The Ethics of Franchising

The purpose of this bfa inspired guide is to  provide guidance not  only to  bfa members as to what the bfa recognises as best practice for franchisors but also what should be expected of franchisees and consultants.

The bfa feels that it is vital that there should be additional guidance available to prospective franchisees when assessing franchise opportunities. There are far too many franchisees who do not make a proper and thorough investigation of the proposed franchise transaction despite the literature and guidance available.  It is also, and unfortunately, true that too many businesses try to adopt franchising methods without properly investigating how this now well developed business technique might be best applied in their business, and all too often on the basis of so called professional advice, which in reality is no such thing.  The bfa also hopes that this guide might provide a useful insight for both businesses and professional advisors into the complexity and sophistication of good practice in franchising.

In publishing this guide to best practice the bfa also recognises, and would wish its readers to recognise, that franchising is a business method used in a remarkable variety of business sectors with sizable variations in the division of responsibility and authority  between  franchisee and franchisor. What may be best practice in most franchises, might not fit the precise circumstances of others. In such cases it remains vitally important to find out why the sector’s hard won consensus on best practice does not apply. As the Code of Ethics states, it does not form part of any contract unless the contract so provides; likewise this publication is a guide to best practice and it is not intended to be construed as creating any contractual basis between franchisor and franchisee unless they explicitly choose to adopt it.

One of the curious features  of franchising is that  many prospective franchisees take too much for granted including their own position and attitude. Prospective franchisees must understand that franchising has limitations; it does not provide a route to automatic success for all; it does provide a business framework which reduces but  does not  eliminate  the  risk which is inherent  in establishing and running a business. Ultimately if things go wrong franchisees often seek to blame someone else and that  someone else must be the franchisor. That is frequently looking in the wrong direction.
Not all franchisors do their homework properly: some are excellent, some are good, some are average, some are below average and some are downright awful. It is no different from any other walk of life. No one can guarantee success least of all a franchisor, but no franchisee who is not thoroughly prepared in his or her own mind and wholly committed  to the cause will succeed no matter  how good the franchisor. Conversely the franchisee who has entered  the relationship with the right attitude  may succeed even if the franchisor is below average.