|
|
Every
Journey Begins With A Farewell
By Susan P. Kezios, President, AFA
As franchises and their associations prepare for what will surely be one of our most active years on Capitol Hill, we need to pause a moment and say goodbye to a good friend. It is with much love and respect that we dedicate this issue of the AFA Blast FAX to Ted Poggi, former Chairman of the National Coalition of Associations of 7-eleven Franchisees (NCASEF) and Founding Member of the American Franchisee Association (AFA). Ted and his wife, Bobbi, owned one
7-Eleven franchise in New Jersey. Ted was an AFA Board member from 1993 to 1997. He died on July 23, 2001 at age 58 of complications from diabetes.
Ted Poggi was a passionate supporter of franchisees' rights. He worked tirelessly in his role as Chairman of the NCASEF (National Coalition) to express franchisees' viewpoints and to protect the interests of the members of the National Coalition. Ted never wavered in his commitment even though he knew his actions could lead to the non-renewal of his franchise agreement by 7-Eleven corporate. |
"If we accomplished one thing in those early days we brought to light
a problem that neither the public nor the government knew existed."
-Ted Poggi (1943-2001)
|
I first met Ted Poggi in 1992 in Washington, DC. Ted had responded, along with other franchisee leaders, to a Congressman's invitation to attend a franchisee "listen-in." He was particularly concerned at that time with 7-Eleven franchisees' lack of bargaining power as their contracts came up for renewal. He understood that without bargaining power 7-Eleven franchisees were in danger of losing more and more revenue to corporate and for some eventually it would mean losing their businesses.
Ted was very excited about the idea of a national umbrella organization of franchisees from all chains. At the February 1993 organizing meeting of the American Franchisee Association (AFA) he told the other franchisee leaders, "no one franchisee is as strong as all franchisees together." That phrase became Ted's slogan. No one worked harder to get franchisees from all brands to join and work together.
Ted was the franchisee from AFA's Board who volunteered to speak at the meetings of other franchisees to passionately spread the message-"no one franchisee is as strong as all franchisees together."
In September of 1993 Ted participated in the first Legislative Affairs Day (LAD) held by the AFA in Washington, DC. As franchisees walked the halls of Congress they would often run into franchisors and their paid lobbyists. These encounters were a little unsettling for both sides. Franchisees were new to this game and become somewhat unnerved in seeing the franchisors and their hired professionals.
However, franchisors were also taken aback because for the first time, Congress was finally hearing from the other side from franchisees.
After a day of walking the halls of Congress Ted returned to our meeting room, looked at me and said, "the franchisors are chasing me like Pac Man!" While he felt a little harried by the franchisor reps, Ted understood an important fact-many members of Congress simply did not understand the relationship between franchisees and
their franchisors. And, most importantly, when a Congressperson or their aide heard the franchisee side of the story, many understood the issues and were willing to take action, regardless of party affiliation. Ted participated in six Legislative Affairs Days (LAD) during his tenure on AFA's Board. |
By January of 1994 Ted was testifying regarding the problems franchisees faced in state hearing rooms. It was a pleasure working with a man so dedicated to helping all franchisees. Ted would always ask for help in preparing his testimony. I often received a draft of his remarks with, "Do your English teacher thing. Thanks, Ernest Hemmingway," written on the cover page. That meant, of course, "please proofread!"
No one who met Ted Poggi will ever forget his sense of humor and quick wit. He often brought a smile to your face when you least expected it. One year Ted sent a note to the AFA from the 7-Eleven convention in Nevada that read simply, "The only money left in Vegas." The envelope included 7-Eleven's annual AFA dues.
In 1995 Ted rallied-and I mean rallied-the 7-Eleven troops for the White House Conference on Small Business (WHCSB). Of the 32 states in which the AFA organized franchisee participation Ted had 7-Eleven operators at more than half of them. This was remarkable since 7-Eleven had franchises operating in just 25 of those states. In the end, out of 127 franchisee delegates that went to Washington, DC in June of 1995 under the AFA umbrella, 21 of them were 7-Eleven operators. |
"The franchisors are chasing me like Pac
Man!" -Ted Poggi
|
I still remember the look on Ted's face the night the delegates voted not one but two franchisee-sponsored issues to the final list of 60 small business issues at the White House Conference.
