When your right hand is missing
Dan Archer - Franchise Development Director, X-Press Legal Services - Director, BFA
OK so I admit it. After writing a piece for Venture Marketing Group’s Franchisor News on blogging I have been hoist by my own petard. In my “To blog or not to blog” article I advised that the art to successful blogging is regularity (amongst other things). I have since then not put fingers to keyboard in 3 weeks, a regularity problem which must now be fixed with the blogging equivalent of Turbo Lax TM.
The subject for this week is the team of people around you. If there is any defence for my wanton neglect in not writing for three weeks it is that during the summer holiday silly season, our business has like many others missed key staff. The impact on Aviva of employee number 2345 taking two weeks in Turkey is relatively light. For many small businesses coping when people take well-earned holidays is like having your right hand cut off.
So the crux of this piece is that when we recruit good people and empower those good people to make a difference to our businesses it is always going to be the case that when they are not around we are going to miss them.
Having read an excellent Blog last week by the BusinessGP Marc Lawn where he discussed the need for business people to look in the mirror first when considering business success. My extension of this would be to look in the mirror and realise what you are not good at, then recruit someone that is good at this.
The problem for many small business people is that the business oligarchy and decision making monopoly that comes from having created the baby can often lead control freakery that would make a public school headmaster blush. Being good at the business may not be the same as being good in the business and could also not be good for the business.
Mike Goddard the current Chairman of the British Franchise Association and Chairman of Belvoir Lettings refers to his art of delegation as finding people that do things better than him and letting them do it.
In franchising this is essential. Once the original business becomes a franchise it actually morphs into 2 businesses. Successful franchisors recognise that just because they are talented retailers or restauranteurs it does not mean that they will be best placed to recruit, train and support franchisees. The franchise side of the business has a requirement for resource and expertise and should be treated with the appropriate love to make it a success.
In coming back to my situation my right hand (lady) as it happens has now returned and all is well with the world. For the last two weeks I have been working with the sense that I have had my right hand cleaved at the wrist. It is amazing though what can be achieved with a bloody stump.
Dan Archer is Franchise Development Director for X-Press Legal Services and is a Board Member of the British Franchise Association. You can follow Dan on twitter by visiting www.twitter.com/therealdarcher
Tags: dan archer, franchise recruitment, franchisor, management, recruitment, small business, staffing
2010 bfa HSBC Franchisor of the Year – Winners Announced
Cathryn Hayes - HSBC Head of Franchising
I had the pleasure of announcing the winners of the 21st bfa HSBC Franchisor of the Year Awards 2010, supported by Express Newspapers, at the award ceremony in Nottingham last week.
Presentations to the judging panel by the 15 finalists in April brought much deliberation before the winners were selected for the three award categories. We judges felt that those chosen displayed exceptional qualities at a time when British businesses have had to be more innovative than ever to compete successfully in today’s economic climate.
The winners were:
bfa HSBC Franchisor of the Year Award
- Gold – TaxAssist Accountants
- Silver – Domino’s Pizza
- Bronze – Autosmart
HSBC Franchisee Support Award
Express Newspapers Brand Builder
- Cook
Judging the finalists was tremendously difficult as so many franchisors have shown innovative ways in which to survive and prosper despite the economic downturn. TaxAssist clearly demonstrated unique and exciting business success and is a deserving winner of the bfa HSBC Franchisor of the Year Award. Deciding on the winners of the HSBC Franchisee Support and Express Newspapers Brand Builder awards were equally difficult with exceptional practices on display – Revive! and Cook should be justly proud of their achievements.
I am sure that all the winners will capitalise on their success and continue to build businesses with strength and conviction by helping their franchisees to adopt innovative and strategically sound tactics for growth.
To view photo’s from the event have a look at the album on our Business Network site.
Tags: BFA, cathryn hayes, express newspapers, franchise, Franchise awards, franchising, franchisor, hsbc
The Bribery Act and Franchising
John Pratt - Senior Partner, Hamilton Pratt and Legal Advisor to the British Franchise Assocation
The Bribery Act has been passed into law subject only to the making of the necessary order. Inevitably the tough new regime introduced by the Act raises the prospect of UK companies, particularly multi-nationals facing more aggressive investigations and fines potentially running into tens of millions of pounds. In the words of the Financial Times, “reputations and profits will be threatened if companies fail to show they have set up and followed, adequate procedures to prevent bribery”.
