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Franchisor of the Year Is What Troubled Quiznos Needs

The best thing to happen to Quiznos at this stage is for its leadership to follow the example of Curves' Gary Heavin. Schaden and senior leadership should meet with Toasted Subs Franchisee Association regularly to discuss strategy and franchisee issues. Right now the association is ignored by Quiznos, and when angered its leaders sued.

There could be mentorship by AAFD and its association members in how to successfully run an IndFA association. Franchisee purchasing and marketing coops could be formed. Fairer franchise agreements could be scored and negotiated for improvement. The thousands of Sold but Not Open stores could be addressed and resolved. And franchise encroachment, where one shop is placed too close to another to maximize franchisor royalties, negotiated so that territories are clearly defined.

TSFA could certainly use two hundred thousand dollars to help provide support and services to its members.

Frankly, such support and communication is the best hope Q has to repair their sinking ship -- by listening to and tapping into the talents of its independent franchisee association members that are motivated to save their investments.

On second thought, Quiznos may need many years of being awarded Franchisor of the Year to solve their mountain of problems. The good news is that its operators have many good answers for the franchising company on the quick service restaurant business.

Ray Borradale's picture

Looser?

The bright people are getting results - can't measure them but you came so that would suggest anyone with half a brain can find BMM.

as bright as folks are around here ....

they don't seem to pick up on the people players. hint: think constant loosers.

Wolfboy

Funny how Michael Webster, even when he's referring to the wrong person, still makes more sense and has more credibility and a lot more class than the fleabitten wolfboy.

Won't it be grand when he finds some other tree to urinate on?

michael webster's picture

Bloody Fool II

BF writes: "I was referring to J Michael Garner. I don't know who the hell Ron Gardner is?"

Ronald K. Gardner  is a partner with Michael Dady and J Michael Garner. 

Strike 2.  You want to try for 3? 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Millionaire Richard Quick Esq's picture

A license to swill

He has a license to swill.

Got to change the bar locks every time he visits.
See you on the veranda!

Millionaire Richard Quick, Esq.

Website:  FranWorst.com

you must mean the 'un-Happy Hour'

But there might be a second person at the table if Kelly can get over there in time. Does he have a valid license - for anything?

The Solomon/Muldoon/Bloody Happy Hour

From the reportage, his Happy Hour must have started upon wakening today, per usual.

RichardSolomon's picture

I'm off to the Happy Hour with Seamus Muldoon at Muldoon's

here in Houston - starts in an hour. I wonder what the lead off topic will be this afternoon.

--

Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

bloodyfranchise's picture

I did say Garner - didn't I Mikey,

http://www.dadygarner.com/

I was referring to J Michael Garner. I don't know who the hell Ron Gardner is?

For someone who accuses one of not doing their homework, I think you should put on the dunce cap! Once again, your immaturity precedes you!

Bloody

michael webster's picture

2010 Franchisor

Richard Quick writes: " I'm golfing with Rick this Saturday and am sure he'll greenlight $200K for the, uh, independent franchisee association. Heck, we'll forceship a can of pickles and pay for that in a week."

Greenlight the cheque here. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Millionaire Richard Quick Esq's picture

Quiznos: AAFD's Next Franchisor of the Year!

Mr. Purvin:
I am a great fan of the AAFD awards and don't believe you should change a thing.
In fact, please reserve the 2010 Franchisor of the Year Award for Quiznos. I'm golfing with Rick this Saturday and am sure he'll greenlight $200K for the, uh, independent franchisee association. Heck, we'll forceship a can of pickles and pay for that in a week.
Be a sport and put a couple of those Cuppy's contract trophies aside for us, too ;)
If there's some kind of order form, please fax to my office and we'll return it with the deposit.
Based on prior awards and your criteria, I see no reason Quiznos won't make your best recipient yet!

See you on the veranda!

Millionaire Richard Quick, Esq.

Website:  FranWorst.com

michael webster's picture

Help Needed, Then

Nick, then I guess we will need more than attorneys and IndFAs as members!

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Howard R. Morrill's picture

re: Awards

If my franchisee clients had mistakenly invested $300,000 of their tens of millions of dollars in a crummy franchise, it'd sure be alot easier to finance what comes next. Unfortunately, they usually invest $300,000 of their $200,000.

Nick Bibby's picture

re two tabled options, Michael

Granted, I have neither your time in grade analyzing these issues, nor your knowledge of the decision makers involved, but at first glance, it seems to me that only by combining both options, plus an 'overall' quality agenda, can this thing hit a homerun.

