Episode Transcript
Speaker 1 00:00:03 Everybody, another episode of All Things Considered Franchising, powered by Scott, my franchise coach.com. I am your podcast host and president and founder of Scott, my franchise coach.com. Scotty, my here, uh, all Things Considered Franchising is a podcast dedicated to the franchising industry and entrepreneurs, both individuals that are already entrepreneurs seeking to become entrepreneurs. And Scott Mylo franchise coach.com is a organization consulting service that provides a free service to individuals that like to research and explore business ownership, helping you build a business model and introducing you to the opportunities that could fit. And I have a great guest with us today, somebody that I've known, uh, I hate to say it this way, but, uh, when I was a young man, <laugh>
Speaker 2 00:00:56 We're both young
Speaker 1 00:00:58 And, uh, we both had, uh, color in our hair other than Gray. Yeah. And, uh, but, uh, uh, uh, just somebody who is just, uh, well-known in the industry, somebody who I consider to be a rockstar, uh, kind of a different element in franchising. And that is, uh, Paul Rocchio, who is Vice President, uh, of development and member services for the International Franchise Associations. Hey, Paul, great to see you again,
Speaker 2 00:01:22 Scotty. Always a pleasure, man. Thank you. And, and thanks for this opportunity, man. Really, really do appreciate it. And it's funny you just mentioned, you know what I, you know, my, my official title I've been, lately, I've been just telling people I'm the janitor here at I f A, you
Speaker 1 00:01:34 Know, <laugh>. Well, in today's world, you know, it's not the same as when we were younger and had titles. Of course not everybody does a little bit of everything these days. Exactly. That titles are, uh, are are misleading. But, you know, Paul, it, it, it, it's a caveat to, uh, US speaking, and I'm glad you're here because, um, we're coming off one of the most successful I f A conferences, I think I can remember, uh, and correct me if I'm wrong, uh, over 3,500, probably close to 4,000 attendees.
Speaker 2 00:02:02 Oh, yeah. We had, um, uh, 42, about 4,200 attendees. Wow. Wow. I mean, yeah, it was, uh, you know, record, uh, record attendance, um, by far
Speaker 1 00:02:13 And the International Franchise Association, the I F A, uh, plays an integral part in the franchising space. Uh, uh, not so much for the political sense, but making sure that I like to simplify it and just say kind of those rules, regulations, ethics, and morals are being followed, uh, within the organization, both on the franchisee, franchisor side, and of course handling any type of perception or negative publicity that franchising might get. And you've been, you, you've been with the I F A now, I think 25 years, if I'm correct, 24
Speaker 2 00:02:46 Years, not that I'm Cap, it was, uh, 24 years of March, March 15th. Right,
Speaker 1 00:02:51 Right. So franchising has taken, uh, is, is kind of a pendulum, I guess, an up and down, uh, at what you've seen in the last 24, 25 years. The state of the industry now, I think is stronger than it's ever been, but it also has a lot of what I call little blimps in on the radar. Yes. So walk us through the strengths or what you're seeing in the industry and how the I f A is playing a role in making sure that the industry stays on this straight line, the straight and narrow I call it, uh, to, to again, represent and be a backbone for franchisees and franchisors.
Speaker 2 00:03:30 Listen, uh, and, and, and I, I will tell you, um, in, in the 24 years that I've been in involved in, in franchising, but you know, through the associa, you know, through my vantage point as an association hack as I like to call it, because, uh, you know, I moved to DC to go to graduate school was, you know, bit by the political bug, uh, worked on Capitol Hill, was a government related, you know, I was a lobbyist, um, moved over to I f a as a lobbyist to, to also build our political grassroots program. Um, but then got kind of fed up with lobbying, but fell in love with franchising and moved over to membership. Cause I love working with entrepreneurs, working with franchisors, franchisees and, and the supplier community, you know, what we call the franchise family, if you will. Um, you know, the one thing about I f a and, and our mission has never changed.
Speaker 2 00:04:19 We protect, enhance, and promote franchising day in, day out. And, and, and it, you know, since the inception of I F A back in, you know, the late fifties, but, you know, officially 1960, and it was founded by, by Bill Rosenberg, the founder of Dunking Donuts. And I had the pleasure of knowing him, uh, the first few years I was here at I F A and he would always tell the story about how he stood up from the table. He was with a group of, you know, franchise founders at the time and, and said, you know, threw down a hundred bucks and said, let's start this bleep be bleep association. And that's how we came in into play. And, and it was because franchising was being looked at and, and, and cons, they were considering the federal government was considering regulations to the business model.
