It is a truism that the majority of franchisors that are able to join the BFA do so. The many benefits range from ongoing exposure to best practice and developments in the industry to being counted amongst the band of ethical franchise practitioners.What is less easy to define and less well known is what exactly is the BFA, what does membership really mean, and what does it take to become a member? By Andrew Quail, former head of quality standards and compliance at the BFA.
What is the BFA?
The BFA is first and foremost a standards-based organisation, membership of which is voluntary. Funding is by membership subscription. It was established in 1977 by a group of major franchisors to act in the interests of the industry as a whole in assessing and accrediting companies which meet its quality criteria and ethical standards, as well as help the world at large distinguish between good practitioners and the rest.
Over time and against a changing backdrop of franchising evolution, the BFA has developed standards to ensure that potential franchisees can continue to give credence to accreditation. Today, admission to membership requires that the applicant franchisor (or professional affiliate) submits to a thorough assessment of its franchising operation against criteria that are rooted in the European code of ethical conduct in franchising and the extension and interpretation adopted by the BFA.
Whilst the BFA uses its best endeavours to establish the eligibility of an applicant, the onus for demonstrating that the criteria have been met on initial accreditation or reaccreditation lies finally with each applicant.
In joining the association the franchisor members (full, associate and provisionally-listed) commit themselves to comply with the rules of the association and the terms of the policies and procedures it publishes, such as the code of ethical conduct, disciplinary procedure, complaints procedure, appeals procedure, and terms of annual reaccreditation.
Members also agree to:-
- Comply with the code of advertising practice published by the Advertising Standards Authority.
- Provide any non-confidential information relating to their franchise business, or the standing and qualifications of its directors, as requested by an authorised official of the association.
- Provide to a full-time official of the association access (at reasonable times and on reasonable notice) to confidential information relating to the franchise and its standing (on the understanding that such information remains confidential to the authorised official).
- Comply with the spirit and intent of the guidelines to best practice published by the association.
Grades of membership
There are three grades of franchisor membership – full, associate, and provisionally-listed. All are required to conform to the standards and the rules referred to earlier. Members are admitted at the membership grade appropriate to their stage of development. Provisional listing is naturally by far the most common entry level, and direct admission as a full member very rare. Members progress towards full membership after thorough reaccreditation, which not only confirms their operational standards, but also establishes their readiness for upgrading as their business evolves and matures.
Full members: full membership confirms that at the time of the most recent reaccreditation the franchisor met all the standards and criteria of membership, including a commitment to abide by the rules and various procedures of the association (such as the complaints and disciplinary procedures, appeals and reaccreditation rules). In addition, the franchisor demonstrated a proven trading and franchising record, supported by audited accounts and evidence of a track record of successful franchising.
The length of time the 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. The record on franchise openings, withdrawals and failures (if any), as well as their trading and financial performance, are factors in determining eligibility for full membership, as is evidence that the business is not dependent on the income from the sale of new franchises to sustain itself.
Associate members: associate membership is for the franchisor that has not yet had the opportunity to acquire the depth and breadth of trading and franchising experience that the passage of time brings. Associate members are encouraged to upgrade to full membership when they are ready to demonstrate longevity and variety of experience.
Provisional members: provisional listing is available to businesses with a successful trading record of at least a year that are in the process of developing a franchised business (most often with a pilot operation at this stage). They must also commit to complying with the conditions of membership and working to achieve the standards for associate membership within two years. They will also be taking and applying appropriate professional advice in the development of their franchise proposition.
In addition to franchisors, the BFA has an affiliate category open to professional advisers, who are accredited on their proven professional skills and the successful application of those skills to franchising. They undertake to ensure the advice on franchising they provide to clients is of a standard consistent with the aims and objectives of the European code of ethics.
Criteria for membership
The accreditation process has been developed through a research-based methodology that applies verifiable facts in a highly objective and quantitative manner to arrive eventually at a dispassionate and objective assessment of the applicant company in a franchising context. This is supplemented by references from franchisees, interviews and other appropriate sources of applicable information. In general terms, the entire process measures the applicant company against the following four criteria.
- The business to be franchised must be viable. Evidence must show that the product/service is saleable, and at a level of profit that will sustain a franchised network.
- There is a means for the transfer of the know-how to a new operator at arm’s length, essential if the business is to be franchised.
- The franchise is structured and operated in accordance with the ethical principles of the European code (the franchise agreement is formally assessed by the BFA’s legal adviser).
- All information on the business that is material to the franchise proposition and contract is disclosed without ambiguity to prospective franchisees.
In assessing the information provided by the applicant franchisor, the association looks at the following key assessment areas:-
- Level of product and market innovation
- Experience of the management team in both its sector and franchising
- Focus and strength of the financial model
- Disclosures made to prospective franchisees
- Selection and training of new franchisees
- Initial and continuing support, promised and provided
- Fairness of the contract and the disputes handling record
- Track record of the business in both trading and franchising.
Through its various procedures the BFA is committed to maintaining the high standards which are at its core, and it encourages applications for membership from all sound and ethical franchisors in order to strengthen and enhance the franchising industry, and its reputation and success.