World Franchise Council: What do they do?

The World Franchise Council (WFC) is a non-political association formed in 1994 of more than 40 franchise associations from all over the world. The main purpose of the WFC is to encourage the international growth of franchising, and to progress the understanding and use of best practice among its members.

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On its journey to achieving fair and ethical franchising worldwide, the WFC has a vision to be the prominent source of credible information for and about the global franchise community through its values of credibility, respect, integrity and sharing.

The history of the World Franchise Council

The WFC began at the first International Summit, which was sponsored by the Mexican Franchise Association in 1993. At this conference, a draft constitution of the intended organisation was composed by representatives from France, Mexico, Europe, Argentina, Canada and the United States. In 1994, the International Franchise Association’s annual conference was held in Las Vegas and the initial draft constitution was approved by national franchise association executives led by the International Franchise Association and the European Franchise Federation. It was here the World Franchise Council was born.

To produce a more detailed draft of the constitution, a taskforce led by the British Franchise Association, with input from the Canadian, Brazilian and Mexican associations, was created. It was this draft that was accepted at the Lisbon meeting in 1995. Although this constitution has been amended over the years to reflect changing needs, the general objective of the council has remained unaltered.

All members of the WFC recognise the need for a formal constitution to ensure that its views and objectives are representative of all national franchise associations. The chair of the WFC is held by the chair of the most recent WFC meeting to also ensure that the council is run cooperativity and effectively for all member nations.

Membership

Membership of the WFC is open to all national franchise associations that are established as not-for-profit organisations, on the provision that:

• Their governing bodies are mainly made up of franchising companies or their representatives.
• Their own code of franchising good practice is consistent with the WFC’s requirements.

With one of its roles being the development of franchising best practices, the WFC also accepts, as associate members, national franchise associations which are committed to working towards the council’s full membership requirements (if there is not an existing member in that country or territory).

Current members

Current members of the WFC are Argentina, Australia, Belarus, Belgium, Brazil, Canada, China, Colombia, Croatia, Czech Republic, Denmark, Egypt, Finland, France, Greece, Guatemala, Great Britain, Greece, Guatemala, Hong Kong, Hungary, India, Indonesia, Italy, Japan and Korea. The WFC also includes Lebanon, Malaysia, Mexico, Netherlands, New Zealand, Philippines, Poland, Portugal, Russia, Singapore, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, U.A.E, U.S.A, Venezuela and the European Franchise Federation.

World Franchise Council: What does it do?

Meetings

The WFC members meet twice a year with different associations taking it in turns to act as hosts. During these meetings, the meaningful exchange of information takes place between the associations from all continents (except Antarctica) being represented. All attending associations give an update on the state of franchising in their country, including economic and legislative developments. This provides vital information to WFC members so that they can inform current and prospective international franchisees in their country of any changes that they should be aware of.

Representation

Each national association member of the WFC will be entitled, but not obliged, to propose two representatives to attend and contribute to the bi-annual meetings. One of these attendees must be:

a. The elected chairman of the association b. The appointed chief executive officer of the association c. A representative selected at least two weeks before the meeting and submitted in writing by the chairman of the association

If there is a second attendee, they will be either (b) or (c) from the above list.

Each member country also has the option to send up to two observers (without speaking rights) to the WFC meetings.

Exhibitions

Franchise exhibitions are generally held in the member countries of the WFC, and give franchises the chance to promote their brands internationally. The exhibitions are arranged by WFC member associations, or by recognised partners in their respective countries. Only exhibitions acknowledged officially by a WFC member are endorsed by the World Franchise Council itself.

The British Franchise Association’s approved exhibitions are also recognised by the WFC. Find out more about the 2019 London franchise events that you can attend to learn from experts from the franchise industry and meet peers from the franchising world.

You should now have a better idea of what the World Franchise Council is and what it does. Let’s now consider some of the main topics in franchising including its advantages and disadvantages, and questions to ask when buying a franchise.

Advantages of franchising

1. Operate under an established brand. When you become a franchisee, you benefit from operating under a registered trademark. The franchise should already have a recognised brand name and a pool of trusted customers. This means that you don’t have to spend as much time and money in the initial stages trying to build brand awareness. You will still have to market the franchise in your local area though.

2. Proven business model. Buying a franchise is generally less risky than the independent start up route, as the franchise has developed a proven business model and tried and tested operational systems. If the franchise has already seen success in a number of other locations across the UK, there is clearly a demand for its product or service and it is being marketed and delivered in the right way.

3. Training and support. Franchises provide their franchisees with the security of a support network. Before launch day, franchisees normally participate in a comprehensive training programme where they learn the ins and outs of running the business. Even when they’re up and running, the franchise will provide ongoing support; for instance, in sales and advertising.

4. Existing business relationships. The franchise should have already established relationships with numerous different businesses, which means less work for you. This could include with suppliers, distributors and marketing teams, for example.

5. Can enter new sectors. Because franchises provide training and support, and a proven system to follow, it isn’t always essential for candidates to have any previous experience in the sector they are entering. Often, the main traits a franchisor is looking for in a franchisee is being business-minded, a people-person and completely dedicated to the success and growth of the franchise brand.

6. Easier to secure funding. Banks and lenders are usually more likely to provide financing to franchises because they consider them a less risky route to business ownership. It’s actually been proven that franchisees are more likely to succeed than independent start-up businesses, with franchising having a success rate of 93 percent across the industry.

   Disadvantages of franchising

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1. Have to stick with suppliers. Keeping your overheads as low as possible in order to maximise your profits is going to be an important concern for you, and one way to achieve this is finding the cheapest suppliers. But it will most likely already be outlined in your franchise agreement which suppliers you have to use. This leads us on to the most significant disadvantage of the franchising route…
2. Lack of control. Franchisees generally don’t have control of how the business is run. They would have already agreed to this in the franchise agreement, and only in very few circumstances can franchisees operate differently to what is outlined in the document. Therefore, if you don’t want to have anyone else to answer to and want to be in charge of the direction of the business, franchising might not be the best option for you. However, even though franchisees don’t get to make the final decision, the best franchises will encourage them to suggest their ideas and share experiences with other franchisees.
3. Impacted by other franchisees’ success. There is the chance that another franchise location could do something to damage their reputation, and this could reflect badly on the brand as a whole, potentially affecting your sales and profitability. This highlights the importance of conducting thorough research into the franchise before deciding to invest. If you get any suspicion that the franchisor or their representative might be hiding something from you, this is a huge red flag. For more warning signs to look out for when buying a franchise, see another one of our articles here.

What should I ask myself when buying a franchise?

• Do I have the necessary skills and personality traits to run the franchise successfully?
• Do I have access to the financial requirements?
• Do I trust the franchisor?
• What is the current state of the industry?
• Will I feel satisfied owning this franchise?
• Can I expand my business if I want to?