If on the other hand, it is determined that contractual language and FA support/relationship building is the main objective, then I don't think there's a future.

Darnelle White's picture

re: Awards

Howard asks, "how much money are you out if you mistakenly buy a ticket to a lousy movie with the "Best Set Design"?

Producers of a movie franchise can be out tens of millions if they mistakenly invest in a lousy movie such as Schindler's List III: Escape from New Mexico where the franchise has previously won a "Best Set Design" award.

Movie-goers who buy a ticket to Schindler's List III: Escape from New Mexico? They lose their time and $8.

Likewise, franchise buyers can be out a lot of money if they simply buy a franchise based on the AAFD award-winning wording of its legal contract. But at least they'll be better protected in the courts.

For franchise-goers? They'll be out $4 for a hamburger in the lousy franchise that has the "Best Contract" award.

michael webster's picture

AAFD and Investment Decisions

Nick;

There are basically two thoughts in the AAFD right now about how to improve franchise systems.

Here is my own summary.  The AAFD is largely committed to using the marketplace for reputation as a way of improving franchising.  There are two ways to do this.

1.  The AAFD cannot get large systems to adopt all of its fair franchising standards and so has to target new and upcoming systems.  One way to make this attractive is to award franchise systems with the AAFD Accreditation for having a fair contract, and improve the marketplace supply of fair contracts. 

I do not favour this approach, largely because I don't believe that the fairness of a franchise contract is very important to a new or turnaround system, abscent a well thought out business model.  Primarily, I don't believe that the AAFD has any global expertise or recognized skill in putting together franchise systems, so I am reluctant to pass out awards for a total quality franchise system.

The second view point is this. 

2.  The AAFD should assist well established IndFA's to become businesses, and collaborate, compete and coordinate with their franchisors.   Theses IndFA's are not litigation groups and favour deal making over dispute settling devices.   Deal making and dispute settling procedures use in part objective standards.  The demand for the AAFD's main product, objective Franchising Standards, would be increased.

Some argue we can do both, 1 and 2.  I am only in favour of 2, and would like to see the AAFD collaborate with certain IndFAs and confront their franchisor on some key points for change in the agreement, following how AAOHA's used their 12 Points of Fair Franchising to bring about change in certain Hotel contracts.

AAHOA was able to do this because their members are looking to buy other hotels and so a negative review would hurt the franchisor's ability to resale.

For example, DDIFO might partner with the AAFD, use the AAFD's comprehensive grading of their contract to obtain concessions from the Franchisor.   The ultimate failure to obtain those concessions would leave the DDIFO no choice but to withhold recommending the purchase of any new Dunkin Donuts.

As I say, I favour 2 as the correct approach.  Primarily because a large majority of AAFD members and supporters have specialized skills in both deal making and dispute solving. We can be recognized as experts, whereas 1 requires us to be experts in evaluting business models. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

michael webster's picture

Bloody Fool

BF writes: "Too bad you're not a class act like a Brown or a Dady or a Garner , but that's a story for another time."

Uh, Ron Garnder said this about Curves :

Before the awards banquet franchisee attorney Ron Gardner, who represents the franchisee association, stated, “The company has supported a completely independent association, both financially, and through open and continuous access to Curves’ senior management and have embraced the CFA as a valuable source of information.

That’s contributed to noticeable improvements in the system for both the franchisees and the franchisor—exactly how a healthy franchisor/franchisee relationship should work.” 

This is why whatever knowledge you may possess about franchising will be discounted - you don't do any home work, and are content to merely rant and rave. 

You then look like a bloody fool to everyone who can support their assertions with facts.

How is that working for you?

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Howard R. Morrill's picture

re: Awards

Darnelle, setting aside the other problems with your analogy to the Oscars, how much money are you out if you mistakenly buy a ticket to a lousy movie with the "Best Set Design"?

bloodyfranchise's picture

Wow Mikey, Richard touched a nerve

Quite frankly, the AAFD is obsolete. Isn't it as simple as saying the AAFD is about helping a franchise lose money, just not all their money?

Franchise associations are riddled with lukewarm and political operatives (from both sides of the fence all at different stages of revelation) with little to no value for the individual franchisee. Yes they are one of the only models that creates revenue for lawyers or people like Mr. Purvin. Another bottom-feeding exercise justifying taking money from people in exchange for watered-down ineffective programs and events (worse than a chamber of commerce).

