Tag Archives: NLRB

Storytelling and Franchising: Keeping It Simple.

15 May

Multi-Unit Franchising

 

Franchise Update Media hosted another spectacular Multi-Unit Franchising Conference recently in Las Vegas. This is one of my favorite annual business conferences due the diverse backgrounds, skill sets, and interests of the attendees.

The final day included a fantastic session discussing issues impacting small business owners. The International Franchise Association’s Matt Haller moderated the panel which included Catherine Monson of FASTSIGNS, Matthew Patinkin of Double P Corp, Ron Feldman of ApplePie Capital, and IFA Chair Shelly Sun of BrightStar Care. This “A-Team” of business leaders offered their candid insights on many subjects, but the prevailing topic was the National Labor Relations Board and its 2015 ruling on the joint employer standard.

It occurs to me that such non-elected policy makers, as well as some elected officials, journalists, and activists are dreadfully uneducated about the ownership of a franchised business. This leads to the general public being uninformed and in many cases purposefully misinformed.

If we want to correct this, we need tell the story of franchising in simple terms —  so simple, in fact, that a politician and maybe even a journalist could understand.

Here are my two suggestions to properly and simply communicate the role of a franchisee:

1. The Franchisee Is a Customer of the Franchisor

There’s no clearer argument than showing that a franchisee is a customer of the franchisors and not an employee or middle-manager. There are many things small business owners must purchase in order to open their doors. The purchase from the franchisor is just one of those things.

As an example, let’s use a home services franchise brand such as a plumbing, landscaping, or cleaning franchise. There are several things you need to buy If you want to own one of these businesses including:

A) The Franchise.
B) A Truck.

If you buy a Ford F150 for your business, does this mean The Ford Motor Company is a joint employer of your staff?

Of course not. The car brand from whom you purchased your truck is not in charge of your employees.  Also, the plumbing brand from whom you purchased your franchise is not in charge of your employees.

 

2. Not Franchisees. Owners.

While some franchise systems may have specific language that they can or can’t use in some agreements, in general discussions we should refer to owners as owners.

If we, as an industry, had used this terminology more often in recent years, the anti-business Washington bureaucrats, lobbyists, and activists may have targeted a different industry. They would have perpetrated their schemes on a business sector without owners.

 

 

Small Businesses, Mega-Brands, and Hope.

15 Sep

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Defending Small Businesses on Capitol Hill

This month will end with members of the International Franchise Association once again gathering in Washington DC and meeting with legislators. We will discuss several issues affecting all franchisors, franchisees, and suppliers as well as lobby for less regulatory impediments as usual.

The key issue this year will be the National Labor Relations Board’s decision to completely ignore the basis of the franchise business model. The NLRB recently ruled that some businesses are now responsible for the employment actions of other businesses.

Unless you’re blissfully ignorant or work for a service union, you will agree that employees of a locally owned business are NOT actually employed by a corporation that had nothing to do with hiring those employees. (Without setting foot on Capitol Hill, I can tell you right now how the two senators from my home state of Illinois will respond.)

If the work of the IFA in past years is any indication, the IFA members and the IFA team will do a fantastic job of communicating the needs for running a business, growing that business, creating jobs, and ultimately growing the economy.

Mega-Brands and “Hope”

But how much of this effort pays off for those who do most of the heavy lifting – small to medium sized franchise systems – versus the huge brands? Will McDonalds and the other mega-sized franchises join this fight? If we’re successful, these large brands have the most to gain. Will they support this activity and join us on Capitol Hill? I hope so.

A great deal of pro-business promotion, communication, and lobbying is done by franchise industry suppliers. Are the mega-brands supporting these suppliers? I hope so.

When they select a PR firm, software vendor, ad agency, insurance provider, or other business service, do they ask if that supplier supports franchising and the IFA? I hope so.

Continuing to educate legislators and voters about how businesses operate is important for the IFA this year. Perhaps in 2016, we can also educate some large brands about how businesses operate.

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