Franchise Resources: IFA, AAFD, SCORE
Amanda: Great. On our last episode of “Franchising with Purpose,” we talked a lot about the support and resources that a franchisor provides. So, not just the, “I signed on it down the line, and now, what do I do,” right? We talked about being in business for yourself but not by yourself. So, how does a franchisor help you through getting your business opened, up and running, and then 6 months, a year, 5 years, 10 years down the road, that support that’s still available to help you grow and thrive in your franchise? So, today, I wanna switch gears a little bit to the external resources that are available to a franchisee and franchisors alike. There’s lots of organizations out there, we’re gonna talk about a couple today. We have IFA, the International Franchise Association, AAFD, Mike, forgive me…
Mike M.: American Association of Franchisees and Dealers.
Amanda: Okay. And the last one we’re gonna talk about is SCORE.
Mike M.: The Senior Corps of Retired Entrepreneurs.
Amanda: Okay. So lots of great resources out there for us. So let’s talk a little bit…let’s start with the IFA, International Franchise Association. What are some ways that a franchisee can tap into them and help them grow outside of what we talked about last week, which was, you know, the internal team and the fraternity of franchises, I think you called them last week, Mike? You know, what are some other options that are available, and how do we tap into that?
Mike P.: Well, there’s a wealth. I mean, where do you begin? I know, you attended many of these conferences that the IFA puts on, specifically for franchise owners and franchisors, to really be able to keep your finger on the pulse of what’s happening out there. You could pick one topic: marketing, technology, which is evolving so fast. You know, they talk about the bleeding edge of technology, and that’s an old term compared to the way that technology is evolving now. So, for a franchise owner to be able to go in one place, be exposed to a wealth of information, and then to have people that they can talk to help decipher that, how they might be able to incorporate those business practices and business tools into their operation is really important. Some people might say it’s critically important. Right, Mike?
Mike M.: I would. Number four.
Mike P.: But, you know, it’s… And one of the things that we enjoy from the franchisor’s perspective is that we’re there in the same meetings with our franchise owners, learning and strategizing how we can then incorporate these and integrate them into our businesses. And I think it’s phenomenal, you leave that event or any events that they have with a wealth of information, but it doesn’t stop there. It’s something that’s a continuum of opportunities and information and tools that, once you become part of the IFA, it is just an invaluable resource that’s being fed by other franchise owners with tips, tools, and best practices that you can use.
Mike M.: Yeah. So, the International Franchise Association, which is the IFA, because I don’t know if you said that upfront, I don’t remember if we…
Mike M.: Twice, good. All right, well, there you go. Shows how much I’m listening. It’s just an amazing organization for many reasons, but I’ll try to stay high level with this as possible. First of all, historically, the IFA has been a franchisor-facing trade organization. I mean, they are there to fight for the rights of franchisors. Everything that they always have done and everything they still continue to do is to protect franchising in America, which, in many cases and many times over the course of many, many years, has been under attack. But franchising is a strong engine that feeds America. And so the IFA believes wholeheartedly in the importance and premise of franchising. And from a legal and regulatory standpoint, if I was a franchise business owner and I knew that there was this huge trade organization that was fighting on my behalf in Washington, D.C. and around America on the legal and regulatory changes or challenges that would affect my business as a franchisee, and that’s not my franchisor, that’s an independent trade organization, I’d feel really good that I have a powerbroker to that level fighting for my interests and rights to run and operate a successful business in my community, employ workers, give back to my community, and they’re doing this behind the scenes and I don’t even know what’s happening.
So, from a legal and regulatory standpoint, they do just an amazing job. But they are so much more than that. I mean, they have brought so much to marketing, and sale, and franchise development, and operations, and technology, I mean, they have, as part of their network, people that are constantly working on improving the practices around the various areas of the business model or franchise model that I’m operating every day and I’m not seeing what they’re doing. But then I go to their conference, and I’ve been there I don’t know how many, countless, you know, over the last 28 years. And the one that I just went to this year, in February of ’19, there were three really big nuggets that I picked up that I would not have picked up had I not been at that conference. This is 28 years later.
