The Center for Total Quality Franchising®

Member Login

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?

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 Superbowl-ads.com , 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?

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...

Free Marketplace Ads and Franchise Voice Subscriptions

While support for fair franchising is the most important benefit of membership, the AAFD works hard to make your membership as valuable as possible. Our members get a whole host of valuable FREE services, including: The AAFD Franchise Self-Evaluation Tool A free legal consultation with a member of the AAFD’s Franchisee LegaLineSM FREE Healthcare WellCards and discounted Health Savings Accounts Free AAFD Meeting Call Services Exclusive Access to a broad range of discounts and values through the AAFD’s BenefitHub A digital copy of the AAFD’s Road Map to Selecting a Franchise Discounts and special member pricing for the products and services you need to succeed in business That’s a pretty good deal, right? Well, we’re going to make it even sweeter. You should have recently received an email that informed you of two new big FREE services that now come as part of the AAFD Membership package. The first is a free subscription to the AAFD Franchisee Voice weekly information emails. The second new benefit is access to the AAFD Marketplace. The AAFD Franchisee Voice The AAFD Franchisee Voice is a weekly email filled with important information, news and opinions on all things franchising. This hot tip sheet will give you important insight on what’s happening in the franchise world and provide advice on how you can succeed at your own franchise endeavors. The email you received included a button to subscribe to the AAFD Franchisee Voice. If you didn’t already subscribe, then do it now! The AAFD Marketplace The AAFD Marketplace is here! We are proud to announce that the AAFD Marketplace is officially in beta testing.  The new classified listing service will allow franchisees and franchise suppliers to sell fixtures, lease land, hire new employees, look for jobs and new opportunities and even buy and sell existing franchise businesses through the AAFD Marketplace partnership with BizBuySell.com. As an AAFD Member, you will automatically have access to the AAFD Marketplace, where you can see what is for sale and maybe even buy something you need at a nice discount from retail prices. Oh, and one more thing, during beta testing, all standard ads are FREE for AAFD Members. That’s right, you can sell extra equipment, put out a help wanted ad for...

You Asked, We Answer – Why Would the AAFD Accredit a Franchisor with a Bad History: A Case Study

The AAFD recently received an inquiry about our awarding of the coveted Fair Franchising Seal to Tutor Time, a company that had been previously disciplined by the US Federal Trade Commission. We thought all AAFD Members and subscribers would be interested in our answer: Thank you for your recent inquiry to the AAFD. You asked: “I know the FTC action [against Tutor Time] was a long time ago, but how can a potential franchisee trust your organization when one of your accredited franchisors had engaged in the sort of practices you are trying to prevent?” Tutor Time went through a complete change of ownership 10 years before the company was accredited by the AAFD, and the company we accredited had completely different ownership and no connection with previous management. Notwithstanding the fact that this was completely different ownership, AAFD accreditation is available to companies that atone for past errors and reform their franchise practices to meet the AAFD’s high standards. The criteria for AAFD Accreditation are set forth on our website: 1. The company must recognize and bargain with an independent franchisee association, and the association must nominate the company for accreditation. 2. The AAFD Committee on Standards must find that the franchise agreement we are accrediting is consistent with the AAFD’s Fair Franchising Standards – this may involve substantial negotiations with the franchisee association to amend to agreement to meet our criteria. We will not accredit a company whose agreement is not 85% in conformity with our standards.. 3. Once our Standards committee votes in favor of accreditation, the independent owners association must agree with our findings and also find that the company’s actual practices are consistent with our Standards. The FOA must then nominate and endorse the company to receive the AAFD’s Fair Franchising Seal. 4. Finally, the AAFD conducts a telephonic survey of all franchisees in the system and asks three questions: a. Are you reasonably satisfied with the franchise agreement under consideration for accreditation? b. Are you reasonably satisfied with your relationship with your franchisor? c. Do you vote for your franchisor to be accredited by the AAFD? d. We must attempt to contact every franchisee in the system (at...

AAFD Public Guest Posting Policy

The AAFD welcomes guest blog submissions from those who have something relevant to say about franchising and/or of interest to franchise owners. We look forward to hearing from franchise owners, attorneys, suppliers, consultants, or others who can provide special insight into an area of franchising, or of general interest to small business owners. AAFD blogs are typically posted throughout the week, but blasted to blog subscribers the Monday or Tuesday following the date of posting. Our guidelines are simple. Guest post submissions must: • Be related to franchising in some manner or of significant interest to our blog visitors, o We are a national organization, so highly regional topics are not favored unless they can relate to our broader audience. • Be written in an engaging, understandable manner • Not focus on the same topic of a recently published post. (Please review our blog so as not to write repetitive content.) • Not contain derogatory, discriminatory or highly critical language (we are not about tearing down individuals or specific companies) • Provide some relevant takeaway that will be useful to our readers • Be no longer than 1,000 words. (We may make an exception in special cases.) • Not be obviously commercial or self-promoting. The AAFD provides resources for members who are interested in marketing their services to our community, including listings on the AAFD.org website and periodic email blasts. If you are writing about a service or product you provide, your proposed blog should provide relevant information without being self-promotional. We accept blog posts from members and non-members, but the AAFD Bylaws only allow Supporting (supplier) Members to market products and services through the AAFD. This means that only Supporting Members can include live links to their organization in their guest blog post. Non-member guest bloggers can include their name, title, affiliations and email address at the end of their blog post without live links. We will review all submissions. AAFD members will receive priority posting privileges. If the article meets our standards, we will approve it to post and will give you an estimated publishing date. If it doesn’t meet our standards, we may provide suggested edits or let you know it’s...

