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Universal Franchisee Bill of Rights

From the Coalition of Franchisee Associations

Why franchisees need a bill of rights

Franchising is one of the most powerful brand building tools ever created. It is reported that franchising is responsible for 760,000 businesses, 18 million jobs, 14 percent of the private sector employment, and over $500 billion in annual payroll. Total sales by businesses operated by franchisees are projected to reach over $2 trillion this year. 1 out of every 12 businesses is independently owned and operated by a franchisee.

Over the last 50 years franchisees have invested their capital and hard work in creating some of the most recognized brands in the marketplace. The success of franchising is predicated on the investment by franchisees. This is now at risk because the terms of the franchise agreements have become more one-sided in favor of the franchisors. They have significantly reduced the ability of franchisees to build their businesses and serve their customers.

This Universal Franchisee Bill of Rights is a fairness doctrine. It has been developed by franchisees in multiple systems and industries to identify the basic terms of fairness that are missing in their franchise agreements, and must be restored to ensure the success and growth of the franchise systems.

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Franchise Disaster

My wife and are are having a heck of a time with a new franchisor who hasn't kept their end of the deal at all. It's been a huge mistake, spending thousands on legal fees. This franchisor is a joke....they have no outline for ongoing support or anything. Just can't believe how bad it's been, not the busines, but the franchisor.

franchise bill of rights

I rmember this site when i was an owner of a franchise ,it appears it is trying to balance between complaints and advice . Both are resonable attempts at trying to make sense of the one sided abuse that franchises can heave on someone , This is not to say they all do as i still own another one ,but there are some thta are really abusive , and most all are manipulative at the least.
The real problem as alreadt mentioned is you have zero rights , noe , nada , zip, in fact you only right is to shut up and take the abuse oh and if you get in alawsuit , there is no way out except down ,it depends on how far they want to take you.
Franchises are regulated as investments? How the hell does that make any sense, its legal slavery if they want to do it to you. In anormal busines you can simply fail or choose not to continue .
In anoraml job you can leave , thats not the same in a franchise ,it can be potentially the worst experience one will have in business.
I am Not an inexperienced business person . i am actually very sucseesfull , i have lost my entire life savings defending an impposible situation, and the problem is the court system allows false accusations , and you have to defend against them all , and actually spend huse dollars and never really make it to court to have your day , by that point you are whipped and have no energy to contibus and you have to move on
NO way should businesses should be run like the mafia , but franchises can
I hope something can be done will this bill but i doubt it

Franchising

Guys, quit all your whining about what can and can't be done, you guys are the reason why the Franchsiors will always divide to rule the franchisees.

KUDO to AAHOA and Jay Patel from Pensacola FL for taking on Choice hotels last year with huge balls.
This guy used a brilliant strategy and convinced AAHOA leadership of it and challenged Choice hotels that ultimatley prevailed on everything they violated Choice on.

In many of AAHOA members eyes, he is the master of franchise strategy, if you all dont know of him, he was the one that pissed off Cendant back in 1999 and they withdrew from AAHOA as he architected and introduced the "12 points of fair franchising" of which you know call the UFBOR.

Also for those of you who don't know, He also wrote the book Franchising Is It Fair? How to negotaite a franchise agreement. He has donated over 10,000 copies to franchisees to educate them and currently let's all franchisees and university students to download a version on his website.
If you have not read it, it is a must, his boldness and straight to the point candid approach is admirable.

You can get a free copy at www.franchisingIsItFair.com .

My point is quit all your bickering and take lessons and learn from his strategy and approach.

And one more thing, for the critic who doesn't have faith on the UFBOR, the orginal AAHOA 12 points of Fair Franchising are a household name in the hospitlaity industry, in fact, Motel 6, Red roof Inn, La Quinta Inn's Americas Best Value Inns to name a few have, all, either adopted the 12 points of Fair Franchising and/or created their own version of the 12 points similar to AAHOAs'. even Wyndham now practices several of them while they won't admit it.

This goes to show change can come if you have patience and unity.

Bob

comparing most franchising to the hotel / motel segment is dumb.

The hotel segment is unique in that there is real estate ownership involved and not rental space. The fact that franchisees own their building gives them leverage in the industry. You cannot compare the hotel segment with any other segment. It is unique in its own right.

