Selling a franchise
Our business model to others seems relatively simple; this is however, far from the truth.
Once you have finally sorted out your company's' procedures and overall business model you actually have to launch in the market place, once you have done this you need to make sure that your new franchisees are supported effectively and most importantly remain happy to be part of your franchise network.
All in all this equates to one major task and without the right support you may fall a few hurdles short of your end goal.
You should consider the following points before you launch your franchise business:
Setting up your businesses franchise systems:
Most businesses have systems in place, whether they exist for product orders, customer relations or simply dealing with day-to-day operations, you may not even realise it!
In many cases a small to medium size operation will have most of its workings held inside the mind of the employer or employees, the task that presents itself in the first instance when creating a franchise business is to extract these systems, plot them on paper then arrange them in such a way that others with no background understanding of the business can use them to good effect. We know this as 'Procedure Planning'.
If for example you were opening your own business in a completely new industry, but you have very little experience of it, what would be your first and main priority?
In the realistic world the answer to this question is not learning how to sell any new products or services but learning how to operate the business in a quick and efficient manner. For example you open an Estate Agents, you know how to take a property onto the market but if you do not have any idea how to sell it, or what to do when and if you do agree a sale, the Estate Agents would not be open for very long!
Such is the importance of planning and structuring a procedure for your new franchisees to follow. This is not to say that any procedure will not be liable to change, you must allow for fresh opinions, suggestions of others and amendments to external procedures such as legislation in order that you may progress your own company over the course of its trading history.
Setting up your franchise internal operating systems:
As with the setting up of your franchise systems the internal operation of your company will also need to be assessed and amended.
For instance if your franchise company will be supplying products directly to its franchise network an accurate supply, invoicing and sales ledgering system will need to be created if it does not already exist. In addition to this, a supply arrangement will also need to be covered in your franchise agreement and sections of your franchise operating manual to ensure a smooth and seamless operation from day one.
Other systems will need to be created such as franchise figure reporting, management fee invoicing, recruitment strategies, launch programs and dispute resolutions. This is just to mention a few and in reality there are probably many new, updated and amended systems that will need to be put in place before you launch your franchise business that it will make your head spin.
However, as with your planning of franchise systems it will be crucial to the success of your franchise to plan, check and recheck every internal process taking into account every conceivable eventuality. Even then you may still have to amend these systems after the launch of your franchise business, once you have begun to receive feedback from the other parties now involved in your network.
As a final recommendation, Franchise UK always recommends that an internal franchise operating manual is created and learnt by the employees of the company, Knowledge is the key to the success of your franchisees and without it you may find your franchise failure rate is unacceptable.
How do you charge your franchisees?
There are a number of ways that a franchisor can charge its franchisees, initially and ongoing throughout the franchise relationship, to assist you with this we provide the following examples:
Initial Franchise Fee
The initial franchise fee will or should depend on the type of franchise you have and the actual franchise pack that you are offering your new franchisees. It would be commercial suicide to offer a shop-based franchise at £10,000, and then offer a franchise pack that costs you £20,000 in shop fitting and stock expenditure!
This suggests that you will need to consider the actual cost of the franchise pack offered to each new franchisee in the first instance, then estimate what the total value of the business will be to your new franchisees.
For example, a home based franchise that offers a lower return on investment, or can be operated on a part time basis a smaller initial franchise fee may be applied. A franchise opportunity that offers a larger turnover, revenue, territories and works using a much greater business model will obviously have a higher initial franchise fee. In relation to this, a higher franchise fee will need to be charged because the training, development and support needs of the franchisee will be higher and more complex.
Franchise Management Fees
Quite often described as a 'Royalty Fee', although this in our opinion does not represent a true meaning of the term.
A management fee can be charged to franchisees as a fixed, or percentage fee on a regular reoccurring basis. In most cases franchisor's will choose to charge the franchisee a percentage of the franchise businesses turnover for services such as ongoing support, marketing, advertising and development of the brand and company, this does however represent another complicated question.
How much do you charge?
You must first consider the support needs of a franchisee and in terms of this. the relationship that exists between both parties should be considered as like that of a mother and child, this seems like a strange comparison but read on.
Initially the franchisee will be extremely dependant on your help and support, much like a young child or baby. As the relationship ages, much as the child does, the franchisee will become less dependant eventually becoming independent, much like a teenager. The biggest problem with a teenager, much as with a franchisee, is when they reach independence they rebel.
