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Starting a franchise association may help you gain more control over business decisions and connect with franchise affiliates. As a franchisee, working with other franchise owners creates a network of information and influence that can help you advocate for your business needs with a franchisor.
Our franchise lawyer in Orlando, FL, at Luther Lanard, PC can help you create the type of association that supports your business’s growth and stability. Should I start a franchise association? Our legal services can assist you with creating an association’s business structure, constructing sound agreements, and navigating potential disputes.
What Is a Franchise Association?
A franchise association creates a central organization where franchise resources, education, and business networking outlets come together. Franchisors, franchisees, and suppliers can join a franchise association. A franchise association can benefit the franchising community.
Professional development and networking play a crucial role in building a business. A franchise association may offer educational opportunities, seminars, or workshops to create avenues for franchisees wanting to stay current with industry trends. A franchise association provides the platform to develop contacts and learn from others within the franchise industry.
Franchise associations differ from franchisee associations.
What Is a Franchisee Association?
Franchise owners may ask themselves, “Should I start a franchisee association?”, without knowing their purpose and advantages.
The general purpose of the franchisee association is to provide franchise owners with a knowledgeable platform to seek advice on franchising questions, establish legal resources, advocate and collectively negotiate with franchisors, and assist with franchisor disputes.
A franchisee association may choose to become an entity structured as an LLC or corporation. The entity then uses its negotiating powers to work with a franchisor. Our Orlando franchise attorneys have unique experience assisting franchisee associations with structuring an entity to maximize their potential and bargaining power, similar to employee unions.
Franchisee associations may also play a crucial role in establishing mentors for new franchise owners whose questions may go unanswered by busy franchisors working with numerous individuals. Franchisee associations advocate for the best interests of franchisees.
When Should I Start a Franchisee Association?
It is generally optimal to start a franchisee association with around 20 franchisees. However, beginning a franchisee association with fewer members may be beneficial to smaller franchise companies. The idea of strength in numbers becomes prominent when at least 20 franchisees come together to influence a franchisor and present a unified front collectively.
Will a Franchisee Association Benefit From Local or Nationwide Members?
The franchisee association you create can benefit from the experience of local and nationwide members. A hybrid approach can allow local franchisee associations to join other regional franchisee associations to form a national body.
What Are the Benefits of a Local Franchisee Association?
Florida franchise owners may work with local franchisees to focus on regional challenges and opportunities. Your regional franchisee association can address local business regulations more effectively by working with a franchise lawyer. Regional franchise owners will also want to stay informed about changing state laws that impact Florida franchisees.
A local franchisee association can identify regional market trends and suppliers to meet these needs. Local franchisee association members may combine marketing efforts and strategies to increase franchise visibility across a larger area. Location allows local franchisees to learn from each other by sharing successes and challenges.
Should I Connect With National Franchisee Associations?
Regional franchisee associations may band with associations in other states to create a national voice to advocate for franchisees’ best interests. Local franchisee associations in Florida working with national associations have the potential to initiate significant change by negotiating more beneficial contracts, identifying cost-saving suppliers, and utilizing profitable business tools.
Working with franchisee associations in trend-setting locations can help other franchisees prepare for market shifts more proactively. The resources and support from a nationally cooperative franchisee association can bring awareness to the franchise. At Luther Lanard, PC our franchise attorneys provide trusted counsel, helping maximize your business opportunities nationwide.
Can Starting a Franchisee Association Provide Business Owners More Negotiating Power?
It is more likely a franchisor will overlook or disregard the requests and concerns of an individual franchisee. However, a franchisee association can represent numerous franchisees’ concerns, potentially garnering a franchisor’s attention more effectively. Negotiating power is critical to franchise owners throughout various business stages and influencing franchisor decisions.
Franchisee Associations Can Influence Marketing Goals and Spending
Franchisees have hands-on experience with customers in their community. They understand local markets, demographics, and regional preferences. Franchisee association leaders can share marketing objectives with franchisors based on the feedback of numerous franchise owners. Local franchisee associations in Orlando, FL, can also advocate for transparency in franchisor marketing costs.
Franchisee associations can create long-term business sustainability using marketing techniques that a region is more open to receiving. Franchisee associations can utilize data from local stores to identify customer preferences, price points, and strategies to generate new business. Franchisee associations can promote fair marketing efforts throughout a region.
Franchisees Possess Insight into Point of Sale (POS) Systems
Significant changes to POS systems can result in severe disruptions to franchise businesses. Franchisee associations allow individuals who understand specific franchising challenges to participate in selecting affordable POS systems that support POS sales and data collection crucial to building a franchise. Franchisee association representatives may also demand accountability for costly upgrades.
A franchisee association can work with local businesses to facilitate educational opportunities for business owners wanting to better understand POS system features and maximize their potential. They can also provide guidance on the significance of adhering to franchisor system standards to support uniformity across franchises and to meet compliance.
Franchisee associations can also increase awareness around the importance of cybersecurity for franchises. Franchisees may handle sensitive personal data, requiring training on and attention to potential cybersecurity threats.
Franchisee Associations May Encourage Diverse Vendor Availability
Franchisors often work with vendors who offer monetary incentives in exchange for promoting and selling their products. Franchisors may also benefit from affiliates offering rebates when their merchandise is sold in franchises. Franchisee associations have more bargaining power to level the playing field when it comes to vendor partnerships than a franchisee working alone.
