Stop Fighting Your Franchisee Association and Start Reaping the Benefits
Successful franchise systems have two core foundations: unit profitability and strong franchisee/franchisor relationships. Franchisee associations, which are typically meant to represent the interests of the franchisee to the franchisor, are usually organized independently of the franchisor, and can play a key role in whether the franchisee/franchisor relationship is positive and productive, or negative and combative, which in turn impacts profitability and growth.
Why Franchisee Associations Are Formed
Independent franchisee associations are more common than they were 10 or 15 years ago. An external association may be formed for a number of reasons:
- The franchise system is growing rapidly and franchisees become discontented if they feel like the franchisor isn’t responding to them.
- There’s a specific incident or grievance franchisees are focused on bringing to the franchisor.
- Communication breakdown between franchisees and the franchisor, or the franchisor is non-responsive.
- Franchisees feel the existing Franchise Advisory Council (FAC) is “fixed”, or not representative of the whole franchisee community. They may feel that only “favorites” of the franchisor are being appointed to the council.
Sometimes independent franchisee associations are recognized by the corporate team, other times not, which can add additional strain to the relationship.
The Difference Between a Franchise Advisory Council and a Franchisee Association
Typically, associations are legally organized, have a specific agenda or focus, and often an adversarial relationship with the franchisor. There is a more formal structure; most associations have the power to sign contracts, and legally represent and negotiate on behalf of its members. Franchisees pay membership dues to belong to the association, and frequently not all franchisees in the system participate.
An FAC is a committee of individual franchisees, organized by the franchisor, to provide feedback and collaborative ideas to the franchisor on how to improve the system. Effective FACs are interactive groups that provide constructive, structured collaboration between franchisor and franchisees, and serve as an effective representation of the franchisees and their perspective to corporate management.
FACs are most typically internally organized by the franchisor, have a less formal structure, and there is no cost for franchisees to participate in an FAC. They are intended to represent the voice of the franchisees and communicate operational challenges to leadership; however, they do NOT have any real power or need for any approvals, there is NO voting, and FACs have no authority or liability.
Ideally, you are like our top quartile of clients – the strongest and best brands today based on our independent market research – and have formed an FAC in your system. If you haven’t, or you want to compare how yours stacks up, download our FREE FAC Workbook for a step-by step guide on how to get started. If you need more help or want to assess the effectiveness of your FAC, contact us.
How Franchisee Associations Can Benefit Franchisors
While franchisee associations are often (but not always) formed out of discontentment by the franchisees, the relationship does not have to be complicated or adversarial. In fact, welcoming and fostering a positive relationship with a franchisee association yields a number of benefits, such as:
- Sparking collaboration between franchisees and franchisors.
- Driving participation with the rest of the franchise community in system-wide calls, events, roll outs of changes or new products/services, and in gathering feedback.
- Work resulting from these groups often drives ideas and changes that the franchisor can implement to strengthen the brand
Our advice, work with the associations! Recognize the value that they can bring to your system. It’s the same idea as responding to a poor customer review: you’ve been given an opportunity to turn them into loyal, raving fans! One of our clients, Griswold Senior Care is a testament to acknowledging and working with associations. They turned their community around and won the 2017 and 2018 Franchisor of the Year award from the AAFD for their commitment to the relationship with franchisees.
The International Franchise Association (IFA) points to a number of franchise associations that are succeeding. We have been hired by, and conduct our franchisee evaluations, for franchisors AND associations. We’ve worked with franchisee associations, including Elevanta, the franchise association administrator for Burger King, and the Planet Fitness Independent Franchisee Association, to survey their members. Both are high-performing brands that are consistently recognized on our lists of Top Franchises. We have seen firsthand how the association shares the results of the survey with the franchisor and collaborates to implement positive changes in the system as well as use their status as an award-winning brand to drive development. (See how we work with Franchise Associations.)
We ask a standard set of questions and make it easy to customize the survey and add more detail around the issues that matter most to you. FBR can present the data to the entire franchisee community, or with the franchisor/executive team to reinforce the third-party work that was done to help neutralize both sides and provide clarity on what to work on first and offer guidance on how to get there and get everyone working toward the same goals.
If you’re faced with a strained relationship with franchisee association or your FAC, put the work in to understand what you can do to work together for the good of the system. If you continue to ask franchisees what they need and want, then you can respond by setting clear expectations on what’s to come next. That, along with transparency, respect and communications, will get everyone moving in harmony.
Interested in seeing what questions we ask on our standard survey? Email me at [email protected] to request a copy.