The American Trucking Industry Runs on Exploitation — Here’s The Proof | Candace Ep 196
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What year did the United States of America abolish slavery? You might have answered 1865. But are you sure about that? Because today, we're gonna talk about the modern mask of slavery in America and the indentured servitude that is creeping into more and more of our biggest industries and trapping more and more of us while the rich just keep getting richer. Welcome back to Candace. ♪♪

In The Secret Life of Groceries, Benjamin Lord has a profile on a trucker that he rode with for a week while he was trying to learn about the shipping and logistics that go into our groceries. And it is shocking.

And last time, I covered a story from this book, and it involved a lot of reading in order to contextualize the character of Thun Lin, who was a slave laborer in the shrimp industry in Thailand. This time, I won't do as much direct reading, but rather mix together quotations and summary to convey just how absolutely insane and messed up the world of long-haul trucking is.

And similar to the last story, this one's going to start out seemingly somewhat mundane. And by the end of it, you'll be rethinking your entire perception of America, the grocery store, and every single product that you buy. Because it turns out our American way of life isn't just dependent on brutal slave labor in faraway places like Thailand or India.

More and more Americans are slipping deeper into what can only be called indentured servitude and bordering on outright slavery as well. And truckers are a vast and underappreciated lot. So, first of all, understand that everything, everything in your life comes to you on a truck. From the big appliances of our lives to the smallest bite of food, every single staple, butter knife, copper wire, or ceramic mug comes to you.

comes via a truck. If you build it yourself, the parts you use for building arrived on a truck. If you grow it, the seeds, organic fertilizer, and bailing wire for your compost bin arrived that way too. Trucking as an industry is gargantuan.

In America, 10.7 billion tons of freight are moved per year. That breaks down to 54 million tons a day, or 350 pounds of freight per man, woman, and child moving around this country every single day.

Today, to support our modern American lifestyle, 350 pounds of stuff got moved from one place to another in our supply chain just for you. Plus another 350 pounds for me, plus 350 pounds for Candice, and another 350 pounds for baby Roman every single day.

Trucking is the most common form of employment in the majority of American states, with more than 12.6 million commercial drivers circulating our highways. That is almost 5% of adults in America working in trucking. Without trucking, life in America ceases. They are like our nation's circulatory system, bringing everything that is needed, where it is needed, when it is needed.

And the industry ebbs and flows with minute shifts in our economy or our taste for the holiday season. And yet, it's also one of the most dangerous jobs, right up there with deep-sea fishermen and timber cutters. Trucking has the highest numbers of deaths per year of any job.

In The Secret Life of Groceries, Lore writes, quote,

Lynn Riles, the trucker that he's profiling, says, quote, In a car, your blind spot might be a few feet. Mine is 53 feet.

Lohr lived in the cab with Lynn Riles for a week, and he describes one load in particular, just any old average trip from somewhere to somewhere else, but indicative of the shape of Lynn's life. And at the end of the trip, they arrive at an Aldi distribution center. This trip was dairy, starting in Charlotte, North Carolina, and was 1,050 miles, stopping at three different distribution centers. For this trip, Lynn Riles was able to

Lynn was paid $1,231 gross, or $1.16 per mile, which is pretty decent for a brokered load, apparently. On top of that, she was also paid $368.50 for fuel, which doesn't cover the fuel, but all told, for two or three days work, it doesn't sound so bad, right? Well...

As Laura puts it, that's the lure. But here's the hook, the deductions. Right off the top, Cargill, who she drives for, takes 28% of her gross pay and 10% of her fuel pay for the privilege of driving in their fleet. Then the $300 weekly fee for leasing her truck. She still owes last week's truck payment too because it was a slow week, so it was double this week. Then she has to pay the guys who unload her truck as well.

There's also a mandatory cleaning fee out of pocket, maybe a couple hundred more bucks. Then there are the fixed costs that are due each month and year. Lynn pays taxes per mile per state and needs to pay an accountant to handle the complexity of all of that.

Not a choice for her, as Cargill requires it. They also require her to retain a lawyer to handle billing disputes, then insurance, also mandatory with their approved insurer, then maintenance on her truck, which she doesn't own, which, Lore points out, when you drive 12,000 miles a month in a big rig, it's a whole different thing than for a regular car.

Then, she has to pay into an escrow account called her security, which once again, she is contractually obligated to fill, despite the fact that it is held by the trucking company in case she ever decides to quit on her lease-to-own agreement. And lastly, there are lots of other little fees like food, cell phone, GPS, and other electronic devices that she is required by her carrier to use, etc.,

And then there's risks outside of her control, like the week before this book was written, when a newbie trucker accidentally backed into her and then sped off to avoid liability. It's just one example. Lynn was left with the insurance claim for the damage and no one on the other end of it.