Section 7 of the Act creates a new strict liability offence for companies and partnerships of failing to prevent bribery occurring within their organisation. It is the Section 7 offence that could apply in a franchising context and which this note will consider.
The only defence to a prosecution under Section 7 is if a franchisor has put in place adequate procedures designed to stop corruption. Unfortunately, what constitutes “adequate procedures” is not defined in the Act. Formal guidance will be provided on this during the course of 2010. The bribery prohibited by the Act applies whether it takes place in the UK or elsewhere, provided that the business, which is being prosecuted, carries on business in the UK.
The elements of the Section 7 offence are:-
(a) a person associated with the franchisor;
(b) bribes another person intending:
- to obtain or retain business for the franchisor; or
- to obtain or retain an advantage in the conduct of business for the franchisor.
The Act defines an “associated” person as one who performs services for or on behalf of the person being prosecuted. What “performing services” means is vague. The Act indicates that it will be determined by reference to all of the relevant circumstances! Whenever there is scope for uncertainty it makes sense to err on the side of caution but just how serious a risk is it that franchisors could be liable for the acts of their franchisees? One franchise lawyer very publicly demanded that the British Franchise Association should be involved because of the seriousness of the risk. We do not agree.
Generally speaking franchisees do not perform services for or on behalf of the franchisor, but instead perform services for or on behalf of themselves and so will not be “associated”. An obvious exception to this is where franchisors obtain national account contracts or require customer contracts to be entered into between the franchisor and the ultimate customer and franchisees perform those contracts as agents of the franchisor. This is a relatively unusual arrangement and much more common is where franchisees perform national account work as the franchisor’s sub contractors. In our view it is unlikely (but not impossible) that sub contractors would be treated as “associated” persons.
Crucially clause 7.1 of the Act sets out two further alternative requirements for the offence to be committed. The first is that the franchisee (if it is an “associated” person in the first place) makes a bribe with the intention of obtaining or retaining business for the franchisor. Franchisees generally obtain and retain business for themselves and the franchisor benefits from it but it is unusual for franchisees to obtain or retain business for the franchisor. Where this could happen is where franchisees obtain national account work for their franchisor or obtain customers who will contract directly with the franchisor.
Alternatively the franchisee (if it is an “associated” person in the first place) has to make a bribe to obtain or retain an advantage, “in the conduct of business for [the franchisor]”. It is not clear what, “in the conduct of business” seeks to add. Is it a reference to the conduct of the franchisee’s business or a reference to the conduct of the franchisor’s business? If the latter, clearly franchisees are not usually involved in the conduct of the franchisor’s business. If the former, then the words do not appear to add anything. Assuming the worst case scenario and it is the former interpretation that prevails, the question is whether if a franchisee obtains a contract by bribery and that contract is entered into by the franchisee on which the franchisee pays continuing fees to the franchisor, this would result in the franchisor obtaining “an advantage”. The short answer is that it is unlikely but “it might”.
Our view is that the Act is only likely to apply if a franchisee obtains national account work for its franchisor or contracts are entered into directly between a franchisor and its franchisees’ customers in respect of which the franchisee performs services as the franchisor’s agent. In practice, this is a pretty unlikely situation! Nevertheless, we would suggest the following precautionary steps be taken:
- If your franchise involves national accounts or you require contracts to be entered into with you obtain specific advice;
- Insert a prohibition on bribery in your Manual along with a procedure for dealing with bribery issues;
- Send a formal notice to all franchisees stressing that bribery is wholly unacceptable and will, if found, result in the immediate termination of their franchise agreement;
- Insert a specific prohibition on bribery (and other relevant provisions) in your franchise agreements;
- Monitor the publication of the guidelines on what constitutes “adequate procedures”.
If you have any queries please contact John Pratt on: 0121 237 2020 or email: John.pratt@hplaw.co.uk
