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Why every Franchisee should support the AAFD and its Affiliated Chapters?

Why every Franchisee should support the AAFD and its Affiliated Chapters?

It’s simple – The AAFD is Your Center for Total Quality Franchising. This is a concept that extends far beyond improving your relationship with your franchisor, or fixing your contract. The AAFD is dedicated to making your business work better, and to help you increase your profits and your quality of life. We will only complete the journey with your continued and renewed support. See the complete list of AAFD Fair Franchising Initiatives and Financial Benefits. [spacer] [youtube url="http://youtu.be/okND-mY1bIk" width="400" height="200"]...

Happy Holidays from the AAFD!

Happy Holidays from the AAFD!

As another year comes to a close, I wanted to take this opportunity to personally thank you for your continued support of the AAFD. Please continue to share your thoughts and feedback with me directly at rpurvin@aafd.org. I also encourage you to take part in the Franchisee Voice blog or our other social media discussions on Facebook and Twitter. It means so much to me when I hear from you, and your voice will continue to shape our efforts to advocate for Total Quality Franchising! From our family to yours, have a safe and healthy holiday and a Happy New Year. Until next time, Bob Purvin and the entire AAFD...

Total Quality Franchising! A Better Path to Superior Franchise Relationships

There has been much discussion and chatter in recent months about a spate of franchise fairness legislation being considered in several state legislatures.  In  a recent blog article, “Showdown in Harrisburg, Pennsylvania,” http://www.bluemaumau.org/showdown_harrisburg franchise attorney Ted Pearce questioned the sagacity of proposed legislation.  In doing so, Mr. Pearce paid a compliment to the AAFD’s efforts to promote franchisor accreditation as a better approach: “During the late 1990’s and early 2000’s, when the American Franchise Association proposed national franchise relationship legislation, another franchisee-sponsored organization sought to rebalance the franchise relationship though market forces anchored by the concept of a fair and balanced franchise agreement. The American Association of Franchisees and Dealers (“AAFD”), formed in 1992, pioneered the idea of “Total Quality Franchising,” and encouraged franchise systems to engage in collaborative negotiations to develop a fair contract under AAFD Fair Standards guidelines. The prize for this collaborative conduct was the fair franchising seal, which could be affixed to a franchisor’s disclosure document”. Mr. Pearce goes on to lament “Today, however, the AAFD’s initiatives have waned.” In fact, the AAFD is still dedicated to identifying franchise systems that can earn of Fair Franchising Seal.   Two companies are currently pursuing AAFD accreditation to empower the growth and success of their franchise systems.  We are still convinced that AAFD accreditation can advance a brand’s growth and profit by creating collaborative franchise systems which allow AAFD (and franchisee) endorsement of AAFD Accredited Brands.  Our progress has been slowed by the economy and other observable factors, including: 1.    The lack of a threat of legislation has reduced the pressure on franchisors to accept negotiated franchise agreements as an alternative to regulation. 2.    The AAFD has set a high bar for Accreditation – recognition of an independent association and a negotiated agreement endorsed by the association and ratified by system franchisees. 3.    Franchisors have seen are bar as either too high, or have not met our criteria in the opinion of their franchisees. For most franchise systems, the decision to apply for the AAFD Fair Franchising Seal is the commencement of a process to a collaborative culture, the recognition of an independent franchise association that may have been previously disavowed, and the...

New Franchise Legislation: Point/Counterpoint

AAFD CEO Robert Purvin was a guest panelist on CRE Radio’s recent program “New Franchise Legislation: Point/Counterpoint” , Friday December 6th, along with franchise attorney, Erik Wulff, a partner at DLA Piper,  as they discuss differing views on these efforts to increase franchisee rights: "In the '90s, we witnessed efforts by franchisee rights advocates to introduce federal franchise legislation to protect franchisee interests in their relationships with franchisors. In connection with the FTC reviewing and amending the FTC Rule on Franchising, similar efforts were made to add a relationship component to the amended rule. These various efforts failed and we have been through a period of relative calm with respect to proposed franchise legislation. However, in recent months we have seen a resurgence of legislative efforts – this time at the state level – that may change the playing field. Whether it is due to the challenging economic environment, a perception that franchise agreements are more one-sided or other circumstances, these recent efforts seek to tilt the balance in favor of franchisees by restricting franchisor practices that are deemed unfair, protecting franchisees’ equity in their businesses and empowering collective actions by franchisee groups." ~ Erik B. Wulff, Esq. Listen to the podcast program...

