CFA Chair Responds to IFA Attacks

Franchising sounds like it’s about big business, but it really isn’t. Those well-known brand-name restaurants, car care centers and convenience stores – the ones you see on the back of your child’s Little League jersey or who donate items for your community fundraiser – are owned by small-business owners. Franchisees are small-business owners.

My name is John Motta. I am the chairman of the Coalition of Franchisee Associations (CFA) and a Dunkin’ Donuts franchisee. CFA is an organization made up of franchisees and franchisees only – our 35,000-plus member franchisees own over 85,000 small businesses, employing over 1.5 million individuals across the country.

Recent statements about a bill that will help franchisees across the state of Alabama and hopefully – eventually – across the country have caused me great concern. The current chairman of the International Franchise Association (IFA), David Barr, recently wrote an Op Ed in the Wall Street Journal and spoke on the Fox and Friends news program about the “Protect Alabama Small Business Act” – a bill that gives Alabama-based franchisees more rights in running their businesses. Let me be clear: IFA represents franchisors, not franchisees, and while they state that they support “franchising” in general, their membership consists of franchisors, vendors and those franchisees who the franchisor chooses to “opt in” to membership.

I can spend this opportunity disputing Mr. Barr’s claims that this bill will destroy franchising while clarifying that the data he cites actually comes from a company (FRANdata) whose CEO served on the IFA board and currently is an active member of several IFA committees, but I will let you decide what the bill actually accomplishes.

To read the bill, click here or go to the Alabama legislature’s website and search for Senate Bill 129. You will see that this bill does nothing to destroy the franchise model but, instead, allows franchisees more freedoms in running their businesses. Specifically, the bill allows franchisees to form associations; requires both parties to act in good faith; allows franchisees to pass their business onto qualifying family members; and requires franchisors to buy back any remaining inventory upon the termination of a franchise. IFA is counting on you to not read the bill but instead succumb to their scare tactics. You decide.

The mission of CFA is – and has always been – the protection of small-business investments by American families, as no one else in the nation is protecting them as they invest their net worth in franchises. Unlike the franchisors, franchisees stand to lose everything they have or will earn over their lifetimes. There is no one to protect franchisees because their franchise agreement – which is completely non-negotiable – even deprives them the right to their day in court. 

The “Protect Alabama Small Business Act” has nothing to do with unions or government interference with your business and everything to do with protecting the life savings of American families who enter franchising. As stated in the bill, the intent is clear: “to promote fair business relations between franchisees and franchisors and to protect franchisees against unfair treatment by franchisors.” If Mr. Barr and the IFA oppose these principles, perhaps they should admit where their loyalties truly lie – with franchisors.