There are several UK Franchise Associations.
It was all so simple 25 years ago when the only trade association in the UK was the British Franchise Association. Back then your only decision was do I join or not? Some franchisors did some didn’t. But you did get a discount to do the franchise exhibitions as a result so we joined! In my early days as a franchise specialist in the early 90’s there was a great circuit of franchise exhibitions which were always good fun. They were organised by the Venture Marketing Group on behalf of the British Franchise Association. Myself and my colleagues would do every franchise show when we were building our first network for a brand we owned called Appletree Cottage. we stopped doing them after we recruited over 100 franchise partners and went on to sign up a further 67!
We didn’t sign all our franchisees up at shows though, broadsheet and tabloid newspapers and magazines also worked back then. They still do to an extent but most budget is now expended online. After we sold Appletree, which was then part of a four company group of franchised brands we had established I formed a consultancy that worked with potential franchise owners called Franchise Pro and that company was an affiliate member of the BFA for several years.
There was Wembley or Olympia in London. The NEC in Birmingham, The GMEX centre in Manchester and the SECC in Glasgow. We did a few Irish versions in Dublin (they got messy on a night out) and even a few in Belfast. Every so often I’d hop over to the International Franchise Expo in Washington DC for the International Franchise Show. I always enjoyed that trip and my first class flights there and back as a legitimate business expense. It’s now in New York though.
As far as the UK is concerned there are three trade associations for franchisors to choose from. There’s the British Franchise Association, the Quality Franchise Association and the Approved Franchise Association.
Franchise associations are not regulators.
Trade associations are not regulatory bodies. We don’t think that phrase should ever be used really. The public assume a regulatory body is a government appointed body. So we’re not really fans of any watered down version this either such as “self regulatory body”. What is your interpretation of regulation I wonder? Regulation is defined as the enforcement of standards and behaviour. There is no regulatory body for the franchise industry. We don’t think that any trade association should purport to be “that” body for the industry or say anything that might confuse a franchise buyer. I’m sure they might argue otherwise but hey – we’re never going to agree on everything are we? One of the biggest issues in franchising is misrepresentation and that’s where we’re coming from with this point.
Cost and profit
Lime Licensing Group’s MD Andy Cheetham has just signed Lime up the BFA and so we are now Development Consultants for the British Franchise Association. That costs around £1500 per year and the BFA like many other professional bodies likes to sell professional qualifications. In the BFA’s case that costs about £3,000. Similarly the QFA charges members around £350 to join and their competency course costs £150 or so. The AFA charge about £600 for franchisors and just under £1,000 for service providers. Running an association is a profitable undertaking but the QFA are the only ones who state they are running a not for profit enterprise. Although this isn’t independently verified it certainly strikes a chord with some. Lime joined the QFA when it first launched a few years ago and are still members today.
Qualified in franchising
Once you’re a member you can apply for a franchise qualification if you fancy. Once you’ve completed the course successfully you can then have some post nominal letters after you name. In the BFA’s case that is “QFP” Qualified Franchise Professional. The International Franchise Association use “CFE” standing for certified franchise executive. The QFA version is VFP (verified franchise professional) and the AFA don’t have an accreditation as far as were aware, which we’re pleased about because this paragraph is already confusing enough!
Always remember that post nominal letters regardless of where you see them should be taken with a pinch of salt. You could probably have some letters of your own choosing after your name anyway! In Lime’s case each of our consultants passes our own elite franchise advisor training before they are let loose so that could be EFA for example, or EFE maybe, or EFC …. There’s no one to stop us doing that and our training is the most comprehensive we are aware of in the industry. I’m also a sailing instructor when I’m not franchising, that’s an “SI” in nautical terms. So as previously mentioned, qualifications show a certain attainment but I mainly learnt to drive after passing my test and even though I’m also a yachtmaster there’s no way I can sail as well as someone who has five times more sea miles.
Nepotism in UK franchise associations
A potential issue arises when those who run an association create a problem of impartiality. It has often been thrown at trade associations run by members that some members are favoured over others. An example of that might be that when a random enquiry comes along someone in the association might recommend one member or supplier over another rather than just point them in the direction of the members list or the nearest one geographically speaking. Or maybe there’s a favourite group who always end up being promoted above the others. Mainly some brands are just better adverts for an association than others. It is a fact that in all groups and clubs some people just get along better than others and human nature takes over when friendships are formed.
Conflict of Interests
Could a government minister who is also on the board of a private company truly act impartially when something in their ministerial life affects their private role? We all know the answer as has been widely documented numerous times. Someway down the pecking order it’s also a sad fact of a significant number of trade associations and not just those in franchising. It’s because a lot of associations are run by people from within the industry. It can lead to the association being used as an extension of their own marketing for commercial gain.
If a Director of a trade association was a shareholder of a new or existing franchisor for example will they access franchise leads that might not have otherwise found their way to that brand? Or would that brand be promoted better in the association than a direct competitor? You can judge that one for yourself too. In an ideal world every franchise association would be run by impartial people and independently audited. But it’s not an ideal world we know that. However this article is commenting on UK trade associations which by definition need to be started by unpaid volunteers or they would never have got off the ground in the first place. It’s for those that run associations to show that they can avoid conflicts of interest or otherwise declare their preferences.
My wife Debbie used to show Dalmatians, we had a dog that was the most beautiful of them all (she was honest). She actually won her class at Crufts twice. One night myself and Debbie were invited to the annual “Dalmatian of the year” dinner dance. Amusingly we watched one judge in particular accept a bottle of Dom Perignon from a competitor. He quickly shoved it under the table. Here at Lime we’ve won awards we’ve never even entered. We gratefully accept them all of course. But when a trade association gives an award don’t accept that as a substitute for your own due diligence whatever you do. Just take it all with a pinch of salt.
Who’s the biggest and the best?
The BFA are the biggest with around 200 members, the QFA have around 115 and the AFA around 60. (But someone feel free to correct me if I’m wrong). The franchise industry has something like 1,000 franchisors in it. So none of the associations have cornered the market really. The QFA and the AFA are privately owned businesses, and those who run them are also active elsewhere in the franchise industry. The difference that we have found in the BFA since we were last members 15 years ago is quite significant. The BFA is run by Pip Wilkins who is taking the association forward and as usual it is run by its members with financial transparency. From what we can see Pip and her executive team are doing a great job.
Why do UK franchise associations have a role
Competition isn’t a bad thing so for all the years the BFA had the market to itself they didn’t really have any concerns. It might be a concern to them now though that 175 other brands are members of other organisations but I don’t think they need worry too much. What matters from our view point is that they have clearly set their stall out as the number one destination for excellence in franchising. The BFA’s core message is that it’s members are the most professionally accredited in the industry. It’s true that applicants are examined and go through a thorough accreditation process – we’ve been through it.
Should you only buy franchise that’s a member?
No, no and no! If you’re reading this as potential franchisee by all means take some comfort from a brands membership but no trade association can guarantee to anyone the quality of any franchise opportunity. It’s also true that genuine regulators do a better job. The BFA can’t fine anyone whereas the Financial Conduct Authority can bring proceedings that send someone to prison. Some of our clients have been members of the FCA and that’s true regulation right there! So always do your due diligence and don’t assume any franchise is a good purchase just because they are members of a trade association. It’s a factor but you’ve got many more important checks to do before you get influenced by that!
Do your due diligence of a member just the same as you would a non member.