I'm still trying to figure out what's "wrong" with Mr. Electric.
Individual cases are only useful to a small degree, as there's not a firm in history that hasn't had a few stumbles. Now, if you were trying to show a pattern, that's another matter.
I'd look at least to appellate cases, AND their rulings, before drawing conclusions.
For example, at one point multiple franchise holders of Snap-On tools engaged in action against Snap-On, claiming that territories were falsely represented, etc. Such a claim goes right to the heart of the agreement, and is far more serious than if a single speculator simply wanted to back out of his agreement. (That suit was settled and terms sealed, so there's no telling what the real story was.)
Another example would be the many times various Midas Muffler franchises were convicted of fraud. While those shops happened to all have the same owner, it's interesting that the parent company never had the least objection to having this skunk represent their brand. In many instances, the parent company need only remove their sign and the franchise is out of business. I can't speak for others, but to me the idea that I would be associating with known crooks would be a deal breaker.
The McDonalds' franchises in northern Nevada were once all owned by Larry Mack. Around 2005 it was found that two of his employees were "mining" employment applications for identity theft and circumventing immigration fraud. While Larry was cleared of any wrongdoing (the franchise was fined), that didn't stop McDonalds from severing their relationship with him. From owning a dozen name-brand franchises, Larry had to start over by operating a single sports bar. Now THAT's protecting the brand!
There's no single way to set up franchises. Some arrangements have far more individual latitude than others. You don't like it, don't sign.
"National coverage" really means very little. Three of the nations' larges banks have very little (or no) presence in Arkansas or Tennessee. Yet, none can claim that Wells Fargo, Bank of America, or US Bank are 'failures.' That's the effect local rules can have.
Mr. Electric has attempted to partner with Home Depot in finding residential customers. This arrangement is handled differently by HD's main competitor (Lowes), and both arrangements have raised issues regarding contracting laws. It's very possible that no arrangement can exist that is allowed everywhere. What's 'required' in New York might very well be 'illegal' in New Jersey.
I don't see any problems with the Mr. Electric arrangement. Indeed, they seem positively angelic when compared to any number of "lead finding" or "Success Inc." operations that have appeared in this chat.
