Originally posted on 08/09/2017. Updated on 11/06/2019.
The British Franchise Association (BFA) is the trade association for franchising and acts as the respected voice of authority for both franchisors and franchisees. The primary objective of the BFA is to offer impartial advice and guidance for people who enter and work in the world of franchising. Founded in 1977, the BFA was established by the major franchise companies in the UK to develop and apply consistent criteria and assessment methods to the industry.
The BFA sets a benchmark for best practice in franchising. Conditions are in place to determine whether a franchisor can be granted membership. These criteria include an assessment of the business model, an evaluation of the franchise agreement, a review of the training and support provided and proof that franchisees can maintain profitable businesses.
What exactly is the BFA?
You might be wondering who is behind the association. The truth is that it is governed by a Board of Directors that, in turn, consults several small committees. The Board of Directors is made up of 11 BFA-accredited franchisors, two Associate Member franchisors, three Professional Affiliate members, three franchisees and the BFA Chief Executive. Four committees approach the Board of Directors with suggestions. The committees are: the Finance and General Purposes Committee; the Quality Standards Committee; the Membership Committee; and the External Relations Committee.
Advantages of Being BFA-Accredited
One of the benefits for franchisees is that they are given support to help them recognise the right opportunities and steer clear of the wrong ones. An important feature of this support is that it draws attention to pre-approved, ethical franchisors that have undergone a robust accreditation process to become members of the BFA. This is an endorsement that not many companies receive. The BFA declines membership for companies if they can’t adhere to the criteria in place for ethical franchising.
However, the BFA’s endorsement should not replace a prospective franchisee’s own research. It should simply give franchisees a sense of security. A BFA-accredited franchise represents a profitable franchise opportunity that employs ethical strategies and should be relatively easy to sell on when the time comes.
In addition to this financial security, BFA members can benefit from the BFA’s considerable influence across the world, as well as network and meet like-minded franchisees at BFA events; be a part of the BFA promotional events; and enrol themselves onto BFA training courses and educational seminars.
Events include member forums (perfect for networking and keeping up to date with changes to the franchising industry), annual conferences (with speeches and seminars), the BFA-HSBC franchise awards ceremonies, Qualified Franchising Professional (QFP) training sessions, educational franchising seminars, charity events, BFA specialist events (to learn more about particular elements of franchising, such as recruitment, resales, legal issues or network motivation), public awareness events (to boost public understanding of franchising), franchise exhibitions (showcasing the best BFA-accredited franchises), webinars (to reinforce the benefits of BFA accreditation for members and non-members), the AGM and workshops with professional advisors.
Other Ways To Be Affiliated With the BFA
There are ways to foster a relationship with the BFA without becoming a full member. Become a Qualified Franchise Professional (QFP) to prove your ethical and professional approach to franchising. This qualification is not applicable to entire franchise businesses; it should be pursued by individual franchise professionals.
Alternatively, achieve the Prospect Franchisee Certificate. This is a free, video-based, online course that you work through in your own time and it gives prospective franchisees the skills and reputation to start a thriving business. A similar course is available to franchisors, called the Prospect Franchisor Certificate. By completing this course, business owners who want to build their business through franchising put themselves in the best position to see franchise success.
Banks & Professional Consultants
A number of high street banks are also affiliated with the BFA. By being involved with the BFA, banks come to understand the extent to which franchisors are assessed for membership, which gives them greater respect for endorsed franchises. This will give franchisees a huge advantage when it comes to applying for business loans.
The BFA acknowledges the importance of accessing the right advice when considering a career in the franchising industry. That’s why it also provides a comprehensive list of accredited franchise professionals, including solicitors, accountants and bankers. By consulting qualified professionals from the start of your franchising journey, you can be sure that you’re giving your new venture the best possible chance.
The International Franchise Association (IFA)
The UK’s franchise industry is supported not only by the BFA, but also by the International Franchise Association (IFA). This is a US-based association that was founded over 50 years ago to represent franchising worldwide. The IFA’s objective is to defend, endorse and improve franchising on behalf of its members. It has produced a statement of guiding principles to underpin its ongoing endeavour to improve franchise practices and to advance franchise relations.
The 12 guiding principles are:
- Franchising is a unique business model. It is in the interest of the franchisor, each franchisee, the suppliers to the franchise system and the consuming public that franchisors define, maintain and enforce brand standards throughout the franchise system.
- It is the goal of every business that each stakeholder is successful, and franchising is no different. Franchisors and franchisees need to be profitable to be successful. However, as in any business model, franchising is not immune to the risk of failure and neither the franchisor nor the franchisee is guaranteed economic success.
- Franchisees should clearly understand the franchise business model before investing. It is the responsibility of each prospective franchisee to conduct a thorough due diligence of the franchise system, to retain competent legal and other advisors, and to fully understand the terms contained in the Franchise Disclosure Document before signing any franchise agreement.
- Prospective franchisees have the prerogative, at the start of the franchise relationship, whether or not to enter into any particular franchise relationship. Prospective franchisees may also choose to not become franchisees of any franchise system.
- While not transferring any equity in the franchisor’s intellectual property to the franchisee, franchisees should have the opportunity to monetise any equity they may have developed in their business prior to the expiration or termination of the franchise agreement.
- The licensor is the owner of its intellectual property, including, without limit, its trademarks, trade secrets, methods and standards of operations. The licensor has the right and obligation, under the law, to protect its intellectual property and define the terms under which it licenses to others the use of its intellectual property. It is the terms contained in the franchise agreement that define the licence granted to franchisees and that govern the relationship between the franchisor and franchisee.
- Franchisors should clearly understand the franchise business model prior to choosing franchising as a method to expand their business concept. Franchisors should be knowledgeable and understand the financial, business and legal terms included in their Franchise Disclosure Document and franchise agreement.
- The franchisor has the right, as owner of its intellectual property, to include or not include successor rights in the franchise agreement offered to prospective franchisees. The franchisor also has the right to establish the terms contained in the successor agreements it offers to franchisees. Franchisees may choose to negotiate, accept or reject any offer.
- Clarity and transparency is essential for establishing and maintaining positive franchise relationships and for the goal of continuous improvements in the franchising environment. Franchisors and franchisees should maintain proactive business policies and communication practices, and regularly consult with each other for the enhancement of franchise relations.
- Subject to the requirements under the law, franchisors should focus primarily on the business requirements of managing and striving for improvements to their franchise system. Franchisors should support their franchisees and enforce brand standards necessary to enhance the economic performance for both the franchisees and the franchisor. It is the responsibility of franchisees to manage the day-to-day affairs of their businesses to meet the franchisor’s brand standards.
- Improved pre-investment disclosure will benefit both prospective franchisees and franchisors by enhancing the competition among franchisors for qualified franchisee candidates. By clearly communicating the terms contained in a franchise offering, prospective franchisees will be able to evaluate and make investment choices among the wide range of franchise opportunities available to them and choose from those that meet their goals, ambitions, financial and other requirements.
- Market forces, rather than government mandates and relationship laws, should create the climate for changes to franchise agreements and should drive improvements in franchising practices.
Although there is no legal framework for franchise businesses, there are plenty of guidelines out there for franchisors and franchisees to refer to. By adhering to the standards set by the BFA and IFA, business owners and entrepreneurs put themselves in the best position to build a profitable, ethical and personally rewarding business. To find out more, just visit the BFA and IFA websites.
Alice Tuffery, Point Franchise ©