Richard is right when he states that Curves paid 200K for a BS award. I know you don't like to hear that, but it's the very clear motive of Curves to try and get more suckers to buy in. After all, if I'm Curves and I can get a big up front investment via an endorsement of the AAFD, what the hell do I care if the franchisee makes it or not. I can churn them again and again and the AAFD is helping me!

You Michael, just cannot face the fact that you are in a losing battle and it's only a matter of time until franchising blows a gasket. The internet is and will continue to shine the light on the huckster franchisors and their little band of merry men (brokers, consultants, investors, lawyers). If you had gone the distance to fight the good fight and remain franchisee specific, the outcome would have been much different. When this happens (imminent) and the average joe realizes that unless he puts up real dollars (millions) to buy a real franchise that is proven to make money, then he'll simply have to pass and open up a small business or go back to school and learn a new trade. Most people with a brain who have been disenfranchised are doing this very thing and are successful.)

Face it, the franchising model is flawed and that's what you like about it so much. It's an oxymoronic relationship between a greedy corporate-minded franchisor who's willing to manipulate and abuse its franchisees in an effort to use the franchisee's money to grow it's brand (using someone else's money is always easier) in exchange for the hope it sells. It invests only what it absolutely has to into the actual business as it's pure motivation is to sell more franchises which eventually dilutes the value of the whole. Then he runs off to another continent to do it again.

And because of the economic reality that corporate and blue collar jobs are shrinking every where, people are subject to the "hope selling" of con men brokers and consultants who have no conscience. With the huge amount of money available in 401Ks, retirement and pensions, worthless franchises are getting larger and larger fees and delivering less and less for those fees. They are experts at spotting these marks in their most vulnerable state, and even more expert at fleecing them.

You Michael, are playing both sides of the fence because you have to! You cannot make any money off the franchisees unless you catch them before they engage (and this is why you lawyers lurk on BMM all day). If you don't get them then, you're screwed because the franchisor has gotten all their money. You justify your franchisor points of view because they are the only ones that can bring you a fair wage using the money of the franchisees! It's a shame you chose to be a franchisee lawyer, as the revelation of the previous sentence forced you to walk across the aisle to now work with franchisors. Too bad you're not a class act like a Brown or a Dady or a Garner, but that's a story for another time. Your immaturity and reactionary defense comes out as clear as Craig's tasteless self promotion.

To quote Ralph Nader and the Franchise Fool, "Unsafe at any speed" is the only solution for franchising these days. Without major reform, conversion back to franchising being subject to state law and not arbitration, franchising is just plain stupid.

To endorse franchising is to be a gypsy that sells snake oil. Anyone with a positive outlook on franchising is without a conscience. Not one franchising system is safe to enter into today when one has no say in the direction of the franchise, the FDD can be changed at any time and the franchisee has to stay in the system to retrieve their sunk costs or simply go broke and end up with nothing. Lives are being ruined and you're still justifying and defending the endorsement of Curves and Cuppy's. How can you with a clear conscience approve the investment in a model that is so one-sided and fraught with so many intangible twists and turns outside the franchisee's control?

Bloody

Nick Bibby's picture

Your "Brilliant" comment has little to do with the issue at hand

First, it’s disappointing that a franchise professional would consider the obvious to be 'brilliant'. You know, I know, everyone in the know knows, that most franchises are lousy investments, and it would be best if only the cream was brought to market and later on rewarded. But that's not reality, so, what's new?

Second, anyone can point, for many reasons, at the AAFD and its totally dumb past moves as they relate to the 'overall' world of franchising, but even those 'dumb moves' are not the issue at hand.

The real issue is that AAFD 'started' a movement, the only movement, through which some meaningful reform might be achieved. Neither the IFA, nor any solo effort has impacted as many systems as AAFD, and even though it has been blind to franchisee profitability, and 'other' basics of good franchise practice - yes, pretty damn stupid, I agree - they, with new membership/input, are apparently bending to the light. (I’m not a member by the way and may not become one.)

OK, the initial leadership may have lacked insight, foresight, marketing skills to attract the 'right' profile members, or even common sense regarding the potential outcomes of their award decisions. I've never gone near it for all of those reasons, but that's the past, and I won't hold the past against someone demonstrating change – not talking change, but demonstrating change. I’d want that chance; maybe others wouldn’t.