Speaker 2 00:05:07 Um, right. And I'll tell you, things have just never really changed. I mean, as long as I've been here, we're always having to educate people about franchising. Nobody understands franchising. I mean, we're all in it. We, we breathe it day in and day out. Right. But you talk to the general public, um, a lot of people, they just don't understand franchising, especially, you know, people on Capitol Hill here in DC or out at the state level or local level, whether it's, you know, mayor's offices or, you know, state legislators, um, the media, uh, and, and also the regulators. I mean, we are always having to educate folks and, you know, and that's where the protection piece comes in, right? We are always protecting the business model. And I'll tell you the business model has, but I don't wanna make it sound like the sky's falling, but the business model has been under more of a direct threat in, in the past 10 years than it ever has in the history of, of at least if a's existence.
Speaker 2 00:06:06 Right. And, you know, the pendulum, uh, has shifted back really to the state's side. There've, there've been a number of things. Obviously, you know, we jokingly refer to it as the, you know, the country of California. But, you know, you know, California has some, you know, the fast act, uh, your joint employer, and then of course, Arkansas and my, my, you know, awesome colleague, uh, Jeff Hanscomb, you know, that was the all last minute. And, you know, we pulled together some awesome panelists and, and we were able to f fight that thing and Right. And right. And we were very happy about that. Then there's a onerous bill in, in, in Arizona, but, uh, uh, I was told that, uh, we're in good shape there. And then there's a onerous bill in New Jersey, but only focused on the hotel, hotel sector, but still, right. You know, it's there.
Speaker 2 00:06:57 And, um, and then of course, you know, on, on the regulatory side right now, listen, the FTC is, is, you know, they, you know, they, they're looking to, you know, they put out a request for, uh, for comments on, on, on franchising on the franchise rule, and there's gonna be a hearing and, and, you know, we're very involved with it, and we have, uh, you know, some questions that we've asked some of our, uh, friends on Capitol Hill to ask, uh, you know, during this hearing. Right. Um, and you know, it, it just seems like, you know, you know, we're always trying to be very open with everyone. And what, I mean, everyone, I mean, you know, whe whether it's it's the lawmakers or the regulators, and, and it just seems to me, and this is my, my opinion, um, my personal opinion, but it just seems like, like people are being a little, you know, on the regulatory side, they're being, they're being kind of one-sided about things.
Speaker 2 00:07:54 And that just really concerns me because, you know, we all know that franchising is a powerful tool, powerful cog in the economic wheel, uh, uh, of the US economy. And not only is it a, you know, you know, a very strong, you know, over 800, you know, B billion directly related to y you know, to franchising. But, but at the end of the day, it, it provides the opportunity for people to realize the American dream. Exactly. I mean, we all know, we've heard the countless stories, you know, you know, whether it's people pulling themselves up by the bootstraps or, you know, people coming to this country and, you know, mopping or sweeping the floor, and, and, and now they're multi-unit, multi-branded franchisees. Right. And, you know, not that money's everything, but you know, they're multi-millionaires, you know, but, but, you know, and then it, it does, it just, it gives people the opportunity to be their own boss. Right? We always say that, be your own boss, uh, as there, what franchising does.
Speaker 1 00:08:55 Let me ask you this, Paul, and it's interesting because you're absolutely right. It, you know, the, the pushback on franchising seems to be getting a little bit louder and louder each year. Uh, although it, right now, it, it, it's still just a loud roar. The roar is getting a little bit louder, but has the I F A looked at and kind of put the finger on it on why the loud roar, why the pushback? Is it coming from the, the independent entrepreneur, the big corporations? What is it that people fear about the franchising industry and the, you know, the labor practices and the independence that franchisees have that are following a model? I mean, these are independent business owners. They own their business. They can wake up in the morning and sell their business. They just have to follow the model. So where is, or what is the reason for the pushback? Is there any, is there any one thing that stands out?
Speaker 2 00:09:54 Yeah. Honestly, and from, from my vantage point, it's, it's a couple of things. Um, the s e I u the unions, you know, they are, they are very, you know, they listen, they have deeper pockets than than we do. And when I say we, I mean, I, I, I mean, if f a, uh, you know, we are a very small trade association. I mean, we are not as, you know, and we don't have the kind of revenue that, you know, national Restaurant Association has, or the Hotel Motel Lodge and National Retail Federation. But, you know, when it comes to franchising, you know, we're, and you know, we, we represent over 300 different verticals that, that happen to franchise. Not everybody in those verticals are franchise ORs. Right. But those that are, you know, they play with I f A, um, you know, because, you know, for various reasons, obviously.
