Once you’ve made a decision to start a FAC, there are a number of factors to consider, including whether to start an association or FAC, how many members should be involved, how long the terms should be for members, and what powers members will have over setting meetings and achieving system-wide goals.

By Thomas Flaherty

While many organizations think that it may be better to wait to start an FAC (until the organization is larger, there are hundreds of franchisees or thousands of locations), the best time to start thinking about creating an FAC is right now.

I often, somewhat jokingly, share that there are two kinds of franchisors: Those who like torches and pitchforks; and those who don’t. What kind of franchisor would you like to be? One who likes having candid, collaborative, sometimes-challenging and awkward conversations with franchisees, or one who likes torches and pitchforks? While the question may be posed with humor, it is not far-fetched.

When Tide Dry Cleaners started franchising in 2010, there was an opportunity to create the culture from the ground up. The approach would be “polite, but firm” with a penchant for diplomacy and decorum, while also acknowledging that sometimes smart people may disagree on matters that are very important and, often, very personal. While disagreements may occur, there would be discussion about the data and reasoning behind why a position was taken, or a decision was made. There would also be a true spirit of humility and objectivity that would be encouraged for all parties on both sides of the table. The team employed a servant leadership approach and truly embraced the idea that all involved should be disciplined, accountable, collaborative and driven for mutual benefit and excellence!

It may seem unusual to start an FAC with only a handful of locations open (approximately 10 locations in the case of Tide Dry Cleaners). However, the choice was made to set the tone early on for how the culture would be, internally and with
the franchisees. 

The effort associated with setting the cultural foundation is, in and of itself, an effective strategy for working with FACs. Franchisees want to be heard, and they want to speak with those who authentically care and are interested in helping them. Given what they have invested in time, energy and treasure, they deserve that.

Rather than becoming paralyzed by the thought of implementing an FAC, you should do your research, prepare a relationship framework, and dive in. It is not necessary to start with all the formality of bylaws, large numbers of FAC members, officers, sub-committees, elections, etc. However, it is helpful to consider how you would like to start, and then how you could evolve over time.

Once you have made the decision to create an FAC, there are multiple variables to consider:

Why should you start an Association or FAC?

To create a formal channel of collaborative communication between the franchisor and franchisees to discuss matters of mutual interest (positive and negative) in the spirit of mutual respect.

To focus on system-wide matters, not individual franchisee matters.

To emphasize the spirit of continuous improvement (financially and in all areas of the business).

To show the franchisor’s intent to be humble and open-minded.

To explore innovation, and potential impacts on the business of evolutionary changes.

To avoid the torches and pitchforks scenario.

Should you start a Franchise Association or FAC or both?

You could consider starting an FAC first. Many franchise associations start because something is not working well. The FAC may be a good proactive measure.

How many FAC members should you have?

There is no required number of members. You could start with four and increase or decrease, as needed. Have four members provide coverage for North, South, East and West regions (and the regions may be designated based upon need and where you have franchisees and/or locations).

What is the term of each FAC member?

Many franchisors start with one-year terms, and may modify from there. You may want to consider one of the members having a two-year term, so that someone on the FAC has some historical perspective and experience as an FAC member.

Should you create subcommittees?

Subcommittees are not required. You may consider adding them as the need arises to focus on specific short-term issues, or to address ongoing
business matters.

Should the members be elected or appointed?

Most FAC members over the long term will have been elected by the franchisees. Early on, you may have difficulty getting participation in the FAC, so you may want to consider actively recruiting FAC members and appointing them until such time as you are ready, and franchisees are ready, to begin an election process.

What are the powers of the FAC?

The FAC wields a tremendous amount of influence with the franchisor and the franchisees. While the FAC is largely an advisory body, you may consider having the members vote on certain matters, and using the voting results as significant data on which to influence the franchisor’s overall decision on a matter.

How many FAC meetings should you have?

Typically, FAC members meet two to four times per year. You should ask your franchisees and/or FAC members how many meetings they recommend having per year. Four is a clean number that may be used to discuss quarterly results; however, it is down to the need and choice of the franchisees and franchisor. You may also consider having some meetings in person and some via telephone/webinar.

Should FAC members be paid?

Members are usually not paid for their service, although reasonable expenses (you may set guidelines) are reimbursed to members for travel and/or other administrative costs.

Should FAC members create agendas and set goals?

FAC members (and the franchisee constituencies they serve) should set the agendas. The franchisor may also add items to the agendas in order to obtain franchisee input or, generally, to inform franchisees of business results or other substantial updates. Consider having each year’s (if you choose annual terms) FAC members determine their top goals to be accomplished for the year, and then ensure that those items are addressed in the FAC meetings.  Consider limiting the number of goals for the year to three to five so that you may focus on progress and results.

How do you create an environment of trust and transparency?

You created an FAC to foster collaborative relationships and get things done.  Now, you have to listen. Truly seek to understand and remain objective.  Focus resolving matters in a way that benefits the franchisees and the franchisor. If your franchisees are successful, you will be successful.

There are numerous resources available to help, including the IFA website (www.franchise.org) and annual convention sessions, your franchise attorney, board members and/or other franchising professionals.

Creating an FAC, and investing your time in working together collaboratively, should pay tremendous dividends for all. You will face bumps along the way; however, you should celebrate your FAC members for their service, and you should celebrate your success together — it’s a big deal!

Thomas Flaherty is President & CEO of Agile Pursuits Franchising, which operates a number of Tide Dry Cleaners locations. Find him at fransocial.franchise.org.

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