If no logical changes are made (shortly) in terms of focus, selection, and considerations of how award decisions impact the investment world, then I will come to believe there is no good here to be gained and I will be through with the discussion.

I'll even agree that 13-17 years is a long time to get one's act together, but it's a different organization today. Now, if stubbornness and/or ego continue to resist logical change, then it deserves to die out, but there are lots of new deputy sheriffs in AAFD town and I'd like to see if that blood makes a difference.

michael webster's picture

Review of Seal

The Fair Franchising Seal is awarded only for 3 years.  In theory, if the contract changed dramatically or the IndFA imploded, the Seal could be revoked.

We did revoke Cuppy's Accreditation when it became clear that Cuppy's was not honouring its refund commitments. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Ray Borradale's picture

Sorry Craig

I understand where you are comining from - I get this all the time but you cannot afford me. 

I don't know why you would address this to me - I asked a question regarding the 'Seal'.   Nice ad though ...

Ray Borradale's picture

Thanks Michael but

is there a process of review; example only - if a franchise was granted a Seal say 3 years ago is the criteria revisited to ensure that nothing has changed for the worse and to where the recipient is no longer entitled?. 

michael webster's picture

AAFD Seal Winners

Richard writes: "But the good franchisors don't need BS awards from BS associations, and they certainly won't pay for an award like Curves just did with the AAFD - $ 200,000 - outrageous."

This is nonsense and you know it.  The franchisor Curves gave $200k to their IndFA to establish itself, nothing to do with the AAFD.

Good franchisors do value collaborative franchise relations, and any recognition of that.  The AAFD is the only game in town for recognizing and promoting those relations.  For better or worse.

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

michael webster's picture

Seal Process

Ray;

There is a process for the AAFD Fair Franchising Seal, which requires that a) there be an independent franchisee association, b) the contract grade out high on the fairness scale, and c) the IndFA recommend that the Franchisor receive the Fair Franchising Seal.

Since few franchise systems have viable IndFA who are engaged in collaborative relations with the franchisor, there are few AAFD Seal awards.

The challenge for the AAFD is how to encourage more collaborative relations; and the current scheme is to use the Standards as a marketing tool.  A venture I oppose when there is no IndFA. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

The Craig's List of Franchising

Looks like another provider is jumping right up on the self-promotion and advertising bandwagon.

You go get 'em guy because there's just no way the readers can resist these non obvious write ins.

Darnelle White's picture

Awards

Solomon writes, "The real problem with award recipients is that they are not chosen for having provided a system that consistently made money for the franchisees over many years."

I don't quite follow the logic.

When an Oscar is given for the best written score, we don't insist that the Academy Awards choose from only the best picture of the year or from a studio that has consistently produced entertainment over many years.

It's ok to give out awards for fairest contracts, most supportive franchisor of franchisee associations, or member of the year. That's useful information, even to naive and uninformed consumers.

I think Solomon's beef is that there isn't a best picture of the year award. The AAFD isn't prepared to make that call. But I bet Solomon is ready.

I can hear it now. "And for the most investment-worthy franchise of the year, where you will have the best chance of making boat loads of money, the Solomon goes to (drum roll please) . . . "

Franchise Central and Navigator's picture

A Process

Hi Ray,

With almost 30 years as founder of Franchise Architects and Franchise Navigator, this is what I advise my clients:

A business, both at the consumer level and the franchise level, is very much like an 8 Cylinder engine.

Just like those cylinders need to be in harmony so must the cylinders of a business. If one of the cylinders is out of sync it messes things up for everyone.

Here are our cylinders:

Operations, Marketing, Advertising, Legal, Sales, Financial, Organizational and Human Resources, Information Technology and Imaging, Branding and Positioning.

This is how we investigate and learn about a company. We like this process because it reveals the strength's and Weaknesses of a company.

This is our Process.

Craig Slavin
Franchise Architects
Franchise Navigator
847-465-0111

Franchise Central and Navigator's picture

Brilliant

Richard,

Once again you are brilliant.

If a concept or business model does not validate at the consumer level, it should not be franchised. There is no hope at the franchise level unless things change.

Franchising is a "bottom-up" concept. Consumer level first and then franchise level. Not the other way around.

I agree with your comments.

Craig Slavin
Franchise Architects
Franchise Navigator
847-465-0111

RichardSolomon's picture

The real problem with award recipients is that they are not

chosen for having provided a system that consistently made money for the franchisees over many years.