I wish he had more opportunities to be that happy during his tenure as NCASEF's Chairman. He gave so much of himself to right the wrongs that so many franchisees faced.
As long as I knew him Ted's physical health was not very good. I can remember on many occasions how he labored just to walk to Congressional appointments or to make AFA Board meetings. During some Legislative Affairs Days I was concerned that he would not get through the day's sessions. As I learned of his many health problems, while observing how tirelessly he worked, I came to understand that this man was a hero in the truest sense of the word.
There were no other agendas with Ted Poggi. He was a genuine patriot. All Ted wanted as Chairman of the NCASEF was the best possible contract for 7-Eleven franchisees and for the 7-Eleven franchise system. He was supportive of what he called "fair franchise legislation" because he saw it as the only way to ensure the future of franchising for all those involved. In 1997 Ted retired from both the AFA Board of Directors and his position as Chairman of the
NCASEF.
Today, 7-Eleven franchisees enjoy a more harmonious relationship with their
franchisor. I believe this is due to the courage and the dedicated work of Ted
Poggi. I also believe that such unselfish dedication affected 7-Eleven corporate as well. In fact, it would seem that 7-Eleven corporate feels the same. Jim Keyes, 7-Eleven, Inc. President and CEO, who was often involved in tense and sometimes unpleasant discussions with Ted Poggi and his NCASEF administration, paid Ted the highest compliment, albeit posthumously, at the National Coalition's annual convention this summer. At the grand banquet in a room filled with top 7-Eleven, Inc. vendors, management and franchisees, Jim Keyes said, that he and Ted were very good friends. Jim said that he and Tariq Khan [current NCASEF Chairman] get credit they don't deserve for the improved relationship between the company and franchisees. "While it may have been Jim Keyes and Tariq Khan who walked through the door, it was Ted who opened the door," he said.
In one of the last e-mails I received from Ted he wrote, "I miss the old fights. If we accomplished one thing in those early days we brought to light a problem that neither the public nor the government knew existed. In retrospect our rock throwing against their ballistic missile capabilities had franchisors at a disadvantage. The power of the word is mightier. Just think about the resources (money and manpower) corporate America had to spend against our small but well-voiced team. I miss the fight, but my health keeps me from rejoining the team. Keep up the good fight. Remember-[an] old chairman just won't fade away."
So, as we grieve, I say to Ted that we will remember. We will keep up the good fight. We will have to finish the journey without you. But we will never forget what you so unselfishly gave to both 7-Eleven franchisees and the entire franchise community. |
|
 |
Our lives are shaped by those who leave as much as by those who remain.
The staff and Board of Directors of the American Franchisee Association (AFA) would like to express its outrage at the attack on our freedoms on September 11, 2001. We extend our condolences to the friends and loved ones of those who lost their lives. And like all Americans we stand behind our government in their efforts to bring the perpetrators to justice.
|
|
|
Remembering Ted... The Wind Beneath Our Wings
By Teresa Maloney, former Vice Chairperson National Coalition of Associations of 7-Eleven Franchisees
(NCASEF) |
My Mom was always a stickler for table manners. I remember so often we four kids would question the need for knowing these seemingly trivial niceties, and Mom would say, "Some day you might have dinner with the President at the White House." We would roll our eyes, believing that would never happen.
Well, I have yet to have dinner at the White House, but I did have breakfast with the President in 1995; and all because of the determination, dedication and drive of Ted Poggi. Because of Ted Poggi of the NCASEF, and Susan Kezios of the AFA, franchisees from across the country were delegates to the White House Conference on Small Business (WHCSB) in 1995. You have to understand, franchisees were previously shut out of the process; franchisees were previously not thought of as "traditional" small business owners. We franchisees actually marched on Washington, DC! Ted, you were the wind beneath our wings. |
My first National Coalition (NCASEF) Board of Directors meeting was Ted's first as Chairman. There was tension in the room as it had been a hard fought campaign for Chairmanship. I didn't know any of the players, but I immediately saw that Ted was a determined man.
