A Franchise Advisory Council (FAC) is a committee of franchisees who, together, provide the franchisor with input as well as insight on how to improve the system. Generally, a group of franchisees, which are those that operate a location under the franchise agreement, come together to create this type of panel. It provides outstanding advice and guidance to the franchising company about the on-the-ground needs of the franchisee as well as the day-to-day operational needs.
Key Factors That Impact an FAC’s Success
The Franchise Advisory Council must operate properly in order for it to be beneficial to everyone involved. It does not supersede any type of franchise law and, in most cases, is not a requirement. However, the FAC can prove to be invaluable when in place and used properly.
The benefits of an FAC are in the way it operates.
To be effective, the FAC should have a written charter that outlines the establishment, nomination, election process and the nature of meetings. It also should dictate how the panel will interact with the franchisor’s personnel and how it will report back to the franchisees.
A written charter can ultimately define how the system works and whether or not it will be successful in its operations. The ultimate goal of an FAC is to facilitate communication between the franchisor and the group of operating franchisees to improve the business overall. The details of how the FAC works is really up to the establishment of the charter and the needs of the franchisees.
It is recommended that the FAC meets each quarter. In terms of costs for the organization, the franchisor often finances the costs for face-to-face meeting rooms and support costs affiliated with the FAC.
What is discussed at these meetings is also dependent on the needs of the group. Some of the topics may include:
- Current marketing methods
- Supply chain concerns
- Operational issues and procedures
- Product and service matters
What should not be discussed at these meets are personal issues or matters between individual franchisees and the franchisor. Generally, these are opportunities to further the business and improve operations, reduce costs, or tackle other internal concerns in the way the company works.
Ensuring the Franchise Advisory Council Is Effective
In order to be beneficial, the FAC must be designed effectively. It must meet all franchise law requirements and it must be created in such a way as to benefit all parties involved.
Allow the team at Sheltonpower & Associates help you to create the ideal FAC structure and aid in other matters related to franchise law. Our attorneys have exceptional experience and a high level of dedication to helping franchisees to create and thrive in solid franchise agreements. Contact our offices to learn more about franchise law or FACs.