The Independent Franchisee Association
An iconoclast Canadian thinker on franchising has a fascinating take on Independent Franchisee Associations. He expounds on stages of franchisee efforts in attempting to resolve their problems.
Many of the BMM audience will know Les Stewart only for his cryptic remarks, but he is a serious student of the power relations in franchising. He comes down hard both on franchisees and their attorneys. Les completely understands the purchasing power of collectives, the difficulty in getting franchisees to accept their collective obligations and privileges.
Les expounds on three less than sentient evolutionary stages:
You think you can do it alone. No informal or formal franchisee organization. You consider everyone else a loser if they have a problem or are not achieving their goals. Contempt for anyone not rowing in unison.
Franchisee Advisory Council, FAC. "My franchisor is simply misunderstood and is my 'fwend.' It is better to to co-operate and work within, rather than think for myself. My field guy says, 'Gosh, we’ve never heard that concern before. We’ll check into it.' If I could only explain my concerns, then the franchisor will change his ways because both franchisor and franchisee have to be successful, right?"
Independent Franchisee Association, IndFA. "How could I have been that gullible and stupid? I need to band together for a legal revolution to get 'respect.' Everyone, throw some money in and we get a bad-ass lawyer to whip some franchisor butt."
Les thinks that none of the three approaches above work. He has a different suggestion, which I encourage you to read. He is right about points one through three. But I part company with him on the not-for-profit model he has for Independent Franchisee Associations, IndFA.
The IndFA must be a for profit company which collaborates with the franchisor by being both a competitor and cooperator.
The IndFA must never lose sight of the fact that at one time the brand will be up for sale, either through a bankruptcy, sale or assignment. They must plan for that day to influence the conditions of the transfer, or to obtain the trademark themselves.
No other direction or goal is as important to the IndFA as obtaining valuable property rights in the trademark through the normal operation of the marketplace.
The IndFA should never set itself up to obtain "recognition" from the franchisor. On the contrary, until the IndFA has a viable business strategy and program which gives the individual franchisee economic value, there is little or no point in looking for recognition.
The IndFA can influence the growth of the franchise system by periodically publishing reviews of the system and its contract. It is in the IndFA's interest to control entry into the franchise system and obtain new members. Any IndFA which relies upon the veterans of the last legal fight to carry the day is a system in decline.
Above all else, the independent franchisee association is a business providing value to its members, jousting in the marketplace with the franchisor and saving for the day when the trade mark becomes available for purchase.
- Franchise topic:
Les Stewart MBA FranchiseFool :: WikidFranchise
‘The greatest obstacles will be within the minds of franchisees themselves.' - Les.
I would like to hear from those who have had success and those who have failed in attempts to organize franchisees into a collective. What makes the difference?
Les Stewart MBA FranchiseFool :: WikidFranchise
Comments are now open on this blog, I turned off comments by mistake. Thanks to Paul for alerting me about this, and Mr. Blue Mau Mau for transferring over the appropriate thread.
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Independent franchise associations need to be able to make business sense. Association members need to get past their anger and grievances of attacking franchisors in order to give something of worth to their members and to be of any long-term use. I would want an association to think about how to create positive change so that my operation will be better off. They need to place themselves in a position with the board of directors so that when the captain of the ship is bad, they can replace the captain (Think of the recent example of Gold's Gym).
IndFA need money to provide benefits to members. They need access to private investment funding, attorneys and experts so that if the franchisor takes the system into a perilous course, ignoring its franchisees, the association can protect its members by finding a new owner to set the chain back on the right course.
Why are franchisee associations uniquely qualified for that?
Because these business entrepreneurs have the long-term memory of the chain and operational expertise. Their members collectively remain ringing in business and understanding the company's collective history long after the president or senior VP du jour are gone. And adequate capital gives them access to experts who can help them execute their plans.
That's what I've gathered from one article or another on Blue MauMau.
Bob writes: "Their members collectively remain ringing in business and understanding the company's collective history long after the president or senior VP du jour are gone. And adequate capital gives them access to experts who can help them execute their plans."
