IFA Convention Unclouded by Stormy Economy and Protest
SAN DIEGO (Blue MauMau) - While demonstrators marched and rain storms raged outside, convention attendees sat in sheltered comfort inside and listened to speeches on the bright outlook for the franchise industry. As former President Bill Clinton delivered a keynote speech to members of the International Franchise Association (IFA) convention, nearly 150 protesters were gathered outside the Grand Hyatt hotel downtown. The Proposition 8 opponents wanted a boycott of the Hyatt franchise because Hyatt franchisee Doug Manchester donated $125,000 to ban gay marriage.
Former U.S. President Bill Clinton on Sunday spoke to conference attendees, addressing how the government's bank bailout last year "saved us from a total meltdown." Clinton emphasized, "I'm not into total meltdowns." The former President ruffled a few members' feathers when he mentioned that he thought that union efforts at passing a card check law was a good idea, although he acknowledged that there were issues with non-secret union ballots. The Employee Free Choice Act, or so-called “card check,” is a system in which employees can organize a union by a simple majority of employees signing a non-secret ballot. The IFA opposes such a bill, gauging that it could easily create unions in franchise systems.
Outgoing chairman of the IFA Steven J. Greenbaum observed, "There is no need for me to recap the current state of the economy, the credit crisis or the effect it is having on all of us. We are all hearing it from almost everywhere we turn and, of course, we are living it and feeling it in our businesses." But, he emphasized, "Change is in the air and change is a good thing."
Greenbaum continued, "The most exciting thing to me is that I have never been more optimistic about the future of this association, my own franchise company or my own personal outlook on the world. It's times like these that test our mettle and challenge us to look within to improve, to grow, and to open our minds to new ideas and new ways of doing things.
According to a presentation by franchisor law firm DLA Piper that used statistics from FranData, new franchise systems in the United States have plunged since 2004 (see chart). Estimates of 2009 figures look even worse. But Greenbaum sees such economic forces as an opportunity.
"As the financial crisis unfolded this past year, I found it very interesting that 'the experts' were all saying hunker down, focus on unit economics and franchisee profitability, and position your resources to support your organization during these difficult times,” the IFA chairman said. “As a franchisor of two brands, one well established [PostNet] and one emerging, I thought how silly: isn't this what we all should be doing all the time? Well, the fact of the matter is that we are, but never so acutely as we have been in the past few months. We will emerge better, faster and smarter organizations because of this, so when times are good again, and they will be, let us not forget the lessons learned during this economy."
Matt Shay, IFA president and chief executive, reported on the health of the trade association that focuses on franchisor issues. Despite economic hard times for some of its members, Shay stated, "Our franchisor membership now stands at more than 1,300 companies." He added, "Despite the faltering economic climate in the third and fourth quarters of last year, membership revenue grew by nearly 7 percent over the previous year.”
"Revenue [for the IFA] has grown by nearly 65 percent in the past five years, from less than $8 million in 2004 to more than $12 million last year," continued Shay.
In speaking about conference attendance and the revenue it brings to the IFA, Shay declared, "Last year's convention revenue was up by 10 percent over 2007, and overall conferences revenue was up by about 5 percent."
According to Alisa Harrison, the IFA's vice president of communications and marketing, this year's convention attendance "was close to 2,400." That number was down from the expected 2,800. Last year, some 2,900 attended.
Shay cautioned that 2009 may be a little bumpier than the recent good years. “We expect this to be the most challenging revenue year since 2002,” he stated. But he optimistically declared, "Sooner or later, franchising will be, as it always has been, on the leading edge of the economic recovery."
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Related reading:
- Clinton tried to change IFA venue, staffer claims, San Diego Union-Tribune
- Clinton focuses IFA speech on economy, San Diego Union-Tribune
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