can learn a lot at the American Association for Justice (Justice.org), the Public Justice Center (PublicJustice.org), and the American Association of Franchisees and Dealers (AAFD.org).

Lloyd Chapman is Founder and President of the American Small Business League (ASBL.com), working to protect the interests of our nation's 33 million small businesses. His goal is to stop the diversion of federal small business contracts to large corporations. See the special project at DontCheatWomen.com. Follow Lloyd at X.com/LloydChapman.

Bruce de Torres is author of GOD, SCHOOL, 9/11 AND JFK: The Lies That Are Killing Us and The Truth That Sets Us Free (read the amazing reviews at brucedetorres.com), marketing director at TrineDay.com ("Books that challenge official history...because it matters”), and host of REALITY WITH BRUCE DE TORRES.