Over 100 franchise leaders trekked to the Faegre Franchise Summit in Minneapolis Aug. 7-8, sharing concerns about the economy and solutions on topics from franchise relations to finance to FDDs.
It was the first year of the Summit since franchise firm Faegre & Benson merged with Baker & Daniels, founded in Indianapolis. The post-merger firm is now one of the 100 largest headquartered in the U.S. and the largest law firm in the state of Minnesota.
Summit chair Beth Brody successfully showcased new talent as well as the respected and familiar headliners so well known in franchising based in Faegre’s sleek Minneapolis offices in the historic Wells Fargo Center.
After a moving keynote by Cinnabon CEO Kat Cole connecting her personal story to the necessity of and strategies for franchise system change, a Panel of the Pros including Geoff Hill of Roark Capital, Charlie Simpson, President of Great Clips, and Keith Gerson, President of FranConnect, joined Brody in a spirited back-and-forth continuing the discussion about change and how to implement it.
Success comes from “a willingness to do today what others are unwilling to do – to be focused on continuous improvement,” said Gerson of FranConnect. He said franchisees often know what’s wrong in a system long before talking about it, and may react to proposed changes by saying, “What took you so long?”
“If there are flies in the ointment,” Gerson said, “they already know.”
On the other hand, said Simpson of Great Clips, referring to franchisees, “We need to make sure we’re not asking people to do things differently ‘just because,’ and we need to be conscious of all the change that’s taking place constantly for them.”
During a finance panel chaired by Faegre partner Kevin Hein, Guidant Financial Co-founder and CEO David Nilssen and IFA’s Beth Solomon, VP of Strategic Initiatives & Industry Relations, announced a strategic alliance to provide more credit access educational programing to IFA members. Guidant has also stepped up its commitment to VetFran, becoming a “VetFran Preferred Provider” to offer more outreach and education to veterans as part of the alliance. So far this year, Guidant has helped small businesses access $200 million in capital, including start-up financing.
While year-over-year lending to small businesses has increased, Solomon said, lending to franchise businesses decreased by 3.64 percent from June to July following a 5.73 percent increase in June, according to the BoeFly/IFA Franchise Lending Index.
“As credit access continues the slow climb out of the lows of the financial crisis, our data show that lenders are first turning to industries they understand well, such as restaurants,” BoeFly Co-President Mike Rozman told QSR.com.
During the finance panel discussion, some franchise leaders described a pattern of increased scrutiny by the Small Business Administration of franchise documents and in some cases a slowing in the approval process for SBA loans as a result. Some at the meeting commented that state legislative initiatives aimed at changing franchise laws could be drawing SBA’s attention.
IFA’s Director, Political Affairs & Grassroots Advocacy Erica Fitzsimmons, commenting on franchise legislation in California that was narrowly defeated by an IFA-led campaign, noted that this type of legislation is not likely to go away.
“We would fully expect this to come back next year,” she said. “That’s why it is so important that our members come to Washington Sept. 10-11 to IFA’s Public Affairs Conference to educate members of Congress on critical issues for our industry.”
To learn more about the Conference, click here.