Franchisees have had a belly full from fast-food chains
The parent companies of Quiznos, Subway and other well-known brands face lawsuits from unhappy current or former franchisees. Last year, Burger King temporarily cut off relations with its franchisee group because the two sides just couldn’t get along.
Although such highly publicized spats haven’t substantially thinned the line of new recruits to franchising, some experts are concerned that the rough patches could slow the growth of some of the industry’s largest brands.
“The first thing any good potential franchisee is going to do is call other franchisees and ask them about the system,” said franchising consultant Frank Steed.
“In brands where there is unrest and unhappiness, that doesn’t make for a great reference check. And that will hurt those systems and their ability to grow.”
Mr. Steed, president of the Steed Consultancy, based in Kerens, Texas, will offer his thoughts on maintaining healthy franchising relations and communication during the four-day Multi-Unit Foodservice Operators conference that opens Sunday at the Hilton Anatole hotel in Dallas.
The conference is largely for those associated with chain restaurants, including many that owe their current girth to franchising, in which independent operators pay to operate as part of an established brand.
Fast-food and sit-down restaurants account for nearly 30 percent of franchised businesses, according to a study released in August by the International Franchise Association and FRANdata, a research firm in Arlington, Va., that focuses on franchising.
A separate FRANdata study estimates that last year there were 154,231 franchised dining units in the U.S., including fast-food outlets, sit-down full-service restaurants and baked-goods stores such as Panera Bread Co. That’s up 26 percent from 2000.
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