The IFA's Strange Penchant for Tyrants

But bad behavior by franchisors hasn’t fazed franchising’s oldest and largest trade association [IFA] in the past. Maybe Caldeira and Luther's coming into the fold will just be business as usual.

Blue MauMau
June 5, 2010

The IFA's Strange Penchant for Tyrants
Janet Sparks

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Putting leaders in who oppress franchisees seems to be a pattern for the International Franchise Association. A year ago to date, Stephen Caldeira abruptly left his position as executive VP of communication and chief public affairs officer at Dunkin’ Brands, amid internal controversy and bitter disputes with the company’s franchisee community. But tomorrow is a new day. As the International Franchise Association begins its summer board meeting at the Boca Raton Resort & Club, Caldeira will be basking in the limelight as IFA’s newly appointed president and CEO, while members welcome him into the fold.

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Steve Caldeira /IFA

IFA had once appointed Caldeira to its board of directors in February 2009, at the same time appointing Dunkin’s executive chairman Jon Luther as secretary, allowing Dunkin's executive chairman the extraordinary privilege of bypassing its bylines and tradition to jump ahead of the leadership line. Now, with Caldeira coming in as CEO, Luther is second in line to the IFA’s chairman position, following the reigns of Driven Brands CEO Kenneth Walker and McDonald’s franchisee John “Jack” Earle, respectively.

Most know that Luther is not an executive who leaves anything to chance. With the unexpected resignation of IFA’s former CEO Matthew Shay on April 16, the IFA has appointed Luther’s former trusted vice president in that seat, making Luther’s position as chairman much easier in 2012.

So, what will Luther and Caldeira bring to the table at IFA?

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Jon Luther /IFA

Luther, with his impressive resume of various leadership and board positions and prestigious awards, promises to give IFA more clout as he tours the world, advocating the success of franchising. In addressing the New York restaurant show earlier this year, Luther took credit for “unwinding 60 years of culture” in the Dunkin’ Donuts chain. He said it took him six and a half years to effect the “transformation” of Dunkin’ Donuts. In accomplishing his goal, he stressed the importance of selecting his team on the values of integrity, honesty, responsibility and humility.

IFA chairman Ken Walker stated that Caldeira has a wonderful reputation as a fundraiser, which could be helpful to the IFA. He said he was also passionate about advocacy, education and the PR side of the association, not to mention his international influence.

While the IFA is chartered with protecting, promoting and enhancing franchising, which they say means that they want to represent the interests of both franchisors and franchisees, we continue to see the organization has a propensity for abusive, litigious franchisors in its leadership roles, despite its more benign code of ethics on paper.

IFA’s first woman chair JoAnne Shaw of The Coffee Beanery was one example of franchisee conflict grabbing national media attention. After taking one legal battle clear to the US Supreme Court over an arbitration award, she found her appeal rejected by the nation’s highest court. Chairman James H. Amos of The UPS Store/Mail Boxes Etc., is still being shadowed by his controversial role in negotiating the sale of Mail Boxes Etc. to packaging giant United Parcel Service. After seven plus years of wreaking havoc among its franchisees, litigation continues today. Amos’ second franchise system, Sona MedSpa, resulted in conflicts with franchisees and much bad press. An arbitration decision against the franchisor for negligent misrepresentation awarded the franchisee $400,000.

Fred DeLuca, founder of Subway, has played a very active role in IFA for decades, and received its prestigious Hall of Fame award. He has had a rocky history with Subway franchisees. DeLuca, through litigation with the advertising council board members, recently was able to regain control of the system’s $600 million ad fund trust to the chagrin of franchisees.

One question remains to be asked: Will Dunkin’s executive chairman and former global communications VP be able to benefit IFA and the franchise community in their leadership roles while they are still pulling themselves out of a quagmire of turmoil and adversity inside the Dunkin’ system? For the past several years, Dunkin’ has been inundated with bad press and Internet comments on franchisee disputes and litigation, leaving a dark indelible stain worldwide. When it comes to relationships with franchisees, Dunkin’ has been declared as one of the most litigious systems in all of franchising.

But bad behavior by franchisors hasn’t fazed franchising’s oldest and largest trade association in the past. Maybe Caldeira and Luther's coming into the fold will just be business as usual.

Related reading:

http://www.bluemaumau.org/ifarsquos_strange_penchant_tyrants#comment-100006


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