On October 3rd, the American Association of Franchisees and Dealers (AAFD) engaged Keith Miller of Franchisee Advocacy Consulting as their Director of Public Affairs and Engagement.
In their online announcement, the AAFD wrote, “Miller, and his company, is the preeminent voice for political action in support of franchisee rights at both the Federal and state level. Keith has been an active leader and voice for franchisee causes over the past twenty plus years, with a growing track record of bringing franchisee friendly legislation introduced and adopted throughout the U.S.“
According to its website, the AAFD “acts to educate the public regarding fair franchise practices, quality franchise opportunities, and to expose the unethical practices that have too long existed in the franchising community” (emphasis added). The website continues, “Unfortunately there is a dark side of franchising — a side as predictable as the axiom that breeds it, ‘Absolute power corrupts absolutely!’ The success of the franchising format of small business ownership has led to a significant imbalance in the relative bargaining power of franchisors and franchisees.”
On July 17th, Miller testified before the Senate Committee on Banking, Housing and Urban Affairs in a hearing called, “Economic Mobility: Is the American Dream in Crisis?” Miller’s testimony was the first franchiSEE appearance before the Senate in decades. Prior to his appearance, only franchiSORS had direct access to the legislature, predominantly through their connections and lobbying efforts. Soon afterwards, on July 31st, Senator Cortez Masto of Nevada introduced the SBA Franchise Loan Transparency Act of 2019 in an effort to help franchiSEES.
The American Dream is in crisis. The corruption in the franchise industry is only one piece of the puzzle that is inspiring American voters to stand together for freedom. These days, corporations rule the country and the legislative, executive and judicial branches of our government protect them. Americans are tired of it. We’re sick of being on the losing end.
The endemic fraud and corruption in the franchise industry is a perfect example of the broader harms occurring in our country. It’s an example Americans need to look at.
The time is ripe for change in the franchise industry. Everyday Americans have more voice and power to speak than ever. Good franchiSORS must stop using forced arbitration clauses (that guarantee their win in every conflict) and personal guarantees in their franchise agreements. Good franchiSORS must abandon the IFA, recognizing that pouring money into lobbying that protects and perpetuates disgusting fraud against their primary investors ultimately won’t end well.
There’s time for the good franchiSORS to stand up and set a better example for the rest of the industry by writing fair agreements. Through standing up for what’s fair and right, good franchiSORS might be able to help save the industry — and their own businesses.
If you’ve got 20 minutes and would like to listen to a podcasted parable that I believe foretells the outcome of this scenario, listen here.