Saturday, August 29, 2015

Is now the time to be Selling your Franchise Back to the Franchisor?

The rules of the franchising industry are changing. The landscape of food retail industry is evolving as well. We ask.  Is now the time to be selling your franchise back to the franchisor? 

This week the National Labor Relations Board has paved the way for franchisors to be held responsible for the employment practices of franchisees, ruling that a party doesn't have to actively supervise a staff to be regarded as a "joint employer."  So we ask should you?

Here is some background first. Last week, the NLRB blocked McDonald’s challenge of a preliminary ruling that stated a franchisor should be viewed as a joint employer.  To redefine large franchisors as joint employers would challenge longstanding protocols of restaurant franchising, as franchisees are generally responsible for employee recruitment, training, wages and working conditions, as well as a number of daily activities central to maintaining their staffs.

Deeming franchisors joint employers would hold parent corporations legally accountable for those employees, making them more vulnerable to lawsuits and a slew of other regulatory actions enacted on workers’ behalf.  So are you an independent owner operator or not?  That is the question at the heart of the issue.  

However here at Foodservice Solutions® we think that restaurant franchising is still a viable model if and only if the franchisor  is doing the right things including:

1.       Abandoning brand protectionism.
2.       Expanded franchisee rights in new non-traditional avenues of distribution.
3.       Focusing on merchandising verses category management?

Consumers are dynamic and brands must be as well.  If your franchisor is doing the same thing they did 20 years ago and doing it in the same way, then it just might be time to sell it back.  As a franchisee you have helped build the brand value?  

Now as new exciting avenues of distribution are opening up are you going to be able to share in the opportunity?  If your company is still relying on category management techniques over merchandising techniques you might be look at other options. 
Invite to help ease your company into the retail fresh food success. Since 1991 Foodservice Solutions® a Tacoma, WA based retail foodservice consultancy has been the global leader in the Grocerant niche. For product or brand positioning assistance contact  or  Grocerant on Twitter

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