Determined to lead franchisees through difficult times by truly believing that, "no one franchisee is as strong as all franchises together." With that vision under Ted's leadership the National Coalition
(NCASEF) became a founding member of the American Franchisee Association
(AFA). We moved out of our little box, flexed our wings and combined our efforts at achieving fairness for franchisees with the efforts of franchises of other systems. We were truly stronger together. Ted was the wind beneath our wings. |
Ted Poggi, John D'Alessandro and Howard Bundy celebrate
franchisees' victory at the 1995 White House Conference on Small Business (WHCSB).
|
Ted had the courage to speak the truth to power. He never censored himself either in his writing or his speech. Many would cringe at his straightforward statements - he was candid, open, honest, truthful. You always knew where he stood, and it was always on the side of the franchisees. Many don't know, most don't remember, that under Ted's leadership the National Coalition
(NCASEF) Board wrote a "fair franchise agreement" and presented it to 7-Eleven management. Never before had franchisees dared to propose their own form of agreement. Ted taught us all to "speak truth to power." He was the wind beneath our wings.
Ted also believed that all too often compromise is simply a lack of leadership. He never walked in a room or sat at a negotiating table thinking of his fall back position. He always shot for the moon, believing that at least we would land among the stars.
Most of all, I am grateful to Ted for his belief in and support of women in positions of power. There was no glass ceiling in Ted's house. He did not fear strong women. He supported and encouraged them. This franchisee from Reno, Nevada, became his Executive Vice Chairperson, traveled the country visiting franchisees, learned to lobby local legislators, marched on Washington, DC to meet with Senators and Congress people on franchise issues and sat at breakfast with the President as a delegate to the White House Conference on Small Business (WHCSB). I did all this--because of my mom's insistence that I have good table manners--and because of Ted
Poggi. He was the wind beneath my wings. He was then, and still is, my hero.
|
Donations in Honor of Ted
Ted Poggi's family has asked that donations be sent to the Mansfield Emergency Squad, PO Box 131, Port Murray, NJ, 07865.
You can write Ted's wife, Bobbi Poggi, at 16 Elmwood Drive, Hackettstown, NJ, 07840. |
|
 |
|
|
|
|
The Legacy of a
Franchisee Statesman
By Eric H. Karp, Esq., AFA Board Member Witmer, Karp, Warner &
Thuotte, LLP Boston, Massachusetts
Franchisees and franchisee associations of every industry and brand have lost a true icon in Ted Poggi. Ted's tireless and highly effective advocacy on behalf of franchisees everywhere, not just those of 7-Eleven, was marked by an uncommon combination of wit and wisdom. His trademark humor was always instructive, never biting. |
Ted Poggi chaired AFA's Legislative Committee and is shown here with
Jere Glover, Chief Counsel, Office of Advocay, U.S. Small Business Administration (SBA) in
September 1994. |
In the early days of the AFA, Ted was the glue that bound us together. He was a frank and insightful observer of the fundamental imbalance in the legal and financial relationships between franchisee and franchisor. He was a savvy political strategist from whom we all learned a great deal; no one was more effective in a meeting with a member of Congress or his/her staff explaining, on a very personal level, why federal franchise legislation is a must.
Ted's foresight reminds me of that great British statesman, Winston Churchill. Like Churchill, Ted had the vision to see that the adversary (in Churchill's case, pre-war Germany) was well financed and intent on building its advantage for no salutary purpose. Like Churchill, Ted warned the skeptics that nothing good would come from the adversary's flexing of the muscles it had accumulated while his constituents were at times complacent, with many ready to accept hollow promises. And like Mr. Churchill, Mr. Poggi realized that only organization, preparation and powerful advocacy can overcome those that seek to exploit an unfair advantage.
The legacy of Ted Poggi lives on in the noble efforts of the AFA. The work that we do today is based on a solid foundation that he was instrumental in creating. Our friend and ally, Ted Poggi, will be missed but never forgotten.
LEGAL
BRIEFS
|
|
GNC Franchises Have Tentative Settlement of Class Action Litigation
Under a settlement agreement tentatively reached by class action representatives of GNC franchisees, the proposed class will receive $4.2 million in direct refunds for product acquisitions. Additionally, the franchisor has committed to making numerous changes in its business practices which will result in additional savings for franchisees. Among other things, the franchisor has agreed to continue its efforts at lowering the cost of GNC Gold Cards, refunds of initial inventories of outdated products, advanced notice of discontinuation of particular products allowing franchisees time to sell products at prices other than close out prices, limits on renewal fees and allowance for franchisees to acquire products from third parties.
