Making

QARsWork For You

by Robert Zarco, Esq.

ThiS article explore the nature ofQuality Assurance Reviews(commonly referred to as QARs)

and the safeguards franchisees shouldtake when th se reviews are beingconducted.

What are QARs?

QARs involve ju t what their full titlesuggests: the evaluation of the level ofquality in a particular franchise. Eachevaluation often contains differentsub-categories, but the overall critiqueis ba ed on the evaluator's assessmentof the franchisee's level of quality andservice in the business. Franchiseesmust meet certain minimum require­ments to achieve a passing score inthese evaluations. These reviews ofteninvolve a subjective analysis; the evalu­ator can simply "eyeball" certain areasof the franchi e, and deem certainhotel functions to be operating at a fail­ing rate, or suggest that the franchiseis not performing "up to par." It is notbeing suggested that these reviews areconducted in a purely random or arbi­trary manner, but the evaluator can

certainly interject hislher "two cents"in the evaluation of the franchise toaffect the franchise's pas /fail rate.

After the evaluation is conducted, thfranchise receives a copy of the evalu­ation, and a brief breakdown of the"score" of the review. If the franchiseepasses the review, the franchise usuallyreceives a commendation lettercongratulating the franchisee for itshigh level of quality in the business. If,however, the franchisee has received afailing score, he/she is normally advisedthat the franchisor reserves the right toterminate the franchise if the "prob­lem" is not cured within a certainamount of time, usually pursuant to theparties' franchise agreement. This is anobscure portion of the contract, but itis neverthel ss an important part of theagreement.

What is the Potentiallmpact of a QAR?

The QAR may just seem like a standardprocedure that franchisees mustfollow, so the franchisor can "check up"on the franchise. Pleas be warned:

QARs can have an enormous impact onthe future of your franchise! Obviously,a positive review is what is hoped forand expected. However, in some cases,the franchisor abuses there reports forselfish interest; there reviews arefrequently used as a vehicle for thefranchi or to terminate franchisees.Sometimes, the franchisor employsthese reviews as a means to replace thecurrent franchisee with the franchiseeof his/her choice.

What Should I Do While a QAR isBeing Conducted?

In some cultures, it is very common forwomen to be responsible for the house­keeping operation for the organization.In fact, the spouse of the franchi eeoften oversees this area of operation.However, men usually act as the prin­cipal operators who participate in theQAR. It is strongly advised that thehead of housekeeping in hotel opera­tions, whether or not this individual isthe franchisee's spouse or generalmanager, actively participate in theQAR. This person should accompany

OARs involve just what their full title suggests:the evaluation of the level of quality in

a particular franchise.

the inspector during the evaluation andimmediately dispute, or, at a minimum,document what take place during theevaluation. This type of documentationcan also afford the franchisee a primeOpportW1ity to object to the commen­tary of the evaluator's review.

There are certainly other steps that afranchisee can take during these evalu­ations to prevent against the possibleabu e of these evaluations. One sugges­tion, as previously mentioned, is toaccompany the evaluator as he/sheconducts the review, and discuss whati being recorded during the evalua­tion. After all, this evaluation involvesyour franchis ; the review should notbe a confidential undertaking, but ajoint effort to ensure the franchiseis operating under the r quisitestandards.

Another suggestion is to videotape theevaluation; this is probably the mostaccurate documentation you can obtainfrom the review. You could also simplytake pictures of the areas the evaluatorperceives to be "lacking" or you canphotograph every area that is beingreviewed to ensure you have record ofexactly what is being evaluated, and toultimately keep the evaluator "honest."

Additionally, you can simply ask

exactly what the evaluator is looking foras the reviews are scored. For instance,what is the criteria for achieving apassing score in the subdivisions in the"quality" area? What has to happen fora business to fail in a particular area?(You can even request a form copy ofthe QAR before the evaluation takesplace so you can become familiar withthe procedure.) Obviously, as a franchi­see, your job is to maintain a requisitelevel of quality and service in your bu i­ness. After all, there is definitely acorrelation between the level ofquality and service of your franchiseand its succe s level. However, the buckdoes not stop there; you have kept upyour end of the bargain and main­tained a high level of quality andservic . As a franchisee, you have anabsolute right to know what, if any, arethe legitimate problematic areas of yourfranchise.

Will I Know When These Reviewsare Scheduled?

These evaluations are done only a fewtimes a year, and you are given noticeas the their scheduled dates. This iseven more of a reason for you to beprepared for these evaluations. Please,get personally involved in the reviewof your franchise, so you can pass withflying colors!

Robert Zareo is aninterna tiona lly­recognized fran­chise legal expertand is a regularly­featured columnistof AAHOA Hospi­tality, as well as aguest speaker onfranchise issues atAAHOA's regionalconferences. He represents numerous hoteland restaurant franchisees in well over 150different franchise systems, throughout theU.S. and internationally. The authorwelcomes comments and suggestionspertaining to this column or to his presen­tations. You maycontaet Robert Zarco, Esq.at the law firm of Zarco & Pardo, PA. bytelephone at (305) 374-5418 in Miami or(213) 627-2449 in Los Angeles; byfacsimile at (305) 374-3428; or by e-mail atzarcopardo@zarcopardo.com. For furtherinformation on Robert Zarco and/or Zarco& Pardo, PA., visit the firm's website atwww.zarcopardo.com.