Can You Trust Franchise Associations?

To understand the Franchise Associations, you have to understand who their members are and why they were formed in the first place.

Membership of a franchise association is limited to the franchisors within the region that the association serves. So for example, the franchisors of the USA formed The International Franchise Association, in Canada it’s the Canadian Franchise Association and in the UK it’s the British Franchise Association.

To look at their history, franchises got a very bad name during the 20th Century and as a consequence governments began to take a closer look at the practices in the industry. To protect themselves from legislation, they bigger franchisors formed the associations as a trade organisation to protect the interests of franchisors.

As franchisor trade organisations, they obviously have to hold the interests of their franchisor members above all other interests. This means you can’t always be confident that a member of a franchise assocation will necessarily be a great franchise. It will just have passed their membership tests and paid the fees.

On the other hand, membership of a trade body is a good sign that your franchisor is serious about staying in business, so there’s a lot to be said for checking for full membership. Do be wary, though, of associate or pending memberships. Any “here today, gone tomorrow” franchisor could quite happily make a small effort to join in order to increase credibility, but never go through to full membership to avoid full scrutiny.

Finally, if you ask for information about franchising from the franchise association, remember you are going to get a view that’s coloured by their ownership of many franchises. The association is only going to tell you all the good news and positive stories, rather than the down-side to certain things. For example, the true purpose and extent of most franchise agreements.

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