Franchise chief bridges gap

Relationships between franchisers and franchisees have often been rocky. There have been territorial disputes when franchisers decided to allow their products to be sold in noncompany stores right next to a franchisee. Tempers have flared over fees and suspicions of kickbacks have been raised when franchisees are required to buy supplies from only franchiser-selected suppliers.

BusinessToday.com
February 28, 2002

Franchise chief bridges gap
Bizlines/by Cromwell Schubarth

Relationships between franchisers and franchisees have often been rocky.

There have been territorial disputes when franchisers decided to allow their products to be sold in noncompany stores right next to a franchisee.

Tempers have flared over fees and suspicions of kickbacks have been raised when franchisees are required to buy supplies from only franchiser-selected suppliers.

Charges of inadequate or inept marketing support have also sometimes strained relations.

That's why franchisers and franchisees tended to gather in opposite camps when forming advocacy groups.

Then came Steven Siegel. He has worked in both camps and is the new chairman of the International Franchise Association.

Siegel knows what franchisees care about from his years as a founding partner in Watermark Donuts of South Boston, which operates more than 40 Dunkin' Donuts franchises in the Hub.

He worked for the other side, as a lawyer for a group that controlled three separate franchise systems - Docktor Pet Centers Inc., Command Performance Co. and I Natural Cosmetics Co. - in the 1980s.

In addition to his local Dunkin' ties, Siegel is also chief financial and chief operating officer at Woburn-based florist chain KaBloom Ltd., which is beginning to get into franchising.

Siegel says you don't need a split personality to work both as a franchiser and a franchisee.

“At the end of the day, both sides have to work together to have a successful business,” he says. “What's important is to know what works and what doesn't.”

Until about 10 years ago, the group Siegel heads hadn't admitted franchisees. Dunkin Donuts' founder Bill Rosenberg started the IFA in 1960.

The franchisers in the IFA, numbering in the hundreds, were afraid of having their voice drowned out by thousands of franchisees.

Getting over that fear has made the IFA a stronger voice for franchising issues, Siegel says.

“When we go to a regulator or speak out on issues, people know now that we aren't just speaking for just one side,” Siegel says.

Tom Burke, executive director of the Dunkin' Donuts Independent Franchisee Organization, says he has high hopes for the IFA under Siegel.

“Steve is a past president of our group, so I know him well and have a high regard for him,” Burke says. “I expect he is going to be a strong advocate of franchising issues. With Steve having worn both hats, I think this is a great opportunity to find new ways to make franchisers and franchisees profitable together.”


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