Franchisee Associations Are Flexing Their Muscles

In 2018 a number of large franchise brands felt heat from franchisees who’d joined together to speak with one voice. Franchise owners have shown that they are increasingly interested in having a say in the management and strategies set forth by their home office masters.

For instance, this year about 25% of McDonald’s U.S. franchisees banded together to form an owners’ association, the first such organization in the company’s history. According to a report from Crains, a majority of U.S. franchisees have registered to attend the group’s December meeting, which shows a potential increase in its ranks. The group can use its clout to push McDonald’s to address issues that affect franchisees, such as dipping sales, overhead costs and the pace of the brand’s mass restaurant remodeling plan, which was recently slowed due to franchisee cost concerns.

A similar organization of 7-Eleven franchisees – the National Coalition of Associations of 7-Eleven Franchisees, which represents the owners of nearly 7,000 stores – called on all the brand’s franchisees to skip the company’s annual conference coming up in February, as it questioned whether earnings from the event would benefit franchise owners. The coalition also took a vote of no confidence in company management this fall, citing lack of funding for shop remodels and equipment replacement, failing to disclose the risks of investment in the franchise, and dissatisfaction with the 7-Eleven franchise agreement.

San Diego-based burger franchise Jack In The Box was sued this year by its National Franchisee Association, which demanded an audit of the company’s marketing fund, as well as reimbursement for mandated store remodels. This year also saw the association take a vote of no confidence in company management, pushed for the ouster of Jack In The Box CEO Lenny Comma, and asked for a seat on the company board.

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