Speaker 2 00:10:45 But, um, I will say that it, you know, the S E I U is, is, you know, looking at, they're looking at their pockets. I mean, look, you know, the world has changed for the unions. Everything is a service related economy, right? And what's the biggest sector, you know, and everything in franchising is practically service related, right? And, and so they're going after, they're going after franchising, and they're not gonna stop. So we're seeing it from there. And then, you know, listen, we all know franchising is, is truly a relationship business. The relationship between the potential franchisee and the franchisor, the existing franchisee and the franchisor, and then the vendor community, whether it's the specific vendor for the franchisee, or if it's a vendor for the franchisee franchise, or, but it's, you know, we call it the three-legged stool of franchising. I don't, I don't love that analogy, but Right.
Speaker 2 00:11:38 But at the end of the day, you can't have a balanced stool without a FraNChiS or a franchisee and supplier. And that's what makes up our membership. But, you know, at the end of the day, like any relationship, I always jokingly say, you know, franchise relationships last longer than most marriages. Mm-hmm. <affirmative>. But, but with that said, you know, nothing's perfect. And, you know, there's always gonna be, there's always gonna be, you know, issues with franchisees and franchisors sometimes, and, you know, they're not gonna be happy. And I, I don't like to use the word disgruntled franchisee or blame it all on, you know, the franchisor or the franchisee. But yes, there's a litigation. We all know you can't have franchising without the, the attorneys. And all my good friends in franchising who are attorneys, I mean, they, they get it. I mean, the large, the largest segment within our supplier membership are, you know, is the attorney, the, the legal as, you know, the legal vertical, if you will.
Speaker 2 00:12:29 But in, you know, when I look back over, you know, when I started here, it was, uh, you know, a federal franchise relationship. Bill Iowa had just, there was a big bill in Iowa, and that was before I came over to I f A. Um, and, and then we had a federal bill, which was Cobal Conyers, and it was truly a franchise relationship legislation, and Right. And then every other, like Bill that had been introduced almost since then, it was always because of, you know, there was an issue with, you know, with the relationship between the franchisor and the franchisee. And, and, you know, you've, you've got somebody who's unhappy and that, and that somebody who's unhappy has a, you know, has a connection, a friend, a relative, right? Yep. Who is a legislator. And they're like, you know, you've gotta help me here. And that's, I mean, that is practically how every single piece of legislation, um, that is negative to franchising and the business model has been in ha, has come into play. Um, well,
Speaker 1 00:13:34 I think also, yeah, the environment that the, also, the environment today is a little bit more hostile. Um, oh gosh, yeah. When it comes, when it comes to sitting down and, you know, kind of hashing things out, you know, you go back into the eighties and nineties, you know, people would sit around with a bottle of whiskey and just say, Hey, look, you know, let's work this out. Hammer, nobody's leaving. But today it's, you know, uh, you know, I'm gonna get my lawyer. You're gonna get your lawyer. We're gonna, you know, we're gonna throw darts at each other. And, uh, you know, so the environment tends to be a little bit more hostile in resolving or resolving issues. But the bottom line is, is that franchising is still a very strong element within the entrepreneur community. I mean, it is, oh gosh. It's still a reliable option for people that wanna hundred percent get into the business 100s. And that's not to take away the independent, but there's just, you know, people are, look, change is always good. And, but unfortunately, there are people that always want change. You know? It, it's, you know, it, it's, they're not looking at it as an industry. They're looking at it as an individual, what's best for me, not best for the industry. Um,
Speaker 2 00:14:38 Exactly. Exactly. You know, and you're a hundred percent right. You're a hundred percent right. I mean, uh, the art of compromise, you know, at least in, in DC from my perspective, the art of compromise is gone. It, it, it is, it is 100% gone. And, um, I mean, look to your point, and I'm, I'm dating myself, and, but you'll, you'll get this, I don't know if all your viewers will, but you know, a hatch and Ted Kennedy, yes, totally opposites, but guess what? They would get together. Now, a hatch wouldn't have a, have a drink, but, but Ted would, and they would get together, they would always hash things out. They would compromise. Yes. You know, and there are some folks up on the hill that do that now, but it's just not the way it used to be. Right, right. It's so, so contentious. It really is.
Speaker 1 00:15:21 Yeah. Well, you know, I, look, I spent almost 10 years down in DC working for the news media as part of the White House Press Corps. So, uh, you know, I remember those days, you know, better
Speaker 2 00:15:30 Than most people.