There's a saying in trucking, the open road is unpredictable in almost every way except one. The longer you're on it, the more certain something costly will happen. A hit and run might be rare, but it's just one risk among thousands. Trailer brakes failing, tires blowing, reefer lines freezing. Collectively, these risks become inevitable. And in the case of this hit and run, the damage was minor. And so her deductible didn't even cover it. And she had to pay out of pocket.

Lynn said, quote, if I need a repair done and I actually have the money, I just pay for it. But that is never the case. Instead, I got to get approval. Then I got to get a loan. Then they charge extra fees for the loan. And then I have to use their garage to get it fixed. Plus, the whole time she's doing that, she's grounded with no income. And so a tiny accident can easily become a slippery slope into complete financial ruin.

Lynn estimates that she grossed $200,000 last year and that she took home less than $17,000.

And she is a 14-year veteran driver who knows her industry inside and out, lives in her truck, and stays out on the road three weeks at a time. She works more than 70 hours a week in a state of constant vigilance, sleeping in four- or five-hour bursts, and waking up for 3.30 a.m. jobs. She didn't see her mother for two years because she didn't have the time off and couldn't get loads that lined up with her mother's location.

And Lore points out that that $17,000 figure is a number likely inflated by pride. In the week he spends with her, Lynn receives a weekly paycheck for just $100, which is what she received the week before. And the week before that.

Quote, it's in my contract, Lynn says. No matter how many expenses I have, I always have the right to a check for $100. So that is what I usually get. I've gotten pretty good at knowing how to stretch it.

That is nothing. Lohr estimates that in the week he spent with her, she netted something closer to negative 150 after factoring in her cell phone bill, unanticipated repair, and just the food she has to eat. One night, he overhears her on the phone asking for a cash advance from her future $100 paycheck so she can afford to eat dinner that night. The next morning, Lynn turns to him and says, I think I can get back in the black, maybe another three or four weeks of this.

And it is completely unclear to him what she means because she's losing money. Another three or four weeks like this and she will be even deeper in debt, further beholden to Cargill.

Quote, or I could just run into a ladder on the interstate that tears my brake lines, she says, to complete what they are both thinking. Lynn, like most truckers, is homeless, sleeping exclusively in the cab of a truck, which she does not own and almost certainly never will. And she'll almost certainly lose it when she can no longer make her payments.

Her credit is shot. Her health is destroyed. She can't eat most food because she lost all her teeth and her new dentures are not properly fitted, so it hurts to chew. Her obsession with Pepsi for calories shifts in Benjamin's awareness into just absolute sadness when he learns this. And all that...

Despite the fact that she's extremely good at her job, hypervigilant on the road, and extremely hardworking, a team player who never once in Benjamin's presence complained about any task or hardship or even her whole lot in life. These things, he points out, are not unrelated. That's Lynn Riles, one very experienced trucker with more than a decade on the road, still working to pay off her truck, which is more like her prison than her form of employment.

But now that you have some texture for what life is like behind the wheel, the real darkness in the trucking industry becomes apparent when you zoom out.

If you hadn't picked up on it yet, debt is the weapon used to shackle drivers to these trucks and to their contracts, and hope is the lure that keeps them on the line. Trucking recruiters frequently recruit from homeless shelters, soup kitchens, recovery wards, and prison work release programs. Truckers also frequently come from minimum wage retail or construction or from serving in the military overseas.

Recruiters promise guaranteed jobs, big pay, no experience required. You'll get a free one-way bus ticket, free hotel and food during your orientation. But then on the fourth day or so, you're given a contract to sign and then you're officially a student driver and you suddenly have all the student debt to prove it.

Then they have a new enticing offer. After you've signed your contract for school and debt, of course, you could be an owner-operator, not just an employee. You can get your own truck and be the master of your own destiny. You don't have to pay a single cent up front. That's how they get you. They force you to take on a literal truckload of debt, which is to be taken out of your future paychecks plus interest until you pay it off, which almost no one ever does.

Instead, you get thrown into an impossible industry where you work insane hours under high pressure and serious risk of death all just to earn your minimum, which you quickly learn is $100 a week, assuming you don't spend it on food.

If at any point you realize that this isn't your cup of tea, no problem. Because then you realize that that contract you signed, yeah, none of this was free. It was all on debt. And now if you want to walk away, that debt is coming with you. Turnover in the trucking industry is insane.

