Advice
“Have an open mind and be receptive to good suggestions from council members. They may have valuable experience they can share”
Downsides It is quite true, however, that a
badly managed franchise council can do more harm than good. If the council gets out of control, it can be hijacked by strong personalities, who sometimes then lock horns with franchisor management. In some cases, the council members lose touch with the network that they are supposed to be representing and steer council meetings towards agendas of their own, which is highly unhelpful. At its worst, the franchise council becomes more of a blocker than a facilitator, engendering ill feeling or militant opposition throughout the network. Roz Goldstein, who has taken part in many franchise council meetings in her previous in-house legal roles with large franchisor organisations, says: “Franchise councils can become obstacles
to good franchisee relations – but only where they haven’t been structured or managed well from the start.” Here, Roz shares some valuable insights into managing your franchise advisory council and its members:
Top tips 1. Take a look at the IFA’s guide to
franchise councils. It has lots of useful materials, including various template forms of council bylaws.
2. Have an open mind and be receptive to good suggestions from council members. They may have valuable experience that they can share.
3. Make sure it is very clear in your bylaws that the role of the council is a purely advisory one. You will consider the views of the council, but you are not bound to implement them. The wording
around this needs to be drafted carefully; your franchise lawyers can be of assistance to you here.
4. Avoid making any reference to your franchise advisory council in your franchise agreement. You may want to reference it in your franchise recruitment materials or disclosure documents, but to avoid creating any legal obligations in relation to the council, make sure that you keep it out of the agreement.
5. Create a limited tenure for each council member in your bylaws. Three years may be a suitable maximum.
6. Your bylaws should specify that to be eligible to be a council member, a franchisee must be in compliance with a current franchise agreement. If you are in a legal dispute with a franchisee, they are required to stand down.
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Author
Roz Goldstein is the founder and managing director of Goldstein Legal
The Franchisor | 97
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