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The economic rationale for a franchise system, as opposed to other corporate forms such as corporations, limited liability corporations, or partnerships, is that the franchise system recognizes that the individual operator does a better job than a paid employee.
Inherent in this proposition is that a franchise system requires an independent franchisee association to grow the brand - an association which aggregates the local experts.
Alisa Harrison, spokesperson for the International Franchise Association (IFA), says joining a franchisee association can be especially helpful when you're part of a large franchise system.
"As franchise systems grow, as the number of franchisees grows, and as the scale and the scope of operations become more complex, an association can help more franchisees get involved in advertising and purchasing issues and planning on regional and national levels," she says.
Denny's independent franchisee association recently assisted the franchisor in providing a new gift card program for the system's customers.
"The negotiation of the legal documents, along with the financial settlement issues associated with the program, were worked through carefully and thoroughly before the franchisees were asked to participate," Barber says.
"The entire franchise community accepted the program and benefited from the hours and expertise of DFA board members who worked diligently for the good of the brand."
This is the type of collaboration that a good franchisor requires from the network of franchisees.
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