Canada: A Seat At The Table: The Case For Franchisee Advisory Councils

In the world of franchising, change has always been a constant, but arguably we are living in a time of unprecedented rapidity of change. Many of these changes are profound, like the worsening world economies, the ubiquity of technology in our personal and business lives and the aging population.

Franchisors have typically based their value proposition to their franchisees and prospective franchisees on past achievements that predict future successes. What we will be witnessing in the future is that franchisors will have to demonstrate their skills, or develop them, as effective change agents to maintain the success of their systems against this backdrop of rapid and deep change. This will involve an increasing need for franchisors to innovate and, more importantly, get their franchisees to implement the innovations. In this context, the case for franchisee advisory councils or FAC has never been clearer or more compelling.

What is a Franchisee Advisory Council?

A FAC is a body comprised of franchisor representatives and franchisees, who are charged with enhancing communication, working together to improve the system and helping resolve challenges that impact the franchise system as a whole. There are a number of choices in structuring a FAC that can have a dramatic impact on its effectiveness. For example: Will the franchisee representatives be elected by other franchisees or appointed by the franchisor? If appointed, are the franchisees respected leaders among the rest of the franchisees? Will the FAC set its own agenda or follow that of the franchisor? Will the decisions of the FAC be highly persuasive on the direction of the system or act asa rubber stamp for the decisions of the franchisor? The more the FAC is seen as credible to the rest of the franchisees, the more use it will have to the franchisor.

Can a Franchisee Advisory Council And Franchise Association Co-Exist?

Classically, a FAC and an independent franchisee association, or "Association," are seen as polar opposites; the former as a tame pet of the franchisor and the latter as an obstacle, if not a threat, to the franchisor's goals and ambitions. In reality, they start to look very similar and produce similar results depending upon how the FAC is structured or how the franchisor engages with the Association. Can the two co-exist in the same system? Yes, but where that is the case, there is often tension between them, duplication of effort and less effectiveness for both.

While the franchisees have the legal right to organize themselves into Associations, the franchisor has no legal obligation to deal with an Association. However, once established, a franchisor ignores an Association at its peril. Sometimes the FAC is established simply because an Association suddenly appears, but then it may be an uphill battle to convince franchisees that the FAC is a better alternative to an Association.

The ability for franchisees to communicate, organize themselves into Associations and operate as a group independent of the franchisor has never been greater. With that awesome capability comes the real danger that in some cases the wrong franchisees may end up leading the conversation to the detriment of all. Establishing a FAC early and making it credible to the franchisees, as a result, has become a "must do" rather than a "nice to do."

Why Have a Franchisee Advisory Council?

In addition to the need for a FAC as a more constructive alternative to an Association, a FAC can serve many useful purposes for a franchisor. With the inherent tension between a franchisor, which typically benefits from the "top line," and franchisees, who survive and prosper from the "bottom line," an effective FAC aids in the development of a better, more trusting, franchise relationship. It can also provide crucial information from the trenches for the franchisor, help the franchisor avoid the consequences of ineffective or poor changes to the system from thefranchisees' perspective, achieve faster and better compliance from franchisees to changes in the system and provide a dispute resolution mechanism between franchisees and between the franchisor and a franchisee. All of these benefits have always been part of the argument for the establishment of a FAC, but against the backdrop of today's pace of change, they are rapidly becoming necessities for the healthy growth of any franchise system.

Prospective franchisees today have greater knowledge about franchising and how it works, and a much greater ability to research the background of a franchise system and competing franchise systems, than ever before. As a result, the existence of a well-structured and effective FAC can be a tremendous validation point in the marketing of franchises.

Are Franchisee Advisory Councils Relevant in A World of Instant Communication?

Some have argued that, in today's world of instant communication, all of the benefits of FACs and, for that matter, the threats from Associations, evaporate. While incredibly beneficial in presenting information and shaping attitudes in a franchise system, at the same time, technology enhances the opportunities for disgruntled franchisees to mobilize and create new challengesfor the franchisor. A recent example demonstrating this dark side of technology is a petition established by "John D. from Longmont" requesting that the United States government secure the necessary funding and resources to begin construction on a Death Star, a fictional Star Wars space weapon, by 2016. The petition met the website's Terms of Participation and the White House is now required to respond in a timely fashion. While this is a light-hearted example, it demonstrates the ability for disruption (and wasted resources) that can result from new technology. This, in turn, re-emphasizes the benefit of a FAC, as it can, if credible to the franchisees, be a powerful voice of calm and reason, against the voices of franchisees who would harm the system. By giving franchisees a seat at the table, franchisors can ensure discussions among the parties are focused on mutual benefit and cooperation versus confrontation.

Finally, the franchise relationship is fundamentally a personal relationship, which requires personal engagement in face-to-face meetings and gatherings. While communication through technology can aid personal engagement, it can never replace it in the franchise context.

The fact is FACs are important to the healthy growth of a franchise system. They are a better alternative than an Association, but need to be created early in the life cycle of a franchise system and structured and operated for maximum credibility among franchisees. Technology is a wonderful tool, but can also be turned into a formidable weapon in the war for the hearts and minds of franchisees. In this rapidly changing world, the case for FACs is getting stronger every day.

Originally published in the March 2013 edition of Franchising World.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions