The 4 Ways Associations Can Help Franchisees While independent franchisee associations can be viewed as confrontational, when all involved parties get talking, the groups can be a collaborative source of support and education.
This story appears in the April 2018 issue of Entrepreneur. Subscribe »
Franchisees occupy a precarious niche in the business ecosystem, caught between the twin pincers of labor and management. They're not employees, but they often lack real power to steer the course of their own businesses -- which is why many franchisees choose to band together and form independent associations.
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"The job of independent associations is to give franchisees a voice and help them communicate with franchisors," says Christy Williams, CEO of Elevanta, a management company that runs many franchise associations, including those for Burger King, Buffalo Wild Wings and Qdoba franchisees. These associations are entirely separate entities from the franchise itself, which makes them different from, say, franchisee advisory boards, which many franchise brands create themselves.
Franchisors sometimes see these associations as adversarial, particularly if there's a dispute between franchisees and the brand's executives. But leaders on both sides say that, disputes aside, associations often provide a lot of value -- offering resources and training that franchisors may not be able to -- and create a united community that can prove indispensable to business owners.
That's what Matt Murphy found after stepping in as CEO of Griswold Home Care in 2014. At the time, there was a lot of tension between the brand and its 180 franchisees. "Before I joined, the corporate side wouldn't recognize the independent association of Griswold franchisees," he says. "But to me, it made sense to talk." For 16 months, Murphy's team and the association went over every line of the company's franchise contract, and the relationship took a turn. "We began to collaborate," he says. "Some of our franchisees have owned their businesses for 36 years. How ludicrous would it be for me to tell them what's best? They have too much wisdom."
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Here are four things associations can provide to franchisees -- and what you should explore and investigate before joining one.
1. Education
Franchisors aren't always equipped to help franchisees navigate a lot of the red tape and regulations that come with business ownership. Independent associations, however, can. "The Affordable Care Act, for example, was a huge challenge for franchisees," says Williams. "They didn't understand the law; they thought they'd have to shut down their businesses. We helped them understand it, demystify it and figure out what type of benefits to offer, and how."
2. Shared learnings
Who better to go to for advice than the folks who know exactly what you're going through? "Several of our associations have a quarterly magazine where franchisees share info on their businesses," says Williams. "In 2017 we had a franchisee share internal processes on how they keep workers' comp claims and slips and falls low. They shared those best practices." Other common topics include tips on third-party delivery services, local marketing programs and philanthropic opportunities.
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3. Access
Most independent associations host events or conventions where franchisees can get face time -- as a group -- with suppliers and vendors, Williams says. And even though most franchisors have to approve all suppliers and vendors, they're still comfortable with this meet-and-greet practice. "Franchisors are OK with it because it's good for their franchisees," she says. "And a group has more clout, so buying and prices can improve."
4. Advocacy
Like Murphy's experience with the Griswold franchisees, Williams says she finds most associations have good relationships with their franchisors. Still, conflicts are a part of business. "Of course there are challenges, but that's the point of these associations," she says. "They help provide feedback and negotiate contracts, and help explain why franchisees might be uncomfortable with something. There's always room to meet in the middle."