The franchisees were represented by AFA Affiliate Member Peter Lagarias, Esq., of The Legal Solutions Group in San Rafael, California, together with lawyers Philip Kramer and Wayne Mack. |
|
Franchises Succeed in Compelling Arbitration of Monetary Disputes
In Choice Hotels International v. BSR Tropicana, franchisees overcame a franchisor's objection to arbitration of disputes involving liquidated damages. The franchisor had asserted that a franchise agreement clause relating to liquidated damages fell within the scope of the exception to the arbitration clause in the agreement providing for litigation, rather than arbitration, of certain types of monetary disputes. The court specifically held that while payment of specified sums, such as franchise fees, could be litigated as apposed to arbitrated, the liquidated damages clause required determination of factual issues and therefore was within the scope of the broad arbitration clause and not the exception to the arbitration provision.
|
|
Legal Briefs was written by AFA Affiliate Member Michael
Einbinder, Esq., of Rosen, Einbinder & Dunn, P.C., in New York. |
|
|
GAO Audit Confirms FTC Cannot Address AFA Members' Concerns
A report released by the U.S. General Accounting Office (GAO) on July 31, 2001 regarding the Federal Trade Commission's (FTC) enforcement of its franchise rule confirms what franchises have known for a long time-that the FTC is not an option when it comes to dealing with their problems. FTC staff state in the report, "...FTC's unfairness authority generally does not apply to franchise relationship issues." Yet, the report also shows that the majority of franchise complaints received by the FTC involve post-sale relationship issues.
Major findings of the report:
Failure to Bring Franchise Relationship Issues Up On the Radar Screen. The report acknowledges that the FTC's Franchise Rule does not address the content of the franchise agreement or the franchise relationship. Again, FTC staff noted, "that FTC's unfairness authority generally does not apply to franchise relationship issues."
92% of Franchise Complaints Reported to the FTC Involve Relationship Issues. The GAO report states that from 1993 to 1999 ninety-two percent of complaints reported to the FTC related to post-sale relationship issues, or a combination of post-sale relationship and pre-sale issues.
Significant Growth in Number of Franchise Complaints. The report shows a ten-fold increase in the number of franchise complaints reported to the FTC. This dramatic rise is evident even though FTC complaint data was available only through June 30,1999.
FTC's Flawed Investigative Procedures. The GAO report noted that FTC staff failed to document its reasons for closing 77 of 79 franchise investigations from 1997-1999. The report also revealed that from 1993-1999 over 49% of the franchise related investigations opened by the FTC could not be clearly categorized from the information the agency had available.
The FTC Brought 1 Franchise Case to Court in the Last Four Years. For a segment of the United States economy that handles hundreds of thousands of contracts annually, one case seems grossly disproportionate. Approximately 2,400 private lawsuits and/or arbitration decisions were reported to Commerce Clearing House (CCH) over the last four years. And this number represents only a fraction of all franchise-related disputes over that same time period.
100% of the Franchise Cases Filed by the FTC Allege Earnings Claim Violations. Every one of the few franchise cases filed by FTC from 1993-2000 involves alleged earnings claims violations, i.e., making of earnings claims without a reasonable basis, failure to provide an earnings claims document, etc. This is the one piece of information that the purchaser of any business--franchised or not--reasonably expects to receive. However, earnings information is also the one piece of information that franchisors are not required by the FTC to provide to a prospective buyer.
The Limits on FTC Enforcement. The report states, "FTC staff told us that limited resources and other law enforcement priorities prevented FTC from pursuing every meritorious complaint and investigation involving franchises and business opportunities." Even with additional resources, however, the FTC will not pursue relationship issues.
Summary
The FTC's unfairness authority generally does not apply to franchise relationship issues. The FTC states repeatedly they have neither the authority nor the resources to address post-sale relationship issues. The report shows a ten-fold increase in these types of complaints to the FTC. The FTC's lack of proper record keeping suggests it cannot venture an opinion on the extent or magnitude of post-sale relationship problems in franchising. Therefore, baseline standards of conduct such as those found in The Small Business Franchise Act are still necessary.
|
Welcome New Affiliate Member Steven D. Kelley
The AFA welcomes its newest Affiliate Member, Steven Kelley, partner in Lindquist & Vennum's Litigation Group and the Chair of the firm's Franchise and Dealership Practice Group. Steven's practice has focused on representing clients nationwide on matters relating to franchise, dealership, and sales rep relationships.
