What is the British Franchise Association?

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 looking to enter 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.

Benefitting both franchisees and franchisors

But what do bfa members get? One of the benefits for potential franchisees is support to help them recognise the right opportunities and to steer them clear of the wrong ones. An important feature of this support is to draw attention to ethical franchisors that have been approved following a robust accreditation process to become members of the bfa. This is an endorsement that not companies receive. The bfa decline membership for companies if they cant adhere to the criteria in place for ethical franchising.

It should be noted that just because a business is assessed by the bfa, this is not a promise of accomplishment or a replacement for a potential franchisees own research. What it does do is provide those buying a franchise from a bfa member both a sense of security as well as an array of benefits, including:

  • Verified to provide a profitable franchise opportunity
  • Assurance from the franchisor to maintain best practice
  • Enhanced worth for your franchise when the time comes to sell

Furthermore, a number of high street banks are affiliated with the bfa. Through the relationship, the banks appreciate how methodically franchisors are assessed for membership which is taken into account when funding decisions are being made. A recognised, ethical brand is thought highly of by banks and therefore can play a big part in the loan application process.

And the bfa also acknowledge the importance of getting the right advice when considering a career in the franchising industry. For this reason, the bfa also provides a comprehensive list of accredited franchise professionals. These include solicitors, accountants and bankers. By ensuring that youre consulting qualified professionals from the start of your franchising journey, you can be sure that youre giving your new venture the best possible chance of succeeding.

Helping to support franchises in the UK

As well as the bfa, the franchise industry is also supported by the International Franchise Association (IFA). This is a U.S. based association that was founded over half a century ago to represent franchising worldwide. The IFAs aim is to defend, improve and endorse franchising on behalf of its members. They have produced a statement of guiding principles to underpin their ongoing endeavour to improve franchise practices and to advance franchise relations. The 12 guiding principles are:

  1. 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.

  2. It is the goal of every business that each stakeholder be successful and franchising is no different. Franchisors and franchisees need to be pro table 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.

  3. 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.

  4. Prospective franchisees have the prerogative, at the start 4 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.

  5. While not transferring any equity in the franchisors intellectual property to the franchisee, franchisees should have the opportunity to monetize any equity they may have developed in their business prior to the expiration or termination of the franchise agreement.

  6. 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 also the obligation, under the law, to protect its intellectual property and to 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 de ne the license granted to franchisees and which govern the relationship between the franchisor and franchisee.

  7. 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.

  8. 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 then current terms contained in the successor agreements it offers to franchisees. Franchisees may choose to negotiate, accept or reject any offer.

  9. 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, communication practices and regularly consult with each other for the enhancement of franchise relations.

  10. 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 franchisors Brand Standards.

  11. Improved pre-investment disclosure will bene t 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 better able to evaluate and make investment choices among the wide range of franchise opportunities available to them and to choose from those that meet their goals, ambitions, financial and, other requirements.

  12. Market Forces, and not government mandates and relationship laws, should create the climate for changes to Franchise Agreements and should drive improvements in franchising practices.

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