Jim Coen's picture

Over 900 People Have Endorsed the UFBOR

As of July 5th, 2012, Over 900 franchisees, friends of franchisees, and franchisee associations have endorsed the Universal Franchisee Bill of Rights.

 

If you haven't already done so please endorse it Today!

http://www.franchiseebillofrights.org

"Firends of franchisees?!"

HA! how about neighbors, school teachers, physicians of franchisees? HAHAHA

Jim Coen's picture

Over 700 People Have Endorsed the UFBOR

As of April 14th, 2012. 700 franchisees, friends of franchisees, and franchisee associations have endorsed the Universal Franchisee Bill of Rights.

If you haven't already done so please endorse it Today!

http://www.franchiseebillofrights.org

Barbara Jorgensen's picture
Jim Coen's picture

Over 635 People Have Endorsed the UFBOR

As of March 26th, 2012. 635 franchisees, friends of franchisees, and franchisee associations have endorsed the Universal Franchisee Bill of Rights.

If you haven't already done so please endorse it Today!

http://www.franchiseebillofrights.org

Jim Coen's picture

The Franchisee Bill of Rights has over 500 endorsements.

As of 9-22-11, the Universal Franchisee Bill of Rights has received over 500 endorsements from people and organizations.

Endorse the Universal Franchisee Bill of Rights today!

Association

How about allowing your employees the right to "free association"?

Association

What is the difference between a franchisee and an employee?

Employees have legal rights.

That's why. Unions were needed when there weren't 400,953 laws applied in the everyday protection of every single employee in the United States. That's just federal. Add several hundred thousand more laws and regulations for the state and municipal level.

You know how many laws protect franchisees in most states? Zero.

Thats a UNION and they

Thats a UNION and they already exist. Employees have the right to form unions when a majority of employees decide to take that path.

Really!

And they don't have that right? What dictator runs your company?

Larger perspective on Bill of Rights

This makes sense. And for those of you wanting a larger perspective on this topic, you can see the Bill of Rights for Buyers of Small and Midsize Businesses.

From this webpage you can access the document:

http://ipbba.org/BillofRightsforBuyers.php

RE: Larger perspective on Bill of Rights

Yes a business owner who under-reports his business income, cheats his landlord of percentage rent and files fraudulent tax returns is going to adhere to your Bill of Rights for Buyers of Small and Midsize Businesses.

Are you out of your mind? It just won't happen and to expect the typical business broker to even care about anything besides his commission is absurd. And if they did disclose the under-reporting, cheating and fraud and the buyer bought the seller's liability would be unlimited.

I'm a bit confused.

There are somethings in this bill that are worth pursuing.

I'm definitely in favor of item 6,7, 8, 9, 10, 11, and 12. Especially 11 there are so many ways that Franchisors take advantage of the fact that an agreement signs away the franchisee's legals and restricts them to arbitration.

Usually, in arbitration, the arbitrator is a franchise employee and thus biased. The franchisee looses in most cases with this situation. It has been well documented that the mandatory arbitration system doesn't work and heavily favors the franchisors.

The beginning of this bill is skewed I think.. Item 1 would never work. No franchise is going to allow franchisees to make money for the enemy while making money for themselves. It would also lead to franchisees using resources from one franchise to cut corners on the other. For example let's say I own one branch of Dunkin' while also owning and operating a McDonalds, if I take the sausage patties I get from Dunkin' and sell them at the McDonalds, who would know? Yet, Dunkin is paying to supply patties at both locations.

Item 2 can't be enforced. What you mean "Good Faith?" Contracts are established to define what that means. So item 2 should be: "establish a good contract?"

Item 3 should be assumed and the latter items should allow the franchisee to sue for discrimination damages.

Item 4 I agree with. A good franchise should always do this as it will make more money for all parties.

Item 5 : sure as long as the franchisor can access that profit is being made. After all this is corporate business and the franchisor would want to make sure that pricing is done in a sensible manner.

UFBOR

Based on the comments regarding UFBOR I've read here, I'm going to assume those commenting are not franchisees.

Guest 23 states "so you want to bring order to franchise relationships" - what UFBOR did you read? UFBOR isn't about order; it's about fairness and ethical business conduct. If you operate in the franchising world, you cannot deny between paying a landlord and franchise fees, a high percentage of franchise owners are not earning the returns they expected.

