Turning up the (Flame-Broiled) Heat: How an effective franchise organization should NOT be run

I have commented previously on the ongoing feud between Burger King management and its franchisee association, which represents most of the franchisees in the Burger King system.  It appears they have not learned their lesson and are still going at it. According to a report in the Wall Street Journal, the leaders of the franchisee association sent a blistering rebuke to BK management over $1 double cheeseburgers, soda revenue sharing, and other things. The relationship is sour enough that management retorted not to the association itself, but directly to the franchisees in the system.  In fact, it seems that the only communication that is occurring between the company and the association is through a number of law suits that are currently being traded back and forth.

Franchisee associations are designed to be powerful allies in growing a brand and strengthening the system.  They serve as the common voice of the franchisees, collaborate on national advertising funds, and help guide effective franchise policy, which overall encourages more franchisees and adds to a stronger bottom line for all of its independent owners.

But in the Burger King example, their ongoing disputes have actually had the opposite effect and are now harming the business.  The WSJ noted that Credit Suisse and Oppenheimer & Co. have both downgraded BK stock over these squabbles. And the company had better hope that prospective franchisees are not turned off by the dispute since franchisees account for 90% of the Burger King restaurants.

Clearly this is a topic that stresses the terms of a franchise contract as others have noted.

So much for havin' it your way.