While federal and state laws can vex franchise companies, sometimes city ordinances sting the most. Some are taking their cause directly to mayors in a new local-level lobbying effort.
They say you can’t fight City Hall, but several franchise operators and the IFA are trying to work with city officials to improve relations.
That was the goal when mayors from Minneapolis suburbs Eagan, Apple Valley, Burnsville, Savage and Woodbury met last summer with 20 or so franchisees about making business easier. They took part in the International Franchise Association’s most significant local-level event yet.
Several "Meet the Mayors Summits" are planned for 2013 in Atlanta, Miami and Charlotte, North Carolina. According to Miriam Brewer, the IFA’s senior director of education and diversity, the meetings are a response to a stated need for more communication.
The IFA has been involved with the United States Conference of Mayors for years — so much so that the conference has its own franchise task force. But at last year’s conference, people said they wanted more. "One of the mayors was saying we need to find an opportunity where we can have dialogue with franchise companies," Brewer says. "We said, OK, we have mayors who are expressing an interest. We need to pull something together."
Franchisees were interested in learning to work with cities, as well. While federal and state laws can provide major headaches for franchisees, sometimes it’s the city ordinances that sting the most. Who can forget Mayor Bloomberg’s "soda ban" in New York City, or the drive-thru bans several cities adopted in 2009, or the various "dark sky" laws restricting signage and parking lot lights?
In addition, there are the everyday conflicts relating to zoning laws, building codes and other issues. Steve Hutchens, who co-owns a Dairy Queen franchise in Grand Rapids, Minnesota, says even minor issues can become a hassle when not properly addressed.
‘Kind of a hassle’
"When the new building was first put up in 1997, our sign was a couple inches higher than the building and that was outside the city code," Hutchens says. "So I had to actually attend a city council meeting, come up with a plea, and get a special permit to leave the sign how it was until we remodeled again. Not a big deal, but kind of a hassle."
Roy Otto, the city manager of Greeley, Colorado, says the frustration can go both ways. Sometimes a city’s desire to have its own look and feel can get in the way of a franchise’s desire to maintain consistent branding.
"There are sometimes design standards that a franchise creates," Otto says. "They come in and their color scheme doesn’t necessarily meet the standards for a specific development."
Dean Heyl, director of state government relations and public policy for the IFA, says a city that is hostile would be an exception, not the norm.
"Most cities, actually, are very receptive to franchises," Heyl says.
Richard Phillips would agree. As vice president of franchise development for Dallas-based Dickey’s Barbecue Pit, he’s overseen 100 restaurants open in just the past year. He’s seen everything from the good (property tax reductions) to the bad (bureaucratic gridlock where it’s hard to get a decision maker on the phone). He says one important thing cities can do is offer a single point person for the permit process.
"There’s just a lot of different permits that we have to work through," Phillips says. "Having the avenue to speak to decision-makers is kind of a big deal for us."
Direct communication is usually enough to solve problems. Otto says he’s never had a franchisee decide not to build in Greeley because of design requirements, and Phillips claims Dickey’s has never not opened a restaurant due to ordinances. The IFA plans to continue holding events in the hopes that it will keep franchisees on good terms with their city governments.
"Some may have a relationship, some don’t," Brewer says. "It’s an opportunity for it to be open dialogue."
A do-it-yourself mayors’ summit
The IFA won’t be traveling to a town near everyone, but individual franchisees can take things into their own hands. Smoothing out relationships with city government is a relatively simple process that yields big results.
Get involved. Whether it’s the chamber of commerce or a local business development organization, there are groups already working to ease relations between the city and the franchisee. Joining can be key to keeping apprised of new legal changes, becoming aware of resources, and allowing a greater voice in what’s going on.
Dean Minardi, who owns a Big Apple Bagels franchise in Superior, Wisconsin, says being part of the local business community makes life easier. "I go to different Chamber events. I’m not super-involved but I’m a little involved in what happens over here," Minardi says. "All I can tell you is they are all extremely helpful to the businesses at all levels."
Show your work. "My best advice would be to be very transparent," says Richard Phillips of Dickey’s. "People go out and they try to do things. It ends up costing you more time and money in the long run. Ask for permission; don’t ask for forgiveness later."
Keep communicating. "You may not see your member of Congress at the grocery store," the IFA’s Miriam Brewer says—but you just might see your city councilor. Having an open line of communication to people at the top can make things a lot easier when problems do arise.
Phillips says that at one point a town in North Carolina demanded they limit certain store signage to black-and-white (their normal colors are black, yellow and red). But they were able to compromise and get the store opened. "It was kind of challenge but we were able to work through it," Phillips says. "Our agreements are 20 years, so we want to make sure we partner with the cities."