President-elect Donald Trump is considering appointing Andy Puzder as his secretary of labour. Puzder, pictured above, is the CEO of CKE Restaurants, which operates the Carl’s Jr. and Hardee’s chain of quick-service restaurants.
Whatever else you might think about Mr. Trump or Mr. Puzder (or fast-food hamburgers, or Carl’s Jr.’s racy television commercials), it will be fascinating to those of us in the franchise industry to see what changes under an executive with Mr. Puzder’s experience and background. Particularly interesting will be the direction the National Labor Relations Board and its leadership will take with respect to deeming franchisors as joint employers of franchisees’ employees
Experience matters and, while franchisors’ leadership teams are not subject to the scrutiny of a Senate confirmation hearing, franchisees should be sure they understand the depth of experience of the members of that team, and their day-to-day involvement with franchisees.
As a first point of contact, many prospective franchisees will deal with a franchisor’s sales and development personnel. This could be at a franchise expo, in response to submitting an online application or other avenues. In the case of an emerging franchise concept, the franchisor’s officer(s) and director(s) may take on double duty for franchise development and management and prospects will deal with them directly.
Prospective franchisees who pass the first stage of screening will be given a franchise disclosure document, which is a statutorily mandated prospectus containing details of the franchise opportunity, to facilitate making an informed investment decision. Included within that document will be an overview of all the directors and officers of the franchisor, and brief bios and CVs of each of these individuals.
Many officers and directors, as well as the sales and development team, of franchisors do have experience working with other franchise systems. Prospective franchisees would be well advised to get contact information for current and former franchisees in those other systems to find out what their experience was like in dealing with these particular people.
In addition to biographies, disclosure documents will contain details of the directors’ and officers’ histories of civil litigation, criminal charges, administrative proceedings and bankruptcy. This information can be critical to a franchisee’s decision-making calculus, and should be reviewed with a legal advisor who can help explain what some of these claim histories, if any, might mean.
While not every leader of a franchisor’s executive team is in the running for a Cabinet position, their experience in business and in franchising should be a factor in any franchisee’s decision to take the plunge. Franchisees should be sure they know and understand who the people are who make the decisions and control the brand, and that they are comfortable with each other.