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Is The Franchise Business Model Starting To Suck Some Serious Wind?

Sucking wind

The franchise business model has been called one of the most brilliant business models ever invented. It is. But, the last couple of years have been brutal to franchising as a whole, and in true American fashion, smart entrepreneurs are offering up alternatives.

(This post may contain affiliate links. Please read my disclosure policy).

Are these franchise business alternatives a precursor to the death of franchising as we know it?

Nah. (At least I don’t think so.) I don’t think that it’s over. (For franchising.) I do see some opportunites for change, though.

If the International Franchise Association (IFA) ever decides to step up, maybe they can even help with some sorely needed changes. But, I doubt if they will; they have their own agenda. (And some of the higher-ups there probably want to keep their fat salaries.) Wow. Is it me, or does that sound an awful lot like what our elected friends in Washington DC want to do, too. Did I mention that the IFA is headquartered in Washington DC?

As it stands, the IFA is nothing more than a pretty impressive lobbying organization, with non-profit status. Now, for those of you who’ve elected to pay thousands of dollars in dues to watch a lot of the same franchise companies win awards year after year, if you feel that you’re benefitting from your membership, keep on keepin on.

I won’t join the IFA. (Unless I can see some real value in doing so.) I guess that I’m a little too “independent.” I say what’s on my mind. (Gently, of course.) I’m also one that’s into visualization; I just can’t visualize myself writing a check for $5,000+ just to say that “I’m a member of the IFA.”


Then there’s the IFA’s model;

Nothing is ever free for members. Nothing. You want to learn more about franchising? You pay. It’s a $$ machine.

Now, the IFA has done some good over the years. For sure. The idea of having an association for folks in the the franchise industry is a great idea. There is new leadership at the IFA, currently. I’d just like to see the IFA help the little guys more. (And not charge as much to do so.) I’d like the IFA to make the franchise industry even better. I’d like them to throw out members who aren’t doing the right things to benefit franchising. (For example, if you’re a franchisor or supplier who’s been sued a lot for improper activities, you lose your membership.)

( I get calls and emails from current and past IFA members who share their feelings about the IFA with me. They do so with the knowledge that I won’t mention their names.)

If you are a new franchisor, you will be encouraged to join the IFA. The connections there can be great. You have to decide if the financial outlay is worth it. (Sometimes the folks that want you to join are incentivized by the IFA. In the past, awards have been given to those who have “recruited” the most new members.) It’s perfectly ok to ask the folks doing the recruiting if they’re going to benefit from your new membership.

My friend Paul Segreto, made the decision to join the IFA. He had been in it before as a franchisor. He felt that he would have some really good business opportunities there. He has. I used to be in the IFA, when I was a member of a national franchise brokerage group. I wanted to attend the conventions etc. (Interestingly enough, only the franchisees that were bringing in lots of revenue, because of the size of their markets, were asked to attend.)


Enough of that

The real reason that I started to write this post was because of a recent post on the QSR website. (Quick Serve Restaurants.)

The post was pretty powerful.



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Although no one expects the franchise model to disappear any time soon, it’s true for anyone in the industry that it’s been a rocky ride during the economic ups and downs of the past few years. Just around the time when a large segment of the population, including millions of Baby Boomers, was getting set to reach semi-retirement and possibly invest savings into a franchise, the stock market crumbled. While traditionally these individuals may have been able to use real estate equity to make an investment, that, too, was wiped out.

This is the first time that I’ve read something that mentions the possible demise of the franchise model. It got me thinking about my industry. And my mission. Please read about my mission.


A new alternative to franchising

As discussed in the QSR post that I’ve linked to below, the co-operative business model isn’t really that new. It’s just being taken more seriously now. If you’re a franchise salesperson, executive, or CEO, this post from QSR is a must-read. It’s time to improve your franchise systems. It’s time to provide even more reasons for prospective franchise owners to choose your concept.(And to choose the franchise model!)

Maybe it’s time for you to read, “The 7 Things That Franchise Buyer’s Want.”

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  • In summation, the IFA has the potential to be a lot more than a Washington lobbying group. They have some great members. (Like Rhonda Sanderson, who always encourages me to join.)
  • The business model of franchising is the best business model ever developed. Let’s make it even better.
  • A co-op is another way for small business owners to band together. (Interestingly enough, while I was writing this, a reporter called me about a story she wrote a few months ago about a co-op. She wanted my opinion, because she was doing an update to that story.)

What do you think? Is the IFA a good association? Can it become even better? Does the co-op model have legs? Am I missing something? Is winter getting closer?

Comments welcome. Below.


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joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes.
For 23 years, I’ve been showing people how to make smart, informed decisions on franchises to buy, and I can help you, too!
P.S. I'm not a franchise consultant/broker.

Straightforward Advice
Joel, thank you for taking the time to speak with me yesterday. It was refreshing to finally speak with someone in franchising who dishes out straightforward, candid advice. You provided me with some insightful ideas that I'm giving a good deal of thought and consideration to. I look forward to speaking with you on our next consultation call."
- John Timmins, Columbia, South Carolina
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