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IFA CEO Invites More Franchisee Involvement

CEO Robert Cresanti listens to panel discussing POS security breaches at the IFA's Legal Symposium in May 2016
Cresanti listens to a Legal Symposium panel of experts (photo/bmm)

WASHINGTON – Robert Cresanti, the newest CEO and president of the 56-year-old International Franchise Association, speaks about franchisee interests, his recruitment into the IFA and his background.

According to the K Street, Washington, D.C.-based IFA, it is the "largest organization representing franchising worldwide," pointing out that there are "nearly 800,000 franchise establishments." Yet many franchise owners know little about the International Franchise Association and even less about the impressive professional background of its newest chief executive.

If franchisees want a powerful lobbyist to block a hike in the minimum wage, a change to the overtime rule, an alteration in joint-employer status or a revision to any other regulation that they deem harmful, who should they call? There may be other franchise lobbyists, but the IFA has some strong points that should be noted, such as its leadership credentials, its half century of working with government and its powerful allies.

Cresanti was appointed at the end of September 2015 to head up the organization after ex-CEO Steve Caldeira's employment contract was not renewed. The new CEO had joined the IFA in 2014 while with SAP America Inc., where he had been vice president of corporate affairs and government relations since 2009. He had also served in government as Under Secretary of Technology and Chief Privacy Officer at the U.S. Department of Commerce, promoting American technology around the world. He served a U.S. President as Co-Chair of the President's Council of Advisors on Science and Technology. In his nearly decade-long service on Capitol Hill, he was a Committee Chief of Staff in the Senate and a Legislative Counsel in the House, where he handled legislation before the Banking, Judiciary, Commerce, Government Affairs and Finance Committees.

As a trade association executive, he served as vice president of Global Public Policy for the Business Software Alliance from 2001 to 2006, representing the technology industry in international negotiations and complex regulatory, legislative and commercial legal matters on a global level. He also served as senior vice president and general counsel of ITAA (now TechAmerica). Immediately prior to joining SAP, he served as the CEO of Intellectual Property Exchange International.

This introduction to the IFA's new chief executive is part 2 of a series based on interviews with IFA leaders at its annual Legal Symposium in Washington, D.C..

Don Sniegowski: Tell me about your background.

Robert Cresanti: I came to Washington, DC in the early '90s. I am a banking and tax attorney by training and have a strong technology background. Prior to coming to IFA I spent years in technology, working for various large companies, particularly focused on intellectual property asset valuation and allocation. I worked at my last job before coming to IFA at the largest software company in the world, SAP. It's not commonly known to people who are storefront users, but SAP does large enterprise systems around the world. I've represented them. It was a great company, but this [IFA] was an exciting opportunity for me.

I spent time in the U.S. government as the Under Secretary of Technology in the Commerce Department. It was the number three level job in the Commerce Department, right behind the Secretary and Under Secretary.

Some friends of mine from the Census area commented that this was such an unusual move that you would go from high tech to franchising systems. I said you are viewing it all wrong. It has everything to do with intellectual property, in just the same way high tech does.

For the first time I can come into your office and say, "We haven't outsourced a single American job. When we use our intellectual property, we bring it abroad and it creates jobs here in the United States. It doesn't pollute the environment anymore when we do things abroad. We don't cause deficits in our trade. We only enhance the exercise. By all rights, as much as the government is focused on promoting technology trade, franchising around the world is also a job creator in the United States. It brings incredible benefits. Plus it is based on the most fundamental things, which is small business operations, mom and pop ownership, and all the way up. So it is a great opportunity to talk about those important topics.

Sniegowski: What did [former IFA CEO] Steve Caldeira say to persuade you to move from high tech to the IFA?

Cresanti: A head hunter actually contacted me first, and then I had an opportunity to meet Steve afterwards. I guess the thing that blew me away about meeting and talking with him was how passionate he was about this industry, and the level of passion he felt about his job and for his engagement, and how important this industry was as a base-layer foundational industry in this economy. It was infectious. I liked that. I liked the fact that those things were economically relevant and important activities. I liked the way he talked about the system as a whole.

