The Role of the Franchise Compliance Coordinator
The Role of the Franchise Compliance Coordinator
One of the primary responsibilities of the Compliance Coordinator is to work with your sales and marketing staff (including franchise brokers) in order to ensure that they are knowledgeable in terms of the information they are required to share and permitted to share with prospective Franchisees. This helps ensure that franchise sales personnel follow proper procedures related to the offer and sale of franchises.
A second responsibility entails their ensuring that the Disclosure Document and related Exhibits are kept up to date, at a minimum quarterly and annually, upon any "material change" to the document(s). In addition, the Compliance Coordinator is responsible for ensuring that state registration documents are amended and renewed on a timely basis. For example, registration and disclosure documents must be amended whenever there is a "material change" affecting the system or the company's relationship with its Franchisees (at a minimum, registration renewals must be filed annually). The Coordinator will work with your franchise attorney to coordinate any required updates and state registration renewals.
The final role of the Coordinator relates to their maintaining files for each Franchisee as described below.
Franchise File Checklist
The following is a list of the documents and information that should be organized by the Compliance Coordinator and included in the Franchisee's file(as applicable to your franchise operation). Some of this information will be maintained by the franchise sales personnel during the sales process. They should be made aware of the required information:
• The Date that First Contact was made and by what Method (phone, personal meeting, email, etc.).
• Notes of all Meetings and Telephone Conversations conducted with the Franchisee during the sales process, including dates, nature of the interactions, key notes, actions taken, and information/materials supplied.
• Copy of Correspondence/Emails (during the sales process) between the Company/Salesperson and the Franchisee.
• Record of Credit Reports, Criminal Background Reports, and other Screening Data and Decision Procedures used to approve the Franchisee.
• Copy of signed Franchise Application, Personal Financial Statement and other related forms.
Signed Acknowledgment of Receipt of the FDD.
• Copy of the Payment (i.e. check) for the Initial Franchise Fee.
• Copy of the executed Franchise Agreement and other Agreements and Addendum (i.e. Deposits Agreement, Site Selection Addendum, Confidentiality Agreement).
• Copy of the executed Franchisee Compliance Certification Form.
Following the award of a franchise, the Compliance Coordinator should include the following forms and materials in the Franchisee's file:
• Documentation (or copies) related to the Franchisee's receipt of all required licenses, permits and bonds relative to the Franchise Business.
• Proof of Insurance relative to the Franchise Business.
• Copy of the Franchisee's Lease and any "Lease Assignment Agreement" and/or Addendum.
• A log that tracks the Franchisee's payment of royalties, advertising fees, training fees, product purchases, etc. This information may be maintained electronically.
• A log that tracks the Franchisee's submission of any reports required to be submitted (i.e. Royalty Reports, Annual Tax Returns, Sales Tax Returns, List of Employees, etc.). Copies of the required reports should also be maintained in the Franchisee's file.
• A log that tracks the Franchisee's participation in meetings, online conferences, and other similar events. This information may be maintained electronically.
• Copies of all key correspondence to and from the Franchisee.
• Copies of all complaints made against the Franchise Business by consumers and governmental agencies.
• Copy of Inspection Reports conducted at the Franchise Business.
• Copies of any "Notices to Cure" for defaults by the Franchisee under the Franchise Agreement.
© 2009 Stephen Vandegrift, all rights reserved
The Role of the Franchise Compliance Coordinator - To learn more about this author, visit Steve Vandegrift's Website.
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When advising clients concerning their franchise operation, FranSource recommends that they designate a responsible employee to act as the Franchise Compliance Coordinator. This position entails implementing a franchise compliance program to ensure the company remains in compliance with all federal and state disclosure laws and regulations.
One of the primary responsibilities of the Compliance Coordinator is to work with your sales and marketing staff (including franchise brokers) in order to ensure that they are knowledgeable in terms of the information they are required to share and permitted to share with prospective Franchisees. This helps ensure that franchise sales personnel follow proper procedures related to the offer and sale of franchises.
A second responsibility entails their ensuring that the Disclosure Document and related Exhibits are kept up to date, at a minimum quarterly and annually, upon any "material change" to the document(s). In addition, the Compliance Coordinator is responsible for ensuring that state registration documents are amended and renewed on a timely basis. For example, registration and disclosure documents must be amended whenever there is a "material change" affecting the system or the company's relationship with its Franchisees (at a minimum, registration renewals must be filed annually). The Coordinator will work with your franchise attorney to coordinate any required updates and state registration renewals.
The final role of the Coordinator relates to their maintaining files for each Franchisee as described below.
Franchise File Checklist
The following is a list of the documents and information that should be organized by the Compliance Coordinator and included in the Franchisee's file(as applicable to your franchise operation). Some of this information will be maintained by the franchise sales personnel during the sales process. They should be made aware of the required information:
• The Date that First Contact was made and by what Method (phone, personal meeting, email, etc.).
• Notes of all Meetings and Telephone Conversations conducted with the Franchisee during the sales process, including dates, nature of the interactions, key notes, actions taken, and information/materials supplied.
• Copy of Correspondence/Emails (during the sales process) between the Company/Salesperson and the Franchisee.
• Record of Credit Reports, Criminal Background Reports, and other Screening Data and Decision Procedures used to approve the Franchisee.
• Copy of signed Franchise Application, Personal Financial Statement and other related forms.
Signed Acknowledgment of Receipt of the FDD.
• Copy of the Payment (i.e. check) for the Initial Franchise Fee.
• Copy of the executed Franchise Agreement and other Agreements and Addendum (i.e. Deposits Agreement, Site Selection Addendum, Confidentiality Agreement).
• Copy of the executed Franchisee Compliance Certification Form.
Following the award of a franchise, the Compliance Coordinator should include the following forms and materials in the Franchisee's file:
• Documentation (or copies) related to the Franchisee's receipt of all required licenses, permits and bonds relative to the Franchise Business.
• Proof of Insurance relative to the Franchise Business.
• Copy of the Franchisee's Lease and any "Lease Assignment Agreement" and/or Addendum.
• A log that tracks the Franchisee's payment of royalties, advertising fees, training fees, product purchases, etc. This information may be maintained electronically.
• A log that tracks the Franchisee's submission of any reports required to be submitted (i.e. Royalty Reports, Annual Tax Returns, Sales Tax Returns, List of Employees, etc.). Copies of the required reports should also be maintained in the Franchisee's file.
• A log that tracks the Franchisee's participation in meetings, online conferences, and other similar events. This information may be maintained electronically.
• Copies of all key correspondence to and from the Franchisee.
• Copies of all complaints made against the Franchise Business by consumers and governmental agencies.
• Copy of Inspection Reports conducted at the Franchise Business.
• Copies of any "Notices to Cure" for defaults by the Franchisee under the Franchise Agreement.
© 2009 Stephen Vandegrift, all rights reserved
The Role of the Franchise Compliance Coordinator - To learn more about this author, visit Steve Vandegrift's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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