The issues and problems that individual franchisees face in a system are not unique and are shared by others in the system. Joining forces enables franchisees to pursue their goals more effectively than if they act independently. A franchisee association is a trade association formed by the franchisees of a single franchise system with the intention of unifying franchisees into a larger group to disseminate and share information concerning such issues and problems. It is a mechanism for the expression of franchisee’s concerns and for leveraging the power of the group to achieve franchisee goals.

Franchisee associations can be a force to negotiate with the franchisor and press franchisees’ interests. Associations can represent the franchisees in the context of the franchisor-franchisee relationship and also outside of that relationship, such as creating joint buying programs to acquire products and services, advertising programs, insurance, payroll services and other business necessities.

Franchisee associations are frequently formed as a result of a crisis in the franchise system, although this need not always be the case. We recommend that franchisees form associations when times are good so that if a crisis arises they are able to respond effectively.

How are associations formed? Generally, a core group of leaders forms and determines that an association is needed to protect the franchisees’ interests. The core group must decide how best to take its idea of the creation of the franchisee association from the embryonic stage to the reality of an organization that can be utilized to communicate concerns to the franchisor and to disseminate information. Einbinder & Dunn, LLP can help franchisee leaders get the process started, assist in the formation of the association and provide ongoing representation to the association.

Contact Michael Einbinder at me@ed-lawfirm.com