Franchisee or franchise owner?

The common sense approach by Mike Barlow and Ed Savory in their article on the use of the term ‘franchise owner’ speaks for itself. It speaks also to the realities of the current debate between the European Franchise Federation – of which the British Franchise Association (bfa) is a founder and an active member – and European Commission (EC) officials, not least those that are the strongest supporters of franchising.

Those pro-franchising officials are having to defend franchising against the voices of big corporate business on the one hand and of the Trade Unions on the other, who have joined common cause in challenging franchising to demonstrate that its franchisees – its franchise owners – are just that: genuinely owners of their own businesses, albeit operating under the franchisor’s brand and system.

The contention of big business is that franchised networks enjoy many of the benefits attributable to SMEs when they are really just disguised corporate chains where the so-called franchise owners are no different to employed unit managers.

Nonsense of course, but it’s a good way of trying to minimise the advantages that franchising has over more traditional, and less competitive, business models. The Trade Unions argue that franchising is just a mechanism for big businesses to move employees out of protected employment with the benefits of representation and collective bargaining (still the norm in many parts of mainland Europe) and into SMEs where minimum pay and many other statutory protections, including the rights of collective representation, can be ignored. More nonsense of course. Franchising can only work in the hard glare of the rule of law. When franchisors move into an unregulated sector, with many black and grey market operators, they bring with them the obligation on their franchise owners to respect the requirements of law, including employment regulations. Franchising has been seen, in contract and domestic cleaning for example; to improve the working conditions of employees, not detract from them. The notion of franchisees as genuinely owners of their own business that they have the right to sell (to a qualifying buyer) with the benefit of the value they have built in the business is central to the defeat of these self-serving anti-franchising arguments by an unholy alliance of corporate business and Trade Unions.

More importantly, the term ‘franchise owner’ speaks to the accomplishments of those people who move into business ownership through franchising and the respect which they have a right to expect for their decision to put their future into their own hands. As the bfa moves to bring franchise owners into the association, I for one will be more than happy, especially in the face of EC officials, to recognise them as ‘franchise owners’.

Brian Smart is also a member of the European Franchise Federation’s Executive Board and the British delegate to the World Franchise Council. At the meeting of the World Franchise Council in September, Brian was honoured with a Lifetime Achievement Award recognising his contribution to the cause of global franchising and of the World Franchise Council.

Brian Smart,
Director General,
British Franchise Association