And I think, whether you’re a franchisor or franchisee, I know that IFA has historically been franchisor-facing, but there is a lot of good information that will help me as a franchisee run my business. And what I give the IFA credit for over the past, I’m gonna say, 5 to 10 years, is they’ve become much more franchisee-facing. Like, they do us, I wouldn’t say as much, but they do a lot for franchisees. Ten years ago, you may have never seen a franchisee in any franchise system show up in an IFA conference. Now, there’s hundreds of them that show up, because there’s valuable tools and information for them running their business in small-town U.S.A. as much as it is for franchisors operating in midtown Manhattan, as an example. So, what a great resource they are, both for franchisors and franchisees, and tons of information that goes out every day. So you should tie into their networks so you get the email updates and information updates that they’re constantly sending. You can literally, if you didn’t have a franchisor, go to the IFA on areas of the franchising model and find some kind of expert to tie into for information, free of charge.
Amanda: We just learned something new about them. I mean, the fact that there’s, you know, while I’m running my business in small-town U.S.A., wherever that may be, there’s somebody on a much larger scale that’s lobbying and protecting the rights, looking out for franchising as a whole. I did not know that they did that. I love it.
Mike P.: You could call it franchising with a purpose.
Amanda: You could.
Mike M.: That’s exactly… I’ll give you an example. I mean, we just learned something yesterday. There was a lot of people involved in this fight. There’s a fight in New York in the home care space that would have caused franchisees and franchisors millions of dollars if the agency in New York that was fighting for a rule change won. And it had gone on for I don’t know how long now, maybe at least two, three years, maybe longer. I may be off on that. And the ruling just came out, they overturned it and they’re staying with the Department of Labor’s ruling on how you handle live-in care in New York. Franchisees would have been out of business if that rule had gone forward. But because of the likes of trade organizations like the International Franchise Association and the attorney and franchisor, companies like Griswold and others that joined that fight, we can rest now knowing that our franchisees in New York are not gonna be put out of business by a crippling legislative change. And that’s what the IFA does. And when you’re running your business in small-town U.S.A., you don’t know that’s going on, that it’s happening.
Amanda: Right. And it could be a huge impact that, you know, we find out down the line. So we learned something new. All right. So let’s move on to the AAFD, which is, Mike?
Mike M.: The American Association of Franchisees and Dealers.
Amanda: I never keep that one straight. So let’s talk a little bit about the resources that they provide to a franchisee and how that’s a helpful organization to maybe get connected with.
Mike M.: So I’ll just start with this. So, interestingly enough, they’re not friends with franchisors. So I know we’re in the franchisor side.
Amanda: So they’re the other side of the IFA.
Mike M.: If you’re a franchisee, 10 years ago, you wouldn’t have, if you were a franchisee, you wouldn’t have liked the IFA because they did nothing for you. I mean that that harshly, but they didn’t get much from IFA.
Amanda: They were focused on the franchisor.
Mike M.: Yeah. Ten years ago, 20 years ago, if you were having problems as a franchisee and you found your way to the American Association of Franchisees and Dealers, they would have jumped right in with your cause and they would help you and others like you fight against the franchisor based on what they perceive and what you perceive were unfair franchising practices. Now, I can tell you that I represent the franchisor side, and if franchisors are listening to this podcast, “Franchising with Purpose,” it’s not gonna sit that low with them because they’re always fighting with one another. However, we went through an experience with the AAFD, and we came out friends and we came out a better system for you. And I think that when you look at trade organizations that have an interest on one side versus another, if you have cool heads and intelligent heads, you have a common purpose that you’re working towards, and both sides believe that they want the best thing for this brand that they both live and they both build, then the AAFD can be a great partner for franchisors that have that type of mindset. And they will help you with everything that you need. They’ll look at your franchise agreement to talk about what your rights are on that franchise agreement, what’s fair, what isn’t fair. And not only will they talk to you about it, but you have an organization of people that you can talk to as well. They’ll put you in contact with other franchisees that have gone through similar things and how they were able to resolve circumstances or situations.
