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Dunkin' Donuts' Steve Siegel becomes first franchisee to chair International Franchise Association: Massachusetts business leader has served as both franchisee and franchisor. His goals for leading the association are focused on assuring the membership that everyone's interests are the same: business success. (Follow The Leaders of Franchising)(Cover Story).

Next month, Steve Siegel will accept the chairmanship of the International Franchise Association (IFA) during the group's annual convention Feb. 9-12 in Orlando. Siegel is chief operating officer and CFO of Kabloom, a 34-unit flower store chain, just beginning to explore franchising. Prior to accepting that position, he served in the same capacity at the national discount retailer Filene's Basement. In his early involvement with franchising, Siegel was general counsel for a group of franchisors, which had several hundred retail units.

Certainly an impressive resume, but what etches Siegel into the annals of franchising history is this: he operates more than 30 Dunkin' Donuts franchises, located in Massachusetts, and that makes him the first franchisee to chair the IFA in its more than 40-year history. Moreover, he is a founding member of IFA's Franchisee Forum, created in February 1993 to advise IFA's board of directors and encourage meaningful dialogue between franchisees and franchisors and to be instrumental in addressing and resolving mutual concerns.

In the early stages of the New Millennium, a Dunkin' Donuts franchisee ascending to the association's top leadership position is fitting. It was at the start of the sector's phenomenal economic and cultural expansion in 1960 that Dunkin' Donuts founder William Rosenberg conceived the idea of a franchise association, and it was his vision that franchisees be fully included as members.

Franchising World recently asked Siegel about his own vision for IFA in the coming year, and he pledged to make full representation of the entire franchising community a priority, fulfilling Rosenberg's original dream. Today, franchises may have to move faster and be bigger to compete in a very different climate than 40 years ago, but strong franchise relations are still the foundation of this unique business sector.

FW: You will soon accept the chairman's gavel to lead the world's oldest and largest association for the franchise sector, the International Franchise Association. What are your top three goals for your year as chairman?

Siegel: Overall, I would like to help fulfill the dream that Bill Rosenberg had, which is to truly make IFA the "Voice of Franchising" for franchisors, franchisees and suppliers. My primary goal will be to achieve full implementation of the system-wide membership program and to get as many of the IFA's more than 800 members as possible to become active in the association. My second goal is to improve and enhance the relationship between franchisors and franchisees. I am the first franchisee to have this honor and this responsibility and franchisors have given me a tremendous vote of confidence. I want to demonstrate for everyone that I can serve as the "Voice of Franchising" because ultimately we are all working toward the same objective. Which leads to my third goal: to preserve and enhance the reputation of franchising. We've lived through the tragic events of September 11 and have seen the contributions that franchising has made as good citizens. I think that not enough time is spent emphasizing what franchising means to the world and to the U.S. where it is such a significant part of the economy and culture. New ideas are constantly being tested and developed through franchising. Franchising breeds creativity.

FW: Your place in franchising's history is set as a leader of IFA, and as the first franchisee to become chairman. It will be a challenge to balance the interests of franchisors and franchisees. How do you plan to direct IFA in the best interests of both parties?

Siegel: At the end of the day, our interests are really the same. I'll use the words of Bill Rosenberg, who said he has never seen a successful franchisor without successful franchisees, and he has never seen successful franchisees without a successful franchisor. I'm going to stay focused on the important things: we have to communicate and work together toward our common goal of building successful businesses. If we keep this in mind, there will be very few problems. Years ago when I began to work in franchising I learned what works and what does not. What does not work leads to confrontation and failed systems. Those lessons will guide me and will allow me to keep things in their proper perspective.

FW: In addition to being a franchisee, you are the chief operating officer and CFO of a retail business. Do you think having experience on "both sides of the fence" will help you as you lead this organization in the coming year?

