Franchising World May Edition

By: Sue Vandittelli

This year marks the 10th anniversary of the International Franchise Association’s Ombudsman program. The IFA Ombudsman office was started in 2001 as a result of a two-year examination of ways to improve and strengthen the IFA Code of Ethics and the IFA’s Self-Regulation program. 
“Success in franchising depends both franchisees and franchisors attaining their goals,” said Charlie Melancon, IFA senior vice president of government relations and public policy. “As   a former Baskin-Robbins franchisee, I know from experience that open communication and mutual respect are critical to the ongoing development of the franchise business relationship. The IFA Ombudsman program plays an integral role in assisting both sides achieve their goals.” 
The IFA Ombudsman program is a confidential, neutral, independent, facilitative, and informal resource available at no cost to either the franchisor or franchisee. The expectation is that the ombudsman will assist franchisors and franchisees to resolve their disputes to their mutual satisfaction and avoid costly and time-consuming litigation with minimum disruption to the franchise system. 
The program is different from traditional mediation as it only needs one party to participate for success to start. It     is also more easily accessed in the early stages of a dispute, as well as after more formal dispute resolution channels have been exhausted. The ombudsman process is a solution focused with expertise in franchise business operations and conflict management. 
It’s important to state up front that the IFA Ombudsman program is not a panacea for all situations and does not provide legal advice, investigate, arbitrate, advocate for any one side or replace normal management channels. It is a diverse tool for franchisors and franchisees to utilize while strengthening their franchise relationship and system.   
Innovative and successful leadership in the 21st Century recognizes that the world and business are changing at light speed. To be a leader one needs to think out of the box and quickly. Individuals are interconnected like never before and thanks to technology, one individual or a small group of individuals have the power to come together to effect change. How does this relate to you and your business and its franchise system? Change is not limited to U.S. government or political movements—we will also see similar instances and results enter into the business arena. Dynamic business leaders must recognize that non-traditional movements that lead to conflict or disagreement require nontraditional approaches to solutions. 
With foresight, IFA made the decision in 2001 to add an ombudsman program as one possible solution and now more franchise systems are adding an Ombudsman function internally or externally. In consultations with several IFA members on best practices, these companies have developed their own ombudsman program. Some of these   programs have been accomplished through joint partnerships with the franchisor and an advisory council or with input from franchisee associations. 
Franchisors cannot afford to overlook the ombudsman model and other early-dispute resolution models as the system grows. It would be similar to saying one could not afford a marketing or human resources   department—it does not make good business sense. That is a primary reason why IFA makes the ombudsman service available to the entire franchise business community. Many times the program hears from individuals that contact the service and say, “I wish that I had known to call you earlier, my franchisor and I would have been at such a different place.” 
Individuals need the ability to talk and think through situations both rationally and irrationally in a confidential environment with another person. As a wise person once said, you cannot be smart and angry at the same time. For the past 10 years, callers have appreciated the ability to speak with a third-party that has no vested interest in outcomes and can credibly speak to both sides. The ombudsman service discusses the different perspectives in such areas as franchisee support, communication, territory issues, product suppliers, advertising or re-selling the franchise unit.   
“The Ombuds Program at 7-Eleven has helped the parties take some of the emotion and negative perceptions out of a conflict and stay focused on facts and options for resolution,” said 7-Eleven Ombudsman Wendy Friede. “Often the caller can release their anger with the ombuds so that he/she can then be more constructive when trying to negotiate a resolution with the other party.” 
Overall, franchisees represent approximately 70 percent of call volumes; 30 percent are franchisors. Franchisors that     contact the ombudsman are typically smaller, emerging systems working to adapt to new leadership styles while building strong relationships with franchisees. These franchise systems cannot afford to ignore potential disputes during early stages of growth and development within the system. Utilizing the ombudsman program and other early-dispute resolution strategies that combine traditional and non-traditional approaches are critical for the future success in any franchise system. 
“Since the Ombudsman Office was instituted in 2003, it has made significant strides in converting a vast number of complaints into solutions,” said Kahala Senior Director, Franchise Relations & Ombudsman Carolyn Stock. “The confidentiality provision of the Ombudsman Office has played an important role in surfacing issues which otherwise may not have been brought forward, often resulting in tangible benefits to both our franchisee community and the company. Through healthy and productive dispute resolution, we have an excellent opportunity to integrate the company’s core values, while effecting positive change, mitigating risk and strengthening community relations.” 
More Powerful Together 
Collectively, franchisors and franchisees can increase capacity to understand and resolve potential conflicts through the sharing of information and ideas. Maintaining a focus on the collective mutual interests of both parties can increase the possibility of successful resolutions. The IFA Ombudsman program and other early-dispute resolution strategies are a critical avenue   that can provide support and resources for franchise businesses. 
I am assisted by IFA Associate Ombudsmen Warren Morris and Danielle Martin. Together they have over 32 years of ombudsman experience. “I am proud to be part of a program that quietly and efficiently assists franchisees, franchisors and other members of the franchise community,” said Associate IFA Ombudsman Wayne Morris. “For some callers, it is a simple question, whereas others have complex issues for which they appreciate having an off-therecord sounding board to speak with just a phone call away. Many callers have expressed their sincere gratitude for the service. Over the years, it has really been a pleasure to assist so many individuals and organizations through the IFA Franchise Ombudsman Office. I look forward to many more years of service.” 
“People need a confidential place to discuss conflicting situations between them and the franchisor or sometimes with other franchisees,” adds Danielle Martin, an IFA associate ombudsman. “The comments we receive at the ombudsman’s office are most often that they are glad to be talking to a neutral person that enables them to see options that they did not think of.”  
 
The IFA Ombudsman office is operated independently of IFA and only provides the association with general statistics of the number of callers, other demographic data and trends. The IFA Ombudsman is a long-time standing member of the International Ombudsman Association and follows its Standards of Practice and Code of Ethics. I am honoured to be celebrating the IFA Ombudsman’s 10th anniversary and impressed with IFA’s vision and commitment to making this a reality for the franchise community. 
Sue Vandittelli, who has been the IFA Ombudsman since 2004, has more than 25 years of business experience and more than 15 years of ombudsman experience. Vandittelli, holds a bachelor’s degree in commerce and has passed the examination required as the first step to becoming a Certified Organizational Ombudsman Practioner through IOA. She can be reached at 1-888-452-0303 or through the Web site 

www.ifaresolve.com

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www.ombudsassociation.org

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