Guest 23 goes on to say "Contracts are about certainty and control". I love that statement. What he means is - once you've signed our Franchise Agreement "do what we say and pay us our money irrespective of changing business circumstances or our failed rules and policies. And, by-the-way, if you decide to sell this "business asset" which we told you would be so valuable as it grew and grew (but never did), give us our "pound of flesh" even though your operating on skin and bones.

I was an investor and the COO of a franchise company. For sure it is a tough business model to succeed at both for the franchise companies and the franchisees. Anyone who honestly believes in the majority of cases the franchisees get a fair deal simply doesn't know franchising very well.

I applaud Jim Coen's work.

Re: FUBAR

@Bob Lucido - You're certainly entitled to your opinion, the franchise bill of rights is DOA and the idea that state and federal governments are going to intervene and reorder commercial contracts is absurd.

They can.

Most franchises are involved in inter-state trade (even international trade) and the Constitution gives the government the right to regulate inter-state trade.

nothing like a "living breathing" set of rules

To attract more franchises. That is an utterly ridiculous notion given the goals.

You are freakin insane Jim Coen

You are one misguided little troll.

Jim writes..."The CFAFFC believes that the UFBOR is a living breathing document that can be improved, amended and updated as franchising evolves."

So you want to bring order to franchise relationships by creating an unimaginative lists of demands that you can add to and change as things "evolve"? Contracts are about certainty and control, but you want the franchise agreement to be a perpetual negotiation that when you "feel" things are unfair you get to cry foul and change the game.

Once the CFA fails at this absurdity I suggest the DDIFO find a capable person to replace you.

Guest23, you just don't like the traction...

Guest23, you just don't like the traction the CFA is gaining. Jim said that the UFBOR should be dynamic, and many people agree. We amend our constitution. We change our laws. Franchisors change their franchise agreements.

As to Jim Coen's effectiveness at the DDIFO (and the CFA for that matter), you are all wet. By far, he is the most effective leader that the DDIFO has ever seen. Under Jim's leadership, they have prospered in membership, vendor support, and in advancing franchisee value.

In short, Jim is damned good and you are fearful and/or jealous of just how much he has accomplished and will accomplish. If not, you would not resort to name-calling and vitriol.

Jim Coen's picture

Watch Me.....

Watch Me....

Watch you do what?

Pursue a losing, warped and unworkable franchise fairness doctrine?

Franchising is a contractual business relationship and you are confusing it with some sort of alternate universe democracy. But you have come to the right place at BMM home of the whining failed and misbegotten failed and some current franchisees to preach your Universal Franchisee Bill of Rights idiocy.

Bill of Rights simply brilliant

Hah. You know Mr. Coen is on the right track when he gets responses like the one above. It is a sign that things are getting hot for franchisors.

I, for one, am going to have fun with trolls and personal attacks like the one above. I may get distracted poking fun at the logic of the troll but I will try to eventually bring the discussion back on target.

To CFA members who voted on this: a bill of rights is a brilliant idea. I mean, who can attack a bill of rights? Really.

The guest wants to focus his attack on Mr. Coen. That's like King George blaming the American Revolution and its ideas on George Washington.

Take the Bill of Rights

Turn it into a list of potential concerns and petition states to make it part of their disclosure process. THEN you will create demand at the purchase side for franchisers to adopt it. The current plan will never succeed.

Have the Franchisor's started

Have the Franchisor's started laughing yet!!!!! Hope you like climbing Mt. Everest for the rest of your term.

Franchisee Bill of RIghts and franchisors

Anonymous guest writes:"Have the Franchisor's started laughing yet!!!!! Hope you like climbing Mt. Everest for the rest of your term."

AS A MATTER OF FACT, Dunkin Brands, a major franchisor that actually offers a business model and not a scam, responded to several specific issues raised by the UFBOR. It submitted a written statement to its own legislators. ThHis is a quote from an article on the front page of Blu Mau Mau (with bonus references to your buddy, Mr. Coen):

"According to the statement, after nine months of franchisees collectively bargaining with Dunkin', the franchisor changed its agreement to allow franchisees to more easily pass on their shops if the franchisee dies. "The recently negotiated franchise agreement also addresses specific situations when the franchisee should be indemnified and transfer rights of the franchisee upon death or other circumstances," declares the company document.
Coen, a former ice cream shop franchise owner himself, acknowledges the change with the franchising company. "I want to thank Dunkin' Brands for the last couple of years in making the relationship between franchisor and franchisee much better than it has been for a long time," he says."