Franchisees and the Challenge of Social Networking

Social media marketing is almost a requirement for businesses nowadays. More and more businesses are discovering that social media sites like Facebook, Twitter and Pinterest can help them connect to customers, address complaints and turn casual customers into loyal fans.  These sites can also let a small business show its personality in a unique and memorable way. For franchisors and franchise owners alike, social networking presents a risky conundrum. Franchisees are beholden to the brand of their franchise, and many franchisors are loathed to allow their franchisees to experiment with the freedom and flexibility that these sites allow. The potential calamities are clear to see.  What if a local franchisee creates a Facebook page for her franchise location and then posts a controversial political opinion or an unflattering image of the company’s product? Franchisors, especially large franchisors, tend to demand consistency as much as possible. Order a burger at any McDonalds across the country, and it will taste almost exactly the same. This consistency spills over into marketing. Sophisticated franchisors usually try to control all branding and marketing on behalf of their franchisees, controlling the creation and approval of all television and radio ads aired in local markets and providing or mandating all point of sale signage to be displayed in the franchised facility. If a franchisee does want to do some local advertising, virtually all franchisors retain review and approval rights. Savvy franchisors are aware of the value and importance of social media, but struggle with effective engagement. The process of controlling brand imaging doesn’t  mesh well with the fluid, constantly-updating world of social networking, where fans may expect multiple updates a day from their favorite businesses or organizations. A franchisor can’t possibly review and approve a dozen or more Twitter and Facebook posts a week from each of their franchisees. So, what is the solution? Should franchisees just give up on the idea of having a social media presence for their specific location, or should franchisors risk giving their franchisees a little freedom? There is no perfect solution, and a lot will depend on the size and resources that a franchisor can provide. Large and well-moneyed franchisors likely have a dedicated social...

Franchise Investor Caution: Franchisors Not Required To Disclose Receiverships

Here at the AAFD, we consistently tell those who are interested in buying a franchise to do their homework. Franchisors are legally required to make presale disclosures to prospective franchise buyers. These disclosures are intended allow a franchisee to purchase a franchise with their eyes wide open, but franchisee advocates have long argued that important disclosures are not required, including financial disclosures about the profitability of the franchise system. Investigative reporter Rick Rommel has recently identified another significant defect in the Federal Trade Commission presale disclosure rules. While franchisors are required to disclose any previous bankruptcies of their officers, franchisors do not have to disclose receiverships. Rommel wrote an article that was published earlier this month in the Milwaukee Wisconsin Journal Sentinel that discusses the case of Tazinos, a chain of all-you-can-eat pizza restaurants that recently registered to sell franchises. According to the article, the owner of Tazinos previously owned a restaurant distribution firm that filed for a receivership in 2007. A receivership is a court proceeding where a court appointed receiver sells the company’s assets and distributes the collected money to the company’s creditors. Sound familiar? A receivership is very similar to a bankruptcy and may spring from the same set of circumstances – a company unable to pay its bills. Unlike a bankruptcy, however, it turns out that a receivership does not have to be disclosed, nor was it disclosed in the Tazinos franchise disclosure to prospective franchisees.   A bankruptcy or a receivership in the past of a company’s officer raises pertinent questions about their ability to successfully manage a company. Franchisees should have the right to know this information. After being contacted by the Sentinel for the article, the president of Tazinos amended the company’s franchise documents to disclose the previous receivership. Just because Tazinos did the right thing doesn’t mean other franchisors will, which means franchisees must be as vigilant as ever and do their homework before buying a franchise.   Read the full article, “Franchises not required to disclose receiverships” by Rick...