More relating to the franchisee this means that as time moves on he or she will be receiving less support because they simply will not need it, in turn this suggests that the franchisee may begin to begrudge paying a franchise management fee to you on a regular basis.
This of course creates the first problem, but you must also consider the actual amount of turnover and profit you are taking away from the franchisees business. For example, is a management fee of 50% of the franchisees turnover fair? We do not believe so.
Taking these thoughts into account we would recommend that you consider a management fee of between 5% and 20%, or an equivalent fixed charge.
Product Mark Up
In most cases when supplying products to a franchise network it will be possible to add a mark up to cover your own admin costs and provide additional profit to your franchise business.
As with the management fee you must again be fair to your franchisees, simply, can a franchisee remain competitive in the market place with the product mark up your are charging to their supplies.
Advertising levies and National accounts
Some franchises choose to charge a fee to franchisees for National advertising and marketing; this is collected from every franchisee in the network, held on an account and then spent by the franchisor in keeping with the relative terms of the franchise agreement or operating manual.
An advertising levy may be charged as a percentage attached to the management fee or as a separate invoice.
There are of course other ways to charge your franchise network but we would recommend that you consider each carefully and where possible seek advice and guidance.
The franchise agreement
The franchise agreement will form the most fundamental part of your franchise business, without this it will be difficult to ensure compliance with the various matters concerning your franchise and as a consequence may result in severe loss of income and damage to your company.
Not only this, but your franchise agreement will relate to and to some degree dictate the contents of your operating manual and the internal, external workings of your franchise business. Therefore you must ensure you gain the correct advice and guidance from a qualified consultant or solicitor, then create the agreement under English Law using a solicitor that is experienced in the franchise industry.
The franchise operating manual
Firstly you should ask yourself what a franchise operating manual actually is, you may already have an Operating Manual for your employees that covers the main points of operation, but this is simply not good enough for your franchisees.
You must believe that every franchisee you sign will be a complete amateur to your business and in truth to running any form of business. You will need to structure the Operating Manual in such a way that you provide the following:
- The background history of the company
- The contacts for support and franchise staff at Head Office
- The contacts, if applicable, of suppliers or advisors
- The methods and procedures of setting up the business
- The methods used by the company to gain new business including advertising and marketing
- The procedures of operating the business including contracts or other documentation that will be used by the franchisees.
- The franchisees obligations and methods/procedures of fulfilling these obligations, such as figure reporting
- Price guides for stock, stationery and any other relevant items
This is just to mention a few but dependant on the complexity of your franchise business there may be many more. If you are unsure of what your franchise business model needs you should gain advice and assistance from an experienced source.
As with your procedures the franchise operating manual will change and be subject to alteration, addition or amendment and these changes must, without fail be relayed to every franchisee in the network.
Advertise Franchise UK
How do you market and advertise the services of the company for the benefit of your franchisees - how do you advertise your franchise in the UK?
Do you either advertise your franchise nationally, have a company website or conduct internal mailing or telecanvassing. If not you should seriously consider conducting one or more of these methods immediately, how else can you add value to the support of your franchise network.
Other marketing and advertising can be conducted by the franchisor on behalf of its franchise network; in some cases such as voluntary or compulsory marketing this can be chargeable.
Either way it is important that you continue to add value and generate new business through these marketing and advertising activities.
The franchise prospectus
Once you have finished putting together your franchise model and decided how to charge your franchisees you need to design and publish your franchise prospectus, or information brochure.
The information contained within this needs to be brief and accurate, with the ultimate aim of explaining the concept of the business, the history of the business and the franchise opportunity itself. You need to be enticing the prospect to attend an initial meeting with you so that you can sell the franchise on a face to face basis.
A response mechanism should also be included so that the prospects can apply for further information and a meeting time and date. Enclosing an Application for Interview normally does this, and a stamped addressed envelope for the return of these documents.
A Confidentiality Agreement will also need to be enclosed, as without one it is not recommended that you disclose any further information on your franchise business to a prospect.
Initial meeting packs
Any prospect that attends a meeting with you should be entitled to take away an initial meeting pack. Within this you should provide more detailed information on:
- The background of the franchise
- What the franchise business does
- How the franchise business does it
- What the franchise opportunity consists of
- What figures should the prospect expect to achieve
- Illustrative cash flows and projections
You should also provide as much point of sale material as possible and a basic copy of your franchise agreement.
Gaining franchise enquiries
Without franchise prospects you will not recruit franchisees, without franchisees you will fail as a franchisor, so, the methods of franchisee recruitment must be correct.
