Brian Davy Public Hearing Testimony

This is going to be a very short presentation on how I felt about the bill, and that's what I was asked to do.

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Legislative Assembly of Ontario
March 9, 2000

Public Hearing Testimony
London, Ontario, Canada
Mr. Brian Davy, franchisee

Standing Committee on Regulations and Private Bills
1st session, 37th Parliament

FRANCHISE DISCLOSURE ACT, 1999
Consideration of Bill 33, An Act to require fair dealing between parties to franchise agreements, to ensure that franchisees have the right to associate and to impose disclosure obligations on franchisors

BRIAN DAVY

The Vice-Chair (Mr Garfield Dunlop): Mr Brian Davy from M&M Meat Shops. Mr Davy, the floor is yours next.

Mr Brian Davy: Mr Chairman, members of the committee, my name is Brian Davy. I am the owner of four M&M Meat Shops franchises in London. I've been with the company since 1983. The chain now has 286 stores in Canada. I've also owned and sold three other franchises in the past 10 years. At one time I had seven, but I've sold three of them. I just recently opened a new store up in northwest London, in Masonville. I was the president for seven years of the marketing council for the chain and also president of the advisory council for M&M Meat Shops.

My relationship with my franchisor is probably a little different from what I've been hearing today and what I've read recently. We've had very little conflict, other than marketing and minor hiccups in the chain as it has grown into a national chain. We believe that our franchise agreement is fair. It also includes a mediation clause, which I believe a lot of others might not have. It has never had to be used up to this time.

Basically looking at Bill 33, as I was asked to read it from a franchisee's perspective, I feel that it was certainly needed to protect the current franchisees, but mainly the new ones coming in. When I got into the system initially, there wasn't the coverage that we have now even in the franchise agreements.

This is going to be a very short presentation on how I felt about the bill, and that's what I was asked to do. I thought my area might be answering questions more than anything else. When we had a national meeting last week of the advisory council and franchisees, we had 450 people there. We read through the bill, discussed it and went through how the majority of franchisees at the meeting felt. The conclusion was that they were all similar in voice.

Mr O'Toole: Thank you very much, Mr Davy. I appreciate that. Just to reinforce for the record, your membership, some 450 as part of this marketing meeting you referred to, if I'm hearing you correctly, endorsed Bill 33.

Mr Davy: That's correct.

Mr O'Toole: The provisions in there, as you know, are certainly to have disclosure. If you want to comment in some detail, we have heard on the disclosure part there is general support. Certainly the intent of it would be widely supported. On the next part, fair dealing, there has been some input with respect to strengthening that provision and the right to associate. It would appear that your organization already has that right to associate. Do you want to comment with respect to those three expected outcomes with this legislation, after several years of consultation, in any specific or general way as to how they apply, not just to M&M Meat Shops but to your business experience since 1983? I'd appreciate it.

Mr Davy: I opened the fifth store in the chain in London in 1983. I opened the 278th store last September. It's hard when you haven't had a lot of problems with a franchisor to pick away at anything that's really not there. We certainly believe that protection is needed. As a chain gets bigger, you certainly get a little bit less voice. We have a national marketing council represented by a big cross-section of franchisees and also an advisory council, which is an elected body from the franchisees within the chain itself, which works very closely with head office and a committee there. They meet probably every six to eight weeks.

Mr O'Toole: One of the bigger things we've heard of concern specifically to the grocery industry was the supplying of goods and/or services. In yours, it's pretty much the same. The only thing is, it's frozen food, I gather. That's part of the whole concept though, isn't it?

Mr Davy: If M&M Meat Shops hadn't branded the name M&M Meat Shops and had tried to live on the Schneider and McCain names, as we did in the early 1980s, I don't think we would be here as a chain now.

Mr O'Toole: You think it's the successful partnering, if you will, and marketplace presence of a strategy and a secret recipe; that you as a franchisee, so to speak, wouldn't exist without the franchisor.

Mr Davy: Basically, they have a very streamlined system in ours. Because it's M&M, we only have one delivery centre, but we have probably 68 to 72 suppliers that will private label M&M Meat Shops products now. I've seen that evolve from the very small factory at the beginning to the fair price structure that they've been able to provide, to give us margins that we enjoy, because as everyone knows - the people in this room in the food business know - it's a tight market to compete with the big chains. But I believe that had we not branded the M&M name like we did, and gone with the suppliers and the quality that we've gone with, we wouldn't have survived.

Mr O'Toole: Thank you very much.

Mr Crozier: Just a brief question. We certainly have an M&M in my hometown. Is it strictly Canadian, M&M, their franchises?

Mr Davy: Yes.

Mr Crozier: I guess other than some of the fast food organizations, we haven't had too much comment on the international part of it. M&M allows you the right to association, I take it? There's nothing to restrict you from belonging to another association of franchisees?

Mr Davy: No, there's not.

Mr Crozier: Do you, by any chance, belong?

Mr Davy: No, we don't.

Mr Crozier: With the testimony you've given, there's probably not any necessity.

Mr Davy: That's right.

Mr Crozier: Well, then my question would be redundant, because it was one of, even if you are allowed to belong to other associations, to what degree does your franchisor listen to the other associations? That's fine, unless my colleague has anything.

The Vice-Chair: OK, thank you. Mr Martin?

Mr Tony Martin: I'm glad you came today, and indeed your story is a good one. I've been carrying around a tome of stories that have been written over the last five or seven years in Ontario about franchise relationships gone wrong. Yours is actually one of the ones where you've done some things that have ensured that they've gone right, and I want to offer my congratulations to you in an atmosphere out there where that's not always the case.

Do you want to share with the group, just ever so briefly, your TSS program and what that's about? There's a story here, and for those of you who are interested, it's in B-51 of the manual here, written March 30, 1999.

Mr Davy: TSS is a program that was introduced probably two years ago to help the stores that weren't doing as well in sales, depending on the market. It's supported by head office. Basically, through extra marketing dollars in after-promotions - so maybe they'd run a major campaign one week and they would support the other stores the second week. Basically that way they try to make every store in the chain profitable and bring the stores up. There's no big trick to it. If you look at the Masonville area and you look at the demographics of London, that store there is going to take me three years, maybe even five years to build up to where we want to be. Just because it's M&M Meat Shops and we open the doors it's still - not that we will get the support, but there are certain stores that do get it through this program that head office implemented.

Mr Tony Martin: Just a question of concern here, or a note of caution. What if somebody comes in tomorrow - for example, Pizza Pizza, which has quite a reputation across the province - and buys M&M? Is there anything in your contract to protect you from their becoming exploitive or whatever? Could that happen?

Mr Davy: We try to keep current and to update the franchise agreements we have. You don't wait till they run out. If something good changes, you can do a new one. I've got 10 years' protection on all the clauses in my agreement if someone were to purchase the company.

Mr Tony Martin: Excellent. Thank you very much.

The Vice-Chair: Mr Davy, thank you very much for your time today. We appreciate very much you taking it.

This document is a verbatim copy of this witness’ oral testimony. To review the original transcript: http://www.ontla.on.ca/web/committee-proceedings/committee_transcripts_details.do?locale=en&Date=2000-03-09&ParlCommID=1&BillID=&Business=Bill+33%2C+Franchise+Disclosure+Act%2C+1999&DocumentID=19723#P513_167143

Copyright (c) 2000
Office of the Legislative Assembly of Ontario
Toronto, Ontario, Canada


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