No Penalties For Not Telling Workers About Healthcare Exchanges

On October 1st, despite a government shutdown and the looming threat of the United States government defaulting on its debts, many provisions of the Affordable Care Act (popularly referred to as Obamacare) came into existence with the mandatory opening of state and federal healthcare exchanges. Anyone who has taken a peek at the news in the weeks since the opening of the exchanges knows that there have been more than a few glitches. What many small employers might not know, however, is that they were supposed to inform their employees of specific features of the Affordable Care Act. The Fair Labor Standards Act (FLSA) requires employers that are subject to FLSA to provide all employees with a written notice that: Informs them that the government healthcare exchanges exist Explains the services the healthcare exchanges provide How an employee can contact the exchange for help signing up for a plan Informs them that they, in certain circumstances, they may be eligible for a tax credit if they purchase a healthcare plan through the exchange If an employee purchases a healthcare policy through the government exchange, they may lose their employer’s contribution. According to the original FLSA, employers who did not send out this notice by October 1st could incur a $100-a-day penalty. Before you start panicking, the Department of Labor announced on Sept. 11 that the penalty will not be enforced. While the government still strongly urges employers to send out this notice, no fine will be levied for those that ignore the policy. This is a smart move on the part on the government, not because flaunting the law should be overlooked, but because media reports indicated that many small business owners were not aware of the requirement. The last thing the administration wants to do is start lobbing big fines at America’s small businesses. Still, it is not a bad idea for employers to take some time to really understand the new healthcare law and to make sure their employees are aware of their options so they can make the best healthcare decision for themselves and their families.  Better healthcare options means healthier and more productive...

Franchising – a licence to print money?

The AAFD is proud to link to a very recent program that was broadcast by the Australian Broadcasting Corporation (the equivalent to NPR in the US) on Sunday, October 20, 2013, about franchising in Australia. The program which was titled, “Franchising – a licence to print money?” was a critical examination of franchising practices in Australia and a comparison to practices in the United States. AAFD Chair, Robert Purvin, was privileged to be a guest on the program. Mr. Purvin focused on the history and evolution of franchising in the United States, and he details the development of the franchise model and the franchisor/franchisee relationship, and he stresses the importance of the franchise agreement in defining the franchise relationship. The program delves into serious issues faced by franchisees in Australia, many of which mirror concerns in the US. We are pleased to include a link for Franchisee Voice Subscribers to listen to this interesting and valuable program. Listen to the interview now   The program may also be accessed through...

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Choosing A Franchise Is One Of The Biggest Decisions Of Your Life –AAFD Associate Membership Can Help You Choose The Right One

Buying a franchise is not a small decision. It will cost you a substantial amount of effort and money just to open your doors, and then you will need to add in some blood, sweat, and tears to build up sales and start making a profit. Although the franchise industry likes to characterize franchise ownership as a much safer and more secure bet than independent ownership (a claim that is frequently invalid), the truth is that buying a franchise entails significant risk in the best of circumstances. The franchise you choose will determine the amount of money that you will need to invest (from your personal savings, in the form of a loan, or both) and, basically, what you will be doing with your life for the foreseeable future. Below the surface, your franchise contract will also determine the amount of freedom you have to run your business, whether or not you can choose your own vendors, and  your potential profitability. Every franchise opportunity is different, and some of the most important decision factors you should take into consideration may not be obvious. The AAFD is a non-profit organization that assists franchise owners and potential franchise owners. Our Associate Membership is a low-cost membership geared specifically towards educating and supporting future franchise buyers who are  in the decision-making process. For only $79, our Associate Members gain access to an incredible trove on resources and benefits, including:  The AAFD Roadmap to Selecting a Franchise The AAFD Roadmap takes you step by step through the franchise decision process. The Roadmap will teach you how to research and select a franchise, walk you through the process of buying a franchise, and provide you with the best and most useful information available about the entire franchising process. No one should consider buying a franchise without first reading this Roadmap. The AAFD’s Franchise Evaluation Tool This interactive tool will allow you to assess your top franchise picks. The AAFD Franchise Evaluation Tool asks you a broad series of questions about a specific franchise opportunity and grades each of your answers. Add up the franchise’s score at the end to see how it fares. Your answers to the evaluation tool...

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