Blue MauMau — Some of America’s largest franchise groups formally ratified a franchisee bill of rights on Friday, June 3. The intent of the document is to spell out a framework of a mutually beneficial relationship between franchisor and franchisee. Hospitality, restaurant, convenience store, automotive services and scores of other sectors that franchise are anticipated to be eventually impacted by these franchising standards.
The document aims to spell out those rights and expectations of both parties as a beginning point of franchise discussion.
“Over the years franchise agreements have become more and more draconian, and this needs to change,” says Jim Coen, co-chairman of the CFA Fair Franchising Committee. “For franchising to truly reach its potential, franchisees must have protection so they can earn, harvest and perpetuate the equity they have worked so hard to develop. The Universal Franchisee Bill of Rights sets a foundation for fairness.”
The Universal Franchisee Bill of Rights is a basis to protect against infringement of franchisee rights. This document brings to light the imbalance in many franchise agreements and problems prospective franchisees should be aware of before they sign an agreement. Voted on by elected delegates from Subway, Burger King, Hardees, hotel owners, Meineke, Supercuts and other franchisee groups, the document contains crucial components: freedom of association, good faith and fair dealing, uniform application of brand standards, full disclosure regarding fees collected from franchisees, right to price, fair sourcing of goods and services, right to renew the franchise, right to transfer, encroachment, ample notice of significant change; termination rights; and fairness in dispute resolution. Many association representatives and individuals close to franchising have contributed to the ideas and language of the Universal Franchisee Bill of Rights.
“Any franchise agreement requires a delicate balance of good faith, fair dealing, and power used responsibly,” said ChandraKant “C.K.” Patel, chairman of the Asian American Hotel Owners Association (AAHOA), an organization that represents over 50 percent of the economy hotel owners in the United States. AAHOA has spearheaded the movement for a Universal Franchisee Bill of Rights across multiple industries for the past seven years.
“For the franchisor-franchisee relationship to thrive, the franchisor must live up to certain principles and the franchisee must follow certain guidelines – and this document carefully outlines how the unique franchise partnership can best succeed for mutual benefit.”
The effort to make a franchisee fairness doctrine has been ongoing for many years, and the CFA created the Fair Franchising Committee to specifically address the needs and rights of franchisees. The committee has spent much time discerning the necessary actions needed to create the Universal Franchisee Bill of Rights. Documents from other organizations, such as the Asian American Hotel Owners Association, the American Association of Franchisees and Dealers and the American Franchisee Association were analyzed and used as inspiration for this new Universal Franchisee Bill of Rights.
The Universal Franchisee Bill of Rights will be officially released on June 22 at the CFA Day Forum held at the Gaylord National Resort and Convention Center in National Harbor, Md. Franchisee associations and individuals will have the opportunity to endorse the Universal Franchisee Bill of Rights at franchiseebillofrights.org once it is officially released at the CFA Day Forum.