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The Joint Employer Conundrum

The AAFD’s was founded in 1992 in reaction to an ongoing degradation and deterioration of franchisee rights and equity that had been evolving for many years. The actual premise for my book, The Franchise Fraud, first published in 1994, was that the then modern-day franchise falsely represented that franchising was (and is) a safe and secure path the business ownership. In fact, then (and now) the ‘modern’ franchise is more business rental than business ownership, and most franchise agreements grant the right to ‘operate’ (not own) the franchised business.

Should You Allow Franchisees Who Are Connected to Your Franchisor to Join Your Association?

Recruiting is always a top priority for franchisee associations, but what happens if you receive interest from franchisees who are connected to your franchisor, such as family members or franchisees who are also employed by the franchisor? This issue of whether to allow franchisees who are especially loyal to a franchisor to join an association was a recent subject of a ‘heated’ dialogue on the American Bar Association Forum on Franchise Law. Some franchisee advocates argued that franchisor friendly franchisees should be barred from association membership as they are innately adverse to an association’s goals and objectives.

Join an AAFD Action Task Force and Fight for the Cause of Fair Franchising!

Do you want to help fix the biggest challenges that franchisees face? Then sign up to participate in an AAFD Action Task Force!

Meet US in St. Louis! Our AAFD Franchisee Leadership Summit Venue is Top Notch

Meet US in St. Louis! Our AAFD Franchisee Leadership Summit Venue is Top Notch

Sep 12, 2018

I have recently returned froma site visit to the Chase Park Plaza Royal Sonesta Hotel in St. Louis. The Chase Park will host the 2018 AAFD Franchisee Leadership Summit and Conference this October 21-24.  I am happy to report to prospective attendees and delegates that we are in for a wonderful experience – a great venue and a great city.

Will My Franchisor Retaliate If I Join a Franchisee Association?

Will My Franchisor Retaliate If I Join a Franchisee Association?

Jan 25, 2018

The AAFD hears frequent concerns from franchisees as they contemplate creating or joining a franchisee association. One of the most common fears is franchisor retribution. While these concerns are understandable, franchisees need to know that the law of the United States is on their side and that their franchisor cannot legally retaliate against members of a franchisee association. Additionally, the AAFD has developed and helped implement successful strategies to address and protect against attempts at franchisor coercion or punishment.

Department of Labor Withdraws Joint Employer Doctrine…a Mixed Blessing for Franchisees?

On Wednesday, June 7th, The Department of Labor made the expected announcement that the Trump administration is withdrawing the Obama era joint employer doctrine. 

This action is a mixed blessing for franchisees. On the one hand, the threat of joint employer classification has clearly negatively impacted many franchisees, including triggering the withdrawal of vital HR support by many “threatened” franchisors.

California Governor Vetoes Fair Franchising Legislation SB610

It is with disappointment and frustration that I report that California’s Governor, Jerry Brown, has vetoed legislation that would have protected franchisee equity and guaranteed the right of franchise owners to be treated with good faith by their franchisors. Governor Brown disappointed and turned his back on thousands of franchised businesses with his veto of fair franchising legislation. But in the process an impressive coalition of franchisee associations was awakened and mobilized to pass four legislative committees, the state Assembly and the California Senate (twice). The pursuit to protect franchisee rights and business equity ownership has now gained a voice and we will be back. The AAFD has been proud to sponsor SB610, and we extend our deep appreciation to California Senator Hannah Beth Jackson for authorizing this legislation and championing franchisee rights. Many great causes start with a small, but growing voice. And the voice of franchisees is growing. We thank all of our members for their support, and your continued support. Our cause is just – fairness in franchising is our goal. If you haven’t read the AAFD Franchisee Bill of Rights recently, click this link and review them now. If you support the Franchisee Bill of Rights use the form linked from the Bill of Rights page to the let us hear from you. Robert L. Purvin, Jr. Chairman, Board of Trustees American Association of Franchisees & Dealers To view Governor Brown’s Veto message to the California Senate, click...

