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Why should franchisors join franchise associations?

Why should franchisors join franchise associations?

The franchise community can often feel disconnected from the wider business world, that’s why franchise associations have created a world for franchisors and professionals in the industry to network, learn and collaborate.

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Words by Raghav Patel, digital content writer at Global Franchise

People do business with people. Therefore, it should be no surprise to know that in virtually any industry on any level, there are always collective groups and organizations that band together to share knowledge and resources.

Whether these organizations focus on creating events or providing ongoing support to members, group associations drive interaction and activity amongst its members.

Industry associations often provide tangible benefits to their members, especially when there are a variety of businesses within the association. Membership may include discounts on the services provided by other association members – such as legal or financial advice – which can be costly. Some associations are so essential that they are able to leverage their sizeable memberships or their powerful voices to favorably influence or lobby for legislation and regulations for the benefit of their respective industries.

Franchising is no different. While franchising is widely visible in the outer world in the form of numerous popular businesses, the world of franchising is somewhat out of reach to the general public. Franchise associations buttress the industry by regularly providing their members with new information, new events and opportunities.

Most countries have their own franchising association; while there is one global franchise association that encompasses all nations, which is the International Franchise Association, albeit its activities mainly focus on U.S. matters.

What are franchise associations?

Franchise associations are collective groups that come together to protect and further the interests of franchisors.

“Generally, franchise associations exist to serve their membership and support a healthy and vibrant franchise sector within a nation or region,” explains Sherry McNeil, CEO and president of the Canadian Franchise Association (CFA).

“Joining a franchise association means becoming a part of a larger community of franchisors, franchisees, and suppliers to the industry.”

Franchise associations are often viewed in a positive light by the industry, they advocate for the sector on a whole on a national and sometimes global scale, as well as devoting resources to help individual franchisors.

Most associations have processes to vet members before they are accepted, to maintain standards on organization membership. Once a franchisor has been successfully vetted, most organizations will require a yearly fee and different levels of membership that entail different benefits.

While there is no one way in which a franchise association can be structured, the vast majority of these associations consider events and exhibitions an important part of what they offer their members and partners. Many events have gone hybrid, allowing for a mix of in-person events and virtual events. While in-person is the gold standard, many associations have kept collaboration ongoing with the use of digital tools.

Franchisors also often turn to their local associations during times of crisis for guidance.

“During the pandemic year, we held many webinars on COVID-19-related topics. In the beginning, it was crisis management, how to get your financial support from the government. There were all kinds of questions regarding how to survive this pandemic,” says Johan Martinsson, CEO of the Swedish Franchise Association (SFA).

“Generally, franchise associations exist to serve their membership and support a healthy and vibrant franchise sector within a nation or region”

Franchise associations are capable of acting as pressure groups in certain territories. The U.S. has a rich history of political lobbying, with various groups commissioning reports, studies and forming narratives to influence lawmakers into passing favorable laws. Franchise associations do the same; the IFA runs a ‘Power of Brands’ campaign designed to promote franchising and set a new narrative.

Benefits of joining franchise associations

Credibility

Association and who your business is seen with can impact its image. Industry associations can be viewed as sources of authority. When your franchise is seen to share the same table as many other highly successful and well-respected franchisors, it immediately sends a message that your franchise is of a similar quality.

“Becoming a member of a franchise association like the CFA gives franchisors an edge over non-member competitors thanks to the credibility earned by being part of a recognized franchise association,” explains McNeil.

“Joining a franchise association demonstrates that the franchisor is committed to bettering their business and building a reputable business that customers and franchisees can trust.”

Most associations perform checks on incoming members to make sure they align with their own standards and what the company itself has reported.

“We have a system that most country’s associations actually use, you go through a control and check-up to become a full member,” says Martinsson.

“Meaning that they guarantee that they will fulfill the ethical roles mandated by the European Union, we also look into the economics, and that the franchisees that are happy.”

Some associations offer accreditations, which require franchisors to pass a test and be up to an association’s high standards. Such an accreditation signals the caliber of the franchisor with a simple accreditation logo.

