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Associations Make Better Franchises

Justin Klein

In this new Podcast series, Blue MauMau spends five to ten minutes on key issues facing the franchise industry with top leaders and future game changers. Each interviewee discusses one issue.

One of the industry's foremost franchisee attorneys, Justin Klein of New Jersey-based law firm Marks & Klein LLP, speaks about why franchisees need independent associations and cooperatives with functional responsibilities.For decades there have been franchisee advisory boards that dish out advice to franchisors. That is, if a franchisor is in the mood to listen. And even if the franchisor listens, they often fail to act.

In his $206 million settlement with a wayward Quiznos, one of the largest in the history of franchised restaurant chains, attorney Justin Klein, representing thousands of aggrieved Quiznos franchisees, negotiated the recognition and authority of franchisees in an independent franchisee association, as well as the establishment of franchisee cooperatives to audit supply prices and national marketing efforts. Obviously Klein thinks that these structures are critical to a good franchise chain. In fact these same three organizational structures help the industry's leader, Subway sandwich chain (Doctor's Associates Inc.), outmaneuver the competition.

Klein answers why there is a need for an autonomous association of franchisees in franchise chains.

"The better franchisors who work well with independent franchisee associations, and who take their [franchisees'] ideas and implement them, will have a much better running system," says Klein. He thinks that franchisees are getting more sophisticated and increasingly seeking chains where franchisees are in charge of certain national functions.

Click the pointer next to the speaker icon below to listen to the interview.

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