Separating Good Franchises From Bad

Chairman explains benefits of AAFD to franchisee community

I've been away for a week, and I return to discover the AAFD is being described as a Chipmunk that is doing little to impact the quality of franchise opportunities. Our principal accuser has never contacted the AAFD, nor taken the time to understand what we do and what we stand for. Please allow me to set the record straight:

1. The AAFD's Fair Franchising Standards serve as an available tool (even available to Mr. Solomon) to help prospective franchisees to separate the good from the bad in franchising. The AAFD Standards are available for free from many sources including the AAFD website, www.AAFD.org.

2. AAFD Seal Recipients must earn a 75% approval rating from their franchisee network! Franchisor's cannot 'buy' AAFD approval, at least not from the AAFD! Were it otherwise, many more than 20 companies would have earned the AAFD Seal. In fact, the AAFD offers the only true accreditation program for franchisors in the world.

3. The AAFD only recommends companies that have received the seal. If a franchisor hasn't met our high standards, our recommendation is "Just Say No!"

4. Profitability is a major criteria to earn the AAFD Seal. So is an equitable deal, a fair contract, and a collaborative relationship. We have seen some great fad investments, momentarily profitable (read 'Cold Stone' and 'Krispy Kreme') that didn't get our recommendation because at the core, if things ever went south or wrong, the contract provided no protection for the franchisees. We have also seen profitable concepts squeeze all the profits out of the franchisee because of unfair contracts.

5. None of the efforts to regulate franchising have sought to regulate profitability -- all efforts have been directed towards imposing contractual protections. Legislative efforts to date have more exacerbated the problems than relieved them, giving investors a false sense that they are protected by a level of government protection.

6. And perhaps most important, MOST of the franchisees who contact the AAFD want their franchise business to work, and desire a great relationship with their franchisor. The AAFD is most proud of our efforts to define, identify and promote great franchise systems that are profitable and embrace collaborative cultures that respect the legitmate needs of both franchisors and franchisees. We have helped several organizations, including once troubled businesses, to get a handle on what it takes to become a great franchise system.

Perhaps instead of belittling the one organization of franchisees that has stood the test of time by lasting more than a few years, Mr. Solomon might support our quest to identify and promote strong franchise systems and help us create greater market demand for such systems.

Wishing all BlueMauMau readers a Happy Holiday Season and the best of fortune in the New Year.

Bob Purvin, Chairman of the AAFD