Franchising's Sinister Side: Vanishing Ad Dollars

Its franchisees didn't feel the effects of their marketing contributions, says Blair McHaney, president of the association. Today, every corner of the franchise system has a good idea of where the money goes, he says. "Now franchisees can focus more on their daily operations and know that someone's got their back."

Put Up Your Diplomatic Dukes

"Appeasement never works," says Seldon. "But don't pick a fight." Once you have a strong group built up, find out what rules in the contract govern the marketing fund. Then -- first politely, then forcefully -- ask the franchiser for an accounting of all funds.

Don't settle for an audit, which doesn't tell you what money is going in and out, says Seldon, who recommends utilizing a jointly sponsored third party through the process. "If franchisers don't have anything to hide, they'll let you take a look," he says.

Franchisers have no obligation to deal with an association, so a good strategy is to appeal to their self-interest.

"If you walk up with a franchise agreement in one hand and a fist in the other, you're not getting anywhere," McHaney says.

Most franchisers realize that involving franchisees in the decision-making mitigates blame for themselves if something goes wrong, says Seldon. They are also willing to offer transparency to gain access to valuable tactical information only local franchisees can provide.