Gordon Clark - A Straightforward Guide to Buying a Franchise: Changing Your Life with a Business That is Right for You

CHANGING YOUR LIFE WITH
A BUSINESS THAT IS RIGHT
FOR YOU

Gordon Clark

Straightforward Publishing
www.straightforwardco.co.uk

Straightforward Guides

Copyright Straightforward Publishing 2015

1st Edition

ISBN:
978-1-847165-01-5
eISBN: 978-1-84716-550-3

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No aragraph of this publication may be reproduced, copied or transmitted save with the written permission or in accordance with the provisions of the Copyright Act 1956 (as amended). Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damage.

Cover design by Bookworks Islington
Printed by 4edge Ltd www.4edge.co.uk

Whilst every care has been taken to ensure the accuracy of this work, the author or publisher cannot accept responsibility for loss occasioned by any person acting or refraining to act as a result of any statement contained within this book.

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Over the last 30 years the franchising industry has grown enormously and, in many cases, has provided people with a lot of enjoyment and a lucrative income. I say most cases because as with everything stories are legion of people getting ripped off and losing their shirt on failed ventures.

If you look at the trade papers, such as Daltons Weekly, you will see literally hundreds of franchise opportunities available. Most are tried and tested. A lot, however, are nothing short of comical, put together by people who have causally started a business, split it into territories and sold the rights to trade in an area. Quite often the product or service that is being sold is spurious and bound to fail. You will see as we go through the book that it is crucial that the business that you are thinking of buying into is a member of the British Franchising Association. Right at the outset, we will discuss the bfa as it will be crucial to you if you are thinking of getting involved with franchising.

The below will give you some idea of what the bfa is and how it operates and different levels of membership and the criteria applied by the bfa.

The British Franchising Association (BFA)

Below is a statement from the BFA website:

The British Franchise Association (bfa) is the only voluntary self-regulatory body for the UK franchise industry, with a standards based approach to membership. Its aim is to promote ethical franchising practice in the UK and help the industry develop credibility, influence and favourable circumstance for growth. As a result one of the bfas main jobs is to help potential franchisees recognise the good, the bad, and the ugly franchise opportunities for what they are. Another is to help to secure their own position amongst the good franchises.

As I mentioned earlier, there are many franchise opportunities which can turn into nightmares. Hence the existence of the bfa to act as a regulatory body.

About the bfa

In 1977 the major franchise companies in the UK decided to set up their own association. The British Franchise Association (bfa), was formed to act in the interests of the industry as a whole in assessing and accrediting franchises, the terms of the contract between franchisor and franchisee, the testing of the system and its success as a franchise. Franchisors and professional advisors to the UK franchise industry wishing to be accredited must put themselves forward to the bfa to be tested against its strict and extensive criteria. Only if they successfully pass accreditation are they then able to gain membership of the bfa, gain access to the benefits of membership and become represented by the British Franchise Association.

The role of the bfa

The British Franchise Association is the voice of ethical franchising in the UK. It is the Trade Association for those who pass accreditation and also plays a key role as educator to the many potential individuals and businesses that consider franchising. Therefore, it is very powerful and if you are considering taking on a franchise then the bfa will play a key role in your decision, or should play a key role. In recent years, the bfa has developed to include work around the engagement of franchisees into the Association and it has developed awareness campaigns to consumers and has launched industry recognised qualifications in the shape of the Qualified Franchise Professional. Details of this and other initiatives can be found on their website www.thebfa.org.

Criteria and checklist for membership

When they join the British Franchise Association members have to commit themselves to comply with the terms of the policies and procedures published by the Association. These are The Code of Ethical Conduct, The Disciplinary Procedure, The Complaints Procedure and The Appeals Procedure. Members also agree to comply with the Code of Advertising Practice as published by the Advertising Standards Authority and to abide by other regulations published on the bfa website. The following represents different types of membership. For costs of membership you should go to the bfa website..

Full and Associate Members

All Full and Associate members of the bfa must meet four key criteria: that the business is viable, franchisable, ethical and fully disclosed. With these checks in place, franchisors can be admitted to membership, providing also that they commit themselves to abide by the Advertising Standards Authoritys code of practice and also to the Associations own complaints and disciplinary, appeals and re-accreditation rules. Full members will have a proven trading and franchising record. The length of time a franchised business has been in operation, and the changes in business and financial circumstances it must have survived before it can be said to be established, will vary from sector to sector.

Provisional listing

Provisional Listing is available to businesses with a successful trading record of at least one year and that are in the process of developing a franchised business (most often with a pilot operation at this stage, whether franchised or company owned). The business will have offer documents that are free of ambiguity and misleading statements, and any direct or indirect references to future trading potential will be objective and based on actual experience. They will already have a franchise agreement that meets the bfas Code of Ethics and will be able to demonstrate that their development programme is founded on good franchising practice. Provisionally Listed companies commit to complying with the conditions of membership and to work to achieving the standards for Associate Membership within two years.

Professional Affiliation

Professional Affiliation to the bfa is open to professional advisors who have been accredited on the basis of their proven professional skills and the successful application of those skills to franchising. They undertake to ensure that the advice on franchising that they provide to clients is of a standard consistent with the aims and objectives of the European Code of Ethics. The involvement of bfa affiliated advisors in the development of franchise companies is one of the measures the bfa uses in assessing companies for Provisional Listing. Affiliate membership is limited to six core discipline areas, Finance (banks and accountants) Legal, Franchise consultants (business development), Franchise consultants (recruitment and brokers) Recruitment media websites, recruitment media magazines and newspapers

As you have seen, it is crucial that if you are thinking about getting involved in the world of franchising, the first step should be to consult the bfa. Although not everyone is a member, if they are then this will give you the security to want to pursue your particular business option as the business will have passed through many rigorous tests to arrive at their membership..