Generally speaking there are two mediums to consider, the press and the Internet. Such items as television and radio and even national franchise events, though attractive, may not bear the results you require when rolling out your franchise opportunity. However, these may be worth considering a few months down the line, especially if you have been successful in recruiting your vital first franchisees.
When considering press advertisements it is important that you consider your target market to position your franchise business correctly. What type of prospect is most likely to enquire into your opportunity and what publication are they most likely to read, if any at all.
The cost of a press advertisements in many cases will be high, as your company should be looking towards National Publications to secure the best possible readership, that said you may only be recruiting in pockets, or cluster building, which is when a local publication may be a more viable medium.
When advertising you need to think carefully about the content of your advertisement, remember you are spending large sums of money and a badly designed advert may as well be like you flushing your advertising budget down the toilet.
Consider the following when compiling your advert:
- Impact on the page
- Positioning on the page
- An introduction to what the franchise business is and does
- The benefits to the prospect such as the franchise pack and earnings potential
- The initial franchise fee
- A response mechanism such as a free phone number
Once the advert has been compiled you will need to prepare for a period of testing. There is simply no guarantee that an advert will work for you and it is likely that by changing the size, publication, even the general layout a better response can be achieved.
A testing period is, as we have mentioned, a way in which you can gauge the response from your advertisements, if you are happy with the levels of enquiries do not change the advert, if you are not, go back to the drawing board. When gauging response you should remember that we have found that an average of one franchisee will be recruited for every fifty leads that you receive, therefore lead generation is vital.
Internet marketing of a franchise opportunity has increased in popularity over the past few years. This method not only offers relatively cost effective lead generation in comparison to the press but also ensures your company of the maximum UK and International coverage.
In many cases you can sign up to a monthly package or pay for your franchise leads on an Ad-Hoc basis, which in its own right offers benefits as filters can be put in place to make sure you only pay for a lead that you require, for instance, you may only be recruiting franchisees in the UK, why then should you pay for a lead for a prospect in Nigeria.
You may also be offering a franchise with a large start up cost, why would you want a prospect that cannot raise the required funds to complete the purchase. In short with the Internet you have control, which benefits your franchise company in its early stages of development.
As with press advertisements you will need an internet advertisement that provides the information required in such a way that it may entice the franchise prospect to make an enquiry.
Although in the early stages of development franchise exhibitions should be an afterthought we would like to take the opportunity to briefly cover this method as exhibitions can offer many franchise recruitment possibilities.
Such events as the National Franchise Exhibition at the National Exhibition Centre in Birmingham draw prospects in their thousands, so once again it is vital that you portray the right image on your stand, help and advice on this is available from an array of sources, including the event organisers themselves.
The franchise pack
What exactly are you going to supply to your franchisees and how valuable will this be to their business?
A question worth thinking about in some depth, that we would suggest you consider in the following way:
What will the franchise business need to operate?
If you are franchising an Ink Refill company would it not be worth supplying the franchisee with the refill kits or machines, or even an initial stock of ink. If you are franchising an estate agency business would it not be advisable to provide a stock of 'For Sale' boards or a database management system.
The list of possibilities is endless but it is our opinion that certain franchise companies should stay well clear of 'Toys', or in other words an item of good value, that is attractive but simply does not benefit the business, for example, supplying a new PC or Laptop to a newly recruited franchisee in an IT & Office Equipment franchise holds little benefit as the franchisee should be able to purchase the item at trade price anyway!
How do you propose launching the franchise business?
Whether you are offering money towards initial marketing or conducting it internally on behalf of the franchisee you should always include some manner of launch or ongoing advertising or marketing activity. This holds many benefits such as building your brand in the area but no benefit of this is as important as getting the new franchisee off the ground with new leads and new business.
Stock and stationery
You should always provide an initial stationery pack for your franchisees, this should include:
- Franchise letterhead
- Franchise business cards
- Franchise company brochures
- Franchise point of sale
Quantities are at your discretion but bear in mind that the franchisee will need to operate with a limited number of outgoings for the first few month of training, therefore may not appreciate the additional expense of reordering stationery.
Stock is once again a question of what is needed to operate the business and whilst you may wish to give a franchisee everything they need to operate the business initially, this in the interests of your own profits may not be viable. You can however consider a stock donation as part of your pack.
Customers and prospects
In most cases you will grant a territory to a franchisee, this will be a territory that no other franchisee or even the franchisor may operate in whilst the franchisee is trading, thus any existing customers and prospects should be passed to the franchisee.