I would also point out something the Colonel Sanders knew when he was establishing his IndFA's: once the founder has gone, the only collective long-term memory resides in the franchisee network. Franchisors who transfer their franchise system to corporation may find that without a vigorous IndFA their own legacy is tarnished.
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Franchisee associations, to be effective, cannot become social clubs with honorifics and complaining. Only the most important matters should be allowed to be assigned to franchisee association resources.
Whenever something creative, positive, constructive can be accomplished it should become top priority and the association should make a lot of noise about everything positive it accomplishes.
The association has to constantly sell itself to its own constituency in order to keeps the resources coming in to enable what must be done. It is as valuable in good times as it is when tough times present tough problems.
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Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Bob, I have thought over this thread a bit more. Les does have a nose for power imbalances, which is why he is so hard on attorneys. So there may be more to Les's idea here than I first thought.
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
I live in a country where the size of major networks is minimal in comparison to those in the US. IndFAs must offer value to members where a collaborative relationship is based on results and a mutual respect between the IndFA, members and the franchisor.
Given that most franchises systems everywhere in the world are relatively small at what stage does size matter? Can an IndFA be effective when available membership may reduce the level of funding necessary to be truly effective? I don't believe an IndFA can work if necessary goals for a collaborative IndFA are modified to cater to available funding and may perhaps lead to such IndFAs targeting, for example, only an ability to fund litigation or be involved in supplier negotiations or influence the management of an advertising fund ....
In saying that; I have said this before at BMM - knowing what I know now I would never consider a franchise offering if there wasn't an IndFA within that system.
‘The IndFA must never lose sight of the fact that at one time the brand will be up for sale, either through a bankruptcy, sale or assignment. ‘
This is one point where I find that most in franchising do lose sight - living in the minute.
Ray, if an IndFA cannot minimally organize its own convention, or attract vendors to sponsor its convention, it is probably too small to be viable as a business.
There is one exception to this, and that is if the IndFA can generate sufficient quality traffic on its own website to have a viable affiliate program.
But, before you can collaborate with anyone, you have to bring something of value to the table - worn out complaints won't cut it. Too many groups start out by complaining that the franchisor won't recognize them. Well, do something worthy of recognition.
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
The small systems too often get plundered because there is no weight behind their networks and I am concerned that they are often forgotten while we focus on the high profile brands - good and bad. I suppose they just have to get educated and work with what they have and making smart decisions.
I have found that franchisees underestimate the ‘fear' [for want of a better word] that franchisors have of organised franchisees. If an IndFA was to leverage that ‘fear' in most cases than they would be doing themselves an injustice and they would not add to the brand or the value of their investment. Quite often you see knee-jerk reactions from both sides based on lousy communication that leads to distrust.
Organised franchisees are the only way that franchisees can truly partner with a franchisor but as you say it must be collaborative and not confrontational for it to work - they must bring something to the table. I would suggest that once a sense of collaboration is achieved then is the time to consider the value and need in addressing ‘worn out complaints'.
Tinker, in her post of March 28, 2007 stated that she felt "no call for alarm."
Furthermore, even assuming that "Les does have a nose for power imbalances" (whatever that means) how does this mean that Dale Nabors going over to Tinker's business is somehow the fault of "attorneys" or that somehow "attorneys" have some kind of responsibility to contact "appropriate authorities"?
Leaving aside the fact that this whole dustup is more than 2 years old (presumably there are a lot of more recent "power imbalances" for Les to fault "attorneys" for)--
--what exactly is the "more to Les's idea" that you have discovered?
Michael, you say that you encourage us to read Les's wisdom .
Perhaps I am missing something here, but for franchisees to create "total chaos within any system" while being "100% anonymous" and having "[g]ood fun watching whitey jump" since "The Suits" have no way of stopping the "total chaos" of franchisees sending a "communique demand over a weblog"...
Those sound like some Berkley students circa 1969, after smoking too much weed. (Umm..ok, well-- they didn't have the weblog.)
I highly doubt that tearing down the house will appeal as a strategy for most franchisees, and I am amazed that you would even take this seriously as a basis for an independent franchisee association.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Les Stewart MBA FranchiseFool :: WikidFranchise
Paul, I don't believe that any attorneys here had a duty to report anything about Dale's visit to Tinker. But, I am puzzled as to why Dale visited Tinker, and what he hoped to accomplish. Perhaps Les can share his thoughts on this with us.