SB610 passes Assembly

This is a small but very important victory for franchisees everywhere. Notwithstanding a major opposition from the International Franchise Association, franchisee interests I have received a major boost from the California Assembly. Now back to the Senate to approve the amended bill, and onto the governor's...

Who Will Win The Advertising Super Bowl in 2014?

Who Will Win The Advertising Super Bowl in 2014?

Jan 24, 2014

The Denver Broncos and Seattle Seahawks are now set as we count down the days until Super Bowl XLVIII. The  Broncos and Sea Hawks are on a hot streak, but they have nothing compared to the sizzling cost of commercial time during the big game. According to , the price for a 30 second spot during  the game is averaging about $4 million (up to $4.5 million). Big companies are willing to pay the price for all the eyeballs they get in return. Last year’s game between the Ravens and 49ers held the attention of over 108 million Americans, making it the third most watched television event in U.S. history. The Super Bowl represents the culmination of sports achievement for football players and football fans. It also beautifully represents one of the greatest benefits of the franchise system – brand visibility. A local sub shop owner could never hope to scrounge up $4 million for an ad during the Super Bowl, but last year Subway aired three spots, giving each of their franchisees unparalleled visibility. In fact, franchisors have a long history of dominating the ad airwaves during the Super Bowl, which provides their franchisees with incredible branding that no single business owner could hope to obtain on their own. To demonstrate the marketing power of franchising, for the past 25 years the AAFD has reported the Advertising Super Bowl, tracking how many Super Bowl Ads are placed by franchisors as compared to all other ‘non-franchising’ companies.   In the  history of the Advertising Super Bowl, franchisors have dominated the match-up, taking more Super Bowl air time than non-franchisors 24 out of 25 years. During Super Bowl XLVII in 2013, the AAFD survey found that 74% of the ads aired during the four hour game came from businesses engaged in franchising. (Check out the full AAFD survey breakdown from 2013) Interested in seeing who will win this year’s advertising Super Bowl? Follow the AAFD on Twitter for live updates during the game and subscribe to the Franchisee Voice Blog to find out the survey results. I can’t tell you which team is going to win the Super Bowl, but when it comes to advertising,...

Can Franchisee Associations Serve as a Substitute for Franchisee Protection Laws?

Can Franchisee Associations Serve as a Substitute for Franchisee Protection Laws?

Dec 11, 2013

Law Professors Robert W. Emerson and Uri Benoliel have recently published a compelling article in the Penn State Law Review, “Can Franchisee Associations Serve as a Substitute for Franchisee Protection Laws?.”  The article identifies the need to protect franchisees from franchisor ‘opportunism,’, which the AAFD describes as ‘franchisee abuse.’ While the premise of the article is to dispute claims from franchisor advocates that franchisee associations alone are sufficient to protect franchisees, and that franchise fairness legislation is necessary to address unfair practices, the article has generated some ‘unintended’ comments that the authors believe that franchisee associations lack value. First and foremost, the lack of franchisee protective legislation stems from the lack of an effective organized voice of franchisees to lobby for such laws.  In other words, franchisee associations are not a substitute for legislation, rather they are essential if there is any hope for passing legislation into law. After 25 years of trying to organize franchisees, while the authors identify the fear of franchisor retaliation is a significant factor inhibiting the establishment of franchisee associations, I think the authors missed the most important factors: 1.    Franchisors are in the franchising business, while franchisees are not engaged in franchising, but in selling goods and services.  We have found that franchisees are not engaged in the rights of franchisees for the long term (the way a franchisor executive might be), but have only a passing interest when rights are infringed. 2.    Franchisees tend to react to a crisis, and when the crisis dissipates the associations tend to dissolve.  The exceptions are those franchisee associations that  into the purchasing cooperative business, and/or are large enough to engage an executive director and staff that can deliver a stream of approved suppliers.  For this to happen, franchisees must first have a right to engage the supply chain. 3.    Franchisees have not shown an interest or inclination to network effectively with other franchisee groups.  There have been efforts, including the AAFD, the AFA, and now the CFA, but the willingness of franchisees to truly join in common cause has been limited at best.  Until franchisees understand the importance of strong alliances, and common cause, associations will continue to have limited...