Franchising is about creating a community of business owners working out of the same system and sharing the same goals, metrics, brand, system, etc. It is franchise malpractice to not have your franchisees reporting their numbers in a uniform way, which starts with a standard chart of accounts for your franchisees. If you don’t have a standard chart of accounts, then how do your franchisees know what winning looks like? By Tom Spadea
It’s that time again, when most franchisors start to think about updating their Franchise Disclosure Document (FDD) for next year. Around the time this article gets published in early December, if you are a franchisor client of ours, you should be receiving your first “FDD Renewal Reminder” email. By Tom Spadea
For many of our clients, especially founders who have built their original business from the ground up, delegating decisions and authority is a constant struggle. It’s understandable, as the founders have historical and intimate knowledge of the brand and want to continue to shape and mold it as it grows. By Tom Spadea
I might be dating myself by recalling the anti-drug ads from the ‘80s and trying to relate them to franchising. The relevancy in my mind comes from the fact that restraint and saying no to something that feels good in the near term but will cause long-term pain is much easier said than done. By Tom Spadea
A strong start for new franchisees is essential for a healthy and growing franchise system. One of the best ways to kick-start a new business is with a big grand-opening marketing blitz. Emerging brands that try to be conservative with the required grand-opening marketing spend do so at their own peril. By Tom Spadea
Seems like a simple enough question. However, I think many franchisors forget they are in two businesses. One is the underlying subject-matter expert on the service provided to consumers, such as a restaurant, gym, roofing, and so on. But the second, and increasingly more important as your system grows, is the business of franchising. By Tom Spadea
For many franchisors, the goal is to get your system and your agreements to the point that you no longer need to entertain addenda or changes to your franchise agreements. But for new brands, that is just not realistic. By Tom Spadea
As the old saying goes, the best time to plant a tree was 20 years ago. The next best time is today. Many emerging and startup franchisors hold off on collecting their brand fund fees because they don’t have a plan for the money, and they are still getting used to being franchisors. By Tom Spadea
Effective communication is not just about what is said or written, but how well it is heard, understood, and retained. As a franchise lawyer, we spend many hours with our clients, trying to turn their business model and vision into readable, unambiguous, and enforceable agreements. By Tom Spadea
Many systems are tempted, as they update and renew their FDDs, to lean into more restrictive clauses and aggressive enforcement programs against wayward franchisees. By Tom Spadea