March 13, 2014
To: Maine House of Representatives
My name is Jack Crawford, a Franchisor and President of Ground Round Independent Owners Cooperative (IOC), based here in Freeport, Maine. Over my 33 years of experience in this industry, I have led large and small organizations, independent and franchised, at times as a franchisor, and as a franchisee. I have also served as a member of the Maine Restaurant Association for 12 years and as Past Chair. I am writing today to urge you to reject LD 1458.
Ground Round operates 28 locations in 10 U.S. States including two locations here in Maine. All of our restaurants are owned by and operated by our franchisees. In fact our overall brand is owned by its franchisees and our staff is directed by a board of franchisees elected to serve by their peers. We are against the need for LD 1458. Many of the elements of this bill are duplicative with guidelines already required of franchisors by the Federal Trade Commission. Yet the bill goes even further to the point where franchisors will not be able to protect their brand, assure compliance to standard from all franchisees, and ensure transfers and terminations are acted upon in the best interest of the operator, but also for the brand and reputation of the name all franchisees rely on for their business.
Every franchisor has terms addressing issues like transfers and succession inside our contracts already, with orderly processes and timelines for approval of and smooth transfer of these matters. Legislation that puts the government in the business of deciding who can operate a business in our franchise systems is not only unnecessary, but potentially damaging to the brands that we and our franchisees have worked so hard to build and protect. No franchisor likes closings or shutdowns, especially those which happen abruptly. Much time is allowed for the franchisee to respond, and we try to help the franchisee to cure their defaults, as closings and potential litigation against a franchisee by a franchisor all must be disclosed to new franchise prospects.
Many franchisors (like Ground Round) are not large corporations, but small businesses themselves, and in some cases smaller than franchisees who support this bill. While this bill is allegedly supposed to help the small franchise owner, it makes doing business as a small, Maine-based franchisor more difficult to protect our brand and consistency.
Thank you in advance for your review and consideration of these comments regarding LD 1458. If I can answer any questions regarding this testimony, please let me know.
President & CEO
Ground Round IOC
15 Main Street – Suite 210
Freeport, Maine 04032
Office: (207) 865-4433 – ext. 664