BFA responds to Government debate on franchising with call for greater understanding
Pip Wilkins QFP, the CEO of the BFA (British Franchise Association) has written to MPs following the recent debate in parliament entitled ‘Franchising and Corporate Power’, held on July 2.
The letter was sent to clarify the BFA’s position on regulation of the UK franchise industry, which was brought up during the debate, and to offer insight into the role of the association.
Wilkins began by reassuring MPs that the BFA shares their concerns about protecting franchisees and upholding ethical standards but said that they do not think regulation is necessary, as there are already adequate legal processes in place.
In the letter Wilkins laid out the aims of the association: “The goal of the BFA is to ensure that franchise businesses in the UK are run in a professional and ethical manner.”
Explaining the BFA’s accreditation process for members, she wrote that: “Franchisor members undergo rigorous auditing of their businesses before joining. We look at all aspects of their operation practices, business procedures, finances, marketing materials and the support structures for their franchisees. We also carry out an independent review of their franchise agreements through our specialist legal professionals. Part of our accreditation process is that we also survey a franchisor’s franchisees in a satisfaction survey.”
According to Wilkins, once accredited, members are given access to extensive continuous training and educational events via the BFA Academy and the advanced QFP qualification.
She went on to remind MPs that franchising is a hugely successful industry which, according to their most recent 2024 franchise survey sponsored by NIC Local, contributes £19.1 billion to the UK economy, employs 770,000 people, that 89% of franchise units report profitability, that the average unit turnover is £400,000, that the forced churn rate is only 1.8% amongst franchisees and that the majority of franchisors are SMEs.
The letter included expert testimony from franchise professionals including Alisdair Gray, executive director of the European Franchise Federation, who reminded MPs that despite 30 years of debating the issue, the EU had never opted for full regulation. He praised the British franchise sector for their success and warned that regulation would stifle innovation and growth. He also reminded MPs that the BFA’s code of ethics, that all members must adhere to, has very clear rules about expected behaviour and those who do not comply are expelled from the association and the education, networking and support this provides.
Franchise specialist solicitor Roz Goldstein from PartnerWise Franchise explained that the UK already has contract law in place to protect franchisees but urged all prospective franchisees to seek expert legal advice before entering into a business relationship with a franchisor.
The Chairman of the BFA board, Paul Thompson, formerly of Water Babies, called for greater education rather than regulation and noted that the debate in Parliament highlighted a lack of understanding of the franchising sector. He urged MPs to meet with the board or come to the BFA’s annual conference, to gain a greater understanding of the industry.
Wilkins closed the letter by saying she hoped the Government would come to the BFA, as the undisputed experts, to seek their advice in the future, if they wanted to discuss regulation.
Reflecting on the debate Wilkins said: “We very much hope that MPs will accept our invitation to come and learn more about franchising, from those who have been working in it for decades. I said in the letter that whilst we understand things aren’t always perfect, we do not believe regulation would benefit the franchising sector at this time and we look forward to a harmonious and mutually beneficial working relationship with members of Parliament and the Government in the future.”
To learn more about franchising in the UK and the BFA’s work visit www.thebfa.org
Notes to Editor
- The BFA (British Franchise Association) is the voluntary self-regulating governing body for franchising formed in 1977 by the major franchising organisations looking to accredit and promote those franchise systems that meet the strict ethical and business criteria of a good franchise.
- The term 'franchising' has been used to describe many different forms of business relationships, including licensing, distributor, and agency arrangements. The more popular use of the term has arisen from the development of what is called 'business format franchising.'
- Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trademark/trade name of the franchisor and to make use of an entire package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.
- The BFA hold a full list of all its members and the code of ethics to which these members adhere to on its website: www.thebfa.org
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