So, you know, if I’m a franchisee and I was worried about signing a franchise agreement that, typically, to be fair, are slanted towards a franchisor, and for a good reason, because the franchisor ultimately has to protect the brand. Now, we’re not getting into all the weeds about whether how much they have to protect the brand and how slanted it should or shouldn’t be…
Amanda: Conversation for another podcast.
Mike M.: That’s a big discussion. However, it should be slanted at least fairly to the franchisor because, ultimately, it’s their brand, it’s their trademark, it’s their protection. And because, if they’re selling nationally, they gotta have the ability to step in when somebody’s not doing the right thing by brand, trademark, a system, that you have the ability to enforce the franchisor. But if I’m a franchisee, they do have my back. And if I’m just thinking about buying a business and I’m going the franchising route, and I’m trying to figure out who I might be able to talk to to get information and education about what I need to know about FDD or a franchise agreement or a relationship, then I have a trade organization like the AAFD to go and go to.
Amanda: Mike, anything you wanna add?
Mike P.: You know, I’ll just kinda mirror what Mike said. I think it’s important, you know, to use that because that’s the true sense of partnership when you’re aligning with your franchise owners and franchisor and have an organization like that that has looked at, you know, every aspect of our business. It has sanctioned and said, “Hey, you know, you guys, you’re doing a pretty good job,” and our franchise owners are happy. Having that kind of support and have somebody, you know, kinda peel back the layers and look at us just to make sure that we’re on track and that we’re fair and honest and equitable. I think that’s so important.
Mike M.: Let’s share a quick story with you.
Amanda: I love story time.
Mike M.: So, in 2017, Matt Murphy, you know, Matt Murphy is the CEO of Griswold Home Care, and myself went out to Palm Springs, California because we’re invited by the American Association of Franchisees and Dealers to attend their conference. And I had been so used to sitting at IFA conferences that, for years, were very franchisor-friendly and very franchisor-facing. So everything you got was from the franchisor’s perspective or from the franchisor’s interest. And then, here we are, the only franchisor company that was at the conference, and there were probably 30, 40, 50 franchisee companies, either franchisees or associations of the franchisees they represent, at this conference. And all the presentations were very franchisee-facing. So, when you talk about litigation or compliance from the franchisee side, I remember sitting in that audience and laughing with Matt about it, in a good way, not a bad way, not laughing at, laughing with, to say, “Wow, this perspective is so much different to sit here and listen to an organization that is presenting the same thing that the IFA would present but from a completely different side or perspective.” And it was very eye-opening for us, very eye-opening for us to get that perspective and see a different side of this franchisor-franchisee relationship. And I can tell you, in ’17, Griswold Home Care won the AAFD’s fair franchising seal because of our negotiations on our franchise agreement with our franchisees and our franchisee association, Griswold Home Care Franchise Association, won that award, the fair franchising seal, and we had like a 98% compliance with their standards, which was all because of the 2 sides coming together with reasonable common sense heads and intellect on a common goal to push a franchise in the same direction that we all have been interested in going and working with the AAFD through that process to get this done to earn that award. We didn’t know we were gonna win it, we didn’t set out to win it, we set out to create the best franchise agreement that we could create that benefits both sides, it just so happens that it earned us that award. But what an interesting perspective it was, sitting at their conference, listening to them present everything that I’ve always heard historically from the franchisor’s perspective, having them present it from the franchisee’s perspective. But it works. If it’s done right, you have the right two sides that can come together, it works.
Mike P.: That came as a result of being nominated by the franchisees.
Mike M.: Yeah. Our franchisees nominated us for the award, and we happen to win that year.
Amanda: Well, congratulations.
Mike M.: Thank you.
Amanda: All right. So it sounds like we’ve covered both sides of the field here, right. The IFA, which has historically been a little bit more franchisor-focused, and I won’t say a little bit, probably much more so, up until recently, and the AAFD, which really has the franchisee’s best interest at heart here, and not that everybody doesn’t, but coming together to really achieve the best outcome for the brand and, ultimately, for, you know, the folks who are involved. Let’s talk a little bit about the last one, so SCORE, which is the Senior Corps of Retired Entrepreneurs.