My thoughts on the IndFA are quite clear, but I believe Les has made some important observations about the overall structure and point of an IndFA - and your quotes I believe are somewhat unfortunate.
But, why don't you just focus on my thoughts about an IndFA, if Les drives you to drink, smoke or to engage in other mind altering activities.
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
We Germans don't need to be driven to drink, we can find a good Hefeweizen on our own.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Paul: ‘total chaos within any system" while being "100% anonymous" and having "[g]ood fun watching whitey jump" since "The Suits" have no way of stopping the "total chaos" of franchisees sending a "communique demand over a weblog"...'
This is a perfectly acceptable strategy within a system where a designed and definate failure mix with franchisee apathy and existing regulation leaves no other alternative. In a perfect world this would never be acceptable but this is franchising and access to justice is limited to those with enough funds to outfund a well-funded franchisor.
That may not relate to IndFAs but Les points out that there are alternative options. In the right circumstances throwing back some of what has been thrown goes a long way when the brand is doomed anyway.
Les: ‘During times of universal deceit, telling the truth becomes a revolutionary act.' - George Orwell, writer (1903-1950)
First of all, Les does not advocate this as a last resort, but as one of the defined stages in a process.
Secondly, if you are forming a franchisee association for the purpose of destroying your system that is not likely to be a viable model for franchising in general, as Webster is proposing. This is why I think Webster is nuts to find Les to be some kind of "iconoclast:" there is a difference between smashing the icon and vandalizing the church in a blind rage.
Thirdly, for someone who finds cyber-stalking to be so distasteful to advocate "100% anonymous" cyber "total chaos" for the purpose of "watching whitey jump"...
...well, that is not only hypocritical it is bizarre.
I honestly don't see what productive solution Les Stewart brings to the table. But then again, I don't understand this quasi-Marxist bit either; it is entertaining, but then again so is watching someone's 4 year-old throw a tantrum in the supermarket.
As to Les' penchant for throwing up some cryptic remarks followed by quotes from famous dead people: that really doesn't impress me; in fact it is often indicative of a lack of logic (not to mention originality).
Anyway, we are now venturing far beyond the article topic--and Cuppy's franchisees never even formed a franchisee association. Hell, Bob Purvin had a toll-free conference call and only 5 of the 300 or so franchisees even bothered to call in.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Les Stewart MBA FranchiseFool :: WikidFranchise
Using chaos and vengence in bringing down a system because there's no justice and honesty in the world makes no sense to me. Huh??
That's like saying that when angry at the captain in a sinking ship, shoot holes in the hull. The ship is doomed anyhow. And it makes you feel good. HUH?
No , i think you have misinterpreted the analogy.
How about this: Franchising can be a leaking, defunct battleship pretending to be the good ship lollipop.
The current laws in australia allow any titanic to pretend it is the lollipop. There are customers standing on the shore seeking passage/cargo on this ship. The ship is not seaworthy but it's seaworthiness is only accurrately judged by a sailor who knows that certain technical, financial, employee and other problems mean that the ship is not seaworthy. The sailors try their damned hardest to explain in landlubbers terms that the ship is not sea worthy and that to travel/ send cargo via the ship would be a sacrifice to Davey Jones' locker but the landlubbers will only be convinced and can only be "disclosed to" by the ships captain, who gets paid for trying to attempt delivery of the cargo/accepting passenger fare and not for successful delivery of such. The sailors only get paid upon successful delivery of cargo/passengers.
It makes sense for the sailors to jeopardise the ship sailing if they think that leaving the port will result in utter ruin.
The sailors, who understand the workings of the ship they run, who realise that it is all very well for the captian to make promises, but know that they do not get paid if the captains promises are not fulfillable and who are liable for the captains promises even when unfulfillable might then start shooting holes in their own ship to prevent future loss of cargo and to prevent the captain from maikng such promises. If trying to tell the landlubbers that the captain is a crook, the ship unseaworthy and the crew is close to mutiny over conditions is the only way to get this captain barred from being a captain then yes....the sailors will shoot holes in the hull of the very ship they work for.
