Having Words With: Keith Miller

Owner, Subway of Auburn & Grass Valley; chairman, Coalition of Franchisee Associations

Hometown: Modesto, Calif.
Education: master’s degree in business administration, Golden Gate University; bachelor’s degree in computer science and business administration, California State University, Chico
Personal: married 28 years, two daughters
Career: franchisee, Subway, 23 years; programmer and development manager, Rolm Telecommunications, seven years

The nonprofit Coalition of Franchisee Associations Inc. was born in 2007 when seven organizations banded together “to leverage the collective strengths of franchisee associations,” according to its founders.

Today, the group comprises 15 associations representing more than 30,000 franchise business owners from industries as varied as foodservice and massage, and is led by 2012 chairman Keith Miller. He is a three-unit Subway franchisee from Auburn, Calif.

Besides weighing in on franchisee-franchisor matters, the CFA — with offices in Kennesaw, Ga., and Washington, D.C. — handles government relations and provides administrative and other services for member associations. It counts within its ranks associations representing franchisees of the Buffalo Wild Wings, Burger King, Domino’s Pizza, Dunkin’ Donuts, Hardee’s, Little Caesars, Long John Silver’s and North American Subway chains.

The coalition’s early milestones include its 2011 ratification of a “Universal Franchisee Bill of Rights.” Among the issues it touched on are the right of franchisees to price services or goods as they see fit, right to protection from encroachment, right to transfer franchises, and the right to ample notice of significant change to a franchise system.

How is the CFA unique?

Everyone on our board of directors has either been elected as a board member to their own brand’s franchisee association or has been hired as an executive director by their brand’s board of directors. Being franchisees, we love this industry. This isn’t a radical group of people trying to kill franchising.

What does the coalition want to accomplish?

It wants to make sure that franchisees have a true place and strong voice at the [contract or legislative negotiating] table. What we have to remember — and this isn’t considered on Capitol Hill, sometimes — is that it is the franchisee that invests in and creates jobs in their local community — not the franchisor and not the brand. There are so many things out there slowing that [jobs-creation] process down, including anti-business regulations.

As reflected in the Franchisee Bill of Rights, and from the CFA’s perspective, what are some of the things that need to change in franchising?

There are parts of the bill that talk about renewal options and being able to renew under similar conditions as when you signed. If the terms of the contract have changed drastically [by renewal time], what choice do you really have? Here I have invested 20 years of my life in a brand, and now I’m faced with a choice of signing a contract I don’t like or giving up my livelihood. Worse yet, even if I don’t sign that contract, any new person in the system that buys my assets and my store has to sign that new contract, and the changes in it may have just devalued my assets.

Anything else?

Every franchise agreement reads something like, “You will follow the then-current operations manual.” Twenty years ago, the operations manual stated things like how hot to cook hamburgers or how many slices of meat you should put on a sandwich. Now, like at Burger King, they actually put in their operations manual something like, “You will sell this burger for $1.” Or, when you signed the contract it cost you, say, $50,000 to open your outlet, but six years later something gets added into the operations manual that says you have to do a $70,000 remodel.
We understand that franchisor lawyers are trying to protect the brand, but you can be overprotective. We feel we need help protecting our assets and our side of the business.

What’s next?

Either getting some of the things in the Franchisee Bill of Rights included in franchise contracts or, if we’re not successful at that, adding legislation to help protect franchisees.

Contact Alan J. Liddle at [email protected] [3].
Follow him on Twitter: @AJ_NRN [4].