How Franchisors Have Failed At International Master Franchising, And What They Can Do To Succeed In The Future

Franchise Update:

What was happening in the franchisor community? The Italian legislature had proposed that no franchisor be allowed to offer franchises in Italy unless it had a history of operating at least two units in the country before it began franchising. Ultimately, Italy adopted a more flexible experience standard. Then China adopted a two-unit, one year of experience standard as a precondition for franchising there in its 2004 Franchise Measures.

When the International Franchise Association (IFA) tried to rally the World Franchise Council, a group of national franchise associations, Director General of the British Franchise Association Brian Smart argued in favor of the Chinese restriction. As he pointed out, it is similar to the European Franchise Federation’s (EFF) requirements that a company have “operated a business concept with success, for a reasonable time and, in at least one profitable unit before starting its franchise network.” (EFF Code of Ethics, 1972)

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