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Franchisees unite, seek political clout with new coalition

Franchisees unite, seek political clout with new coalition

Robin Lee Allen

CHICAGO – Restaurant franchisees along with their peers from other industries are mobilizing to create a national association intended to give them a louder voice on Capitol Hill and in legislatures across the country

The burgeoning organization, which will be called the American Franchisee Association, is expected to provide a support system and a collective political voice for franchisees in much the same way the International Franchise Association now represents franchisors.

Membership details of the AFA, which will be officially unveiled later this fall, are not yet available, said Susan P. Kezios, who is president and founder of Chicago-based Women in Franchising Inc. and is coordinating the effort. She did allow, however, that support for the organization is strong.

“This is no new issue,” she explained. “There’s been a lot of organizing behind the scenes.”

The AFA, whose formation comes at a time when several franchise-related bills are pending in Washington and in state legislatures nationwide, intends to distribute more evenly the balance of power in the franchising industry, Kezios said.

Although some franchisees have formed their own franchisees associations, a national association is necessary to aide the majority, who remain unrepresented, she noted.

“There are thousands of franchisees out there, and they have no voice to lobby on the federal level,” Kezios said.

“The International Franchise Association is really the International Franchisor Association,” she continued. “It was formed so franchisors could meet without the input of franchisees. That’s why we’re very clear about our name. That’s been part of the problem. They do not represent the industry.”

The Washington-based EFA was founded in 1960 to promote franchising worldwide, to lobby for fair legislation on behalf of its members and to educate the public about franchising, said John Reynolds, the IFA’s executive vice president.

The IFA has 800 franchisor members, representing about 75 percent of the marketplace dollars generated by the franchise industry, Reynolds said.

There are about 2,500 U.S. franchise companies.

While franchisees have no national association, it is misleading to think that they lack representation, Reynolds said. Many chains have franchisee advisory councils that are active in corporate decision-marking, he noted.

“The impression is created that there is nothing else available – that franchisees don’t have groups that meet with franchisees- regularly,” he said. “There are independent franchisee groups that may have started within the company and then separated by mutual agreement and then other cases where the franchisees form independent group because their interests are not the same as the franchisor’s.”

But, he added, “if there are special interests that they [the franchisees] have that need to be pursued by that organization, then they have the right to form that organization.”

Many franchisees say the AFA’s formation is necessary.

“This is like paper diapers,” said Ron Bellamy, president of the International Association of Taco Bell Franchisees. “Ther’ve been needed for a long time, and someone’s finally come around and invented them.

“We [franchisees] don’t talk,” he continued. “We’re competitors, but there’s so much commonality in issues. The issues are common, and they do have to be addressed.”

The IATBF represents about 85 percent of Taco Bell’s franchisees, Bellamy said.

Bellamy and the leaders of 17 other independent franchisee associations recently attended a forum in Washington, D.C., in support of two franchise-related bills introduced last spring by Rep. John J. La-Falce, D-N.Y. One bill seeks to establish federal standards for the franchisee-franchisor relationship; the other, to set federal guidelines governing disclosure. There are about 40 independent franchisee associations nationwide, Kezios said.

During the forum Women in Franchising Inc. sponsored a lunch during which the 18 franchisee leaders discussed the AFA. WIEF, founded by Kezios in 1987, advises women and minorities on franchise ownership and provides training for franchisors.

“We all seemed unanimously in agreement that there was a severe need for this type of association,” said Gary Smith, chairman of ALCF Inc., an association that he said represents about 200 Little Caesars franchisees. Little Caesars has more than 3,000 franchised outlets.

Other franchise companies represented included Dunkin’ Donuts, Domino’s, Jiffy Lube and Mail Boxes Etc., Smith said.

“I think that we are all in the same pattern whether we are competitors in the industry or a Jiffy Lube franchisee,” he said. “We are on the same wavelength that franchisors desire to become more dictatorial.”

With few details on the strength of the AFA’S punch, franchise companies were deferential in their reactions.

“We have no reaction until we know what they’re going to do and the scope a d the membership,” said Gary Gerdemann, a KFC spokesman. “There is already a very active KFC franchisee association, and we work closely with them. So I’m not sure KFC franchisees would need such an organization. But if they feel the need, they are free to join it.”

Leaders of the Association of Kentucky Fried Chicken Franchisees Inc. were unavailable for comment.

“Any effort that improves and expands the dialogue and communications is a positive move,” said Jeff Lightburn, Taco Bell’s director of corporate communications. “The key is … to continue to work together … to focus on ways that we can mutually progress.”

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