Siegel: If you look back at my early career, I was a principle and general counsel for a group of franchise companies, so I was on the franchisor side of it. I spent time as the chief operating officer of a major retail chain, which was Filene's [Basement], and am now chief operating officer at Kabloom, which has 34 stores and is now beginning to franchise. Having been on all sides gives me the perspective to understand what it takes to protect the brand, but also to understand what franchisees need. I grew my Dunkin' Donuts franchise from start-up to 22 stores--every aspect, from hiring that first employee to finding that first location to developing a large organization. By understanding both sides, I can be a more effective leader. I think that's part of the reason I have the honor of being selected to this position, because I know you have to bring people together in the same room, at the same table, without running to court or to the legislature, to solve problems.

FW: The association recently adopted a system-wide membership program that has enabled greater numbers of franchisees to participate in IFA. How do you plan to involve these new franchisee members, and encourage them to become active in IFA programs?

Siegel: The best thing we can do is let them know what we offer. Technology allows us to communicate with hundreds of thousands of franchisees. We have to tell them who we are and what we do. There's one thing that I learned about the IFA when I was running my Dunkin' Donuts franchises, and that is that I never went to an IFA meeting when I didn't come away with at least one, and often more than one, concrete idea, which I was able to implement in my business. We need to convince franchisees that that is the ultimate value [of membership], that besides protection of the industry, joining IFA will be of immense benefit for learning practical things that will help them in their own businesses.

FW: You have participated in IFA events on Capitol Hill seeking to discourage Congress from considering potential federal franchise relationship legislation. What is it that concerns you about such legislation, and how do you plan to improve IFA's efforts on this front?

Siegel: It is very, very difficult to enact legislation that is applicable to all the industries that make up franchising in this country. It's extremely important that no one become a franchisee without knowing all the facts. So, we need to continue to improve disclosure as we move through the 21st century. The problem I have with legislation is that legislation doesn't solve problems. What solves problems is communicating. We have to teach franchisors from their infancy (as business owners), from the time they open their first unit to their thousandth--the best practices of how to work out differences, and we have to teach franchisees the same thing. Every system is going to have differences. If I can help any system to communicate, to use IFA's Ombudsman program, for example, to solve its problems, then I will have had a successful term as chairman of IFA.

FW: IFA is also a champion of other small-business causes on Capitol Hill, such as tax reform. As a business owner, why do you think it's important for IFA members to make their voices heard on these issues, and how do you plan to make sure IFA members continue to be heard in Congress?

Siegel: There are a number of very important issues before Congress that affect franchising. Capital gains, minimum wage, estate tax reform, tort reform and depreciation are some of them. There is tremendous gain to be had if we can get Congress to recognize the needs of small business. If we can motivate at the grassroots level and stand up and be counted with other larger lobbying efforts, we could influence a number of these proposals. IFA has this ability through the system-wide membership program. And, we know that when politicians get letters from small-business owners, they listen because they know we are the ones who put them in office and we can put them out, too. If we can channel our efforts into trying to get these measures passed, we will have an enormously successful year.

FW: What do you consider to be franchising's greatest challenges?

Siegel: With so many diverse industries, the challenge is to provide an overall environment that will allow for mutual success of all parties. We have to stay away from undue regulations and government intervention, and that will be a springboard to continued unparalleled growth. If we look back over the last 30 years, the one segment of the economy that has maintained constant success is franchising. We have to preserve an environment, even in a down economy, which nurtures the entrepreneurial spirit of franchising.

FW: What do you consider to be franchising's greatest opportunities?

Siegel: Franchising epitomizes American ingenuity--the ability to create, to think, to make things happen. If you think about all the industries involved: hotels, fast food, office supplies ... franchising provides jobs, satisfies the consumer, and enhances creativity. And, the great success of franchisors only gets augmented by the ideas that come from franchisees, from the Big Mac at McDonald's to fresh bagels at Dunkin' Donuts. There is no limit to what franchising can achieve.
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Author:LaGrassa, Kara
Publication:Franchising World
Article Type:Interview
Date:Jan 1, 2002
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