'Fairness' is at Root of Collaboration at FASTSIGNS
Catherine Monsons, CEO of FASTSIGNS
“To me it’s all about fairness,” said Catherine Monson, CEO of FASTSIGNS, when it comes to the franchise agreement she asks franchisees to sign. She and two others spoke on a panel about franchisor/franchisee collaboration at the International Franchise Association’s Legal Symposium in Chicago, May 3-5.
For example, when she became CEO about six years ago, the agreement said the franchisor could make unlimited demands for capital expenditures, but she put a $20,000 cap on such spending for every five years.
She uses the franchise agreement as the last resort when trying to gain compliance. “You have to make the business case,” she said, and cited an example. FASTSIGNS started in the summer of 2008 to get franchisees to sell digital signage, but last year, five years into the initiative, “literally our digital signage wasn’t even 2 percent” of systemwide sales—in other words, the efforts were a bust.
So she changed the approach. “So rather than pulling out the agreement” and saying the changes were mandated, they put in place for 18 months a 50 percent royalty and ad fee rebate for digital signage sales—and in the first quarter of this year alone, $525,000 in sales were for digital signage with the number expected to rise.
Brian Schnell, Faegre Baker Daniels in Minneapolis, moderated the panel, on May 4 at the Marriott Magnificent Mile in Chicago. Aziz Hashim, head of NRD Capital in Atlanta, and Ann Hurwitz, a partner with Baker & McKenzie in Dallas, were also panelists.