We would recommend that you approach this very carefully and in the case of existing customers you take measures to ensure that the changeover between franchisor and franchisee is seamless.
Franchise operations manuals and training
The final thought is to include the obvious, every good franchise company offers its franchise operating manual and induction training as part of the franchise pack.
There are of course other items that will need to be included in the franchise pack, and this is ultimately dependant on the type of franchise you operate. Remember that help and guidance on this subject is available, if you are having difficulty in preparing your franchise pack, get assistance. The contents of your franchise pack may make the difference between successfully recruiting a franchisee and not.
Signing a franchise
The processes involved with signing a new franchisee can be as simple or as complicated as you desire and the reason for this boils down to how many checks you want to make on a prospect before you allow him or her to join your franchise network.
Many franchisor's choose to accept a prospect on face value alone and most of the time there is little need to do anymore, however, some, in most cases better established franchisor's, will check references or even credit check a prospect before accepting them as a franchisee.
You may think that this is a little arrogant, surely you are selling the franchise not acting as an employer, but this in reality is far from the truth, you will need to make sure that the right franchisee is operating in the right area, hence a little arrogance in recruitment could pay long term dividends in the future of your business.
Once you have accepted a franchisee and they have agreed to proceed with the purchase there is normally two stages to the completion of the transaction.
Deposit payment - on occasion a franchisee may choose to skip paying a deposit and move immediately to full payment, this generally speaking is a rare occurrence as most prospects will need to arrange business banking, funding, accountants and maybe even find premises to operate from.
This is a lot to do when you have no definite confirmation of a secured franchise so most franchisors will accept a deposit payment to secure the territory for a short period of time.
Upon doing so you must ensure that the two parties sign a Deposit Agreement, this details any relevant clauses of the deposit payment including timescales and any refunding of the payment where it is applicable.
This Deposit Agreement should be created by a solicitor to ensure its contents are accurate enough to protect your business.
Following a deposit payment, or as we have already mentioned in some cases immediately, a prospect will make full payment of the initial franchise fee.
Upon doing so you will need to ensure that two franchise agreements are completed and signed by the franchisee, a witness and an authorised representative of your company.
This will complete the franchise purchase and allow you to start preparing and issuing the new franchisee with your franchise pack, support and guidance, the franchise operations manual and most importantly book the new franchisees induction training. We recommend that you only begin to implement the start up events upon the franchise sale being completed; this is to avoid any loss to your business, should the prospect change his or her mind.
Granting franchise territories
You must first consider the original 'Pilot Operation' trading territory; it is obvious that you wish to expand your business by franchising to offer better coverage throughout the UK , but where exactly does the largest volume of your business come from?
Do you operate a retail franchise business where most of your trade comes from the town or city and surrounding areas, or do you sell by phone and the internet to businesses in a much wider geographic area, such as a whole postcode district or county?
Once you have thought about this it should be easier to grant franchise territories and where possible predefine your UK franchise territories in such a way that each franchisee may be allowed the maximum level of success. This said, it will be important that you do not agree too large a territory, by doing so you could lose additional revenue for your business and put your franchisees in a position where they may not be able to work the franchise area effectively, thus loosing business, market share and brand awareness within the franchise territory.
Franchise areas granted should be marked with a clear boundary line; ensuring that the franchisee does not stray into or solicit business from another trading franchisee's patch.
Franchise training and development
Every good franchisor develops and offers their franchisees training and in most cases development courses, we shall cover each point separately.
Initial or induction training should be offered to franchisees at the earliest opportunity after the franchise sale has been completed. In the induction training you should be looking to increase the new franchisee's knowledge of the business, the products and/or services that are offered and the methods that your company uses to gain new business and create sales.
Not only this, but you should also consider general business practise training and most importantly a recap of the franchisee's main obligations under the franchise agreement.
In some cases a franchise development program should be offered to your franchisee's following any induction training. This is simply because as a rule a great deal of the knowledge learnt on induction training course will be forgotten as a franchisee begins to trade, this could include important procedures which the franchisee must be doing.
This is known as a learning curve and it is your responsibility as a franchisor to ensure that this curve does not decline after the course.
