Who is Phil Zeidman?
What you may not know about the father of franchise law.
By Andrew Parker, CFE
Harvard graduate. Legal expert in franchising. World traveler. Family man. All of these describe the achievements of Phil Zeidman, who served as General Counsel for the International Franchise Association for decades. What they don’t describe is the Alabama native’s path to becoming one of the most influential attorneys in franchise law, and how Zeidman’s legacy will impact the franchise community for decades to come.
For people outside the franchising community, the first question that may come to mind is “Who is Phil Zeidman?” For those within franchising, Zeidman’s name and reputation are well-known as someone who directly helped the founders of the franchise business model in the U.S. – and may even belong on the “Mount Rushmore of franchising” himself.
DLA Piper’s Bret Lowell, who has worked with Zeidman for years, describes him as the “Father of Franchise Law. No other person has had more influence on what laws got passed, what those laws said, and how they have been interpreted.” Basically, Lowell continued, “franchise law is what it is today largely because of Phil’s wisdom, insights, and influence.”
Early days
Zeidman’s path to franchising traces back to his days at Harvard Law School, when he was writing a paper on how to start a new business. When doing research for the paper, he came across the trade publication at the time for the lodging industry called the Tourist Court Journal. Inside there was something about franchising.
“I later found out that I was exactly at the moment of the beginning of franchising,” he recalls. “Ray Kroc had just bought McDonald’s, Kemmons Wilson had just gotten the idea [for Holiday Inn], Col. Sanders was just starting Kentucky Fried Chicken, and Henry Bloch had just started H&R Block.”
After serving two years in the U.S. Air Force, Zeidman returned to Washington, getting his first job at the Federal Trade Commission. He started learning more about franchising and eventually took a role as assistant to the head of the Small Business Administration. At the time, “they had this crazy notion that you couldn’t loan money to a franchisee because he had a contract, called a franchise agreement, with the franchisor, who was assumed to be a big business,” Zeidman explained. So, he put together three days of public hearings on franchising, and afterward fixed the rules to “make them more sensible.” During the meetings, he met the then-general counsel from IFA, who asked Zeidman about his post-government career plans, adding that “we could use you.”
Zeidman recalls that it “sounded very grandiose. It turned out to be a handful of guys in a hotel room in Chicago with no budget.”
IFA’s lawyer
Zeidman has a unique skill, one that Lowell describes as “an ability to see around corners. Phil looks not only at what is happening now, and the implications for tomorrow, but he also perceives and considers what lies much further down the road. That is an uncanny ability, which he has mastered, and for which all lawyers strive.”
That skill has led to a number of breakthroughs across the globe. One example of IFA’s brand and reputation working hand-in-hand with Zeidman’s expertise developed in China, where it looked to be “forbidden territory” for U.S. franchisors, as China had passed regulations requiring the operation of at least two company-owned units within the country for a year before offering the concept to potential franchisees.
“It would have basically killed the China market to an overwhelming number of franchisors,” Zeidman explained. DLA Piper has offices in Shanghai, and Zeidman led a group to speak with government officials on behalf of the association. “The IFA brand had meaning,” he said. “We were able to meet with top officials, and persuade them that they would be harming the growth of their own economy if they did this,” he said.
Personal Relationships
As Zeidman’s first and still-running client, IFA “means the world to me,” he said. “Most of the franchise work we’ve done is a result of being involved with IFA from the beginning.” In many ways, the personal relationships developed over the years stand out above the association itself. “The personal relationships with the IFA Chairs over 50 years, many of which who have become friends, has meant the most,” he continued, “and that’s not something that happens much in law practice. They’ve been able to preserve that sense of family.”
Zeidman’s legal authority has extended beyond franchising on more than one occasion, Lowell recalled: “We were at Dulles Airport, and got so immersed in talking that we failed to notice the doors to the gate closing… but then, by unleashing a double-barrel of lawyering, got the doors re-opened and the plane returned to the gate so that we could board. Especially as we were headed to an important meeting, that was a big accomplishment!”
Lessons learned
What tips can franchisors learn from Zeidman’s experience in regards to conflict resolution with franchisees? First, he said, spend a lot of time at the beginning making sure that things are done right. Second, maintain a good relationship with the franchisee throughout. “Next is that almost every dispute that can be resolved amicably, should be,” he advised. “It may irritate you that you’re having to do it, but there’s almost no dispute that is worth the cost of taking it all the way with lawyers on both sides, with their own egos, and their own pocketbooks involved.”
For those starting out in franchising, Zeidman warns that “it’s not as easy as you think.” The process will also take longer than you think. “If you don’t get it right at the beginning, it probably will never be right – that’s not true, you can fix it, but the amount of time and effort to fix it is really a waste of resources as opposed to doing it right from the start,” he said. Lastly, for new franchisors, Zeidman said it’s important to think about the operations from your franchisee’s perspective. “If it doesn’t work for your franchisee, it’s not going to work for you.”
Bookends
Zeidman considers two key moments in his career as bookends. The first took place in 1965 when he was sworn in by Supreme Court Justice Hugo Black, and the second when he was recognized with the Who’s Who Legal Lifetime Achievement award in London in 2017. “There’s 52 years between the two,” he said.
What are Zeidman’s plans for hanging it up and calling it a career? “I told my partners I’ll retire as soon as I pay off my student loans,” he joked. “My father practiced until age 94, I think I’ll do that,” he added.
One place he likes going outside of work is a family house in Destin, Fla. “My grandchildren play on the same beach that I played on as a child,” Zeidman said. “I get a lot of gratification out of that.”
Andrew Parker, CFE, is Editor-in-Chief of Franchising World and Senior Manager of Publishing at the International Franchise Association. Find out more about DLA Piper. Register today for the 2018 IFA Legal Symposium.