Edward Kushell writes on BlueMauMau that he was an expert witness for Robert Halcro and Alaska Rent A Car in the recent case that awarded $19 million to the Avis franchise owner in Alaska.
Edward Kushell is president and founder of The Franchise Consulting Group. He has been a franchisor with 400 units, a multiunit franchise owner, a former president of the International Franchise Association, a consultant to hundreds of companies involved in franchising, and an expert witness in nearly a hundred cases. He can be reached at (310) 552-2901or emailinfo@franchiseconsulting.com.
The actions of Avis, in my opinion, represent everything that is bad in franchising.
I spent many months looking into all aspects of the relationship—reviewing countless documents, personally interviewing Robert Halcro and the key people in his organization and relying on my more than forty years-experience in franchising as a franchisor, multiunit franchisee and longtime consultant to hundreds of companies engaged in franchising. As a past president of the International Franchise Association, I believe I understand how deeply that organization promotes fairness in franchising. My activities in this case culminated with my writing a comprehensive expert report.
I am not a lawyer and do not offer legal opinions but I am quite capable of commenting and offering opinions on the actions of certain franchisors and how their actions impact other franchisees in their system, as well as on the reputation of franchising.
Halcro has been a franchisee of Avis for over fifty years and developed all of Alaska for Avis. He invested considerable sums of his own money, paid substantial royalties over fifty plus years, and he was always the model franchisee. When Avis acquired Budget, and without my getting into their alleged violations of the specific terms of the agreement they had in place with Halcro, they never even tried to first communicate with him as to their intentions. They never had the good judgment or courtesy to first try and explain their motives to Halcro to see how they could make the acquisition in a manner that would not threaten the livelihood of a fifty-year franchisee. They never seemed to understand that there was a possibility of a “win/win” outcome. Instead, they rammed it down Halcro’s throat, confident that the Avis juggernaut, backed by private equity resources, would not be challenged and would force this then 85-year old franchisee into submission. Avis obviously did not understand that there are some franchisees with so much principle that they are willing to risk everything they have to stand up for their rights, as Halcro chose to do at considerable financial and personal cost.
I can only imagine what franchising would be like if franchisors with considerable resources, in many cases financed by private equity firms, chose to deal with franchisees the way Avis did with Halcro. Whether franchisors and their lawyers choose not to term it as such, franchising in practical terms is a partnership. Both common sense and fairness dictated that Halcro be treated as their longtime partner, which he was, and as one who contributed immeasurably to Avis’s success in Alaska and system wide.
Read more at BlueMauMau
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MFOA members,
Over and over again franchisors change leadership and even ownership, institutional memory is gone and the franchisor seems to treat franchise owners as subservient. It’s the franchise owners are in fact are the builders of the brands and the current management are the merely gatekeepers.
It’s important for franchise owners to be diligent, stick together, and organize to protect, enhance, and defend, their hard earned equity in the brand.
Encourage your colleagues to join and support the Maine Franchise Owners Association – Investors in Maine’s Economy!
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