have your say: Paul Schmidgall | Fire & Rice
Fire & Rice Suspends Fees to Help Franchisees Recover
In an unusual move, paella catering franchisor Fire & Rice abated all royalty and marketing fees for its franchisees for 20 months.
Chef Paul Schmidgall is so devoted to the success of Fire & Rice franchisees that he decided they didn’t have to pay any royalty or marketing fees for 20 months of the pandemic. Schmidgall is the founder of Fire & Rice, a Naples, Fla.-based catering company specializing in preparing paellas for corporate events, private parties, family reunions, farmers’ markets, festivals and other social gatherings. Entrepreneurs who buy a Fire & Rice franchise get everything they need, from a van or trailer to burners, recipes and utensils. When the pandemic shutdowns started in March 2020, Schmidgall unilaterally abated franchise fees, including 6% on 20 Franchising MAGAZINE USA
gross sales, 1% for marketing and 1% for national advertising despite the fact that franchisees were contractually obligated to pay these fees. He reasoned that franchisees needed to save money to shore up their businesses as catering cratered. “I’m the relationship business, I’ll take the hit to help them survive,” he explains.
Mich. Indeed, there was no clause in the franchise documents that would allow a franchisee to stop paying fees in case of a major disaster such as a pandemic. “It helped us financially get through uncertain times, it was one of the line items I didn’t have to worry about,” Neveau says.
The waiving of fees raised eyebrows in the industry. “We don’t know of any smaller franchisor that has forgiven fees for the entire duration of the pandemic,” says Tom Parks, president of Premier Franchise Solutions, which is handling franchise sales for the company.
“I was shocked,” says Annabelle Johnson, a Fire & Rice franchisee in Hilton Head, S.C. “It really reinforced to us what a good decision it was to be a Fire & Rice franchise because when things get tough, Paul stands behind you. It was very heartfelt and kind and generous. A lot of franchisors would not do that.”
Franchisees say Schmidgall’s decision to abate fees was a welcome surprise. “We didn’t expect him to do that,” says Nick Neveau, a franchisee in Lansing,
The fee abatements allowed franchisees to survive the worst of the pandemic as food operations were considered essential businesses and Fire & Rice franchisees
