Iowa Act aids franchisees

While McDonald’s has told the rest of the country it wasn’t franchising in Iowa, the company franchised two more (stores) to Mr. O’Brien. The only restrictions I see on his business are the lines of customers backed up to the street. Mr. O’Brien’s a good operator.

Franchise Times
December 1997

Iowa Act aids franchisees
Brian Grassi

I operate a KFC right next door to Kevin O’Brien; I’m his neighbor. His letter in the September issue (“AFA agenda ‘punishing’”) contained some pretty misleading statements.

Mr. O’Brien makes it sound like Iowa came up with a law out of the blue, with no need or reason. Actually, prior to 1992 Iowa was an island surrounded by states that had some rules governing the franchise relationship.

So Iowa studied the issues and laws of its neighbors and wrote what it felt was a good law. What’s a good law? One that honest people acting in good faith don’t even notice is there. That’s exactly how Iowa’s Franchise Act works.

It’s not “regulation, red tape and mandates.” It’s the freedom to associate freely without the fear of retaliation and the application of common law duties of good faith – among other things.

I checked with our state economist. Since the Iowa Franchise Investment Act started in 1992, many franchised businesses have opened; sales tax receipts are up from over $800 million in 1992 to $913.1 million in ’96; the state expects a half-billion-dollar surplus in income tax receipts at the end of the fiscal year. Unemployment is down from 4.5% in ’92 to 3.2% in ’96. Where Mr. O’Brien and I operate we have virtually no unemployment. Maybe that’s the “economic disaster” he’s talking about.

Twenty-seven other states have either amended existing laws or created new ones once they looked at the results of the Iowa Franchise Act. The Iowa act would be the law of the land if it weren’t for the undue influence of big business’ special interest groups in Washington, D.C. But this is beginning to change.

While McDonald’s has told the rest of the country it wasn’t franchising in Iowa, the company franchised two more (stores) to Mr. O’Brien. The only restrictions I see on his business are the lines of customers backed up to the street.

Mr. O’Brien’s a good operator. I hope that’s the criteria they used in their evaluation.

Brian Grassi
President, Gramenge Inc.
(a franchisee of KFC Corp.)
West Iowa City, Iowa


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Risks: Investments in franchising will stop & be lost if law passed, No numbers to back up dire predictions, Industry muscle, Happy serf, Company man, Appropriate franchise law, Undue influence, Collaborators, Different deals for different dealers, United States, 19971201 Iowa Act

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