There is some great research done into how human spite works. Children given the option to gain one sweet when another gets 5 sweets will sometimes reject all sweets on the grounds that they think the deal is unfair.
The research mentioned shows that classical economics is wrong when it assumes that people will not sacrfice their own income to punish others.
One particular research excercise attempted to gauge how many people would be willing to contribute to a fund that seeked to reclaim the money paid in bonuses for company execs even when the contributors themselves would never see a dollar of the reclaimed money. Subjects were willing to contribute money to the casue purelySociety IS willing to punish freeloaders and it is a fundamental part of societies workings that they do.
It is a vital function of society that the masses are willing and able to punish freeloaders.
Franchisees on a sinking ship are doing just this when they punsish a freeloading captain/franchisor for failing to look after the needs of the existing sailors. When you have made a decision that your ship is unavoidably sinking, whats wrong with trying to prevent others from sacrificing their cargo? Especially if a consigment of cargo simply prolongs the pain of the sailors, ie, the sale of some new franchise terrirtories merely allows the franchiosr to be solvent for just a few months more?
Yes indeed it probably makes no sense to those in a mostly functioning but not optimum franchise to not shoot holes in the hull...But if you know the ship is leaking and you have been screwed and you see the potential to avoid others being screwed as you then yes......I'll cannon ball the frigging lot. I've already lost, we have all lost....all that remains is to prevent others from losing too.
To begin with; I would only advocate extreme measures as a last resort. Boudica; I love your version. Mine is a slight variation but we aren't far apart at all.
Bob; think of people boarding the ship; taking along what they hold dear and what wealth they have acquired. When they eventually complete their journey they are dumped on a beach in the middle of nowhere and everything of theirs is kept on board.
The bigger problem is that the ship returns to collect more passengers with whatever the new wave of passengers wants to bring on board. And the scam is repeated over and over again.
Eventually at least someone wakes up that they can take the ship onto rocks where everyone gets off with nothing or possibly some of what they took on board but in a worst case situation there is nothing much different to their otherwise eventual outcome. The captain's wealth is tied to a destroyed ship. Then the steady flow of new passengers comes to a halt. In franchising it takes a little more than what Les discusses to achieve such a result.
The ‘vengeance' motivator would be undeniable; however for some there would also be a moral obligation - not that hard to come by in the bigger picture of the predestined outcome - to stop others from joining the castaways on the beach.
In the miniature movie A Ducking They Did Go, The Three Stooges find a way to quickly sink their boat.
Unfortunately Bob, this is one of those video's that can only be viewed in the US. I'll have to get the book.
Paul; sometimes I find your interpretations based on speedie comprehension. To be clear - I would repeat that I believe what Les suggests has its place as a last resort.
Paul, I would not hesitate to bring down a brand if it was obvious that a scam cycle wasn't going to be stopped in any other way. There was a terrwific example of how to do it delivered by an anonymous Midas zee. Stop franchise sales - maintain and cultivate network and zor personnel communications - destroy supplier and bank confidence - put the zor under pressure at every level both in and out of the business. They call this role reversal. It worked a treat while the regulator did what the regulator does - watched.
But you are right - this is off topic. So what should we take from only 1.7% participating in the teleconference?
'Arrogance, pedantry, and dogmatism; the occupational diseases of those who spend their lives directing the intellects of the young.'
Henry S. Canby
I don't understand why more people do not blog about their experience in franchising. I have heard from different hurt zees is it just depresses them more but I believe most do not enjoy writing period. Some are not out going and keep things to themselves.
Ray and Boudica are excellent writers and I believe it is talent to put your feelings on paper. Not everyone can put their feelings in writing and have others feel it. There are different type of writers. Lawyers tend to be tecnicle. Ray is tecnicle and can put emotion into his writing. Boudica can show more emotion in her writing. My husband is good with grammer and spelling but is not able to share any emotion in his writing.
It doesn't matter what type of writer you are. What is important is you write period. Be a testimony to the reality of working with a bad zor. I do believe loose lips sink ships. If your zor is out there hurting people and has hurt you do your part and write about it. I do not want others to live the horror after doing business with a rogue zor.