Over the last decade, industry turnover has ranged from 95 to 112%. It's hard to graph what that actually even means. Turnover at a competitive law firm is 17%. Turnover at Starbucks is around 65%. 100% turnover in the trucking industry means that every single member of any given fleet either quit or was fired and successfully replaced that year.

But trucking is not a declining industry. It's not shrinking. It's growing aggressively all while this is happening. Because as with every other industry, just like in the private equity playbook, trucking has figured out how to not just make humans replaceable, but how to actually profit off of their replacement.

First, they recruit dishonestly, convincing people to take out lines of credit for the opportunity. And then they pay them the lowest possible wages or training wages while simultaneously unlocking a critical new superpower.

they can force you to drive in pairs. And when you're driving in pairs, you are not bound by law to take the same number of breaks to stop to sleep like a solo driver would be. Suddenly, trips can be completed in far less time and drivers work for far lower pay. Lynn, who we met at the beginning of this episode, she was making a little over a dollar per mile, which is still left her broke and destitute at the end of a 70-hour work week on the road nonstop.

Student drivers frequently are paid wages as low as 12 cents per mile. You could hire almost 10 student drivers for the price of Lynn's starvation wages. Even driving in teams, that's four or five times as many trucks on the road. Student drivers are the cash cow that the modern trucking industry lives off of.

Trucker Desiree Wood said in the book, quote, there is so much money in students. They work so cheap, 12 to 13 cents a mile. It pays for the entire system. And a lot of these trainers have been driving less than six months themselves. She goes on to say, this is not far from sharecropping. It's debt bondage. It's sharecropping where instead of the field, they are tenants on wheels. So that's one side of the story, a side most Americans don't know about.

But now I want to take it to a conversation Tucker Carlson and Ben Shapiro had about six years ago to voice another side of the story so we can really grasp the whole complexity of this issue.

You talk in the book about technology and how it's shifting and taking away jobs from folks. And you make specific reference to truck driving and the fact that there are going to be these automated cars on the roads. So would you, Tucker Carlson, be in favor of restrictions on the ability of trucking companies to use this sort of technology specifically to sort of artificially maintain the number of jobs that are available in the trucking industry? Are you joking? In a second. No.

In a second. In other words, if I were president, when I say to DOT, Department of Transportation, we're not letting driverless trucks on the road, period. Why? Really simple. Driving for a living is the single most common job for high school educated men in this country, in all 50 states. By the way, that's the same group whose wages have gone down by 11% over the past 30 years. The social cost of eliminating their jobs in a 10-year span, 5-year span, 30-year span is so high.

that it's not sustainable. So the greater good is protecting your citizens. And he's not wrong. Tucker has a great point.

I used to hold the same view. And in some ways, I still do. Because already driverless semi-trucks are on the highways of America. And it's only a matter of years before this industry, one of the largest sectors of employment in America, is largely replaced by robots and AI. But Tucker uses a phrase that I want to highlight. He said, decent people living happy lives. And if that were still true, I would completely agree. And that used to be true.

But as progress has marched on, prices have ground down and margins have slimmed. More and more of this massive industry is preying on these largely high school educated people that are, for lack of a better phrase, extremely vulnerable to exploitation. And they wind up where we left off with Desiree Woods saying, quote, this is not far from sharecropping. It's debt bondage.

It's sharecropping where instead of the field, they are tenants on wheels. And listen, I don't know the solution. I don't know what to make of it all. But at least now I have a little more compassion for truckers on the road. And now that I know that what they go through, I find myself giving them more space to do their job on the road and just a little more patient when I'm waiting behind an 18 wheeler in the passing lane. These are the men and women that make the world work. And they've got a pretty rough go of things.

And speaking of sharecropping, next, we'll talk about plantations that operate today as prison labor camps, eerily similar to their slave master roots. But first, I want to take a minute to tell you about Ground News. Let's be honest. They

The media is not here to inform you anymore. It's here to steer you, to bury inconvenient facts, distort headlines, and promote whatever narrative keeps the power where it is. That's why I don't trust a single outlet to tell me the truth. I use ground news because I want to see what's really going on, not just what the media wants me to believe.

Ground News is an independent platform that brings together news coverage from across the political spectrum to expose how each outlet spins the same story. You'll see how different sides report or ignore the same event and exactly what they're trying to get you to think. It also shows you who's behind the reporting. That's the part most platforms won't show you. The tool I use the most? The

the Blind Spot feed. It reveals which stories are being covered heavily by one side and buried by the other. You want to know what's being hidden? That's where you look. Ground News is fully independent, supported by subscribers, and it doesn't play by the legacy media's rules. That's why I partnered with them.

