IFA board votes on new membership category for franchisees

IFA board votes on new membership category for franchisees – International Franchise Association

Robin Lee Allen

WASHINGTON — Looking to prove the International Franchise Association is evolving into the “Voice of Franchising” it claims to be, the group’s board of directors recently voted to create a membership category for franchisees.

The new category — which was expected and was supported unanimously by the 30-member board — would allow franchisees of IFA’s 710 member companies the option to join the group for the first time in its 33-year history. A task force is now developing the parameters for franchisee membership and its rights.

The decision to include franchisee members comes as the IFA battles both to keep franchise-related legislation off state and federal ledgers and to squelch criticism from burgeoning franchisee associations.

But IFA officials contend those external pressures were irrelevant in their decision, which they say is intended to enhance franchisor-franchisee communications and understanding and further IFA efforts toward self-regulation.

“Some would say it’s legislative pressures,” said C. Stephen Lynn, chairman and chief executive of Sonic Corp. and IFA chairman. But our response is it’s the right thing to do. It’s been discussed throughout IFA history, and there have been members for it forever. I’m not so concerned with why I’m getting the votes now, but that I’m able to get to get the votes.”

While details do not yet exist, Lynn envisions membership will be available to franchisees in good standing with IFA member companies at a reduced rate somewhere between $50 and $200. By good standing, Lynn means those not behind in royalty payments, bankrupt or operating filthy or otherwise-substandard units, not those who disagree with their franchisors.

“We need the minority dissident leadership,” he said. “There are probably some legitimate ideas there we can learn from, and that would create communication that would be a lesson to us all.”

Board members also voted to create two seats for the chairman and vice chairman of its newly formed franchisee advisory council and franchisee positions on some IFA committees. The 21-member council, which first convened last February, is made up of franchisee representatives from some of the franchise companies on the IFA board.

“I think we all feel that we’ve got to move together as one body for the future of franchising — it’s an economic necessity,” said Regina Gardner, chairman of the IFA’s franchisee advisory committee and president and owner of Uniglobe Dynamic Travel Inc., a travel franchise in Houston.

“It’s something that no doubt will bring franchisees and franchisors together, but it’s going to take time,” she added. “We were just born, and this is a first step. If we can seek constructive ways to increase participation within the IFA, the IFA is going to have to come up with a menu of things to make it attractive for franchisees to join.”

Lynn expects details of franchisee membership to be finalized this fall and a membership drive to be in place by the IFA’s annual convention in February 1994.

Despite these overtures, IFA critics are skeptical that the group truly wants better association. There are two seats for [the franchisee advisory council] chair and vice chair, and they will get outvoted. The likelihood that they will have a difference of opinion or would feel free to express it is remote.

“The only way franchisees will have an active voice in the IFA is if they include sunshine laws and franchisees have access to all policy-making decisions. And that is never going to happen.”

Chicago-based AFA was founded less than a year ago to provide franchisees with legislative muscle. It now represents more than 5,200 franchisees and 10,400 outlets and is now developing purchasing cooperatives designed to improve its members’ economic muscle as well.

Officials at the year-old American Association of Franchisees & Dealers in San Diego said they do not believe the IFA decision to include franchisees will keep them from enrolling in other organizations promoting their interests.

“If it promotes dialogue, it’s a plus,” said Robert L. Purvin Jr., AAFD chairman. “I can see why a franchisee can benefit from the IFA’s many services, but franchisees probably recognize the need for an association looking out primarily for their needs.

“IFA’s creation of a franchisee membership is … making a move to correct the marketplace,” he continued. “Before AFA and AAFD were created, you wouldn’t have seen this.”

AAFD has nearly 300 members representing about 7,000 franchise outlets, Purvin said. While the AFA concentrates primarily on franchise-related legislative issues, the AAFD aims to help franchisees develop market power and to provide legal support, Purvin said.

While Rep. John LaFalce D-N.Y. and chairman of the House Small Business Committee, commends the IFA for its recent moves toward self-regulation, he is not likely to soon abandon his push to pass federal legislation designed to promote fair franchising practices, disclosure and data collection, a committee spokesman said.

“Even the most promising initiatives require some broader body of law to make them effective,” he said.

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