Speaker 1 00:15:31 Yeah. Tip O'Neill, Ronald Reagan. I mean, exactly. You, you could disagree with the politics of, you know, whatever side of the table you're on. But those guys would sit down and they wouldn't leave a room, and they'd polish off three or four cigars in a bottle of whiskey. And, you know, they would have a, you know, next morning you'd read about it. Hey, we worked it out. So, um, there wasn't the name calling. So the environment's a little hostile. But, you know, one of the things that fascinated me most about the I f A conference, uh, that, you know, took place, uh, recently in Las Vegas was the amount of new franchise wars, new concepts. I mean, uh, I had, uh, Edith Weisman as a guest, uh, uh, a couple of weeks ago, and, you know, president of Fran Data, and we were discussing this, and I'm curious to get your take in the, if I take, but I have never seen the explosion the way it is of people that are looking to franchise their business and now franchising it and offering it as a franchise. To me, it's, yeah, I mean, I mean, exploding numbers.
Speaker 2 00:16:30 Yeah. It, it, it, it really is. I mean, um, uh, I haven't seen the final stats on, on our convention, but, uh, my colleague Alan, who oversees conferences, um, we had about, about over 600 franchise brands that were represented at the convention. Um, and that was actually, uh, that was actually a record, uh, a record number. Um, but we're still, you know, still kind of crunching numbers and verifying that. But, um, but yes, I mean, um, leading up to every convention, so one of the things I've, you know, historically always kind of overseen is, is our new member first time attendee, uh, orientation and reception at convention. And, and not only do we have a, you know, a lot of new franchisor franchisee and supplier members coming into, if a, but there are always a ton of, of people who are, you know, they might be with Duncan Brands, but they've Right.
Speaker 2 00:17:33 But they're either brand new to franchising or they've never been to the convention before. Yeah. You know, and there's, there's so many people, you know, in that bucket as well. Um, and, and you know, that's, you know, like I always wonder, you know, you know, are they all gonna come to the, you know, to the reception or the, you know, cause I have ambassadors, long-standing members of if a Right to help educate these folks. And, you know, I would jokingly say, get them addicted to the Kool-Aid, you know, <laugh>. Um, but, but, you know, and we had like almost a thousand people in that, in, in that ballroom for the new member first time attending reception.
Speaker 1 00:18:08 We did. We did. Yep. And
Speaker 2 00:18:09 Y you know, it's, it's just fascinating. And, and y you know, I mean, you know, and you know this, I mean, people reach out to me, you know, every day, every week, uh, you know, they wanna franchise their business. And, and I, you know, listen, I I try to talk to 'em out of it because I'm like, it's not easy, it's not cheap. No, nothing easy.
Speaker 1 00:18:27 Right? You're
Speaker 2 00:18:27 Not in the, you know, the restaurant business anymore. You're in the franchise business. Yeah. And if you can't comfortably change your hat and put on the hat of being a franchisor, know what that means, educate yourself, continue. I mean, you know, we learn something new every single day, and I'm still learning something new every day. Yeah.
Speaker 1 00:18:43 There's a policy way. Yeah. There's a policy. You, you're running your business based on a, a manual policy operations. It's not like you can, you can't walk into a independent, it's not like walking into your independent Exactly.
Speaker 1 00:18:56 And saying, Hey, Joe, that's not how I want you to do it. It's, it, it, there, there, there's, it's a different approach, but it's a great way to, to to, to expand your business model, open a hundred percent units without having all the, you know, the wheels. 100% concerning and all the moving parts. Yep. Um, you know, one of the questions, uh, and we touched on this, uh, one of the first things we're running at a little time here, we're talking to Paul Rocchio, who's vice president of, uh, development and member services at the International Franchise Association.
Speaker 2 00:19:25 The janitor,
Speaker 1 00:19:26 <laugh> the janitor. But, you know, one of the questions that I get about, uh, and, and, and especially talking to people that are looking to get into or explore business ownership for the first time, investigate franchising, is educating people about franchising that it's, you know, it, it's, you know, it's not that you just give a guy a franchise check, you know, a franchise fee, and they give you the keys to the door and they do everything else for you. So if I was going to direct somebody to the I F E and say, Hey, here's a great spot to learn about franchising, or what franchising is all about, is there any certain spot on the if e website or anything I can point them to that helps them educate, uh, help educate people that are looking to get into franchising? Oh,
Speaker 2 00:20:10 Goodstein. Oh, a hundred percent. So, you know, our, our website, you know, shameless plug franchise.org, um, you know, we have, we have a lot of free and helpful information on, on, on all aspects. Um, and so on the website, if you just scroll down, you're gonna see a number of tabs like the FTC guide buying a franchise, you know, you know, and, and I, listen, Scott, you, you'll, you get this, I mean, I always tell people, you, you know, always do your due diligence. There's so much stuff out there. Um, there's so many books out there. Yeah. But you have to familiarize yourself with, with all aspects of, of franchising and, and people, you know, like the potential franchisee who reaches out to me or somebody who's interested in, in becoming a franchisee. Um, you know, there's a number of things that, that I will point them to.
