There's been much conversation about the National Owners Association (NOA) and the Coalition of Franchisee Associations (CFA). For everyone's convenience links to both organizations are in the header above.
5 comments:
Anonymous
said...
Thank you Richard. It is imperative that Owners recognize the dire circumstances that the new Franchising Policies will bring, seriously destroying every owners equity. If you want to fight back, you should join and support the NOA. Or - suffer the consequences of McDonalds Corporate Greed and Ineptitude.
McD is destroying the most successful franchise system in the world with the new Franchise rules. They want to move to ten year leases, drive down the value of units(result-little to no owner equity), and move towards the Chic Fil A model which leaves the owner with NOTHING (no equity to sell). You become an employee, and have no retirement/estate value. I totally agree with the above post, the NOA is our last, best hope to stop this corporate maneuvering and greed. No one else can do it. The NFLA is worthless, they are funded by Corp and forced to sign Non Disclosure Agreements (NDAs) which makes the NFLA TOOTHLESS. NFLA is NOT independent, they are controlled by MCD. We approved a $75 per store to fund the NFLA to allow legal and accounting outside services. Where is the LEGAL service to help us with the new Franchise rules? The NFLA is feckless. The NOA is INDEPENDENT- owners serving owners. Join and support!! Or suffer like a lemming.
Universal Franchisee Bill of Rights- Supported by the NOA
Over the last 50 years, franchisees have invested their capital and hard work in creating some of the most recognized brands in the marketplace. The success of franchising is predicated on the investment by franchisees. This is now at risk because the terms of the franchise agreements have become more one-sided in favor of the franchisors. They have significantly reduced the ability of franchisees to build their businesses and serve their customers.
This Universal Franchisee Bill of Rights² is a fairness doctrine. It has been developed by franchisees in multiple systems and industries to identify the basic terms of fairness that are missing in their franchise agreements, and must be restored to ensure the success and growth of the franchise systems.
1. Freedom of Association: A franchisee may freely associate with other franchisees or associations. 2. Good Faith and Fair Dealing: A franchisee may rely on a franchisor’s good faith, fairness, exercise of due care, and performance including the administration of; advertising, rewards programs, marketing funds, and franchise or development agreements. 3. Uniform Application of Brand Standards: Franchisors shall maintain consistent operating standards under a specific franchise system brand name and uniformly apply such standards in a non-discriminatory manner. 4. Full Disclosure Regarding Fees Collected From Franchisees: A franchisor shall make available to the franchisee all records of marketing, rewards programs, and related fees that have been paid by franchisees, vendors, suppliers, and licensees. 5. Right to Price: A franchisee may establish the price of goods and services it sells. 6. Fair Sourcing of Goods and Services: A franchisee, or franchisee purchasing cooperative, may purchase, from any vendor, goods and services that meet the formally established standards of the franchisor. 7. Right to Renew the Franchise: A franchisee may renew its franchise under terms free of unreasonable costs and or stipulations. 8. Right to Transfer: A franchisee shall have a right to transfer its franchise to a qualified purchaser, including, but not limited to, family members or business partners, without unreasonable costs, stipulations or penalties. 9. Encroachment: A franchisee shall have specific market protection wherein the franchisor shall not materially impact the franchisee’s business, or allow another entity with the same or a similar brand to operate. 10. Ample Notice of Significant Change; Franchisee Termination Rights: Notice of significant change to the franchise system shall be given in a reasonable time prior to required changes. A franchisee may terminate without penalty, or liquidated damages, if a change to the franchise system would cause substantial negative impact or if the franchisee is experiencing substantial financial hardship. Under such termination any non-competition covenant shall be void. 11. Default; Franchise Termination Rights: Prior to franchise agreement termination, the franchisee shall be given detailed reasons for alleged default and reasonable time to cure. Termination shall not occur without good cause, and termination shall not compel payments of liquidated damages, and or early termination fees. All franchise agreement rights shall remain in full effect for any franchisee not in default or that cured a default. A default under one franchise agreement shall not constitute a default under a different franchise agreement. 12. Fairness in Dispute Resolution: A franchisee may elect to have all dispute resolution proceedings and legal action occur in the local venue of the franchisee and shall not be required to submit to mandatory binding arbitration. 13. Equity and Property Rights: A franchisee has equity in their business, has made a substantial investment in their business and shall have the right to monetize that equity and investment prior to the expiration or termination of the franchise.
