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Important Changes to the SBA Process that Franchisees Need to Know About

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 Accuse Franchisor of Having “Total Dominion”

7-Eleven Franchisees Accuse Franchisor of Having “Total Dominion”

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.”

What Type of Franchise Attorney Do You Really Need?

What Type of Franchise Attorney Do You Really Need?

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 …

Is Your Franchisor Giving Away Your Leads?

Is Your Franchisor Giving Away Your Leads?

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:

Is Your Franchisor Planning to Cut Your Sales Territory in Half?

Is Your Franchisor Planning to Cut Your Sales Territory in Half?

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.”

The (Not So) New Franchisor Insurance Trap

The (Not So) New Franchisor Insurance Trap

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.

What Franchisees Need to Know About the Brown-Ferris Decision

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 ….

Why You Want to Hire Great Employees for Your Franchise

Why You Want to Hire Great Employees for Your Franchise

Okay, this seems obvious. Of course we all want to hire great employees for our franchise. Who wants to hire average or sub-par employees? Your employees are the face of your company. They have the power to delight your customers and turn them into lifelong evangelists for your business or give customers such a bad experience that they take to social media and review sites and seriously harm your reputation. Additionally, bad employees are expensive! According to Monster.com, the cost of losing a frontline employee ranges from 30% to 150% of that person’s annual earnings.

Your Franchisor Might Not Bring A Flood Of Customers To Your Door

One of the reasons potential franchisees love the idea of owning a franchise is that they often believe the franchisor will work hard to generate customers for their franchisees. Turn on the television or take a tour of your local billboards, and you’ll see tons of ads for Subway and McDonalds urging viewers to stop on by the local franchise. One of the big myths of franchising is that every franchisor can offer strong brand awareness. Sure, you have the pervasive McDonalds and Subways, but for every major brand, there are scores of franchised brands that fail to deliver any significant market demand. Many of these franchises are small and only have a handful of franchisees. They don’t enjoy the multi-million dollar marketing budgets like the big guys. Smaller and newer franchises may have little or no brand recognition, which means you cannot count on the franchise to bring customers through your door. Before you invest in a franchise, do your due diligence. Look around your community to see what kind of presence they have. Ask your friends and family if they have ever heard of the franchise, know what the franchise does, and have ever felt compelled to shop at a franchise location. Most importantly, ask current and former franchise owners if they had trouble getting customers through the door. If your franchisor is small or new and doesn’t have a strong marketing presence, that isn’t necessarily be a deal breaker as long as you accurately understand the situation before you start. Smaller, less well known franchises can be a great deal if you believe that they have a strong product or service and have the potential to grow over time. This could be your opportunity to get in on the ground floor, but it will also mean you will have to work a lot harder to create brand awareness. You may have to focus more heavily on the location of your business, distribute the marketing materials your franchisor provides, and do some hustling to bring in customers. Again, do your homework and make sure you have a strong understanding of how well your potential franchise is branded in your community or what...

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