One of the defining events of our yearly Franchisee Leadership …
The New York Times recently released a scathing article that shines the light on systematic franchisor abuse at the world’s largest fast-food company, Subway.
Many new and current franchisees depend on loans and financing from the Small Business Administration to get their franchises up and running or to expand their existing operations. The SBA recently updated its loan procedure for franchisors and franchisees, and every franchisee should be aware of these changes.
7-Eleven franchisees in California are bringing their franchisor to court claiming that the popular convenience store holds absolute control over every aspect of how its franchisees operate their locations. The suit, filed in the Central District of California, claims that the company has “most powers of an employer and all of the harshest, most overreaching rights of a commercial lender, landlord, and personal property lessor.”
A common misconception about the legal field is that the best lawyers are the ones who are the most aggressive, the most ready to dash off a demand letter and start prepping for the inevitable trial. Law & Order episodes aside, there are many transactional lawyers who are skilled negotiators—deal makers--who never step foot inside a courtroom, and that is very often a good thing!
Well-Known Franchise Attorney Zarco Tells Franchisees that the Browning-Ferris Decision was the “Greatest benefit you guys ever had.”
At the annual gathering of DDIFO, an independent franchisee association for Dunkin’ Donut franchise owners, well-known attorney Robert Zarco of Zarco Einhorn Salkowski Brito took the stage and gave a speech that some would consider heresy. As first reported by Scott Van Voorhis on Blue MauMau, Zarco explained how the National Labor Relations Board’s decision, which found that Browning-Ferris Industries is a joint employer with a company that provided staffers for one of its recycling centers, is not the start of the apocalypse as so many franchisees believe ...
While many franchisors faithfully pass leads to their existing franchisees, the AAFD has been receiving an increasing number of complaints that franchisors abuse their lead generation programs by using leads to sell new franchises rather than forwarding the lead to the franchisee who effectively earned the business. In fact, franchisor lead abuse has led directly to the formation of several AAFD Chapters. This abuse usually happens in one of two ways:
Establishing a meaningful protected market should be a high priority for any franchise owner. A sufficient market to earn an attractive living and profit without competition from your own brand is a key consideration for any franchise investment. A protected market is at the very top of the AAFD’s Franchisees Bill of Rights: “The right to equity in the franchised business, including the right to meaningful market protection.”
Insurance is as necessary to a business as pens, paperclips, and a working phone number. Most franchisees must purchase liability insurance, workers’ compensation, disability insurance, possibly health insurance and more. Since franchisees already need to purchase insurance, franchisors have the opportunity to use their large numbers to negotiate lower-cost group insurance policies that can benefit all of their franchisees. Some franchisors do make an effort to support their franchisees in this way.
At the end of August, the National Labor Relations Board delivered a decision on the Browning-Ferris Industries case. Although franchisors and franchisees were not directly involved in the case, the implications of the decision have franchisors and franchisees very worried. The case itself revolves around Browning-Ferris Industries, a recycling plant that contracted employees from a company called Leadpoint. The two companies engaged in a very standard labor supply contract ....