Previous - "The NFLA is worthless, they are funded by Corp and forced to sign Non Disclosure Agreements (NDAs) which makes the NFLA TOOTHLESS. NFLA is NOT independent, they are controlled by MCD."
This is why it's fruitless to dream about having an Owner/Operator on the McDonald's Board of directors. The same limitations would be in place - but on steroids!
I've been saying for more than 20 years that the enemy of the operator is another operator - going on regional and national boards.
Arbitrarily 'voting' to incur expense to another independent franchise, under the guise of operator-led and approved. Using marketing coops to establish 'joint employer' status and other day-to-day business aspects best left to the independent franchisee.
Using 'best for the brand' as cover to force needless programs and policies, with little to do with selling a hamburger. Forcing reinvestment to improve REIT holdings, while offering little benefit in building the business. Manipulating menu prices with the GMA to where franchisees are held to a financial standard they no longer have any real control over.
Still, even today, those same antics are well employed. As those 'playing the game' think they're exempt from the requirements and it will improve their market acquisition over their fellow franchisee.
Failing to realize, no one is ever exempt. Your cover today, will not necessarily be your cover tomorrow.
I've seen leadership come and go, but the narcissism never fades away. What is eroding is the brand trust. What is being destroyed is employee loyalty. Crew, management and now franchisee turnover is at an all-time HIGH. The system rolls over staff faster than a prep person rolling sausage burritos.
There is a big difference between knowing what brand McDonald's is, compared to thinking what brand McDonald's is. And when those thinking outweigh the knowing, things begin to collapse. Brand trust banks get drained. Transactions drop. Employee turnover skyrockets.
The stock price isn't an indicator of corporate viability, ask those that worked for ENRON.
It takes risk to enact any real change, and franchisees are simply too risk-adverse to solidify to the organization needed to take ACTION. The NOA lacks teeth due to the same risk aversion. When it finally learns what it should of known years ago. It will be way too late. My belief, its already move past the precipice and gravity has now taken hold.
5 comments:
Thank you Richard. It is imperative that Owners recognize the dire circumstances that the new Franchising Policies will bring, seriously destroying every owners equity. If you want to fight back, you should join and support the NOA.
Or - suffer the consequences of McDonalds Corporate Greed and Ineptitude.
#MMGA
#FireJoe&Chris
McD is destroying the most successful franchise system in the world with the new Franchise rules. They want to move to ten year leases, drive down the value of units(result-little to no owner equity), and move towards the Chic Fil A model which leaves the owner with NOTHING (no equity to sell). You become an employee, and have no retirement/estate value. I totally agree with the above post, the NOA is our last, best hope to stop this corporate maneuvering and greed.
No one else can do it. The NFLA is worthless, they are funded by Corp and forced to sign Non Disclosure Agreements (NDAs) which makes the NFLA TOOTHLESS. NFLA is NOT independent, they are controlled by MCD.
We approved a $75 per store to fund the NFLA to allow legal and accounting outside services. Where is the LEGAL service to help us with the new Franchise rules? The NFLA is feckless.
The NOA is INDEPENDENT- owners serving owners. Join and support!! Or suffer like a lemming.
Universal Franchisee Bill of Rights- Supported by the NOA
Over the last 50 years, franchisees have invested their capital and hard work in creating some of the most recognized brands in the marketplace. The success of franchising is predicated on the investment by franchisees. This is now at risk because the terms of the franchise agreements have become more one-sided in favor of the franchisors. They have significantly reduced the ability of franchisees to build their businesses and serve their customers.
This Universal Franchisee Bill of Rights² is a fairness doctrine. It has been developed by franchisees in multiple systems and industries to identify the basic terms of fairness that are missing in their franchise agreements, and must be restored to ensure the success and growth of the franchise systems.
1. Freedom of Association: A franchisee may freely associate with other franchisees or associations.
2. Good Faith and Fair Dealing: A franchisee may rely on a franchisor’s good faith, fairness, exercise of due care, and performance including the administration of; advertising, rewards programs, marketing funds, and franchise or development agreements.
