AAFD as a Catalyst?
Last year's buzz and flash of comments regarding American Association of Franchisees and Dealers award to Cuppy's Coffee has this year morphed into a clear divide among franchise pros with the recognition of Curves.
While I (believe that I) understand the stated goals and nuances of recognition used by the AAFD, people like franchise attorney, Howard R. Morrill, point out that such recognition will "be seen as an endorsement" and I totally agree. Franchisee prospects considering a particular brand will be swayed 'toward' not away from a purchase based on this type of perceived endorsement which has nothing to do with the quality of the franchise 'business model'. It really only deals with 'insider', upper level players focused not on the potential profitability of the franchise model, but on their own fine tuning of franchise contracts and 'maybe' relationship building.
Others who see the negative side of such implied 'endorsements' take their argument to a much deeper visceral level with comments like "the Curves profile has been a FranWhack since even before there was an official FranWhack list", from attorney Richard Solomon. (Solomon 'whacks' franchise offerings that he disapproves of.)
Of course, those who support AAFD's efforts including franchisors, franchisees (and their independent associations and attendant counsel), and others interested in the evolution of higher, more equitable franchise contract standards, emphasize the results of 'good work' and greater cooperation between franchisor and franchisee. I understand this position as well.
But, here's the rub. There is admittedly in all discussions surrounding the Curves 'award' no relationship between the prized efforts and the quality of the business model; same thing last year.
So, if we're talking about quality franchising and ethics, then I'd at least have to suggest that AAFD serve up a bold disclaimer that tells the (all important) investment world that its awards have nothing to do with a franchisee's potential for making money or even getting their money back.
When I look at a franchise purchase I want to know if it works. Like a car, I want to know first and foremost if it's reliable transportation; then I can think about the stereo and the paint job. In so many ways, the fine tuning of franchise contractual relationships as I understand AAFD efforts have more to do with accessories than the actual motor driving the deal.
It looks to me like the award winning franchisors of the last two years have seen plenty of income (and outright wealth in one case), yet, I couldn't endorse either one as investment worthy because they don't seem to represent reliable transportation. They may have improved contracts, communications and relationships, and those are good things, but they don't ensure reliable transportation. Performance representations anyone?
I'm in favor of anything that improves the world of franchising, and AAFD is working in its corner, but I'm first in favor of franchises that are profitable and good for the uninitiated investor (which is the vast majority).
Good luck to all, life's a pretty short ride.
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