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So, now that we've talked about sharecropping on wheels, let's talk about the slaves that still work the plantations to this day. A lot of people don't know that the 13th Amendment, which abolished slavery in the United States, didn't actually abolish slavery. It just put one very simple condition on the practice.

In the very first line, it says, quote, And so we get the prison industrial complex. Some prisons sit literally on the land of former plantations. And

and their fields are still worked by a slave population to this day, which is predominantly composed of Black Americans. And although many people have contributed to this modern slavery and the racial bias of its selection process,

Perhaps no one has contributed more to it than this man, Joseph R. Biden. In 1986, Joe Biden authored and championed the Anti-Drug Abuse Act, which, among other things, imposed extremely harsh penalties on crack cocaine use versus powdered cocaine.

The penalties for crack cocaine were 100 times stricter than for regular powdered cocaine. So the minimum sentencing was five years for five grams of crack or five years for 500 grams of powdered cocaine. You might notice in the snippet from the New York Times here that it says this was an amendment to the 1984 minimum sentencing bill. Joe Biden championed that bill too.

In fact, all throughout the 70s and 80s, Joe Biden was at the front of the charge to expand the power of the prison system. And he authored numerous acts to expand prison populations that were written in ways that clearly skewed towards black Americans. I probably don't need to remind you that it was our own CIA that was flooding poor black neighborhoods with crack cocaine at the time.

And so, from 1973, when these laws started passing and prisons started expanding, until 2009, when this trend peaked, the imprisonment rate in America increased sevenfold. We went from just a couple hundred thousand people in prison to over 1.5 million. Except, by some data sets, it's over 2 million, and has been since 2005, depending on who you trust.

When you look up official Department of Justice fact sheets, though, they conveniently show the data going back just to 2009 when prison populations had peaked. So it looks in this graph like prison populations are decreasing. What a convenient way to present it. You see, they just show this last little decrease at the end there highlighted in pink. Pay no attention to Joe Biden's legacy.

The Sentencing Project reports that one in five black men born in the year 2001 is likely to be imprisoned at some point in their lifetime. Black Americans account for nearly seven out of 10 people in American prisons. Biden actually went out of his way as a Democrat senator to reach across the aisle and ally with segregationist Republican senators to pass these bills throughout the late 70s, the 80s, and the 90s.

In 2013, Biden boasted on the Senate floor that, quote, every major crime bill since 1976 that's come out of this Congress, every minor crime bill has had the name of the Democratic senator from the state of Delaware, Joe Biden.

And so now, for every 100,000 black adults in America, 1,196 are in prison. The rate for white people is 229. You know this is a liberal publication too because they say Latinx, a term that no Latino person has ever used. Literally their entire language is gendered, but whole sidetrack.

It's also worth noting that almost half of federal prison inmates are there because of drug charges. A fact they have the war on drugs and Joe Biden's crime bills to thank for. Only 21% are in prison for weapons-related charges and just 7.3% for violent crimes. Now,

This problem is incredibly complex and multifaceted, and all too often people don't want to account for all of these different factors that are contributing. The justice system has been designed to target and more severely punish black people. Also, black culture has been infested by music, celebrity, and gang culture that glamorizes criminality. Poverty and schools in predominantly black parts of America make it all too easy to slip through the crack.

And none of these truths should serve as any excuse. More than one thing can be true at once. Just because you're black doesn't mean you're bound for a life of criminality with no way out. But if you're born into a class and culture where criminality is the norm and even seen as cool and high status and you see it all around you, well, it's a vicious cycle.

And regardless of the color of your skin, once you're in, the 13th Amendment's abolishment of slavery is out the window, and you join a vast hidden workforce that enriches all of America's most beloved megacorporations. From Frosted Flakes cereal and ballpark hot dogs to gold medal flour, Coca-Cola, and Riceland rice, prison labor products are on the shelves of virtually every supermarket in the country, including Kroger, Target, Aldi, and Whole Foods.

We even export some of these products to countries that we have previously blocked imports from in protest of those other countries' poor labor practices, which to me is peak American hypocrisy. Some prisoners work on the exact same plantation soil where slaves harvested cotton, tobacco, and sugar cane more than 150 years ago.

And slaves are still picking cotton today. Willie Ingram, who was featured in this expose by the Associated Press, picked everything from cotton to okra during his 51-year stay in Louisiana State Penitentiary, known as Angola, which is built directly on top of an old plantation.

Quote, they'd come maybe four in the truck, shields over their face, billy clubs, and they'd beat you right there in the field. They'd beat you, handcuff you, and beat you again. Angola sits on a massive plot of farmland, previously owned by one of the largest slave traders in the U.S. Today, it houses about 3,800 men who head to the field within days of arrival. At first, they work for free, but then they can earn between 2 cents and 40 cents an hour.