Franchisees work closely with customers to understand the buying audience. An association may be capable of negotiating better pricing from franchisor affiliates. Finding vendors who supply products that maximize franchisee earning potential becomes possible when a franchisee association advocates for the needs of a group and the products that satisfy customer demands.
Is a Franchise Advisory Council the Same as a Franchise or Franchisee Association?
Significant differences exist between these entities. A franchise association brings together franchisors, franchisees, and suppliers. They may offer potential avenues to connect the various individuals and groups who impact franchise operations.
Franchisee associations are entities that franchise owners establish to advocate for their collective best interests. A franchisee association elects its officials, who negotiate on behalf of franchisees with a franchisor.
A franchisor generally creates and controls a franchise advisory council, appointing its board members, which may create bias. The council’s purpose is to create a streamlined funneling of information from franchisees to the franchisor. A franchisor retains control of decisions impacting the franchisees.
What Are the Steps for Starting a Franchisee Association?
Connecting with other local or national franchisees who recognize the need for franchising support and representation is crucial. It is paramount to identify key members who can focus on the primary issues franchisees encounter and franchising strategies. Elect representatives who will speak equally for each member of the association.
Work with a team of experienced franchise lawyers who can effectively apply federal and state laws that protect your rights when starting a franchise association. Your representatives, along with a franchise attorney, can determine and establish a business structure that supports your goals.
Florida is a franchise-friendly state. Florida depends on guidance from the Federal Trade Commission’s (FTC) Franchise Rule for legislation regarding franchises.
Identify the Franchisee Association’s Goals and Strategies
At Luther Lanard, PC our franchise lawyers in Orlando recognize the significance of setting goals and implementing policies. A franchise attorney with our firm can offer franchising strategies based on the association’s goals. Creating sound business agreements can reinforce an association’s bargaining power with a franchisor.
Hire Outside General Counsel
Working closely with outside general counsel in Orlando provides your franchisee association with a legal advocate who can offer the following services:
- Legal guidance to association officers
- Draft and negotiate contracts and agreements
- Review contracts to identify red flags
- Navigate franchise disclosure and relationship law
- Represent any potential legal matters against a franchisor or supplier
- Connect you with a network of professionals to promote your business and tackle issues beyond the services we offer
Let our team help you create a strategy that supports franchisees and their success. Cultivating a lasting relationship with a franchisor is possible and can benefit each party in a business relationship. Our negotiation and mediation skills often open doors to resolution without requiring legal action. However, we believe in your right to initiate legal action when a party fails to act in good faith.
Build Franchisee Membership and Connect With Existing Franchisee Associations
There is strength in numbers, creating a unified voice that franchisors take note of. Effectively and regularly communicating with franchisees keeps each individual abreast of new and ongoing association goals.
Once you establish a local franchisee association, forming connections with national associations provides more knowledge for your association. Working with national associations also broadens the potential to effectively negotiate better terms for franchisees.
Regularly Communicate With the Franchisor
Association leaders can begin regularly engaging with a franchisor to find solutions to franchisee challenges. Through teamwork, a franchisee association’s advocacy can find workable solutions that benefit association members.
How Much Does It Cost to Start a Franchisee Association?
Starting a franchisee association and its related costs will vary based on the complexity of the association’s legal needs and goals. Establishing a business structure may be subject to Florida’s business regulations. The franchisee association may also want to establish a membership fee that supports its operations.
Membership fees may cover legal assistance, educational opportunities, operating expenses, and other costs the association accrues. Building membership can increase the capacity to provide franchisees with services.
Can a Franchisor Prevent Me From Starting a Franchisee Association?
The First Amendment of the U.S. Constitution protects the right to assemble. Franchisee associations often form out of business concerns and challenges. Forming an association does not legally obligate a franchisor to negotiate with or recognize an association.
Working with a franchise lawyer can facilitate communication between a franchisor and franchisee association officers. Franchisors benefit from understanding the needs of their franchisees, enabling a franchise’s growth. Communication may prevent small challenges from snowballing into complex legal issues.
Franchise attorneys often use tools like mediation to settle disputes more quickly. Effective dispute resolution skills can also reduce litigation costs by avoiding the need for lawsuits. An experienced legal advocate can also represent association members who experience retaliation by a franchisor for participating in a franchisee association.
Are There Legal Protections If a Franchisor Retaliates Against Me for Starting a Franchisee Association?
Retaliation is generally unlawful when a franchisee exercises a protected right. Document any actions you feel a franchisor is taking against you. Retaliatory actions may include:
- Termination or threats of terminating a franchise agreement
- Selectively enforcing franchise agreement provisions
- Limiting access to programs, incentives, or educational opportunities that benefit other franchisees
- Refusing to communicate or aggressively communicating
- Micromanaging or unnecessary monitoring of a franchise’s performance
State and federal laws may protect against retaliatory actions by a franchisor. Unlawful actions also have the potential to damage a franchise’s brand reputation. We are ready to help you navigate and apply legal protections.
Have Questions About Franchisee Associations? Contact Our Attorneys in Orlando, FL
A trusted franchise lawyer in Orlando, FL at Luther Lanard, PC can offer insight and guidance on how to start a franchisee association. We can navigate legal issues, establish a business structure, and create lasting documents that strive to benefit each member in an association. Schedule a consultation to partner with a franchise attorney from our firm.