“Transparency” is a buzzword of our age, in business and politics. Everybody claims to have it. If so, then why do we often read in the papers about misunderstandings and miscommunications among business partners, and why is there so much corporate litigation clogging the court dockets?
I personally take a simple view of transparency: It is the way business gets done. It is the right way to do business in a moral sense, of course—but it is also more productive, efficient, and cost-effective. This is especially true in franchising.
Take a look at some of the most important legal decisions in the area of franchising in 2010 by clicking here. (Link will redirect you to the Bloomberg Businessweek website.)
You will quickly see my point. Litigation takes time, and requires capital—human capital as well as financial. More important, it diverts attention and resources from the central goal of a business—making money by taking care of the customer.
At La Quinta, we are proud that in more than 10 years in the franchising business, no franchisee has filed a lawsuit against us. I consider it no coincidence that in that same time period, we have been among the fastest growing franchise brands in the hotel industry or any industry.
For me, the openness and transparency of franchise agreements and relationships is paramount.
What do you think?