Making your franchisees profitable is really the name of the game when it is clean. These bozos whose franchisees are broke should not be getting awards for lip service.

Awards should go to Yum Brands, Little Caesars, Popeyes Chicken, Panera Bread and their ilk - all of whose franchisees make money consistently.

But the good franchisors don't need BS awards from BS associations, and they certainly won't pay for an award like Curves just did with the AAFD - $ 200,000 - outrageous.

If the deal sucks, it makes no difference that the contract isn't terrible, because you can't have a good contract on a lousy deal. Deal quality makes successful franchises, not contract language. Vetting contracts only is a ridiculous charade. You have to vet the deal too.

No award to a bad franchisor can ever be "polished" to a state of harmlessness.

All the good franchisors have gone through their rough periods, but in the end the deal quality prevailed over the difficulties and the system MAKES MONEY. MEMORIZE THIS - THE DEAL MAKES MONEY!

--

Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Ray Borradale's picture

Is there a process

of review for Seal recipients? My point would be that franchisor behaviours often change in franchising for many reasons.  As do interpretations of contracts and then many franchisors sell.  On that basis I see danger in approvals.  Nice in theory but dangerous for the naive and we the naive are the majority in franchising.

Nick Bibby's picture

We are actually very close, Bob.

RE the car buying analogy, bear in mind that we are both acting in capacity of 'buyer's agent', not buyer, but we analyze from two very different perspectives. Now things are beginning to get interesting.

It's true that buyers tend to buy on'looks', but purchasing agents are paid to not be emotionally involved; hence a different perspective.

In that buyers, for the most part, will never avail themselves of due diligence expertise, then it has to be done for them.

You and I, after a hundred years, are finally starting to look at the same glide path.

Darnelle White's picture

Packaging

It is helpful for business purchasers to have agreements rated and ranked by expert franchise attorneys. There's no way a family or other attorney could pore over a contract and let the buyer know to the same degree how obnoxious or good the agreement is.

The AAFD's efforts in having attorneys, franchisee leaders and franchisors poring over line upon line of contract to make them more franchisee friendly is as good as it gets for this activity. These finely tuned agreements are benchmarks for associations to negotiate with their franchisors.

If buyers are misconstruing an approved fair contract with a great franchise system, then maybe it is because of organizational or marketing lack of clarity. For example, "Franchisor of the Year" makes sense from a franchisee association's perspective. What is really being said is: This franchisor has given tremendous support to their franchisee association this year and so they are our franchisor of the year. But to a franchise buyer, the award name is counter-intuitive. They automatically will conclude that franchisees think the franchise chain is the best out there. Franchisee insiders will understand but novice buyers will be clueless, and they aren't about to read or sometimes even understand the fine print.

If the AAFD want to appeal to consumers, then make the award titles more consumer friendly. Why not call the Franchisor of the Year award the "Association Supporter of the Year"?

The AAFD could write a tag line to your awards, "Call to ask franchisees what they really think." Invite buyers to contact you and the associations, attend their meetings, and mingle with franchisees face to face to get the real scoop and a mentor.

Some awards lend themselves to reading the description. When J.D. Power issues its "Founders Award," you have to read the brief description to understand what honor is granted.

One last thing: Notice how JD Power has a propensity to issue studies/surveys to first rate many companies with metrics before they issue any particular award to the top performer.

Anyhow, that's my two cents worth of advice on a slow Wednesday afternoon.

michael webster's picture

The Danger with Accredited Contracts

Bob writes: "Unfortunately, we learned with our Cuppy's experience that our original disclaimer was insufficient with Accredited Contracts, for which there is even greater risk since the accredited company may have noo history (or a bad history) to establish it as a worthy player! We also learned that we need to clearly distinguish between the Fair Franchising Seal and an AAFD Accredited Contract."

It wasn't a problem the disclaimer - it was a problem with the AAFD, including myself and Harris Chernow, not spotting Cuppy's for the fraud it is and was.

There is no way around this conclusion.

Until, I am personally satisfied that the AAFD can afford to do the type of due diligence that you would do on purchasing a business, I will be opposed to the AAFD granting any franchise systems any accreditation - no matter how many disclaimer clauses we write.

The goal is to bring about collaborative relationships and not merely push out contracts that neither party have the collective will to honour.

No IndFA, no AAFD recognition for working collaborative relations.  

I am in the minority on this view within the AAFD. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"