Understanding the Franchising Code of Conduct

Modified on - Published on

Understanding the ins and out of the Franchise Code of Conduct

Have you heard of the Franchising Code of Ethical Conduct? Developed by the British Franchise Association, the Code promotes ethical, sustainable and credible franchising in the UK. Its an invaluable resource to help you find trusted franchises and draw up franchise agreements. Here, we give you all you need to know.


Franchising has become a popular way of expanding a business in the modern world. But while everyone has likely heard of it, the word franchising still has no official legal definition.

Even more concerning, there is no formal regulatory framework for franchising in the UK and Europe. Franchisors and franchisees are largely in the dark when it comes to maintaining standards. As a result, many have developed a culture of self-regulation.

The absence of clear regulations, however, becomes problematic in the event of a dispute between franchisors and franchisees around the franchise agreement. Interestingly, courts can consider clauses in franchise agreements void if they deem them unreasonable.

When drafting a franchise contract, franchisors and franchisees find it helpful to refer to the Franchising Code of Ethical Conduct. Created by the British Franchise Association (bfa) and member companies, the Code provides guardrails for parties to exercise their rights and fulfill their obligations. It is essential both parties know their obligations from day one.


Below, we have provided a quick breakdown of the Code and some of the most important information you need to know.

Why the bfas Code matters

The Code of Ethical Conduct sets out regulations on what a good franchise should be, promoting ethical franchising and industry credibility. It is based on the code developed by the European Franchise Federation, which was established in 1972 and consists of national franchise associations from across Europe.

The bfa Code is useful for:

  • Creating fair franchise agreements: The bfa Code of Ethical Conduct has strict stipulations for franchise agreements. This includes ensuring both parties create and sign the agreement; protecting the industrial and intellectual property rights of the franchisor; and setting terms for contract renewal or termination should the franchisee wish it. It is a guiding light for anyone drawing up a franchise contract.
  • Finding trusted franchises to work with: Any franchise can use the Code as a guideline, but all bfa members must adhere to it. This means following its rules on disciplinary action, complaints and appeals. Additionally, franchises accredited by the bfa must follow the Code of Advertising Practice set out by the Advertising Standards Authority. If they do not uphold these standards, the bfa will no longer endorse them. Entrepreneurs looking for safe-bet, trustworthy franchises to join should look for those associated with the bfa.

If you would like your own business to be officially recognised and accredited, you can approach the bfa directly. Remember, however, you must be able to demonstrate that your franchise is ethical, reliable and franchiseable. And you must be willing and ready to abide by the Code.

With a positive track record, you can apply for full bfa membership. However, if you are part of a smaller network, or have been operating for a short amount of time, you could think about getting associate membership as well.

Franchisor obligations under the Code

Theres certain standards every franchisee should expect from their franchisor. According to the Code, franchisors are obliged to:

  • Be the owner of the business or have legal rights to operate under its trade name
  • Have developed a profitable business concept proven over a period of time in other words, the business must be franchiseable
  • Be willing to support franchisees for the full duration of their time with the company, including providing training schemes and ongoing support in business operations
  • Provide all franchisees with a copy of the latest Code, and other up-to-date, accurate information before they enter into a binding agreement
  • Inform franchisees of any contract breeches in writing. When managing conflict, franchisors should first allow franchisees to remedy the situation if they are able or inclined to before taking further action. This is part of the bfas aim to solve disputes fairly, with clear communication and in good faith.

Franchisee obligations under the Code

Within a franchise agreement, franchisees are obligated to:

  • Make all reasonable effort to ensure the business is a success and uphold its reputation
  • Be open and honest in all communications with the franchisor, providing access to the business premises and records as long as this is done at a reasonable time
  • Present verifiable data on business performance
  • Adhere to non-disclosure agreements: It is vital that franchisees do not disclose any business-related or mission-critical information to third parties during or after their time with the business. This enables the business to maintain its expertise and operate successfully.

Get more familiar with the Code

The above guidelines are just a brief sample of the Franchising Code of Ethics. To view it in full or get more information, visit the British Franchise Association website, which explains each element of the Code in detail.

If you are still uncertain about your rights and obligations as a franchisor or franchisee you can also seek out a specialised franchise solicitor. These are experts in the franchise system, able to advise you on everything from franchise agreements to resolving disputes and terminating contracts. The full list of bfa-approved franchise solicitors are available on their website.

In general, the bfa is a useful resource for anyone looking to better understanding the world of franchising full of credible information on every aspect of the sector. Once you are informed and ready to get started, visit our UK Franchise Directory and find the right options for you.

These articles may interest you

Thinking About Investing in a Franchise? Here's What You Should Keep Top of Mind

Investing in a franchise can be a life-changing event. To give you the best possible [...]


4 Things Franchisors Can Do to Boost Franchisee Engagement

Having an informed, engaged and fulfilled franchisee network can give you a competitive [...]


5 Ways to Combat Loneliness When Working Alone

Whether youre working alone for the first time or have spent years flying solo, [...]


The Top Dental Franchises in the UK

If youve got a dentistry background or are thinking about entering the industry, [...]


FOCUS ON BUSINESS SECTORS

5 Top Telecommunications Companies in the UK

Telecommunications is one of the most important industries in the modern world. [...]


FOCUS ON BUSINESS SECTORS

How to Start Your Own Food Delivery Business

The food delivery industry is booming at the moment. In this article we find out [...]


FOCUS ON BUSINESS SECTORS
Did you enjoy this article? Please rate this article
Average rating 4.5/5 based on 1 vote(s)
These franchises may interest you
Coffee Blue franchise

Coffee Blue

Coffee Blue is the UKs leading mobile coffee van franchise, providing barista-quality hot drinks and food to [...]

Read more ›
Minimum investment
8,000
Request
information
Certax franchise

Certax

The National Accounting Franchise that embodies Quality & Professionalism

Certax Accounting is an Accountancy Franchise that will enable you to operate your own Accountancy Practice [...]

Read more ›
Minimum investment
11,750
Request
information
Marla Custom Blinds franchise

Marla Custom Blinds

An outstanding franchise opportunity, carefully measured for success

Marla Custom Blinds is a family owned and operated business with a highly experienced, friendly and helpful [...]

Read more ›
Minimum investment
11,995
Request
information
Inleaf franchise

Inleaf

Better Plants for a Better Office

Start your Inleaf business with our training and support and target 200K+ revenue in year 4 installing and [...]

Read more ›
Minimum investment
22,750
Request
information
FASTSIGNS franchise

FASTSIGNS

More than fast. More than signs.

Specialised in selling, marketing, producing, or installing visual communications including signs, graphics, [...]

Read more ›
Minimum investment
25,000
Request
information

0 Comments

post a comment

Characters remaining: 250