3. Uniform Application of Brand Standards: Franchisors shall maintain consistent operating standards under a specific franchise system brand name and uniformly apply such standards in a non-discriminatory manner.
4. Full Disclosure Regarding Fees Collected From Franchisees: A franchisor shall make available to the franchisee all records of marketing, rewards programs, and related fees that have been paid by franchisees, vendors, suppliers, and licensees.
5. Right to Price: A franchisee may establish the price of goods and services it sells.
6. Fair Sourcing of Goods and Services: A franchisee, or franchisee purchasing cooperative, may purchase, from any vendor, goods and services that meet the formally established standards of the franchisor.
7. Right to Renew the Franchise: A franchisee may renew its franchise under terms free of unreasonable costs and or stipulations.
8. Right to Transfer: A franchisee shall have a right to transfer its franchise to a qualified purchaser, including, but not limited to, family members or business partners, without unreasonable costs, stipulations or penalties.
9. Encroachment: A franchisee shall have specific market protection wherein the franchisor shall not materially impact the franchisee’s business, or allow another entity with the same or a similar brand to operate.
10. Ample Notice of Significant Change; Franchisee Termination Rights: Notice of significant change to the franchise system shall be given in a reasonable time prior to required changes. A franchisee may terminate without penalty, or liquidated damages, if a change to the franchise system would cause substantial negative impact or if the franchisee is experiencing substantial financial hardship. Under such termination any non-competition covenant shall be void.
11. Default; Franchise Termination Rights: Prior to franchise agreement termination, the franchisee shall be given detailed reasons for alleged default and reasonable time to cure. Termination shall not occur without good cause, and termination shall not compel payments of liquidated damages, and or early termination fees. All franchise agreement rights shall remain in full effect for any franchisee not in default or that cured a default. A default under one franchise agreement shall not constitute a default under a different franchise agreement.
12. Fairness in Dispute Resolution: A franchisee may elect to have all dispute resolution proceedings and legal action occur in the local venue of the franchisee and shall not be required to submit to mandatory binding arbitration.
13. Equity and Property Rights: A franchisee has equity in their business, has made a substantial investment in their business and shall have the right to monetize that equity and investment prior to the expiration or termination of the franchise.
Previous - "The NFLA is worthless, they are funded by Corp and forced to sign Non Disclosure Agreements (NDAs) which makes the NFLA TOOTHLESS. NFLA is NOT independent, they are controlled by MCD."
This is why it's fruitless to dream about having an Owner/Operator on the McDonald's Board of directors. The same limitations would be in place - but on steroids!
The strength of the NOA is its independence.
.
I've been saying for more than 20 years that the enemy of the operator is another operator - going on regional and national boards.
Arbitrarily 'voting' to incur expense to another independent franchise, under the guise of operator-led and approved. Using marketing coops to establish 'joint employer' status and other day-to-day business aspects best left to the independent franchisee.
Using 'best for the brand' as cover to force needless programs and policies, with little to do with selling a hamburger. Forcing reinvestment to improve REIT holdings, while offering little benefit in building the business. Manipulating menu prices with the GMA to where franchisees are held to a financial standard they no longer have any real control over.
Still, even today, those same antics are well employed. As those 'playing the game' think they're exempt from the requirements and it will improve their market acquisition over their fellow franchisee.
Failing to realize, no one is ever exempt. Your cover today, will not necessarily be your cover tomorrow.
I've seen leadership come and go, but the narcissism never fades away. What is eroding is the brand trust. What is being destroyed is employee loyalty. Crew, management and now franchisee turnover is at an all-time HIGH. The system rolls over staff faster than a prep person rolling sausage burritos.
There is a big difference between knowing what brand McDonald's is, compared to thinking what brand McDonald's is. And when those thinking outweigh the knowing, things begin to collapse. Brand trust banks get drained. Transactions drop. Employee turnover skyrockets.
The stock price isn't an indicator of corporate viability, ask those that worked for ENRON.
It takes risk to enact any real change, and franchisees are simply too risk-adverse to solidify to the organization needed to take ACTION. The NOA lacks teeth due to the same risk aversion. When it finally learns what it should of known years ago. It will be way too late. My belief, its already move past the precipice and gravity has now taken hold.
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