The advice from the British Franchise Association (BFA) is `Don’t Sign Without the BFA Sign`.

The BFA has around 230 members. One of the biggest benefits that membership offers to franchisees is the BFA accreditation process, which ensures that a franchise is operating to the highest standards as well as a strict code of ethics.

Deputy director Simon Wise says: ”The standards we set are some of the most stringent and toughest in the world. We look through everything with a fine-tooth comb.”

There are obvious benefits to the franchisor as well. As the number of new franchise opportunities continues to grow, people look for reassurance that they are investing in a sound franchise. Estate agency franchise Bairstow Eves Countrywide is a full member of the BFA.

Managing director Alan Snowball says: “It is of great importance to prospective franchisees that a company has been through a stringent vetting procedure and is therefore reliable. Being able to give them that reassurance through BFA membership helps to attract good quality candidates, who then find it easier to source finance, because the banks prefer to deal with BFA members, for the same reasons.”

BFA accreditation requires that a franchise is viable, with a sound financial base on which to grow the franchise infrastructure, proven to be franchisable, and ethical, with the franchise agreement drawn up in accordance with the European Code of Ethics. Finally there must be disclosure. Company claims of turnovers in excess of £200,000 within a certain time frame must be achievable.

While BFA membership won’t guarantee success for a franchisee, it does mean they will be following a proven format and gaining the benefits of a sound business.

And in warning prospective franchisees about the risks of signing with a non-BFA member Wise says: “Remember, they don’t have anyone watching over their shoulder and there is no obligation for them to do things properly. Out of every four franchises that apply for BFA membership, we turn three away because they have failed to meet our required standards.”

The BFA is the home of ethical franchising, with a membership base of 231 franchise brands covering 13 industry sectors. For more information visit the BFA website at www.british-franchise.org.uk

This week sees the launch of the third edition of the BFA Guide to the Code of Ethics, which, for the first time, has received input from members of the BFA National Franchisee Forum.

Author Dr Martin Mendelsohn, of BFA affiliate law firm Eversheds, says: “Their contribution has been positive and objective, and has influenced some of the changes in the new edition.”

These include a clearer explanation about the sort of things franchisors are expected to do both up front and on an ongoing basis, and improvements to the dispute resolution process with new arbitration and mediation rules.

The BFA is also working at producing a code of ethics for brokers, franchise consultants who introduce prospective franchisees to franchisors, etc.

“The new guide highlights one or two significant changes for the franchising industry,” says Mendelson. “And these will rightly bring benefits to both franchisors and franchisees."