Multi-Unit Franchisee Magazine Issue IV, 2012 | Page 67

Collaborative

Tension
“Some franchisors allow franchisees to elect some of the of policy, they communicate directly with their franchisees
members of the FAC, while they appoint the others; other through their FAC. Unfortunately, that’s shortsighted. An
franchisors determine the entire makeup of the FAC. Re- unsophisticated franchisee may think something is fine if it’s
gardless, the word ‘advisory’ means franchisees on the coun- endorsed by the FAC, but franchisors shouldn’t be giving legal
cil have the right to advise, but have no power to effect any advice to franchisees because they’re coming from a different
changes in the system or to veto the franchisor’s decisions.” perspective,” he says. “A franchisor cares about maximizing
That’s where independent franchisee associations come top-line revenues and has a commitment to shareholders to
in. “Franchisee associations are subject to franchisee control improve their revenues. That’s okay if it’s not at the expense
of franchisees, who don’t mind helping build
and have the legal standing to do some things,
“The word
those revenues but are concerned about their
including the right to bring lawsuits. FACs
have no legal standing,” says Dady.
‘advisory’ means own bottom line.” dealing with those difAnother reason for the increasing numbers
Recognizing and
of FACs is that franchisees today “are smarter, franchisees on the ferent perspectives makes for stronger FACs
have been in business, and know how it works,”
council have the and FAs, says Dady. “Theseifgroups have two
says Dave Glodowski, former president of the
different purposes: FACs, operated in an
right to advise, efficient fashion, are there to give input on
Independent Hardee’s Franchisee Association.
“Over the last 10 to 15 years, the relation- but have no power important issues that both the franchisee and
the franchisor care about, and the franchisor
ship between franchisees and franchisors has
to effect any
should listen with an attentive ear and be retended to favor the franchisor because of extreme clauses in franchise contracts. Forming
sponsive to that input. Associations provide
changes in the
an association gives franchisees more power
members with independent advice to enhance
system or to veto their business and help them get value for their
and the ability to talk to franchisors from a
position of strength. It’s more meaningful,
the franchisor’s business when they want to sell.”
and productive and voices are being heard.”
decisions.”
Glodoswski believes much of the reason
When it works
is independence. “Whoever pays the bills has
Franchisors such as National Car Rental take
the power. When you’re on a FAC, you go to
what Dady describes as an “enlightened aptheir meetings and the franchisor picks up
proach” to the issue of FAs and FACs. “Nathe hotel room and pays for meals, and things
tional Car Rental communicates with both
lean their way a little more. When you’re an
their FAC and the FA. They don’t care who
independent association executive or board
they’re talking to because they want franchimember, your franchisee association pays for
see input,” he says.
the hotel rooms and plane tickets and you go
Peter Smith of Enterprise Holdings, Inc.,
in with more credibility and authority,” he says.
which owns the National, Enterprise, and
He says the relationship between Hardee’s
Alamo car rental brands, says the arrangement
and its franchisee association is a good one.
works because, “We are all about open comMichael D’Arezzo, vice president of franchise
munication, substance over process. The fransales at CKE Restaurants, agrees, saying that
chisee association is entirely autonomous and
both Hardee’s and Carl’s Jr. have among the
independent, a national body that is governed
Michael Dady
“best franchisee associations in the industry in
and controlled by franchisees exclusively. We
the way they engage with each other and with the company.” collaborate a little more with our Policy Advisory CommitKaufmann is a strong supporter of franchisee associations. tee in terms of meetings, but if Mike Dady calls and wants
“It appears to me that things work better when franchisees to discuss a franchise issue on behalf of his clients, it isn’t
deal with franchisees, possibly because of credibility and the relevant to me whether it’s the Policy Advisory Committee
filtering that goes on, as well as the topics under consider- or the franchisee association. It’s the same conversation with
ation,” he says. “You also have a unified voice saying something the same people,” he says. “We don’t have time for nuances;
isn’t working. It’s a lot more informative than just a random we’re interested in being responsive.”
selection of franchisees complaining. It’s to the franchisor’s
Dairy Queen, says Dady, is another example of a system
benefit to understand these are issues that may be endemic that communicates and works effectively with both groups.
to the entire system.”
“Dairy Queen recognizes both its FAC, which is national in
Dady also considers franchisee associations the best way scope, and the Texas Dairy Qu