Requirements for joining the bfa
in association with Lloyds TSB
In joining the British Franchise Association, Members, both Associate and Full, commit themselves to comply with the terms of the following policies and procedures as published by the Association:
- the Code of Ethical Conduct
- the Terms of Annual Re-Accreditation
Members also agree to comply with the Code of Advertising Practice as published by the Advertising Standards Authority.
In addition Members also agree to provide to the Association any non-confidential information relating to their franchise business, or relating to the standing and qualifications of its Directors, as may be requested by an authorised official of the Association.
Members also agree to provide a full-time official of the Association, so authorised by the board, 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).
The Association offers a mediation service and a Dispute Resolution Scheme which is available to franchisors and franchisees who jointly agree to use the service.
Members of the Association also seek to comply with the spirit and intent of the Guidelines to Best Practice as published by the Association from time to time.
In respect of both the foregoing general conditions of Membership, and the following specific terms, whilst the Association will use its best endeavours to establish the eligibility of an applicant, the onus for demonstrating that the criteria have been met on initial accreditation or re-accreditation lies finally with the applicant.
Summary of Membership Criteria and Categories
(Associate and Full Members)
1. Viable
2. Franchisable
3. Ethical
4. Disclosed
(Full Members)
5. Proven trading and franchising record
The following specific terms of Membership apply to both Associate and Full Members. Each term sets out a general condition that the applicant must fulfil. Each general condition is followed by examples of how applicants will ordinarily be expected to demonstrate that the condition has been met.
1. Demonstrate that the business itself is viable – The production of 24 months recent audited accounts, including trading accounts, which show that the business is capable of being run at a profit that will support a franchised network.
2. Demonstrate that the operating units in the business can be successfully replicated – The production of 12 months recent audited accounts for a managed arms-length pilot franchise, or a fully fledged pilot franchise, which show a trading performance at least in line with the business plan set for it and which is supported by a developed operating system.
3. Demonstrate that the contractual terms to be offered to prospective franchisees comply with the association’s code of ethical conduct and such other terms as it may publish from time-to-time – Lodge with the Association for its accreditation, and to be available for inspection by appointed franchisees, a copy of the then current agreement and any changes thereto.
4. Demonstrate that the offer documents to be used with prospective franchisees present a full and realistic picture of the franchise proposition – Lodge with the Association for its accreditation, and to be available for inspection by appointed franchisees, a copy of the then current offer documents and any changes thereto.
Applicants who comply with the foregoing general conditions of membership and the specific terms 1 to 4 set out above will be eligible for admission as an ‘Associate Member of the British Franchise Association’.
Applicants who comply with the following, additional specific condition will be eligible for admission as a ‘Full Member of the British Franchise Association’. Associate and Full Members may refer to themselves as such in their offer documents, advertising and other published material. Only Full Members are entitled to use the Association’s logo.
5. Demonstrate that the franchise network has developed over time with a proven trading and franchising record - Provide a record of franchise openings, withdrawals and disputes (which required external intervention to resolve) together with evidence of the profitability of individual units and of the network as a whole sustained over a period of 24 months.
Franchise operations which form part of a larger group or company will be required to submit evidence concerning the franchised network, on a confidential basis if necessary, which is confirmed by a Director of the company as representing a true and fair picture of the franchised network.
Additionally such franchised operations will be required to provide a statement from the holding company or group confirming its intention to maintain the franchised operation for at least the forthcoming year.
Overseas Franchisors franchising directly into the UK, and the Master Licensee of Overseas Franchisors are eligible to apply for Associate or Full Membership in respect of their UK operation. Additionally Overseas Franchisors seeking only to operate through a Master Franchisee are eligible to apply for ‘Overseas Membership’. To gain admission their overseas operation must comply with the general conditions of Membership and the specific conditions applicable to a Full Member (excepting any terms of the Association’s Code of Ethical Conduct which would not be recognised by an Association of similar standing in the Country concerned). July 1990.
