Franchises Attorney in Minneapolis, Minnesota

Franchisee Association Formation Considerations

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When people are thinking about forming franchisee associations they really fall, associations fall in a continuum. On the one hand you have what I call franchisee advisory councils, which are typically hand-picked by the franchisor. They’re often used by franchisors as a sounding board and frankly, as a rubber stamp so that if the franchisor wants to do something that might be unpopular they can say hey, we talked to the franchise advisory council they said it was all okay, we’re going to go down that route. Folks at the other end of that spectrum they’re completely independent, they have nothing to do with the franchisor, although they’re often what I call single issue franchisee associations and that’s when the franchisor has done something that has irritated the franchisees so much, made them so angry that there’s sort of a mob mentality to that group that it’s like the mob in the street and they’re going to march up to the castle and slay the ogre with their pitchforks and their torches.

Good franchisee associations find a spot in the middle. That is that they have issues that they’re dealing with the franchisor that that’s why they exist. They’re adding value to the franchisees, but they’re trying to find a way to do it that is not as threatening. If they can do it with the franchisor if possible or they can work with the franchisor. They’re not there to just tear down the system. They’re there because they understand that they have collective relationship with the franchisor and what’s good for the brand is usually good, usually good for everybody. So finding that middle ground that is the type of franchisee association that we try and help people develop, add value to the franchisee that exists, add value to the franchisor if possible. And that’s not always possible, I don’t want to give the idea that there isn’t some dispute and some tension. Part of the strength of a franchisee association is speaking truth to power and that can be uncomfortable, but that’s the spot, the sweet spot that you try and find on that continuum.

Minneapolis franchisee lawyer Ron Gardner explains what franchisees should consider in the formation of a Franchisee Association.

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