George Cohon, renowned businessman and founder of...
All About the Franchise Advisory Council
As you research Canadian franchise brands, you'll take in a lot of information about each opportunity. One thing you might have come across is the Franchise Advisory Council (FAC). While these councils may not be on the top of your brand evaluation list, they can actually play a strong role as a communication bridge between franchisees and franchisor if they are properly organized and run.
These councils come about in different ways. Franchisees can come together and create a FAC that exists independent from the franchisor, or the franchisor can form one that it funds and supports. FACs are often used as a method of communication for franchisees about priority developments, such as the introduction of new products and services or changes that will impact the entire system. Groups meet on a schedule they determine, such as twice a year or every four months.
With a FAC, the franchisor maintains oversight on activities and keeps decision-making authority. They often create the documents that govern the council and set the procedures and policies for selection of members, which usually involves meeting certain conditions and criteria. Most councils pick members using elections instead of straight appointments.
FACs discuss many topics, such as exactly how services or goods are being provided in the system, the selection of equipment, financing methods and avenues, and the approaches to promotion, marketing and advertising. Generally speaking, a successful FAC will be led by someone who is able to keep the discussions relevant and focused and encourage conversations between members. Naturally, conflict can arise if the FAC meetings are poorly structured.
For true success using FACs, the senior management of the franchise needs to be involved in the council and listen to the concerns franchisees have. On the franchisee side, it's best when the ones participating are commercial-minded, mature franchisees who want to enhance the system overall and respect the responsibilities and rights of the franchisor. A personal agenda could inhibit the FAC and cause friction between its members, leading to a dysfunctional organization that is not serving its purpose. Both the franchisees and the franchisor involved should aim for the fostering of two-way communication that is constructive for the most success.
If a franchise you are considering has a FAC, take a closer look at how it was formed and how effectively it is run. A poorly-run FAC could indicate problems with the system itself.