Mike M.: There you go.
Amanda: Yes, got one. So, what’s the benefit to me as either a potential franchisee or existing franchisee to get associated with an organization like SCORE?
Mike P.: Every community has a variety of different chapters of SCORE, and if you wanna be able to tap into a resource, coaching resource, people that, you know, another layer of support, these folks have been there, done that. They have extensive backgrounds in entrepreneurial businesses and have been where you are. So there’s probably something that you may face that they haven’t already faced, and they’re there prepared to help you, from helping you build a business plan, but also helping coach you, educate you, advocate for you to help you improve your business and grow. Not only to help you understand the business, but how to move it forward, but also to prepare you for the other aspects of business, such as if you need financing and where you might be able to get that additional capital to grow your business. I mean, particularly if you’re manufacturing, then you’re, you know, busting at the seams that you’re, “How do I get to another facility is gonna help me improve my output and the development?” And they’re gonna analyze all the aspects of your business to help you understand where you are to the minute, to the second, how, you know, those metrics that you’re monitoring how well you’re doing. I mean, I know you’ve had experience with them. They help tee up and they interface with the SBA, the Small Business Administration, and how you can interface with them and other vendors. But also within the community, how you can, you know, expand your routes in the community and become a robust vital part of the community.
Mike M.: Yeah. So I wanna go a little different direction in terms of maybe a little higher level from where I think we started, which is value of organizations. So, like, SCORE, the last letter of SCORE is E, stands for Entrepreneur. It’s not SCORF, which the last letter would be an F, which should be Senior Corps of Retired Franchisees. So these are business people. They may have done it independently, they may have done it through franchise systems, these are people that are business people. And so, when I talk about the value of an organization like SCORE, I’m not gonna say that they will favor franchisors or franchisees, but they probably lean to the franchisee or businessperson side, because they’re gonna help you, as Mike alluded to, they’re gonna help you with your agreements and understanding your agreements and rights under those agreements. They’re gonna help you with financing, where to find financing, and if it’s SBA, how to navigate that. They might help you understand your franchise disclosure document or FDD. I know we’ll be talking about that in a later segment. But there’s lots of things that they’ll be looking at, you know, business plans, right. They’ll talk to you about business plans and how to set up a legitimate business plan and how to project properly. They might talk to you about profit-loss and what you need to understand about managing a P&L or a balance sheet, you know, which I may have never done ever in my life. And so they’re entrepreneur-facing, which typically means they lean towards the person buying a business, whether it’s independent or franchise. But they are a good resource, and they’re in every state. You can find an organization or chapter of SCORE. But they promote business. That’s what they promote. And anything that they can do to help somebody get through the process of business ownership, that’s what they’re there to do.
Amanda: All right. Anything that either one of you, any other organizations that you find to be helpful, or anything else that you’d like to add in parting remarks?
Mike M.: There’s plenty of other organizations, but we’re talking very high level and very important organizations. We’ve covered three very important organizations.
Mike P.: Yeah. As a business owner, I think these, you know, as Mike said, there’s a variety of different organizations, but these would be really helpful and continue to move your business forward.
Amanda: All right. Well, I feel like I’ve got support coming out of my ears between what we talked about from the franchisor level, from other franchisees that are in my company, as well as outside resources, right, the IFA, and AAFD, and SCORE, and all the other places that are out there to help me be successful as a franchisee and as an entrepreneur, ultimately. Next time we get together, we’re gonna talk… We’ve thrown around a lot of words over the last, what, five or six episodes now, like FDD and franchise agreement, and all these things. So we’re gonna really spend some time and dissect them for myself and for our listeners, right, what are all these words and what do they mean. So, that’s where we’re headed next. Thanks, both, for being here and looking forward to doing it again.
Mike M.: Thank you, Amanda, and also, thanks to our loyal listenership.
Mike P.: Yes, thanks, Amanda. Appreciate your guidance and keeping us on track. Thank you.