Sounds like only the fraudster franchisors are afraid of franchisee rights to protect their own pockets.

Misleading Dunkin did not adopt UFBOR...

or more commonly called FUBAR and BS.

Furthermore Dunkin's minor changes to their franchise agreement predate UFBOR.

DDIFO did adopt UFBOR

Dunkin is it's franchisees. Who else earned the money?

Go ahead, we're waiting for the next mindless non-sequitur. The emptiness of your arsenal is showing.

Keep proving Coen right.

RE: DDIFO did adopt UFBOR

Who cares if the franchisees declare fidelity to a FUBAR like UFBOR? It means nothing unless the franchisor agrees to it.

Jim Coen's picture

All Franchisees Agree On One Thing

.....franchise agreements has gotten too onesided and onerous.

As of July 31, 2011, one month after the release of the Universal Franchisee Bill of Rights, over 325 people and organizations have Endorsed and or Ratified the Universal Bill of Rights. The UFBOR is a declaration that defines: fair terms in franchise agreements.

Endorse the Franchisee Bill of Rights Today

The more endorsements UFBOR recieves the more credibility it gains.

Eventually the IFA and Franchisors will need to address fairer franchise agreements in order to sell franchises. Market pressure is one way to effect change, there are others; such as legislation, there is no reason why franchisees shouldn't work both avenues at the same time. 

Endorse the Franchisee Bill of Rights Today

Who Else Earned The $$$?

Ahh, Jon Luther is earning $41.3m of franchisee money. Let's see, Neil Mosses, who recently joined Dunkin, is earning a nice chunk. The Brit, Nigel Travis, is raking in close to $5m. Once the new managment grabs the supply chain they'll take even more from the franchisees.

Let's face it: the UFBOR isn't doing diddly to protect Dunkin franchisees from the cash siphon machine in Canton.

Does Canton even know who Jim Coen is?

Dunkin and UFBOR

Then why'd they renegotiate their franchise agreement and supply chain contract to give franchisees more power and right, employee?

Dunkin and UFBOR

Then why'd they renegotiate their franchise agreement and supply chain contract to give franchisees more power and right, employee?

Dunkin FA & Supply Chain

They issued a new FA because they were going public and needed institutional investors to hear that the franchise relationship was positive.

Tell us what exactly was negotiated with the supply chain. They made no mention of any recent agreements during their road show this week.

Dunkin and UFBOR

You claim to know, but it is clear that you are FUBAR. Keep fumbling and bumbling in the dark, and of course babbling to amuse franchisees.

fubar?

Claim to know what?

Well, Pilgram

There's a new sheriff in town and his name is Jim Coen. He's gonna ride that living breathing horse until he has to eat it.

JW

Jim Coen's picture

Thank you Mr. Blue MauMau

The Coalition of Franchisee Associations (CFA) Fair Franchising Committee (CFAFFC) would like to thank Mr. Blue MauMau for hosting a forum for the Universal Franchisee Bill of Rights UFBOR).

The CFAFFC believes that the UFBOR is a living breathing document that can be improved, amended and updated as franchising evolves. If you have comments and or a story regarding a particular component (article) there is a forum for each article (there are currently 12). If you have a comments/story regarding the entire UFBOR please post here.

The UFBOR was created by franchisees for franchisees as a fairness doctrine. The goal is to highlight the imbalance in the relationship between franchisees and the franchisors because of onerous franchise agreements.

Please share your thought. All thoughts will be considered.

Its amazing when you read

Its amazing when you read some of the comments in the forum. Its almost as if franchisors and other idiots surf the forum and use it as a form of lashing back or retaliation. Time will tell if this really comes to fruition.

Its amazing how many have forgotton in this age of socialism that small business and small business franchisees account for a large chunk of the economy. Without franchisees, the franchisors have nothing and without profitable small business the economy will continue to dive. Its a no brainer! So don't attack the idea of a Bill or Rights for franchisees unless you really have something to offer as an idea. Its easy to criticize but much more difficult to develop some ideas of your own.

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