Visibility

The importance of being seen cannot be understated. How can customers or potential franchisees connect with your brand if they aren’t aware of it? While customers tend not to interact with franchise associations, a number of useful and profitable collaborations can be made, especially with potential franchisees.

“One of the roles the CFA plays as a not-for-profit organization is helping to educate Canadians about franchising,” explains McNeil.

“We do this through our Franchise Canada brand, which is a multi-channel content producer serving a prospective franchisee audience through print, digital, social media, and in-person (events) vehicles.

“Our members can leverage our relationship with this audience through advertising and sponsorship to build brand awareness and to ensure their franchise opportunities are promoted to Canadians looking to invest in a franchise like theirs.”

It’s important to note that people who work in the franchise industry tend to follow the largest national and international franchise associations or at least signed up to their mailing lists. A large portion of those people closely follow the industry through associations. If a franchisor has its brand closely associated with an association, it is likely its stories and press releases find their way higher up the franchise association website or newsletter.

Events are the most visible advertising opportunities within the industry since they’re physical and consequently, leave more of an impression. Booths and exhibitions with branding and brand representatives provides great visibility to your brand within your own space. Partnering with associations can see a franchisor’s branding on a litany of material across an entire event, not just a single booth or exhibition.

Personal development and education

Brands are all at different stages of development, and are always looking to improve and get to the next level. Often, that can be difficult if it relies entirely on self-motivation and self-learning. Not everyone is suited to being a one-man band – some require help to realize their full potential. That help can often come in the form of free or discounted professional help and advice.

“The big question is often with the smaller ones [franchisees] is that they are very much afraid of costs, for example calling one of the most expensive lawyers we have in Sweden, because they’re afraid of the bill that comes afterwards,” Martinsson explains.

“I tell them, you can call them and say that you are a member in our association, they will happily support by telephone and answer your questions.

“Because with the partners we have, they see this as a potential customer down the road.”

Many franchise associations offer personal and professional development to improve franchisors’ working knowledge of their field. One even offers it in the form of a qualification, the British Franchise Association (bfa).

The bfa offers the Qualified Franchise Professional (QFP) certificate to any members who attend a number of key events throughout the year and interact with key topics. Teaching is also offered to prospective QFP’s through qualified QFP’s to impart a deeper understanding of the industry and how to successfully navigate it.

“The big question is often with the smaller ones [franchisees] is that they are very much afraid of costs, for example calling one of the most expensive lawyers we have in Sweden, because they’re afraid of the bill that comes afterwards ”

The qualification requires constant learning to maintain, guaranteeing ongoing personal development after certification.

Giving budding franchisors a leg up

Running any business can be expensive, especially a franchise business with its complex financial and legal arrangements. This can also certainly be the case for those who are finding their feet in the world of franchising.

“By providing them techniques for things such as the recruiting of a brand-new franchisee, how it could work, what the best practices are, for instance, innovation management,” says Christoph Wildhaber, general manager at Swiss Distribution (formerly known as the Swiss Franchise Association).

“As well as developing your franchise model by keeping it up to date and at the same time growing your image, which is a particularly demanding and challenging exercise for small companies”

Growing franchisors are always looking for increases in sales and revenue, though this is normally precipitated by improvements in other functions of the business. Learning from those who came before you can help prevent rookie errors and grow faster than planned.

“We have found that budding franchisors need more than lead generation services to grow.

“For these emerging brands, the value of joining a franchise association like ours is the education and best practices, the networking and mentorship gained from experienced franchisors and suppliers, and the credibility from being a member all play equal parts, in addition, to lead generation to help new franchisors grow their systems quickly, sustainably, and responsibly,” added McNeil.

Joining a franchise association is an attractive proposition for many budding franchisors who find access to a wealth of information and contacts after joining.

Importance of networking

Networking is probably one of the most important activities for any franchisor to engage in. Making contacts is utterly essential to meeting the right people for various things, whether it’s a genius marketer or a franchisee developer.