And across the country, work is done for most of our biggest brands, whether it's manufacturing products specifically for that company or producing raw ingredients that are then sold into the supply chain. This is just a small list that the AP was able to directly observe in their investigations.

And they do it because it's incredibly profitable. These workers don't have benefits or protections or typical safety standards. They hardly get paid and so can produce goods for much cheaper than a normal worker. And then these products and goods are sold on the open market where they compete on price with regular farmers and manufacturers, further pushing on family farms to cut prices.

Prisoners also often work in industries with severe labor shortages, and so they wind up doing some of the dirtiest and most dangerous jobs in America for basically no pay. Altogether, the modern slave labor industry brought in more than $2 billion in 2021. And that's just the prison labor, not to mention work release and other programs.

Curtis Davis, who spent more than 25 years in a penitentiary, said, slavery has not been abolished. It is still operating in present tense. Nothing has changed. And next, we're going to talk about how they're trying to bring slavery to the middle class, to you. But first, let's take a break.

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The poorest and most rock bottom are being farmed out as prison labor on literal plantations. People on the verge of falling through the cracks or just crawling out of them are preyed on by the trucking industry, among many other exploitive fields.

Average Americans are locked into dead-end jobs that used to be enough to buy a house, a car, and send your kids to college on. Now those same jobs have Americans on food stamps and taking out debt for just basic purchases. So how do you break free of this rat race? How do you chase the American dream out of the rat race and change your fortune? You start a business, right? Wrong. Because, oh boy, is the franchise industry up to the same games. And listen,

We are about to skim the surface of an incredibly complex dig, and I've done my best to keep it from getting too dry and keep it interesting the way that I try to do. Because it's not always the flashiest, most Twitter viral news stories that is going to be the most important to actually know about. Many of the most important things happening in our world are bound up in complex legal filings and drawn out across years and years of frankly boring processes. And this one, it

It matters. It matters in so many more ways than I'm going to be able to fit into this segment. But this is a start.

Because you see, if you're the type of upstanding citizen with good credit and some amount of savings and income that you could consider applying for the loans required to open a business, you are an even more valuable cash cow to be milked. And the franchising industry, which has for generations been the most accessible way for regular people to become business owners and achieve the American dream, it has found a way to extract every penny that that dream is worth.

Many people think of their net worth as how much they have in the bank. How much money do you actually own? But truly, you're worth so much more than that, even in a strictly financial way. That's because we have credit. You have credit. And it's important before we go down this rabbit hole to unpack credit a little bit, because credit is not just a plastic card that you keep in your wallet.

Credit is your future. It's a promise to pay it back later. And it's a promise to exchange your future time and your future work for something right now. And give yourself some credit. You can probably be worth so much more down the line than you are worth today.

And that precise monetary fact is what private equity and megacorporations have learned to prey on in the franchising industry, which has started a whole predatory practice of contracting people into new businesses, milking them for all the credit they can take out of the bank, and then leaving them with the bill to pay for the rest of their lives. It all starts with a discovery process and a contract.

Suppose that you wanted to start a business or do something meaningful, something to change your family's fortunes and provide a better life for your kids. And you hear about this great new idea. A martial arts studio franchise and a burger franchise are advertising a new business model in your town.

They're looking for someone to open a new franchise location in your town, and the business is basically turnkey. It's ready to go. You hardly even need to spend any time working on it because their proven business model is actually so dialed in that you just open up shop, hire some workers, and the business runs itself. Pure passive income. You just work a few hours a week on the side. You can even keep your day job if you want.

It sounds too good to be true, but you decide to schedule a meeting with them just to hear them out. Maybe this is actually your family's lucky break. When you sit down with them, they show you all kinds of materials and data. It's actually true. These franchises are opening up all over the country, lightning fast, and they're profitable almost right away. The burger place comes with crazy celebrity endorsements, and the martial arts studio runs totally hands-off. It's awesome.

They have all the equipment you're going to need. It's already sorted out. All the branding, the advertising, it's all sorted out. All you need to do is secure the financing to open up shop and your life will change forever. You think it over with your family. It's a pretty big risk, but you know that you're hardworking and you've always dreamed of more.

The document you took home with you is extensive. It's several hundred pages long, and it details everything about how to open and run the store, as well as all the legal stuff. And I mean, really, it's actually mostly all legal stuff, but it also has all the data about how many other successful businesses that franchise has opened across the country lately. So you decide to do it.

