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IFA Updates Its Dues Structure to Meet the Needs of Members

“Throwing down the gauntlet, one of the business owners, Dunkin’ Donuts founder Bill Rosenberg slapped a $100 bill on the meeting table and issued a challenge: ‘What we need is an association!’  Wallets were opened, pledges were made and from that meager and humble beginning, the International Franchise Association sprang to life with a goal that would ultimately broaden to its current mission,” to protect, promote and enhance franchising.”

Those words are from the International Franchise Association’s 40th Anniversary history book describing how the association was founded in the face of increasing government regulations. Over 50 years later, the need for an association to represent the franchise industry before federal and state policymakers, and provide educational opportunities for franchise executives is more relevant than ever.

Accomplishments

IFA has weathered the financial fallout from the worst recession since The Great Depression.  Our revenue sources, including membership are steady.  At the same time, we have added more programs and services to significantly enhance both membership value and our advocacy and communications efforts.

For example, some of our top accomplishments include:

  • The IFA has enhanced staff resources dedicated to our government relations and public policy efforts which has enabled us to strengthen our voice on key business-related issues such as health care, tax reform, workforce policy and credit access, among other issues.
  • We dedicated resources to reach the $1 million mark in receipts for FranPAC to help elect pro-growth, pro-franchising candidates to Congress (FranPAC pledges for the 2011-2012 election cycle are over $1.2 million to date.)
  • We succeeded in stopping onerous labor laws promulgated by the National Labor Relations Board that would have added arbitrary, costly and burdensome new regulations on business owners.
  • We have invested resources in our advocacy efforts at the state level to address growing pressures to change franchise relations legislation and have been successful in both California and Massachusetts.
  • Over the past several years, IFA has aggressively fought for expanded access to capital and worked to increase the understanding among lenders about the power of the franchise model.  Through two small-business lending summits in 2011 and 2012, IFA brought together top lenders, policymakers, franchise leaders and the media to discuss best practices and what policies can be implemented to increase access to credit for the franchise industry.
  • In 2011, IFA expanded VetFran with Operation Enduring Opportunity, an industry-wide campaign to hire as team members and recruit as franchise business owners 75,000 veterans and military spouses, plus 5,000 wounded warriors.  Since that time, membership in the VetFran program has increased to over 500 members, growing over 37 percent in one year, and more than 15,000 veterans have started careers in franchising since 2011, including 4,200 new franchise business owners.
  • IFA has significantly increased its investment into conducting franchise industry research to help promote the economic impact of franchising and its policy positions.  In 2012, IFA launched the monthly Franchise Business Index to measure the industry performance from month to month and it increased its annual economic forecast from once a year to four times a year to have more timely information.

Ensuring Resources to Meet Challenges

All of these accomplishments and the rising costs of doing business have squeezed IFA resources.  As we look to the future, we continue to see challenges ahead, as well as opportunities to provide new programs and services, especially in the area of technology.

To help meet the challenges of today and in the future, particularly public policy issues in Washington, D.C. and in state capitals across the country that could negatively impact the franchise model, the IFA Board of Directors voted to change the member dues structure to ensure that IFA has the resources necessary to meet these challenges today and into the future.

The decision to change the dues structure came after a year-long review by a task force comprised of franchisors, franchisees and suppliers to determine the appropriate dues schedule for the future of the organization. The dues structure had not been fully examined for 16 years, so the task force examined benchmarking data from other associations, survey results from IFA members related to the value for membership dues paid, and research to gauge opinions among members about various dues options as part of their assessment.

The task force concluded that the level of IFA dues was not on par with other associations that are similar in size and scope and that some adjustment was needed to the structure, including:

  • Dues for start-up franchisors, those with less than 10 units, will stay at the current levels to incentivize newer franchisors to join IFA and learn the best practices for not only growing their businesses, but to also learn how to implement successful franchise relations best practices within their companies, which helps the entire industry.
  • Franchisor dues are scaled based on system sales and that structure was determined to be appropriate going forward.  Evaluated on that basis with research from multiple sources, it was concluded that a modest increase in franchisor dues, generally in the hundreds of dollars, across size ranges would be applied.
  • Dues for suppliers were evaluated based on research conducted by the task force using, among other sources, data on supplier dues at many other trade associations.  It was determined a flat-rate dues structure was in line with the research, but the dues level should be increased by $600 to align better to a supplier’s membership value.
  • Dues for franchisees were not changed due to the focus to increase franchisees and in particular, multi-unit franchisee engagement, within the association.

IFA will begin to implement these changes in fiscal year 2013, which begins Nov. 1, 2013, while continuing to look for ways to be cost-efficient, while maintaining the same high standards for membership benefits.

In addition, we are adding new programs and services in 2013, including the launch of a new online member community, which will allow members to connect and engage with each other and share best practices in a more robust, continuous way.  We are adding new programing to help members keep abreast of new issues facing the industry and provide solutions for some of today’s most challenging business concerns.

And, we will continue our successful endeavor to increase the visibility of franchising and the IFA among lawmakers, especially the new Congress in 2013, and the important economic contributions the industry makes to the U.S. economy.

Raising dues in any membership organization can be a sensitive issue, but it is clearly necessary at this point in time so that the IFA can continue to ensure that the association has the critical resources to fight the seemingly endless onslaught of federal and state regulations that continue to hamper the ability of our industry to grow.

I can assure you that the change in the IFA dues structure was not taken lightly or without careful thought and consideration.  We are confident that this modest change will help to ensure that we can provide members with the tools they need to succeed, while also strengthening our association’s ability to be the best and most-effective advocate for franchising for many years to come. ⎯

Scott Lehr, CFE, is vice president, development and member services for the International Franchise Association.  He can be reached at 202-662-0785 or slehr@franchise.org.

 

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