The Somali Pirates of Houston

| 1 Comment | 0 TrackBacks

The Begging Franchise

I think of franchising as potentially useful for everything on earth that involves either commerce or religion. All religious organizations are constructed on the franchise model, with set operating rules and payments upstream by those downstream. Every religion also claims to be unique just as every franchise, good or bad, claims to have a unique selling proposition.

Like religions, commercial franchising requires its own flag. Flag saluters are called upon to subscribe to the "code" of the concept. They face condemnation should they defect. (There is a franchising hell, but for some it begins before you leave the system. Think of Quiznos and Cold Stone Creameries to mention a few.)

Here in Houston, I believe I have identified a new form of franchising directed to the homeless, destitute, drug enslaved, just out of jail/prison, or high school dropout. I noticed it slowly, over time. Its seasonality is not that of spring, summer, fall or winter, but rather day of the week and hours of the day. When traffic density is high, the franchisee at a traffic light controlled intersection has -for a moment- a captive audience of people in cars and trucks waiting for the light to change.

For that moment, the homeless, destitute, and dropouts are transformed into the begging or panhandling franchisees.

The Somali Pirates

Every Saturday afternoon around four o'clock, for instance, at the intersection of the Beltway and Highway 288, there is a small group (always the same folks) who I call "The Somali Pirates" who aggressively operate a panhandling enterprise targeting folks returning from the beach. This is a multi-lane divided highway intersection and they assign about twenty people -all very threatening- to go up and down the line at every red light accosting drivers and passengers with various messages about why they ought to "contribute" to the pirates. Sometimes they are selling some crap or other but usually they are just "begging".

The same market exists at every urban freeway exit onto a main street, because the traffic is heavier there and each change of traffic light provides a new dozen or so cars in more than one lane, stopped waiting for the next light change. To a similar degree the same venue opportunity is presented on any busy street at any traffic controlled intersection.

The franchisees, with custom but homemade looking signs, go up and down these lines of cars soliciting, sometimes with squeegees washing windshields whether or not solicited by the driver to do so and holding out a hand or bucket or basket into which the driver is asked/intimidated to make a cash deposit/contribution.

On more than one occasion, I have noticed that these small groups of beggar franchisees came together in a common vehicle and that they have several signs with different messages. A local marketing co-op, if you will.

These range from solicitations to finance school band or team trips, church projects like choir competitions in other cities, to claims that the beggar franchisee is homeless and jobless, a disabled military service veteran, just lost his family in some catastrophe, is hungry or needs money for medical attention of some sort.

There is an endless array of "Can you please help me" signage, sometimes revealed by some careless beggar franchisee who failed to remember to put the spare signs away out of sight of passing drivers.

Sometimes the "pitch" is flavored by its being done by a suggestively clad girl with the look of someone that your average man would feel like he might like to help/save/"adopt" (if you catch my meaning). These are more likely to be seen at male dense venues like athletic events just after the game is over and everyone is coming out of the parking lots, again traffic light controlled so as to provide that momentary refreshed inventory of about a dozen or so stopped cars. The signs say different things slanted to pathetic situations in which a young woman might find herself and be in need of a "hero" to help bail her out.

Cripples make excellent beggar franchisees, but they do have to be sufficiently mobile to enable them to get up and down each row of momentarily stopped cars with their signs claiming to be disabled veterans unable to find work and homeless as well as otherwise in need of assistance - the list of "reasons why you should help me" seems endless. Drivers face the dilemma of asking themselves whether this person really is a homeless disabled veteran to whom some help would be appropriate or just another bum with a sign.

The Real Jobs People Do

I live in a thriving big city where no matter what the labor statistics might say no one is really jobless. The grey market here provides more than enough work for those not on some corporate payroll. Lawns get tended. Curbs in front of homes get street numbers painted on them. Cars get detailed in vacant gas station or similar empty commercial locations. Vacated buildings get cleaned out for another tenant. Rent a cop security guards pretend to protect small businesses from anything that isn't dangerous in the first place. Chipped windshields get patched. Vehicles containing all sorts of contraband get driven from here to there. People who thought it wasn't cool to do homework and stay in high school stand in medians of busy streets holding signs proclaiming that you should patronize such and such store located in the strip center right there where the sign holder is standing.

All this is cash fueled with no record keeping and no taxes or other ancillary payments or reports made.