In your next meeting, you sign on the line and you officially join the brand family. Next, you're off to the bank to secure a loan in order to open up your new business. And I'm sure that you see where this is going. Sometimes this process does work great. If you're working with an honest company, this really can be the path to a new life.

But all too often, that document that you're holding is actually filled with deception, half-truth, and outright fraud. The Federal Trade Commission sued a franchise called Burgerim, the burger joint that I described just a moment ago in our intro, for fraud. They were selling their franchisees a pipe dream that had nothing to back it up, even though they had information in that document, causing these people to take out huge amounts of debt only to have nothing actually materialize.

The Franchise Times reported that they sold at least 1,550 franchises and collected at least $57.7 million in just initial franchise fees from 2015 to 2019. But they had only opened 130 out of 1,550 locations by 2018.

To make it even worse, they were advertising to veterans and then extracting all of their credit, all their future time and earning potential, only to leave these veterans broke and destitute on empty promises.

Bergeron was pitching this as a business in just the way that I described earlier, a business in a box, and the company was targeting veterans with discount programs to lure them into the business. It sounds kind of insane and even unbelievable, but actually it's a lot more common of an occurrence than you might realize.

In 2023, Lena Kahn, the chair of the Federal Trade Commission, which is the government body that oversees all this stuff, she posted a request for comment from franchisees so business owners could share their concerns and grievances about the industry at large. Her inbox was flooded with comments from franchise owners who had experienced these same predatory practices and lost everything. She later published a document summarizing the findings of her investigation, and it had paragraphs like this in it.

Quote, several franchisees discussed misrepresentations franchisers made during the sales process, startup costs and sales revenue, and profit data were some of the critical areas where commenters reported receiving information they believed was false or misleading. One commenter described, quote, sales data that does not add up and a completely false estimated profit margin. Another commenter said that, quote, Dickey's barbecue business model involves selling stores as substantially more than quoted with Dickey's getting a big portion of the cut.

Dickies will tell franchisees the cost will be $400,000, and it will cost sometimes double that, but you don't know until you are already heavily invested. Then the owner would default on their SBA loan, and the next buyer comes in and pays half, but then they will default until the restaurant is sold for about 10% of the original cost to build.

Note how they said the owner will default on their SBA loan. We're going to come back to that because private equity has figured out how to make the government backstop this fraud. And now when these franchisees are bankrupted and penniless because the business they were promised was all a lie, the government actually pays the bad loans and the private equity firm walks away rich.

Some of these private equity firms are actually setting up webs of shell companies and doing what's called the Texas two-step to hide their assets in tax shelter LLCs while bankrupting out of their failed business before anyone they stole from has a chance to sue for damages. We'll get back to that in a minute because it's super messed up. But anyways, in Lena Kahn's report, she listed the top 12 complaints along with what franchises were most frequently mentioned in that type of complaint.

And Michael Browning Jr. finally got that sweet, sweet recognition that he always craved. His company, Unleashed Brands, was top of the industry in misrepresentation and deception, actual and threatened retaliation, Tiffany's story is just one of many, franchise disclosure document issues, which is a nice way to say fraud, and private equity takeovers. But

It's worth noting that almost all of these top complaints from business owners are all separate elements of the same fraudulent scheme where you lie to get people to buy into your franchise. Then you trap them in predatory contracts that change over time to be more exploitative.

If they speak out, you retaliate against them with lawfare. You can take their businesses, bankrupt them in court, or just charge them the $200,000 fee that they owe you when you fire them. Because you recently amended the contract they signed years ago to add this little tidbit in.

They tried to speak out against it, but obviously a contract's a contract, right? Like I really cannot convey how insane this stuff is. It sounds impossible. It sounds like someone would stop it. Like there would be

Any amount of justice. Like you can't just pretend to have a business and sell millions of dollars of fake franchise burger joints and then launder the money out into a chain of LLCs and say, whoopsies, money's gone. Guess there's nothing we can do. But that is literally happening in broad daylight, right in front of the courts and the regulators. The comments that the FTC received were cries for help. Here are just a few that specifically highlighted Unleashed Brands.

Quote, Franchisees were forced to use a construction management company named Foxfield that was stealing money. Foxfield Company set up a shell corporation for a bogus procurement company that franchisees were required to use. Foxfield's owner, Chuck Piazza, put his wife in charge of the procurement company. The sole purpose was to create an additional markup on items. Markups were in excess of 80% on some items and stole tens of thousands of dollars from each franchisee.

