The British Franchise Association (BFA) is the original and largest trade association for franchising. It acts as the respected voice of authority for both franchisors and franchisees and is designed to protect franchising – ensuring that there is fair and ethical practice by its members.
There is a group of members who stand by those values, influence the industry and work to guide franchisors and franchisees in their business format development and lifecycle. These members are the BFA Advisors and Suppliers – a group of businesses and individuals who have signed up to the code of ethics and have been granted membership based on their experience and ability to support.
There are two forums each year where these members come together to discuss challenges in the industry, share best practices and establish collaborative working opportunities to ensure that the industry is well served by those who understand it and seek to enhance its reputation.
The first of these forums was in April and in the interests of openness, I am the Chair, so felt it went very well! It was an in-person, face-to-face meeting of 37 representatives from the advisor and supplier community. The members who attended were lawyers, accountants, franchise consultants, software providers, recruiters (of franchisees and personnel to the industry), funders and advertising businesses. We also had a franchisor who presented to us her best practice behaviour in recruitment and managing franchisees.
The overall feeling was that there is a gear change in franchising – after a few years of reduced interest, poor attendance at exhibitions and low levels of committed enquiries, the UK public have raised their heads and are engaging in a meaningful way, once more, about investing in franchise opportunities.
Challenges faced by suppliers and advisors remain the prevalence of industry suppliers who are not accredited, who sell their services at cut prices and who deliver poor advice. Everyone in the room would have been able to tell a story of a franchisor who was given bad advice and who tried to establish their business on a shoestring. A key message to businesses looking to grow is to ‘not skimp’ on legal or professional advice. A franchise agreement written by a non-franchise lawyer, for example, will cost you more in the long term and may not protect your business.
Many in the room reported an upturn in resales. This is great for franchisors and franchisees – demonstrating that the business is not just about what you earn while you’re working in it but, for most, they are building an asset that can be sold. Every franchisee will have an exit strategy for their lifecycle, some are shorter than others and franchisee exits can often present a great opportunity for territory growth and an injection of energy from the new business owner.
Lenders are still nervous – underwriters are asking more questions and are looking for more solid investors – and good input from the franchisors. A good business plan is vital.
There is increased interest from multi-unit owners, where a franchisee will own more than one business, sometimes across a number of brands. This is in part due to the BFA engagement with the franchisees directly but also the fact that these franchisees understand franchising, follow the models provided and see the value.
Technology evidently plays a key part in the franchise model and there are numerous platforms to engage with. The use of technology in the business frequently enhances the proposition for a franchisee – and whilst nothing can replace human contact, it will feature more heavily as businesses grow.
There was significant interest in sharing the great news about franchising – but also in educating the general public about the industry. What does good franchising look like and why it might be a great opportunity for individuals who aspire to work for themselves? To that end, we all left determined to find opportunities to talk at local schools, colleges and universities, and to share the power of franchising with other businesses that influence our clients. We are all ‘Proud to Franchise’ and would love to see a resurrection of that branding, even if only through our activity.
Above all, we were clear, that the franchisees are the hero of our stories – and we’d like to share more about their stories. Not just the award winners – the ‘run of the mill’ franchisee, who buys into a model and drives it to success. The core purpose of the franchise.
If all of us share more of the stories, we will help engage the future franchisees – and that’s good for us all.