The foundation of a healthy franchise system is compliance with system standards and requirements. If franchisees are not adhering to system standards, they are not only hurting their own business, but they may also be hurting other franchisees by weakening the consumer’s perception of the brand.
Many legal issues that a franchisor faces are a result of a franchisee’s non-compliance with crucial system standards. The focus of Stark & Stark’s Proactive Operations Compliance is to effectively address compliance issues at an early stage before they escalate into expensive legal issues.
All too often, franchisors have implemented compliance programs which create a defensive and adversarial environment between the franchisor and franchisee, which in turn, escalates compliance issues instead of resolving them. Stark & Stark’s Proactive Operations Compliance program helps a franchisor and franchisee work together in order to resolve problems in a non-adversarial and productive environment.
Our Proactive Operations Compliance Program is based on the following principals:
One Size Does Not Fit All
Our compliance focuses on the drivers of the compliance issues. Non-compliance can be the result of different factors such as a franchisee’s unwillingness to abide by certain requirements, lack of training, a franchisee’s lack of commitment to the business, etc. We work with you to determine the underlying driver motivating the franchisee’s behavior and which approach would be the most effective to address and correct the compliance issues.
Remove Emotion From the Process
Many times a compliance issue can escalate because of the personalities and emotions involved. A compliance program can only be effective if the parties can minimize the emotional issues that arise so that the franchisor and franchisee can productively work together to correct the problem. Our Proactive Compliance Program is designed to remove “emotional responses” to compliance issues and create an environment where there is a willingness on the part of franchisees to work together with the franchisor to resolve these issues.
Train The Trainer
The primary goal of an operational compliance program is to provide franchisees with a thoughtful assessment of areas for performance enhancement and to prevent future non-compliance. In furtherance of this goal, the primary function of a field rep is to help the franchisee identify and address areas in which performance can be improved and adherence to System standards and requirements.
Many franchisors do not provide adequate training to their field representatives to help them understand their important and critical role. As a result, the field representative views themselves as the System’s police department whose goal is to catch and punish franchisees for non-compliance with System standards rather than focus on helping them improve.
Proactive Operational Compliance focuses on working with System field representatives in order to improve the quality of their relationship with franchisees and to enhance their focus with franchisees for increased System compliance and profitability.
Stark & Stark’s Proactive Franchise Solutions include:
- 360° Franchise Sales Compliance
- Franchisee Validation Audits
- Disclosure Document Audits
- Proactive Communications
- Disaster Preparedness
The predicate of each Proactive Franchise Solution is to assist a franchisor in shrinking its bucket of legal issues and problems, resulting in reduced legal costs, increased System compliance and improved franchisee relations.
For questions, or additional information on how Stark & Stark can help you & your franchise system, please contact Adam J. Siegelheim, Chair of Stark & Stark’s Franchise group at 609.791.7003 or via email, asiegelheim@stark-stark.com.
