telcoinabox

As the Managing Director of one of the most successful franchise systems in Australia I was recently invited to speak at the Franchise Council Of Australia (FCA) national convention here in Sydney. I was asked to speak about the success of Telcoinabox including what and how we did it. One of the guidelines provided by the organizers was the question, what would I not do again?. I addressed this is true Damian Kay style, bluntly!

So what was my answer on this? FRANCHISING!!

Arguably it was not the time nor the place for the tirade that followed but given I had left numerous messages for the head of the FCA and none of them returned, I thought this was the perfect forum. In any case, I was just answering the question

So why do I feel this way?

Franchising is supposed to represent a safe and proven environment for people wishing to go into business for themselves. There are many unscrupulous operators that set up a Franchise front and sell franchises then effectively shut down. Speaking with a number of Franchisees at the conference I realised that this was a too common occurrence. I then asked myself what the Industry body was doing about this and the only major campaign that was evident was “Don’t Sign Without the Sign”. Great concept and great intention. The problem with it was that there was absolutely NO substance behind it. Basically if, as a Franchisor you paid your membership fees, you get “the sign” or in other words the FCA logo to use.

This means that potential franchisees were led into a false sense of security as the unscrupulous operator just pays their few hundred dollars and they have “the sign”. I likened it to handing out condoms with random pin pricks in them. You think you are safe but……………………

The council members that were in the audience walked out on my presentation (as to be expected) which was disappointing as I was interested to get their feedback. I guess they were living their reputation

At the end of the session, I was “mauled” by Franchisors and Franchisees alike congratulating me on standing up and telling it as it is as in the past nobody was game to speak out against the council. I have never shaken so many hands in such a short period of time in my life. The feedback since has been astounding and people sending me emails thanking me for making a stand. What touched me the most was a franchisee after the end of the session with tears in their eyes hugging me and telling me that if only someone had stood up years ago they may not have been “ripped off” by those operators that prayed on the unwary.

Many service providers that service the Franchise industry have come out and also congratulated me, telling stories of bullying and other interesting issues.

I have had absolutely no communication from the FCA to discuss my opinion (and that of many other people) which has been more than disappointing and I find this incredibly gutless.

The “Don’t Sign Without the Sign” campaign is a winner as long as it has a report of key areas that the franchise system has met such as systems, support, infrastructure, experience of the operator/franchisor etc. A bit like the Heart Foundations ticks of approval which means that the food has met and passed stringent criteria. Is this too much for the FCA? Probably, they are more intent on travelling to Canberra weekly than really doing what they should and that is building a robust, trustworthy and stable framework for Franchisors and Franchisees to operate in.

So if you are a Franchisor, I encourage you to NOT pay your annual fees, it gets you nothing and if you’re a potential franchisee do not rely on and FCA registered Franchisor, do your due diligence. More than anything ring the franchisees in the system you are looking at including those that have left. Hopefully the FCA will grow some balls and confront the issue.

Author: Damian Kay
Email: damian@telcoinabox.com