Monday, May 9, 2011

How the Franchise Industry misused the Internet - Part 5 of 5

This is the fifth and final article that comprise a White Paper titled The Internet and the Franchise Industry - How an industry misused the Internet. This paper describes the history of Internet communications in the Franchise Industry and suggests ways to improve the current situation.

Part 1 - Introduction
Part 2 - Internet Communications in our Society
Part 3 - Understanding Institutions that Support the Franchise Industry
Part 4 - Impact of the Internet on the Franchise Industry
Part 5 - What can be done in the Current Reality and Conclusion

At the conclusion of this series, the entire While Paper will be published on the FranchiseFacts web site at


The problems outlined in this paper have been twenty years in the making. They are the result of decisions made by tens of thousands of individual business owners. As a group, these business owners have not fully understood the implications of their decisions to utilize Internet communications in the way that they have chosen. It is now up to this same group to move forward in a more effective way. While some may find it convenient to blame current problems on unscrupulous franchisors, the franchisors should not be faulted for continuing to do business while franchisees have changed the way in which they operate. It is the franchisee institutions that have degraded and need to be rebuilt.
Changing the current status quo can only take place with a concerted effort by franchisees, and this change will take time. It took more than twenty years of steady decline to reach this point. It may take another decade before significant changes in the other direction are evident.

Here are three steps that franchisees can take to help restore balance in the franchisee/franchisor relationship.

1. Encourage and Support Independent Franchisee Associations

Where a franchise has an existing Independent Franchisee Association, support it as a paying member. Consider the association to be a long term investment to protect your interests when major changes to your franchise are being considered. Allow the association to serve as the voice of franchisees for all franchisee initiatives. Do not assume that a Franchisee Association financially supported by the franchisor will be looking out for your interests.

Where an Independent Franchisee Association does not exist, work to create one for your franchise. You can contact the International Association for Franchisees & Dealers (IAFD - for information on how to begin the process.

When evaluating the value of an Independent Franchisee Association, do not be focused on short term considerations. Its true value is not in providing new vendors, creating new products/services or distributing a monthly newsletter. It is essential when a franchise is considering changes to a franchise agreement, new pricing models, technology initiatives and other long term determinations. These situations do not come up frequently. When they do come up, it is essential that your Independent Franchisee Association is fully funded and operational so that it can quickly marshal the expertise and resources necessary to evaluate, and then respond to, these opportunities or threats on your behalf.

2. Educate Yourself

Do not rely on information provided by a franchisor and do not assume that someone else is looking out for your welfare. Develop a broader perspective on your industry and the franchise industry in general.

Blue MauMau ( is a great site for franchise industry news and information. Read their articles, participate on the discussion boards and share your knowledge with the community.

FranchiseFacts ( runs a National Franchisee Survey each year and publishes an Annual Report. Participate in the survey, review the Annual Report.

These businesses are providing services that used to be provided by Franchisee Associations in the past. They are evolving as they determine the best way to support the Franchise Industry as it adapts to the technological changes outlined in this paper. With your support, these newer institutions will continue to develop.

3. Be Professional in all your Public Communications

Any group is only as strong as its weakest link. Unfortunately, too many weak links present themselves on the Internet. Individuals who would never write a proper letter will draft a short message in support of or opposed to something that has been published on a web site. For whatever reason, online posters seem comfortable with making statements they would never make to someone in person. Many of these messages are not grammatically correct, contain numerous spelling and/or factual errors, make slanderous accusations and include all types of outlandish comments. The vast majority of these individuals choose to remain anonymous. Some feel that they are doing a service to others by stating what they feel has been left unsaid. What many of these posters fail to recognize is that the content, presentation and tone of their message discredits the vast majority of franchisees in the eyes of those reading such a message. It is entirely likely that franchisors monitor many of the public discussion boards as one method of determining the pulse of their own franchisees. These poorly considered messages are unlikely to sway a franchisor nor are they likely to be considered reliable by other readers.

Three Suggestions to Improve your Online Posts

Identify Yourself - If you are uncomfortable with disclosing your identity, perhaps what you are saying needs to be reconsidered or presented differently. Don't use anonymity in place of preparing a more thoughtful and considered message. Anonymous posts are not and should not be considered to be credible. Instead of serving to advance dialog, anonymous posts more often result in a less than professional discussion of the topic at hand. Traditional print media learned long ago that the best way to promote thoughtful comment is to only publish those letters from an identifiable individual. In the online world, this lesson has yet to be enforced.

Read your message three times before posting - Is your message grammatically correct? Is the spelling correct? Have you completed your thoughts? Can portions of your message be interpreted differently due to lack of clarity? Does your message add to the discussion or are you simply repeating something that has already been said? You only have one opportunity to present your message before it is seen by the world. Be sure to give the right impression.

Do not criticize or complain without offering an alternative - It is much too easy to criticize or complain than to provide a more considered option. Yet it is quite common for online posters to make a complex topic appear much simpler by ignoring facts that may be inconvenient for them. In this way, the Internet has become the chosen venue for those opposed to virtually anything. Anonymity, false claims and repeat postings by individuals, or one individual pretending to be many, seek to misrepresent a reality that some prefer to ignore. Requiring individuals to follow some basic rules in order to have their opinion heard is not an unreasonable stipulation to facilitate discussion.

Demanding the same discipline for online postings as required for publication in traditional media would be an admirable goal. At the very least, these standards would lead to a more supportive environment where thought leaders are more likely to participate and, possibly, thrive. The net effect would be to present the franchisee community as a more professional, knowledgeable and authoritative group.


Franchisees, like most small business owners, are an independent lot. Many have succeeded where larger corporations have failed. They do so by understanding their own businesses to the minutest detail, by doing much on their own, making most decisions independently and having confidence in their own abilities.
Admirable as these traits are, however, there are limits to one's knowledge and capabilities. There is an old adage - a person who represents himself has a fool for a client. This was meant to describe someone choosing not to employ separate legal counsel at a criminal trial. Perhaps the same can be said about someone who thinks they can successfully oppose a large corporation without a comparable organization. Many in franchising have tried. Few have succeeded.

Unfortunately, the Internet has become a tool for the handyman lacking proper expertise. They have all this information available to them yet lack the ability to distinguish among good and bad information, and have even less ability to effectively use this information. It wasn't always this way and there is no need for the current situation to continue.

Franchisees need to acknowledge their individual limitations, recognize and support the development of institutions that compensate for these limitations, and allow these institutions to represent them in their dealings with franchisors.

About the Author

Perry Shoom is the founder of FranchiseFacts, a company that provides research services for the Franchise Industry. The company also publishes an Annual Report of the results from its National Franchisee Survey. The 2010 Annual Report, and the 2011 Franchisee Survey that is currently in progress, can both be found at The survey is open to all franchise owners and store managers. FranchiseFacts does not disclose identifying information that may be provided by survey respondents.

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