According to the NatWest BFA franchise survey 2014, in the past five years the overall economy has shrunk by 2.5% however, over the same time frame franchise contribution in the UK has grown by 20%.
General Director of the BFA, Brian Smart said; "UK franchising offers thousands of people each year the opportunity to take on their own sustainable business, in turn creating employment for many thousands more - a success that has continued through hard economic times while other parts of the economy have struggled."
Due to the growing popularity of franchising in the UK, it is vital for potential franchisees to make sure the franchisor is operating ethically, which is where the BFA could help.
In order to gain a full BFA membership franchises are tested against the structure of their business, relationship and support between the franchisor and franchisee, their system and finally their success as a franchise. After inspection of franchises, not all applicants pass BFA accreditations and many could be turned down for membership.
There are four key elements of an ethical franchise, which all BFA franchisor members should adhere to;
(Taken from http://www.thebfa.org/about-bfa/criteria-and-checklist-for-membership)
- Viable: The business will have evidence to show that the product or service is saleable, and at a level of profit that will sustain a franchised network.
- Transferable: There is a means for the transfer of the know-how to a new operator at arm’s length, essential if the business is to be franchised.
- Ethical: The franchise is structured and operated in accordance with the ethical principles set out in the European Code of Ethics for Franchising, which covers matters of advertising, recruiting, selecting, and interactions with franchisees. The applicant’s franchise agreement is formally assessed.
- Disclosed: All information on the business that is material to the franchise proposition and contract is disclosed without ambiguity to prospective franchisees.