Quote, Unleashed Brands has ruined my family's life. I am a franchisee of Premier Martial Arts that has lost everything I own in under two years. They lied to us countless times during the due diligence and sales process. And Miles Baker, vice president of Premier Martial Arts, told us to suck it up and get over it when my husband and I confronted him about all the lies he told us. Unleashed Brands and PMA have treated franchisees, not only in PMA, inhumanely, and might as well be called the mafia. Quote,

It is traumatizing to be told they are trying to bankrupt anyone with your family name, all while they continue to siphon money from our accounts. Unleashed brands are monsters and the franchise industry should be disgusted by the example they set.

The stories about Unleashed Brands piled up and got pretty specific. One franchisee even claimed that Steven Polozola, the lead lawyer for Unleashed Brands, said to them, quote, We are going to crush you into submission, just like we are doing with Premier Martial Arts and The Little Gym. It is sickening to see how people are being treated after we used our life savings to start a business.

And they are using their life savings as well as their life's credit over and over again. So many franchisees have the same story. They are lied to in the process of buying into the business and not just little lies, overt fraud, felony level lies.

many of which are blatantly provable in the very documents themselves if any regulator cared to investigate. Then, as soon as you sign on the line, they own you, and little by little, the fees are added on, the kickbacks pile up, and the fraud and extortion slowly bury you into bankruptcy. If you try to get out, they can sue you or charge you tens or hundreds of thousands of dollars in exit fees, which are often written in from the start or added on to your contract.

But even more appalling, private equity has latched on to a new strategy. They tell franchisees to use special SBA and ROBS loans. A ROBS loan, short for Rollover as Business Startup, although in this case, the abbreviation ROBS conveys way more clearly what they're actually doing,

They are a way for you to pledge your retirement account as collateral to fund your business. And so now the private equity firm not only gets these people trapped in contractual servitude and milks them for all the credit they can acquire, but it also gets all their liquid assets, but then it also gets their retirement account on an empty promise that you're going to have a brand new business. Just trust us. Sign on the line.

If that wasn't bad enough, they make sure that whenever possible, their victims are using SBA loans, which are special loans for starting small businesses which are backed by the government.

I presume that the initial idea here was to encourage banks to lend to people that are starting small businesses so it could spur the economy. But what it has become is a way for private equity to extort the system and steal from our tax dollars to the tune of Lord knows how much each year. Because an SBA loan, if you go bankrupt and can't pay it back, as so many of these aspiring franchisees cannot,

It's backed up, up to 85% by the federal government. And so what winds up happening is based on these false promises and often fraudulent documents, predatory private equity groups can convince regular people to take out massive loans that they would never qualify for if they weren't joining an apparently reputable franchise.

And when it turns out that the business model isn't what they were told, they're bankrupted. Their franchise is closed down, private equity walks away rich, and the taxpayer dollar covers the bill to the bank.

In this way, private equity is using average Americans as willing suckers, as go-betweens, who get tricked into extracting every ounce of cash, savings, and future credit that their whole life represents. And private equity can run this whole scheme, never having taken on any risk at all. Except risk of going to prison if any regulator or law enforcement agency would ever wake up and do their jobs, which so far has not exactly happened. And so,

The show goes on. This happened to basically every owner of a premier martial arts franchise. They all tried to sue Michael Browning Jr., and he crushed most of them with lawfare and arbitration and regular court as well. This happened to dozens and dozens of little gyms. But this also happens with other private equity, like...

Burger-Em, like Dickie's Barbecue Pit, like Dagwoods, and Subway, and I Heart Mac and Cheese. It's also happening with mental health care clinics. And the list goes on and on. And it's going on right now for thousands of franchisees around the country. I Heart Mac and Cheese is in arbitration right now, and the lawyer representing all of these regular Americans is fighting with everything she's got.

If you want to know more about how corrupt the franchising industry has become and just how this fraud works, FranchiseRealityCheck.com is a website started by Genevieve Prado, who was the first franchisee to buy into the I Heart Mac and Cheese brand based on false promises and fraud exactly as we've described. She has now been in litigation for seven years against the company, and she lays everything out on that website in detail with explanations and evidence, and it's all true crime rabbit hole if you want to check it out.

I Heart Mac and Cheese is particularly dark because the owners are in the process of doing what is called the Texas Two-Step.

Where you open a new legal entity, in this case called Pilar Coffee Bar, and then you transfer all of your assets to it, but none of your debt or liabilities. And when you're bankrupted because, oh, I don't know, you're running an entirely fraudulent business model that was designed to defraud your franchisees, then there's nothing in the bank account when they finally make it through a decade-long legal battle to seek some form of compensation because you've transferred it away.

