The Role of The BFA (British Franchise Association)

[Rick Stally]

Hi All

Franchise can be great when it's genuine but watch out for those sly old foxes who are just after ripping you off!

I investigated buying a franchise and eventually wound up at the door of the BFA, I purchased their information pack and took time to read through it. They basically claim to be an independent governing body designed to accredit honest franchisors and help potential franchisee's by doing several key checks.

As I understand it the premise of the BFA is that to become a member the franchisor must prove that they have a viable, franchiseable business that's been trading profitably for 3 years that can support a franchise network and work in an ethical manner.

I selected one of their accredited franchises and began the process of starting my own franchise. I invested over £10k in the company in question before I became suspicious that something was amiss. My suspicions proved correct and I ceased the business relationship.

The company I became involved with had commenced trading on 17th of September 2003 and was accredited by the BFA in July 2004 there was no successful pilot branch nor was the business viable. The owner of the business happened to be a regional chairman of the BFA.

I complained to the BFA and agreed to enter into their grievance procedure (after consulting my solicitor) this procedure is supposed to take 21 days. My complaint was entered on the 1st of August 2005. It is the 1st of February 2006 and the compliant has never been addressed.

The director general of the BFA (Mr Brian Smart) decided to conduct the grievance personally; he failed to reply to my letters, and never accepted any of my telephone calls. An independent legal expert on franchising looked over the case and stated categorically that the franchise I bought did not (and never had) fulfil any part of the membership criteria for accreditation by the BFA.

Despite my numerous written requests and substantial port folio of documentary evidence the BFA failed to act, the company in question is still trading under the banner of a BFA accredited member run by the regional chairman of the BFA.

Through my investigations I found many people who had lost significant sums of money through business dealing with this man, the total I have been informed of is an amazing £320k in the past 24 months! I contacted the DTI, The OFT, The Inland Revenue, The Trading Standards none of whom wanted to investigate the matter despite my belief that this individual was in breach of section 216 of the insolvency act.

There are some good franchises out there but beware of the organisations, investigate each opportunity personally and leave nothing to chance. I know it takes time but my experience clearly demonstrates that the BFA accreditation is worthless, they will not help you. I can only conclude that they simply wanted the fee he paid to join rather than to promote ethical working practices.

[Ian J]

Unfortunately there seem to be an increasing number of people on various forums claiming that they had been misled into becoming involved with a franchise and when they finally realised that they had been misled and complained to the BFA they seemed to just wash their hands of it.

[bwglaw]

Concur with Ian. The complexity of the law does not help either.

With the BFA 'accreditation' I would wonder whether you could attempt to issue proceedings against them as a second Defendant. I do not specialise in franchising but in other areas of commercial law, including contracts etc. To put it simply; Under contract law, if a body was 'endorsing' a particular franchisor as being bona-fide etc (depending on the terms expressed/implied) they could share the liability if it was sufficient enough for the 'endorsement' to amount to an incorporated term to amount to a warranty of some kind.

Just a thought...


Jonathan

[www.limeone.com]

I think it is a little more than a badge and given it is a business 'due diligence' issue cannot see how they would be liable under warranty. They have no powers to inspect and are effectively paid for and contractually bound with those who pay their membership fees. If they choose to endorse those with no track record than it can only be a matter of time before their own credibility and business is seriously threatened. They are not a watchdog organisation though, they are a profit making business.

What is of greater concern is that many going into the franchise purchase are people with no or little business knowledge but a large redundancy payment. This renders them vulnerable to the unscrupulous and gives franchising a bad name as a business option.

[Stu Dale]

The BFA are for the franchiser not the franchisee

[dadesign]

hello guys,

oic.

well, so far how is the British business frachising in UK? doing great?

well because it seems, plenty of American franchising are dominating the international market/ Asian market.

Such as... you know... McD / Burger King / star bucks / San Francisco coffee / sandwich bar & etc.

i am correct?

[crewboy25a]

I am thinking of becoming a franchisor, but wouldnt touch the BFA with a bargepole....

[bwglaw]

BFA good for information but do not rely on them when things go wrong

Jonathan

[CatherineL]

I am also a former franchisee, and do not rate the BFA. Many of the franchisors who are members are on the board. It is true, they are for the franchisor, not the franchisee. Many franchise agreements state that if you're having problems with your franchisor, you must allow the BFA to arbitrate first, instead of going to court, which is not ideal, when they're heavily biased towards the franchisor.