🔒Jim Coen launches franchise owners lobbying effort

Jim Coen has spent decades in the franchise industry. It's a familiarity he's hoping to parlay into legislative action that improves franchise owners' chances of controlling their own business destinies.

Coen, a former executive director of the New England Franchise Association and for five years the president of the Dunkin' Donuts Independent Franchise Owners Association, formed the Maine Franchise Owners Association this fall. As executive director, he intends to marshal attention and some PAC money toward legislation that he believes will help level the playing field between franchisers — the corporations such as Dunkin' Donuts, Dairy Queen, Re/Max, Subway and Ace Hardware that lend their brand to a network of independent operators — and franchisees, the independent operators.

“Right now, the power belongs to the franchiser, who has been able to gain what we consider an unfair advantage over a franchise owners' ability to harvest, perpetuate and build equity in their businesses,” says Coen.

Specifically, the MFOA plans to introduce amendments to LD 1458, the Maine Small Business Investment Protection Act, which was bound over from the last legislative session. MFOA is soliciting members — it counts more than 3,500 franchise units in Maine with a payroll that exceeds $1 billion. To further its cause, MFOA has organized a franchise owners conference set for Jan. 29 in Augusta with workshops geared toward helping them understand labor and compliance issues, as well as the Affordable Care Act. There's also a lawmaker meet-and-greet component so legislators have a chance to interact with franchise owners and understand their unique circumstances, says Coen.

“Some people don't realize it's the franchise owners who hire the employees, who pay the taxes, who drive economic development, not the franchisers,” he says. (Details of the conference are at mainefranchiseowners.org)

Mainebiz chatted recently with Coen. The following is an edited transcript.

Mainebiz: So is the impending bill the reason you formed the Maine Franchise Owners Association now?

JC: That's a big part of it. The bill addresses some of the onerous clauses that are contained in most franchise agreements that limit a franchise owner's ability to gain from his investment. Many states — I believe there are 17 — have some sort of franchise owner protection [law], but we don't have it here in Maine. As it stands, the bill is very broad and we want to narrow it so it's more palatable and focused.

MB: Can you give me an example of the unfair practices that affect franchise owners?

JC: There are many and it's a complicated issue, but here's an example. Say you are a Dairy Queen franchisee and you have operated that Dairy Queen for 20 years and are in compliance with the agreement. Now say the company's shareholders are agitating for a bigger return. A company executive comes to you and says it's time to renew your franchise agreement, but the company has a developer who wants to take over the franchise and is willing to build two more units. You — the franchise owner who has operated that Dairy Queen for 20 years — can either agree to open two more units as a condition of the renewal, or you have to give it up.

Here's another example: Maine doesn't have what we call a cure law. That means if I've been running a KFC franchise and I'm out of compliance with the agreement, the company has to give me 60 days to 'cure' the problem before it can terminate the contract. Right now in Maine, the franchiser can just terminate the contract without giving the franchise owner an opportunity to fix a problem. You're just terminated, and you lose the investment in the business.

MB: I see that you have a tiered membership structure. Are the membership fees what fund the PAC?

JC: A portion of the membership fees do fund the PAC, but we are seeking donations from others. You don't have to become member to make a donation.