Steven has extensive experience in litigation, arbitration, mediation, and negotiation of a wide variety of franchise disputes, including disputes arising out of termination, franchise transfers and sales, renewal requirements, encroachment, alternative channel distribution, site selection, sourcing restrictions, price discrimination, market withdrawal issues, and many others.
Welcome to the AFA Steven Kelley! We're glad you're here!
AFA Acknowledges Our Supporters
Financing a government affairs effort becomes expensive and cannot be funded solely by the payment of regular membership dues to the AFA. We therefore would like to thank the individuals listed below who've recently made personal financial contributions to support the work of the AFA. If you are in a position to make an additional contribution of your own, please call the AFA's office at 312-431-0545.
Patron Level
Carolyn Burch, H & R Block, AFA Board Member
Lee Hotchkiss, Little Caesar's
Eric H. Karp, Esq., Witmer, Karp, Warner & Thuotte, L.L.P., AFA Board Member
Pete Singler, Esq., Carter & Singler, L.L.P., AFA Board Member
Spence Vidulich, Pearle Vision, AFA Board Member
Benefactor Level
Pat McNeill, Domino's Pizza
Glenn Mueller, Domino's Pizza
Sustainer Level
J. Michael Dady, Esq., Dady & Garner, P.A.
Marty Klein, Novus Autoglass Repair
Backer Level
Carmen Caruso, Esq., Carmen D. Caruso, P.C.
Malcom Lindy, Popeye's Chicken & Biscuits
Patrick Pender, Pearle Vision
Tom Sheroski, Little Caesar's
Calvin White, KFC
Supporter Level
Marc Blumenthal, Esq., Law Offices of Marc N. Blumenthal
Dan Connolly, Dealer Specialties
Contributor Level
Chris Boulier, H & R Block
Pam Campbell, Colors on Parade
OC Crothers, KFC
Scott Nordin, Dealer Specialties
Paul Silver, SUPERCUTS
Rory Valas, Esq., Hankes and Valas, P.C.
Mission Statement
The mission of the AFA is to promote and enhance the economic interests of small business franchises.
Revised June 22, 2001
|
|
Jeff Haff
Named Super Lawyer!
Minnesota Law & Politics named AFA Affiliate Member Jeffery Haff "Super Lawyer" in the State of Minnesota. This is an honor bestowed upon only 5% of the lawyers in Minnesota.
How was Jeff selected a "Super Lawyer?" Over 13,000 ballots were mailed to Minnesota attorneys asking them to name the best currently active lawyers they've observed in their practice. Over 2,400 individuals were nominated. A select panel of 100 lawyers then ranked the nominees in their practice areas. No lawyer could make the list based only on same-firm votes and self-nominations were not counted.
The AFA has always been proud to have Jeff Haff on its roster of exceptional franchisee attorneys. And we're especially proud that his excellence is recognized by peers in his own state. Congratulations Jeff!
AFA Preferred Vendor
Oasis Outsourcing
Contact: Brent Huckert
Telephone: 913-451-1620
Facsimile: 913-451-1694
E-mail: bhuckert@oasisadvantage.com
The AFA is pleased to announce a new benefit program offered by Oasis Outsourcing for our members to help free up countless hours per week by avoiding payroll, insurance, tax and employee benefit hassles.
Oasis Outsourcing, a subsidiary of Wadkenhut Resources, Inc., is a professional employer organization (PEO) providing human resources and payroll services on an outsourcing basis.
A PEO program establishes a contractual relationship between Oasis and your business. Oasis Outsourcing pools companies together to assume the responsibility of an employer for specific purposes of the workers at your location. For example, they pay wages and employment taxes of the employee out of its own accounts and manage all state and federal employment tax issues on your behalf. Other related and additional services are also available.
You can choose to contract with Oasis for a core group of services including payroll services, tax filings, flexible benefit plans, a standard human resource handbook, employer practice liability insurance and workers' compensation. Additional plan options cover 401K retirement plans and medical benefits.
Call Brent Huckert today at Oasis Outsourcing for a no cost analysis of your current program. |
|
|
AFA PAC Personal Contribution Form
 YES,
I want to fund candidates who support issues important to small business franchisees. I
understand that my contribution is not tax deductible and that a corporate check cannot be
accepted. You may proceed to our on-line secured contribution form or print and fax/mail
our form.
Print to Fax/Mail Form
|
The
American Franchisee Association