The signs held by the drop outs adverting gold buyer and seller jewelry shops are the funniest. They proclaim that this particular shylock will pay you more for your gold than the filthy shylock just down the street, or that this schmuck will give you a big discount if you buy gold from him. The funniest is the one where you not only get discounted gold but also some free silver if you buy from the adverted establishment. Meanwhile the sign holding dummy is roasting his bloody ass off in the heat of the street, usually drinking some sugar drink and eating something sweet like a Twinkie, Ho Ho or Ding Dong.

There is also a major industry in petty crime just below the level at which enforcement resources might be brought into play. Petty crime in Texas is defined as crime of insufficient seriousness to make the evening local news.

Panhandling Franchises and its Enforcement -Buttercup

The panhandling business, however, in a city like Houston, is well organized, and each intersection where the prospects of favorable demographics, as I have explained, is a micro business locale. Each locale has value expressible as a function of the panhandling revenue obtainable.

This has occurred to the more entrepreneurial amongst the beggars. Why stand in the hot sun for hours when they can take control of worthwhile intersections through threat and force and "license" others to do the begging and pay them the vigorish/royalties attributable to that cash flow?

The most successful of the street intersection franchisors is a person who goes by the name of Buttercup.

I asked around about Buttercup and actually was able to arrange to meet and interview him at a local dive where he hangs out while he enjoyed eats and drinks on my tab, eating slowly but drinking more aggressively as we visited. Buttercup is an ex teamsters union organizer from Detroit with hands that have come into violent contact with many things and many people. He has the look of someone who has left more than several people dying from assault in some cold wet dark alley and his eyes are dead. His speech is slurred but understandable as he goes from communicative grunt to communicative grunt, the real meaning being conveyed by his face as well as by the inflection of each grunt and hand gestures.

He certainly carries weapons of various sorts, but a knife and a gun are the most obvious. He has no concealed carry permit, nor for that matter any license or permit of any kind.

The government may not even know he exists, although I suspect the police know about him and leave him alone for any of various reasons. One does not ask such a person where he lives or how his family might be, or any other personal question that a paranoiac might feel is intrusive.

Payment is by the day and in advance in cash. The price is whatever Buttercup says it is. I know that the price has not been worked out on any break even or other formula. You can decline but you can't argue, complain, whine or criticize.

You get the "right" to pan handle at that intersection on that day until midnight. You buy a full day. You can buy one corner or up to all four corners of the intersection. If someone else comes along and tries to pan handle in your intersection during your tenure, he or she will be instructed by you to leave on pain of serious injury or worse. Few fail to get the message as it is well known throughout the potential pan handler community how this business works and that if Buttercup needs to be summoned to deal with you your Medicaid coverage will probably not see you all the way through to useful recovery.

But, I suspect that Buttercup probably has another identity that is well financed by his franchise operations. He has money "out on the street" as Tony Soprano would say. The loan shark business fits right in with everything else about Buttercup. Between the franchise business and the loan sharking operations, I have a feeling that Buttercup is rather comfortable by just about any standard. However, when he is seen driving it is in a car that looks as though it probably would not make it to the next corner. God only knows how many aliases he has. I am rather certain that he is better off than most lawyers.

Where does Buttercup fit in the world of franchising? I strongly believe that his franchisees attain a higher return on invested capital than those of most franchise companies in America today. Their executives may dress and talk in a more sophisticated manner but the contracts they use are the high tone legal equivalent of the Buttercup approach to system governance.

In fact, Buttercup probably offers gentler terms because you don't have to wake up the next morning and go back to work as a Buttercup franchisee if you don't like it.

Before you look down your nose at Buttercup consider that he probably - at his level of micro franchising - does a lot better for his franchisees than most so called franchise companies in America today. Any Cold Stone Creamery or Quiznos franchisee would envy the ability to walk away free and clear after any day on which he decided that the investment was not paying off satisfactorily.

Looking to exit your system and their Buttercup, talk to with an experienced franchise attorney who can deal with Buttercup.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Our Franchise Commmunity on LinkedIn

Join & Contribute to our Franchise Commmunity on LinkedIn.

Be Recognized as an Expert.

1 Comment

This is an interesting article and kudos to Richard for having lunch with one of the "leaders".
I have seen these people in Houston, Calgary and Toronto and often wonder if they were organized.I volunteer with a homeless foundation and there is assistance for those that want it maybe there is more short term rewards in panhandling.

Leave a comment

No TrackBacks

TrackBack URL:



Search for Articles

Follow Us

About this Entry

This page contains a single entry by Richard Solomon published on September 1, 2015 4:32 AM.

When Can A Franchisee Continue to Operate if the Franchisor is in Bankruptcy? was the previous entry in this blog.

Do You Have this Unfair and Illegal Provision in Your Franchise Agreement? is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.