Sniegowski: In 1960 the International Franchise Association started as a franchisor organization, purely representing franchisors' interests. But then the IFA decided to incorporate franchisees into the organization. Can you talk about why the IFA decided to do that?

Robert Cresanti
Cresanti (photo/bmm)

Cresanti: I don't know the history of that time particularly well. Not just because my chairman is a franchisee, but also because I cannot imagine life without franchisees. They are such an integral part of our leadership at this point. We still have so far to go in that direction, no matter if that was a recent decision or not that we brought franchisees into the board. I think their influence is undeniable.

I can tell you that now we have questions that are being asked, how much do we integrate suppliers into the IFA. Now franchisees and franchisors are sitting at the table saying, "How many seats should we have for suppliers? Is that the right place for them? What qualities should their membership have?" It is an ongoing process.

We are opening up more and more opportunities for franchisees to get involved, and we welcome the involvement. We also have a policy of reaching out to aligned business sectors as well as franchisees.

Sniegowski: Critics say that in the IFA trying to represent both sides, it represents none. Your franchisee members have to fall in line with what franchisors want, and franchisors can't get all that they want because franchisee members would be upset. What do you say to them?

Cresanti: That's not even a discussion at IFA. No franchisor has come to me and said, "My God, this is a horrible thing. Let's have a side meeting without the franchisees to take part in this discussion."

That has never happened. I have never seen it, either when Steve [Caldeira] was here or when I was here originally. It has been a "Where do we go together, what things can we do together, how do we take into account the challenges that we have as a business model."

Our code is that we enhance and protect the business model, not franchisors and not franchisees.

Aziz [IFA chairman, a franchisee as well as franchisor] talks about this all the time in understanding his employees' needs. I say this because this has fascinated me. I've been entrepreneurial myself, but not in the sense of hiring a bunch of folks along the way. When I ask really successful franchisees, "What makes you so much more successful than another franchisee that just has one store," the answer I find is invariably the same. "I hire really great people. I choose to work with really great people."

For franchisors that are very successful, they must say the same thing. How can you become the best franchisor that you can possibly be? "I have the best franchisees that are out there." In order for something to be truly successful, it has to provide benefits for everyone along the way, whether that's a guy that is making minimum wage or… There has to be tracks and paths to success.

Sniegowski: Did you work with diverse groups of people with different objectives before you came to the IFA?

Cresanti: Yes. In Congress I worked as a lawyer and chief of staff of a committee. If you don't build in all of the relevant constituencies to make decisions, you might have them painted into a corner with nowhere to go. Planning, strategic thought and engagement with everybody is the hallmark of how I view this role. It is engagement. I've never had any frustration from any of the franchisors about franchisees.

I have had frustrations on why we are reaching out to a particular government agency when they do nothing but kick franchisors and franchisees in the face. Even in those cases, when there is open warfare on us, my perspective is to at least open up with having a friendly conversation. I was recently having a conversation with the Secretary of Labor's office (David Weil) and they are combing through California at the moment doing investigations of franchises. One of my board members before I went in said to me, "How are you going to open with David Weil? He's done all these things that we don't like. He is preparing to do harm to the industry."

I told my board member that I'm going to tell Weil the following: I represent the industry that has been the most successful job trainer and creator in the history of the United States. We provide opportunities for people who come from broken homes and broken education to get onto the first rung of the work ladder to provide for their families and ultimately if they do a great job, even in some cases, to own their own franchises. Many of those people may not have the formal education that I do, but they sure are smarter than I am.

I think that resonated with him. We had a very good discussion. We agree on everything by no stretch of the imagination, nor will I shrink from advocating for our industry, but at least it gave us a common basis. It resonates in all of our hearts—franchisors, franchisees.

That is what I am trying to bring to this organization.


Read the other parts of this series of interviews:

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About Don Sniegowski

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.