The Importance of Early Establishment of An Independent Franchisee Association

It has been an unfortunate aspect of independent franchisee associations that they only get established in the face of perceived impending calamity.

In that mode, what precedes the establishment of the association is a period of conflict between the franchisee community and franchisor management. The “air” is filled with invective for a substantial period of time, and animosity is the mood and the ambience. That is absolutely the worst way to go about franchisees providing a really effective positive group force useful to enhance living with a franchisor. But everyone does it that way.

The lesson of this article is to teach the importance of early on establishment of an independent franchisee controlled franchisee association as a vehicle to promote cooperative positive interaction with a franchisor that, because all franchise contracts are very one sided, probably believes that he has no reason or obligation to consider any view but his own on any subject whatsoever.

Without the early onset establishment of this kind of association, the deus ex machina attitude of almost any franchisor has no resistance to its entrenchment. There is no unified moderating voice that is competently advised and focused on only important issues and positions that, ignored, may often become pernicious.

It is also much less expensive to establish a franchisee association early on, before serious problems infest the relationships. When there are no great emergencies that require mountains of hurried work, the available association resources can be put to use building the membership base and developing approaches to the positive management of what needs to be managed. When budgets don’t need to be consumed in rushed confrontational projects, a more rational and reasonable approach to every arising issue is facilitated at much less expense.

In every franchisee community there arises a natural leadership group. If these leading franchisees put up the seed money and retain competent, effective professional guidance, the message that goes out to the franchisee community about what the association is about and why it is so important for all to be participating members is more likely to receive more favorable support. At this juncture, ridiculous promises about litigation not being the purpose of the association – always ill advised, no matter what – don’t have to be made hoping to reassure apprehensive franchisees against a dangerous agenda. When the right message is configured, focused and positive, the association has a far better chance to attract widespread support.

That support won’t happen overnight, and it will probably be necessary for the leadership group to provide the financial support to keep it going for about two years. Ten leaders putting up $ 5,000 a piece for two years is a reasonable magnitude of commitment. By that time the effective message to the franchise community at large will take up the strain, and an organization will become alive because of the constructive projects and programs it can then initiate.

Properly started before emergencies arise, it soon becomes something that franchisees in general perceive they cannot afford to be left out of.

As the franchisor perceives a continued positive and constructive agenda, the modus vivendi of their coexistence becomes more reliable. Mutual respect for the needs of each interest group, franchisees and franchisor management, has a burgeoning impact upon the quality of life unless one party is simply out of touch. The out of touch mentality is far less likely to arise when the association is begun very early on and sends constructive messages.

The cynical amongst you will call this all Pollyanna nonsense and ignore this advice. They have no faith in the willingness of the group to participate and pay dues and end up with the eventual need to deal with emergency situations for which there has been no preparation. To them I say, Good luck. But the reactions will never change if the stimuli never change. Think about that before you write this notion off.

How the franchisee community goes about identifying and evaluating which issues to address, and how the issues should be addressed are the two most highly mismanaged things that franchisees do as a group. That need not go down that way. Betting on the wrong horse always ends badly. Many large groups of historically well performing franchised businesses go awry violating that particular principle, largely because they believe that their operational success has made them prescient concerning the management of difficult franchising issues. Most often that is not the case, and their ill advised decisions make matters worse and much more expensive to address. Why do that to yourself?

Franchise systems in which deficient relationship management is the rule do not produce long term success. Much can be accomplished by stark aggression over time on a huge budget. Much more can be accomplished by doing this in the manner I am suggesting.

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Comments

Richard, Excellent

Richard,

Excellent treatise.  I agree the earlier the better, but if you were to eliminate the word "early" from your title, the point remains valid.

Even established Associations that have existed for long periods must be ever vigiliant in balancing the need to protect themselves and the interests of their constituents while at the same time promoting and fostering a positive and constructive agenda.  When the mutual respect to which you refer is attained, the Franchisor hopefully will realize that the Association can be an asset rather than a threat.  Regardless of the timing or circumstances behind the formation of an independent franchisee association, I agree wholeheartedly that the decisions "about identifying and evaluating which issues to address, and how the issues should be addressed" will go a long way to determining the the effectiveness and longevity of the relationship with the Franchisor.  Obviously, associations that are formed during a time of "peace" can move miles ahead on the path to the development of a fruitful and cooperative relationship supported by the common goals within the franchise system.

Forming associations

Enjoyed your article. In the Boy Scouts we called it “Be Prepared”. In business we call it “planning ahead”. Most of us in business have some type of contingency plan for various potential disasters. And most of us have purchased business insurance to off set claims against us that may or may not happen.

I think the reason that most of us franchisees, current and former, have not formed an association is that we have not considered the fact that we have a different business model than other independent small businesses in the US. The agreements we were so hot to sign, back when we were young and uninformed, is a potential problem for which there is no insurance protection.

When I owned a franchise I was unaware of the fact that the franchisor could make things very uncomfortable overnight.  For example, my franchisor announced that he would “help” me and the other franchisees manage the national accounts. Yes, you guessed it; he got a new piece of the pie.

We had to organize in a hurry as he was about to consume more of the pie. We had not worked together before therefore half of our battle was within our group. Time and money was wasted. If were not for our association that we organized with substantial help from the AAFD and our attorney, Bob Purvin, I would have been put out of business.

Franchisees should organize to work on common problems and opportunities and to develop a good working relationship with the franchisor that benefits all.

Forming associations

Enjoyed your article. In the Boy Scouts we called it “Be Prepared”. In business we call it “planning ahead”. Most of us in business have some type of contingency plan for various potential disasters. And most of us have purchased business insurance to off set claims against us that may or may not happen.

I think the reason that most of us franchisees, current and former, have not formed an association is that we have not considered the fact that we have a different business model than other independent small businesses in the US. The agreements we were so hot to sign, back when we were young and uninformed, is a potential problem for which there is no insurance protection.

When I owned a franchise I was unaware of the fact that the franchisor could make things very uncomfortable overnight.  For example, my franchisor announced that he would “help” me and the other franchisees manage the national accounts. Yes, you guessed it; he got a new piece of the pie.

We had to organize in a hurry as he was about to consume more of the pie. We had not worked together before therefore half of our battle was within our group. Time and money was wasted. If were not for our association that we organized with substantial help from the AAFD and our attorney, Bob Purvin, I would have been put out of business.

Franchisees should organize to work on common problems and opportunities and to develop a good working relationship with the franchisor that benefits all.

Checks, balances and healthy relationships

This is such an important issue for all of franchising and Richard's advice should be heard and acted upon. The only people who would object to any franchisee association would be the opportunists or those who don't understand the value to good franchising of such associations.

It is all about communication and every quality franchise system will achieve great long-term benefits when there is a forum to better understand each other.

Thanks Richard! I would have liked to have seen this important article stay on the BMM front page a lot longer. I direct many people to it [and will continue to].

Cher B