You get away with the fraud and you walk away rich. They get taken for all their cash, life savings, and land with a lifetime of debt to boot. It sounds unbelievable, even impossible. But as we've learned over the last couple of weeks, the system is designed to protect the big boys and to exploit all of us.

At virtually any franchise owned by private equity, you can expect some version of this playbook because franchising is supposed to be a long game, a business built over decades and generations like McDonald's originally was. But private equity lives on annual growth and two-year cycles, extracting as much cash as possible as quickly as possible with little or no thought of the damage or consequences left in its wake. And so now,

We've covered three different versions of the same story, essentially, in three different class segments of society. It's happening to the middle class. It's happening to those at the bottom. And it's happening to anyone who falls through the cracks into prison. But I'm sure there are thousands of you out there that work in other fields that have other similar stories to this because various versions of these stories are becoming more and more common every year.

This is the natural progression of the system that they've built up around us where the ultra wealthy write the rules and the ultra wealthy have a secret court system that works for them. And the ultra wealthy control the politics through donations and powerful leverage. And with every new advancement in technology and AI, with every new economic emergency and corporate bailout, every new war and omnibus spending bill, we are all being marched deeper and deeper into indentured servitude.

The two primary levers of power that control the world are money and the law. We are all trapped under an ever-increasing inflationary vice while our tax dollars pay for their kickbacks, their bailouts, and their wars. And if any of us slip through the cracks or into their secret courts, they've got a prison labor system ready to catch you at the bottom and put you to work.

This is their vision of the future, where you will be a good little worker bee slaving away in the lower castes of society while they sit mint juleps in their McMansions. Where there's one tier of justice for the rich and another tier of justice for us. Where they write the rules and we are the ones bound by them.

And the whole system relies on us staying distracted, on us not knowing how the law works or how arbitration works. These stories are too complex, too boring for us to pay attention to when the TV is filled with flashy pop stars and big booty hoes. Just go to the movies, turn off your brain, and enjoy some good old-fashioned entertainment. Nothing to see here.

But not you guys. Y'all are something special. I want to commend you on getting through another incredibly complex episode. I do my best to make these digs meaningful and entertaining, even when it's a subject that is inherently so complex and boring that most people will probably never learn about it.

So thanks for sticking through to the end of that dig. I hope you learned something or will at least think differently the next time you see a semi truck on the road, because I know that personally, I can never look at trucking the same way again, since I learned all this crazy shit.

And to me, that's the beauty of learning. Not only do we grow smarter, but hopefully also more compassionate for other people by at least walking a short distance in their shoes. So lastly, let's close the week off with some of your comments. And I just want to say, you guys leave the best comments. It's so heartwarming to read a Candice comment section. Y'all are some of the nicest and most informed people out there. And the dash of sort of conspiracy theory sprinkled throughout is just,

It's just, oh, it's so good. I love it. So Kimberly says, we better start adding Ian to the prayers for his safety and maybe state that he is not suicidal at the end of each episode. I'm going to be okay, guys. I'm safe. And I am, of course, not suicidal. Very happy, lovely life. But I appreciate you. Please do keep me in your prayers. SW said, Ian needs to start a history channel. I do feel like I'm just doing, like learning more and more history because all the history that we were taught is lies. I think it's fun.

Norm de Plume said, my husband did four deployments in Afghanistan. He was a military intelligence officer and he spent the entire deployment protecting poppy fields. If you have not yet seen the dig that we just did into the opium trade, poppies, the U.S. government's involvement in drug trafficking, that was spicy. I'm very proud of that video. Very proud of the team for how it came out. Definitely go check it out if you haven't seen it yet.

Nakia Clark said, Candice, we miss you, but Ian has been nothing short of fantastic. Aw. You two should do a regular podcast together from time to time. Enjoy your maternity leave. Candice is enjoying her maternity leave. She's around. She's doing great. Baby Roman's doing great. I do love coming on. I'm going to love when I come back and do podcasts in the future. But unfortunately, I was talking to Candice and I do have to travel more this year. I got a lot of plans, but I'll definitely always come back and come check in because you guys are the best. Candice is the best and the team is the best. So,

Emily Hag says, quote, drink your water, love your family and do something nice for someone is the best sign offline. Yeah, it's just like, I mean, like we just need a little more positivity in this world. We got to remind ourselves sometimes to keep it light, to keep it happy. And so I think there's a good place to end it. Good place to close it out. So thanks for watching the whole video with us. Thanks for liking it before you leave. Thanks for subscribing to Candice and for following the link in the description to go to my channel on YouTube, Ian Carroll Show and subscribing over there.

And be sure, of course, to drink your water, do something healthy for yourself, and tell someone you love them tonight. And we'll see you next week.