Whether you’re new to the world of franchising or you’ve already got some experience working in the franchising sector, you’ve probably heard of the term “franchise association”. Franchising isn’t regulated in the UK. This means it is the franchisor’s responsibility to take full control of their franchise recruitment and expansion. At first glance, this sounds like a risky prospect of doing business. With franchising not being government or legally regulated, any business owner can get into franchising, and it is down to the person looking to become a franchisee, to identify whether the franchise investment is a good option (this is called due diligence). But be that as it may, franchising boasts considerably supportive networks in the form of franchise associations. But what is a franchise association, and should you join one?
If you’re not sure what franchising is, take a look at our franchise guide. It covers most of the basics about franchising. But in summary, a franchise is where a business owner looks to expand their operations by licensing out the rights to trade to “franchisees”. Entrepreneurs can invest in a “business in a box” and benefit from a supportive franchise network. A much safer route to business ownership than starting up alone.
One of the reasons many choose to invest in a franchise is the support. Support by franchisors, support by the strength of the existing brand, and support by banks which can often lend up to 70% of the franchise investment. But in addition to this support, many brands are part of a franchise association.
What is a Franchise Association?
Almost every country has a franchise association, whether government regulated or not. These franchise associations exist within the franchising community to provide support either directly through their team, or indirectly through their suppliers (franchise consultants, for example). Franchise associations will usually operate on a membership scheme, where franchises and suppliers can join and exchange support. Frequently this membership scheme will come at financial expense, for a good association will carry out a thorough accreditation process into details such as:
- The financial background of the company being franchised
- Investigations into the existing franchisees to learn whether they’re trading well
- Investigations into the franchise documents such as franchise agreement
For a lot of countries, being a part of a franchise association builds trust. In the United Kingdom, the British Franchise Association has established itself as the leading self-regulated body of franchising.
How Many Franchise Associations Are There?
Almost every country in the world has a franchise association, be franchising self-regulated or not. Regardless of whether franchising is down to the franchisor or a higher authority body, franchise associations exist to support the franchising sector. Some countries may even have multiple franchise associations. While some associations may be better known than others, there is no preventative measure stopping an organisation setting up their own and providing support. In fact the British Franchise Association recently partnered with the Approved Franchise Association. The AFA for short, was founded to appeal to newer, smaller franchises to help them get into franchise association membership at low cost.
It’s difficult to say how many associations there are, because most websites only list one association per country, generally the most authoritive.
What are the Benefits of Joining a Franchise Association?
Generally, a good franchise association will provide its members with a range of services and support. Some of which include:
A Strong Partner Supplier Network
From banks to PR, health and safety to recruitment. Franchise associations will often have a strong supplier network. Partners who have become members themselves, to lend their services to other members either in exclusivity or at member rates. Having a strong partner network means franchise members can easily call upon the knowledge and experience of partners.
Legal Advice
Either through the association or its associated members, franchise associations should be able to provide on a variety of legal matters. This might include producing a franchise agreement or sorting out a franchisor franchisee dispute. Disputes can arise in any type of franchise, so having this support readily available is a good benefit.
Seminars and Events
The British Franchise Association partner with a number of franchise exhibitions and franchising events. Members can benefit from discounted or exclusive attendance to these events, to network with other members or franchise prospects.
Member Awareness
The British Franchise Association is incredibly well-known. Being a member of the BFA comes with considerable kudos and acknowledgement within the franchising sector, and can have a positive impact on your franchise recruitment. Being able to display the badge of a franchise association means franchises can demonstrate their franchising experience. During the due diligence stage, entrepreneurs will know that a brand with the bfa member badge has passed their accreditation processes.
Should You Join a Franchise Association?
Being a part of a member network such as a franchise association means franchisors will have a wealth of support and knowledge at their disposal. However franchisors will need to carry out some due diligence about what they want to get out of franchise association membership. It’s important to emphasise that franchise associations aren’t franchise directories, and whilst you may get some enquiries, they’re not lead generation portals. A good franchise association’s main effort should be centred around providing support to members.
Be aware that there are several franchise associations in the UK, and some other countries will have several as well. Each of these associations will have a different offering, different benefits. But the thing to ask yourself, is have you ever heard of them? Most people will have heard of the British Franchise Association, but if you come across one you’ve never heard of, ask yourself – will other people have heard of it too? You won’t get the same level of kudos and member recognition if you choose a lesser-known association. That’s not to say you shouldn’t join them… As I said earlier, each will have its own member benefits.
Smaller franchise associations like the AFA do charge less for membership, hence why it was set up – to better support new emerging brands who can’t afford bfa membership.
Before jumping on the franchise association band wagon, find out what their accreditation process is. You should expect to provide a copy of your franchise agreement and franchise operations manual during the accreditation process. These are such important documents; it would be surprising if an association didn’t ask for these. No trustworthy franchise association would carry out an accreditation process without thoroughly checking out the agreement. The franchise agreement binds the relationship between franchisor and franchisees, if this is poorly structured, the franchise could collapse, and this will have a detrimental impact on the reputation and longevity of the association. These documents can change regularly too, so don’t be surprised if the board asks you periodically to supply any updates.
In Summary
More and more franchises are joining franchise associations like the British Franchise Association. It helps to set them apart from their competitors, as a recognised brand that has passed franchise checks. These associations actively work with their members and organise events such as exhibitions and franchise awards.
You should note however, that you don’t need to join a franchise association to be successful. They are a useful asset to have, but many franchises out there aren’t and have never, been part of a franchise association.
Franchise associations provide a strong foundation for the franchising community, through a network of members and partners, and the support can really help a franchise network. One of the reasons why many people get into franchising is because of the support available. And becoming a part of a franchise association, you can provide your franchises with support from a trusted network of members and partners.
So to summarise, if you’re able to afford membership with an association, it can really have a positive impact on your franchise network. You benefit from increased brand awareness through the association and their events, social media, blogs, knowing that there is a strong team working with you to support your brand. Just make sure you carry out your own due diligence and find a franchise association that can meet your requirements.