Speaker 2 00:21:04 Um, but I always tell them, you know, you have to do your due diligence. You have to do your homework. Just make sure you're familiar. You don't have to be an expert, but just make sure you're familiar with what, uh, F D D is and what each item within the F D D is and you know, the franchise agreement and that you could actually talk to existing franchisees or franchisees that recently left the system, ask if, if they have an item 19, what's that? And I tell them, you know, it's like, you, you know, there's so many things that, um,
Speaker 1 00:21:38 Yep. I tell my client, I tell my clients, Paul, that I, if you wanna be a successful franchisee, uh, and eventually become maybe a multi-unit, multi-brand operator, yes. You, you have to learn how to ask questions. If you're not the type of a hundred percent who likes to ask and get information from other people, you are not going to be successful in franchising. You can't do this alone. Cuz franchising is a partnership. And the beauty of the franchising industry and, and, and bringing in organizations like the I F A is people wanna share information. I mean, you attend the conferences or the workshops that the I F A puts on, it's amazing how people are willing to help other franchisees out or people that are looking to get into the industry for the first time. That's amazing.
Speaker 2 00:22:23 A hundred per, a hundred percent. You ate, I mean, I say that to people all the time. Of course, you, you and I have been around forever, but you know, you know, people love to give back to the people coming up the ladder behind them. I see it. Oh, you, we see it all the time. And yet there's competitors within each vertical. But franchising is franchising. Whether you're trying to fill hotel beds, flipping hamburgers, switching out mufflers, franchising is all the same. You're all dealing with the same issues. So, you know, people love to give back to the people coming up the ladder behind. And then I tell especially, you know, you know, start an emerging brands, there's no reason to recreate the wheel. Trust me, every problem that has happened has already happened. And people within the I f A community and the franchising community educate you, help you teach, you tell you how they screwed up a million times and what to do and what not to do. And I mean, we see that all the time. Right. All the time. Um, right, right. And that's what's so great about Fran. And we call it the franchise family. I mean, you know, people love to just give back to people coming up the ladder behind them all the time. Right.
Speaker 1 00:23:26 Absolutely. Well, we've been talking to Paul Rocchio, uh, vice President, development member services for the International Franchise Association. Uh, Paul, it's, uh, you know, it's always great to chat. I wish we had more time. We could probably go on for hours, you know, just telling funny stories and, uh, you know, I mean, we could probably all write a book about things that would ha that have happened or we heard about in the industry. All good things. Um, uh, but, uh, you know, we appreciate, uh, at least I appreciate all the efforts that you put into the I F A and helping people. Um, if anybody had any questions about franchising Okay. To email you, is there a Yeah,
Speaker 2 00:24:01 Of course. Yeah. Email me, call me. Um, you know, I'm, I'm here in the office, uh, every day. Okay. Um, I always to tell people my, uh, I didn't last long, uh, during Covid working for my family, voted me off the island <laugh>. I was back in the office by July 6th, 2020. And, you know, I'm still here Monday through Friday for the most part, <laugh>.
Speaker 1 00:24:22 Well, Paul, thanks so much for sharing some time with me. This is Scottie my, your podcast host for all things considered franchising, uh, and also powered by Scott Myles franchise coach.com. Anyone has any questions? You can email me at Scott Scott my franchise coach.com, or gimme a shout at (860) 751-9126. I do use a phone. I still talk on the phone. Uh, so, uh, feel free to reach out if you have any questions about, uh, uh, looking at franchising or exploring franchise opportunities. Paul, it's been great. I wish you and your family best of the kids in their decision. Thank you. Process. Uh, thank you.
Speaker 2 00:24:57 Thank you, Scott. Appreciate it.
Speaker 1 00:24:58 And we will, uh, catch up, uh, we'll catch up again soon,
Speaker 2 00:25:01 I hope. Yeah, definitely, Mike.
Speaker 1 00:25:03 Thanks very much.
Speaker 2 00:25:04 Hey, well buddy. Bye now.