Franchise figure reporting
As with signing a new franchisee the process involved in franchisee figure reporting can be as simple or as complicated as you make it but we would recommend that you always try and collect the following information from each of your franchisee's on a regular basis:
- Gross turnover
- Type of Sale
- Cost of Sale
- Prospects and new clients
By doing so you will at least be able to gauge how much business the franchisee is generating, whom the business is to and what it is costing them. Remember that franchise figure reporting is not a procedure that simply helps you to create your monthly management fee, it should also be used as a way of identifying any additional needs of the franchisee, such as marketing support or additional training needs.
Franchise support will need to be offered to a franchisee on a daily basis as you simply would not expect a franchisee to rely on question and answer sessions at the end of each week or month, this is just not acceptable, imagine this 'I am sorry Mr Smith but I cannot help with your query as I do not know the answer and will not be able to find out until next month!'
Support should be extended to the franchise network by way of the franchise operating manual, telephone support, email support, additional franchise training, on site visits, marketing support and even by further development meetings or franchisee forums.
It is obvious to state that the franchisee's need for support will be greater in the early stages than after three or four years of trading and in some cases absolutely no support will be needed after this period of time. Therefore it is important that you conduct 'behind the scenes support' such as further brand development, marketing and advertising, new incentive schemes and even new products ranges and services, all to ensure that the franchisee continues to see the value in being part of your franchise network and renew his or her franchise agreement at the end of each term.
As the below chart shows, the drop in support levels without new incentives means that the franchisee becomes completely independent and does not wish to renew the agreement, where as the second chart shows how new incentives and initiatives actually help to keep a franchisee on side, thus renewing his or her agreement for another term.
Provisions should in our opinion be made for the resale of a franchisee's business, though sadly in many cases they are not, some businesses deem it fit not to offer any true benefit to resale at all, owning customers, contracts and stock might seem like good business practice but what about the franchisee's interests, ask yourself once again, is it fair, is it viable?
In truth a franchisee should be able to benefit from any value that they have added to their business over the years of trading. Why else would they be investing their own capital into it, are they really spending all this time and money to be a glorified salesperson?
This suggests that careful guidance and much consideration will need to be applied from the outset of you planning the franchise and in doing so there should be two main aspects to consider.
How does the franchisee benefit?
How does your business benefit?
True resale potential should be offered to a franchisee in such a way that they will benefit in the main from any capital appreciation that has been achieved, and by the value of stock and customers that have been acquired by the franchise business.
A franchisor should be able to benefit from a 'Franchise Transfer Fee', a form of agency fee and ultimately from the ability to keep a franchise outlet trading, all be it with a new owner.
A franchisor must however be aware that all new franchise prospects that are considering the purchase of a resale, regardless of the origin of their enquiry, will need to be vetted as with the first franchisee, and a new Franchise Agreement will need to be signed between each party.
Franchise resale simply is a minefield, because to some franchisor's what we have already said may not apply at all, for instance you may need to keep all of the franchisees customers for internal marketing and invoicing purposes, therefore getting the appropriate advice and guidance in this section of your franchise business planning is important to your continuing business success.
Continuing the term
Continuing the term, or renewal is, as with resale an important consideration, simply, why would a prospect purchase a business that they would not be able to keep after the term of the Franchise Agreement has ended.
Therefore it is once again imperative that you plan your terms of renewal before you sign your first franchisee.
Most franchisor's allow renewal of the franchise agreement, unless the franchisee has been in serious default of the agreement throughout the term. To enable renewal we recommend you create, what we know as a 'Rolling term franchise agreement'.
At the end of each term the franchisee will be expected to pay a renewal fee, which can be as little as an admin charge or as great as a new initial franchise fee, once again, you have to ask whether such a large fee is going to benefit your long term business, despite its obvious attractions. If the franchisee does not renew, you will have to go through the recruitment process all over again, which will cost you yet more money. Try not to set your sights too high on renewal, in most cases it will be far simpler to maintain the relationship with an existing franchisee. Better the devil you know, as they say!
No matter how carefully you plan a franchise before you launch it, or how many changes you make in its early stages of development, disputes are inevitable, it is how you handle a dispute that counts, getting angry or hiding behind the strength of your franchise agreement seldom leads to an amicable resolution.
Therefore a specific path for dispute resolution must be plotted before the first dispute has a chance to arise. Without this there will be no procedure, and as by now you should realise, in franchising, without procedure you may as well not have a franchise business at all.
Disputes may arise between franchisee and franchisee, franchisee and supplier or in most cases franchisee and you company and seldom are they for the same reasons, nevertheless the basic procedure for all franchise disputes should be the same.
