I want to be a Franchisee: Step 9—Navigating the legal contracts

By Beth Caron

Thinking about becoming a franchisee? Excited about the opportunities out there but overwhelmed with what you need to know? Here’s the next part in our series of informational posts about how franchising works.

In this blog post, Heidi Ackerman, Director of Franchise Administration, shares how Great Clips supports its franchisees through the legal issues of starting and operating a business.

The first question everyone asks when they find out I work in the legal department of Great Clips is, “Oh, so you provide legal advice for your franchisees.” And I have to say, “No.”

It’s not because we don’t want to give them legal advice. It’s because we can’t. The legal department of Great Clips represents the brand, not the franchisee. Our job is to ensure that the relationship between the franchisor and the franchisee is clearly defined — mostly through the franchise agreement — and that each party knows their role. In a franchise system, that’s an important separation.

The biggest part of my job is managing those franchise agreements. Every salon has a franchise agreement attached to it defining how a franchisee is going to operate that salon – so with more than 3,500 walk-in hair care salons in the Great Clips system, that’s a lot of agreements!

On top of that, every time a franchisee renews an agreement, or buys or sells a salon, we create a new franchise agreement. Keeping agreements current is important so that both the franchisor and the franchisee know exactly what’s expected.

Many franchise systems have policies that further define what the franchisee can and can’t do. (At Great Clips, our policies are built around our common goals, such as Deliver the Brand, Comply with the Franchise Agreement, and Treat One Another with Respect.)

Policies are created to make sure that there is consistency from one salon to another. Consistency of brand is one of the biggest benefits of being in a franchise organization so it’s the franchisor’s job to make sure that’s happening throughout the system. When franchisees adhere to these policies, they are “in compliance.” When they don’t adhere, they are “out of compliance.”

That’s where our department comes in. We work with franchisees who may be doing things that are out of compliance, as defined in the franchise agreement. Once we’ve called that to their attention, they can work with our other business units to bring their salons into compliance.

Our compliance policy was developed with the input from a task force made up of franchisees. It’s amazing how much they hold each other accountable. The franchisees are their own best regulators – they can be tough on each other! It only takes one salon to ruin it for everyone else. I think this is the sign of a very healthy and supportive franchisee community. They really want each other to succeed and they can only do that when everyone is on board.

One of the best parts of my job is helping new franchisees start their business, and helping existing franchisees grow their business through acquisitions. These can be complicated transactions and we can help them get information they need for a bank loan or a lease agreement. They are always happy for that kind of support.

Great Clips is successful and our franchisees are successful because we care about our brand. Many franchisees have invested their entire lives into their businesses and they want to know that the company is going to do everything it can to protect that. It makes my job easy when I know I’m working for a company and with a group of franchisees who care about this business.

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