BizBuySell.com and AAFD Announce AAFD Franchise Business Sales Program for AAFD Members

The AAFD and BizBuySell are pleased to announce a special discount program for AAFD members looking to sell (and buy) franchised businesses.  Through the new program, branded as AAFD Franchise Business Sales, BizBuySell will provide a range of business sale services to AAFD members at a discounted price. “BizBuySell is the premier resource for selling and buying businesses, including franchised businesses, in the United States today,” said Ross Almo, the AAFD’s newly appointed Executive Director.  “We are thrilled to partner with BizBuySell and to offer significant savings to AAFD members who are looking to sell their franchised businesses.” “BizBuySell is pleased to be working with the American Association of Franchisees & Dealers and their members who might be looking to buy or sell a business” said BizBuySell General Manager Bob House. “Not only do business buyers benefit from gaining access to listings they otherwise might never have seen, but any member who is thinking of selling a business can now access BizBuySell’s resources to help them sell faster and smarter.” BizBuySell is the largest online marketplace for business and franchise sales. According to a company representative, they currently have over 40,000 business sale listings and receive over one million website visitors a month. Their business listings are also featured on more than 150 partner websites, including The Wall Street Journal, The New York Times, The Chicago Tribune, The Los Angeles Times, and many more. Through this partnership, BizBuySell will provide AAFD members with a special discount on all BizBuySell ad packages, as well as other free and discounted products.  Members who are interested in selling their businesses will receive significant savings when listing the sale through the AAFD/BizBuySell co-branded program, which will be seen by hundreds of thousands of prospects. BizBuySell offers three different advertising packages, starting as low as $59.95 per month for their three-month standard package (before the AAFD member discount). The BizBuySell website also offers additional resources for those looking to sell their franchise, including information on how to sell a business, a business news section and a community forum. Visitors to the AAFD website will soon be able to access the AAFD Franchise Business Sales Program through the AAFD Marketplace,...

Bob Purvin Joins Roundtable Discussion Of Franchise Real Estate Issues On Podcast

Bob Purvin recently participated in the June 30th podcast of Commercial Real Estate Radio, hosted by Howard Kline. The topic of the podcast was “Opening a Franchise: American Dream or a Landlord Nightmare?”, and Bob was joined at the roundtable by Perry Roshan-Zamir, Vice President and General Counsel of Baja Fresh and Robin Day Glenn, a franchise attorney who has been representing franchisors in California for many years. Together, the roundtable guests brought decades of franchise legal experience and very different perspectives to the lively and congenial discussion. Throughout the one-and-a-half-hour episode, the guests discussed the current trends in franchise real estate and some of the trickiest issues that franchisees, franchisors and landlords face when negotiating a real estate deal. Some of the specific topics that the guests tackled included the importance of the real estate lease to the franchise operation, changing trends in franchise leases, how different franchisors exert control over a franchisor’s location and real estate lease, the growing rise in lease riders, and the relationship between franchisors and landlords. The guests provided important insights from the perspective of the different parties involved: the franchisee, the franchisor, and the landlord. As Perry mentioned early in the episode, a large amount of conflicts between franchisors and franchisees are related to lease and landlord disputes. An important point that Bob brought up during the discussion was the need for franchisees to use an experienced franchise attorney when making real estate decisions. Many new franchise buyers make the mistake of believing that their franchisor is their mentor and will negotiate a lease with the best interests of the franchisee in mind. This is not always the case, and there are many instances of lower-tier franchisors that have little if any knowledge and experience in negotiating a real estate deals on behalf of their franchisees. This podcast produced some really great discussions and highlighted a lot of real estate issues that are important to new and current franchisees. We strongly recommend taking some time to listen to the recorded podcast, available on the Commercial Real Estate Radio website. This will be a valuable listen for current franchisees, those considering buying a franchise, real estate agents looking...

Bob Purvin Discusses The Myths of Franchising and Fair Franchising Legislation on the Franchise Radio Network

The Franchise Radio Network, a new weekly radio podcast that covers a wide variety of topics of interest to franchise owners, invited AAFD Chair Bob Purvin as the featured guest on its inaugural podcast, first aired on June 21, 2013. The podcast’s host, Aaron Phillips, spoke with Bob about a wide range of topics, including the myths of franchising (detailed on this blog), the pitfalls of franchising, how to discover the right franchising opportunity and Senate Bill 610, a piece of fair franchising legislation that is making its way through the California legislature. An online recording of the 30-minute podcast is now available. The Franchise Radio Network podcast was a great opportunity for the AAFD to reach out and help franchise owners and those interested in buying a franchise understand that not all franchise opportunities are created equal. As Bob discusses in the podcast, owning a franchise is often more like renting a job than owning a business, with few protections for franchisee interests and rights. During the interview, Bob was able to highlight the efforts of the AAFD to protect franchisee rights, advocate for franchisee interests, and negotiate for a franchising community that delivers the enormous potential of the franchise method of product and service distribution. We invite you to take a listen to the interview to learn more about the AAFD, what types of franchise abuses a franchisee needs to look out for, and why Senate Bill 610 is so important for...

s2Member®