Mediation is described as a structured dispute resolution process where an impartial third party, the mediator, meets with disputants in an effort to identify the issues, explore options and clarify goals. The mediator facilitates face-to-face meetings of the parties to assist them in reaching a mutually-acceptable agreement. Parties reach agreement freely, voluntarily and on the basis of informed consent. Mediation is assisted negotiation. As the "process expert," the mediator helps the parties negotiate efficiently and effectively.
Similar to Mediation but an alternative dispute resolution method by which an independent, neutral third person ("arbitrator") is appointed to hear and consider the merits of the dispute and renders a final and binding decision called an award. The process is similar to the litigation process as it involves adjudication, except that the parties choose their arbitrator and the manner in which the arbitration will proceed. The decision of the arbitrator is known as an "award." Compared with Mediation, this is a more formal form of dispute resolution, thus is treated as our second step.
Most disputes will arise or be centred on a breach or default of the Franchise Agreement, enforcing the relevant clause or clauses acts as a stark reminder to the party that there are still obligations to be complied with. Enforcement of the franchise agreement if known as a 'Default Notice' and should always provide the party with a period of time to come into compliance with the breached clause or clauses.
The final and absolute last action to resolve a dispute. By terminating a franchisee you are removing an ability to trade, thus the livelihood of an individual. So ask yourself this, have you really done everything you possibly can to resolve this situation?
It is plain to see that disputes in franchising are extremely complicated and so often become a legal proceeding, therefore you need to show diligence at all times and make sure you get the right advice and guidance from day one.
IMPORTANT: You cannot fully prove the viability of your proposal until it has been accredited by a non related third part, it is all well and good showing history and methods that have worked for you but who is to say that they can be accurately translated into an understandable format for a franchisee to copy?
This is where membership of associations such as the British Franchise Association (BFA) will benefit your business tenfold. The British Franchise Association will check everything from your initial franchise prospectus all the way to your Operating manual and Franchise Agreements, no matter how big or small they are.
If the British Franchise Association does not agree that your business is viable or franchiseable they simply will not allow you to become a member, please note the below membership levels and criteria or feel free to visit the British Franchise Associations website www. british - franchise .org .
BFA Standards and Categories of Membership
Some 190 franchisors have chosen to submit themselves to scrutiny by the association. Their networks encompass some 13,000 successful businesses. The association's criteria demand that all our members, full and associate, meet the following four general objectives:
- Viable: All members of the BFA will have proved in the marketplace that their product or service is saleable, and furthermore saleable at a profit that will support a franchised network.
- Franchiseable: All members of the BFA will have proven they have the means to transfer their know-how to a new operator at arm's length. Most will have done so at their own risk through at least one managed pilot franchise operation.
- Ethical: The BFA has joined with its sister bodies in Europe to devise a new and expanded code of ethics which all members commit themselves to abide by. The code requires standards of conduct in advertising for franchisees and in recruiting and selecting them, and sets minimum conditions for the terms of franchise agreements. Those terms are both critical and complex.
- Disclosure: All BFA members agree that they will, in advance of any lasting contractual agreement, disclose without ambiguity to prospective franchisees the information on their business which is material to the franchise agreement. Members submit their offer documents to the association as part of the accreditation procedure.
With these checks in place on viability, franchisability, ethical and disclosed conduct, franchisors can be admitted to associate membership of the association, providing also that they commit themselves to abide by the Advertising Standards Authority's code of practice and also to the association's own complaints and disciplinary, appeals and re-accreditation rules.
To become full members, franchisors must meet one more objective.
A proven trading and franchising record: The length of time a franchised business has been in operation, and the changes in business and financial circumstances it must have survived before it can be said to be "established" will vary from sector to sector. The record of full members on openings, withdrawals, and failures (if any), as well as their trading and financial performance, is subject to an initial assessment and periodic checks.
New entrants and Provisional Listing
Just because a franchise proposition is new it does not mean that it is necessarily bad - though it may be. The association, therefore, introduced in 1991 a provisional list for the companies new to franchising, who could nevertheless demonstrate that they were taking all reasonable measures to make sure that their business is properly developed and tested for the franchise method.
(Source: British Franchise Association website)
Once accredited you are permitted to carry the logo and your membership status, whether you choose to use it fully on point of sale literature and letterheads, or just in your advertising is basically up to you, but remember that a membership status does make your opportunity a more attractive and plausible proposition.
Of course there may be other matters to consider when franchising your business and we would recommend that you always seek advice and guidance from those experienced in franchising before you launch your business franchise opportunity.
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