Events allow you to establish and further key business relationships.

The most apparent benefit of networking is meeting like-minded business people with whom you can form deep new ties. Whether it’s meeting a potential multi-unit developer or simply exchanging useful ideas with another franchisor, you can come away with a new business deal or a very handy new concept you can implement in your own franchise.

“Networking and attending events are some of the most important and powerful ways for a franchisor to grow as an individual and to grow their business,” McNeil explains.

“Franchisors sharing the ins and outs of what it’s like to run a franchise entity and have experienced many of the same highs and lows that emerging franchisors will experience at some point.

“Building a network of contacts in franchising creates a great sounding board for exploring new ideas, working through challenges, identifying possible partners for future endeavors, and helps a franchisor grown their business through sharing their experience and contacts.”

Franchising events always seek to cover the newest trending topics and can be of great benefit to attendees. Sometimes, the day-to-day operation of a franchise can leave a franchisor without the time and energy to stay on top of every new trend in their market. Staying ahead of the curve is essential in competitive markets like the food and beverage sector. Attending events allows someone to learn about and absorb the new trends which can be later employed to improve operations.

Events are an ideal opportunity to market your brand and have a concentration of people interact with it in a short space of time. During the course of an event, franchisors can pay to advertise or sponsor the event, guaranteeing eyeballs for their brand imagery. While a franchise’s customers do not necessarily attend events, franchise professionals do and a franchisor may just attract high-quality employees or franchisees.

We’ve also learned in this past year that work can get done remotely, but long-term relationships are best forged in person, face-to-face. People tend to drop their guard at networking events – this casual environment is conducive to the creation of long-term relationships and fixing of problems.

“Nowadays, we have more one-way communication. For example, next week we will have a group discussion on how to become better on LinkedIn,” explains Martinsson

“The big issue is, of course, we don’t really get the interactivity. So, when we used to have these executive group meetings, we used to have a lot of discussions, sharing knowledge in the group.

“That’s going to be a challenge with distance, because people cannot really solve things the way we could have done if we were in the same room”

Active national and international franchise associations

The IFA is the only global franchise association, currently. The IFA regularly hosts events and exhibitions for its members on various topics.

The association also hosts events on: optimizing franchise operations, synchronicity between development and marketing departments, female franchising, emerging franchisor-specific events and many more. In addition to the topical events, the IFA also hosts much larger general events that round up the biggest and most important topics from the world of franchising.

The IFA’s size means it has the biggest effect on the world of franchising. Its size means it is able to effectively lobby the U.S. government. The IFA is currently lobbying for a number of laws, one such law is the Fairness For All Businesses Act, which mandates the equal implementation of minimum wages between franchisors and franchisees.

Virtually every country in the world has its own franchise association, and they generally engage in the same kind of work as the IFA, but on a national scale. Swiss Distribution and the Swedish Franchise Association are no different, and seek to create value for their members through similar mechanisms.

“There’s probably nothing particularly Swiss in what we do, many of the other associations do similar things. As always, it’s about exchanging know-how, networking on a personal level and quality assurance.

“By doing this, you create a certain level of visibility and support for your members. That’s why they join,” Wildhaber explains.

Franchise associations provide a platform for the market to flourish

The franchise industry is a unique one, the brands and businesses that make up the industry are so ubiquitous to the public, yet the internal world of franchising rarely, if ever, bleeds into the mainstream.

Franchise associations do a fantastic job of giving franchisors a platform from which they can connect with their peers and collaborate. They give their members extra visibility inside their own franchising community. The plethora of networking and exhibition events held charge their members with vigor and keep the community close-knit.

Education and staying up to date is important in any business, but especially in the competitive world of franchising.

“As always, it’s about exchanging know-how, networking on a personal level and quality assurance. By doing this, you create a certain level of visibility and support for your members. That’s why they join”

More importantly, franchise associations stand up for their members and advocate for them. Lobbying governments to consider the impact any decisions they make on franchisors has kept the industry in a strong position with the understanding that the franchise model adds significant value to any country’s business landscape.

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