Legal advice is necessary but it should not lead ANY franchisee group. Do not allow any lawyer to capture control.
SNIEGOWSKI: Some franchisee associations, frankly, seem banded together merely as an excuse for a class-action lawsuit against the franchisor to resolve a grievance, or at least the threat to the franchisor of one.
PURVIN: Sadly, that is too often the case.
If a lawsuit is the only reason for a franchisee association to exist, it will disappear five years after its startup or until the next round of franchise contract negotiations. The successful associations do more.
The Griswold Healthcare Franchise Association [GHFA] is an example. Franchisees created a fabulous task force on best practices that worked with the company to put on seminars each month. They have great turnouts for their seminars, which are done by webinar. They are now getting involved in lobbying, especially around the issue of caregiver wages. Their legal fund is dedicated to working with various state and local agencies over the rights of caregiver business owners.
Griswold created a products committee, where the franchisee association is now getting involved in the supplier side in a collaborative way. It is not just the franchisor that is cutting a deal with this supplier [getting kickbacks] and mandating that franchisees use that product to enrich the franchisor.
Associations can be more about the supply side than about renegotiating the franchise agreement.
Let me repeat: Associations can be more about the supply side than about renegotiating the franchise agreement.
Rule of Thumb: add together what you’re paying for royalties and ad fund (ie. 4 and 3 = 7%). As a franchisee that does not have a franchisee-led and -owned buying co-operative, you’re putting an additional 7 per cent of hidden cash into your franchisor’s pocket via product and equipment costs.