February 2007 Franchising World

By Matthew Shay 

It started small, nearly 50 years ago.  The International Franchise Association was in its infancy, the vision of a handful of franchise leaders.  Their goal was to strengthen the standards and principles of good franchising and that effort began with a gathering of just a handful of franchise entrepreneurs.

That intimate gathering of visionary franchise entrepreneurs has evolved into IFA’s annual convention, an event of significantly greater proportions, but one that carries the same objective—sharing experiences and building relationships that will help individual entrepreneurs and entire franchise systems improve their operations and expand their brands. 

The franchising community wasn’t nearly as expansive then as it is today.  According to the first study of FRANdata’s Profile of Franchising 2006, in the three-year period from 2003-2005, the registration of new franchise concepts shows that 17 of the 18 key industry categories experienced explosive growth.  In those three years alone, 900 new concepts began franchising.  

What contributes to such a boom?  The increasing credibility of franchising as a structure for building and expanding a business?  Access to capital?  Changing demographics?  An increasingly large pool of qualified investors and franchisees?  A healthy regulatory climate?  Of course all of these, and many other factors, contribute to the current environment in which franchised businesses continue to grow and the IFA experiences similar growth and opportunity.

At the macro level, it’s not immediately obvious that an event like the annual convention is inextricably linked to the success of franchising. But as a means of generating, building and sustaining momentum in support of an agenda, sharing enthusiasm and challenging one’s beliefs in a competitive environment, the impact of a good old-fashioned annual meeting shouldn’t be underestimated.  Even as we live in a world increasingly reliant on technology and the Internet, which tend to diminish the opportunity for personal interaction, there is no substitute for face-to-face interaction with one’s peers, competitors and role models. 

The annual convention is a microcosm of the franchising universe—franchisors, franchisees and suppliers engaged in learning, sharing and deal-making—franchising stakeholders sharing their experiences with others.  This exchange of information doesn’t just benefit those engaged in the conversations—it benefits the IFA as well.  

An increase in attendance at programs like the IFA convention results in increased membership numbers and those ultimately generate revenue that becomes vital resources for IFA to fulfill its advocacy role on behalf of the entire franchising community.

The overall revenue generated from IFA’s three main revenue categories—membership, marketing and conferences—increased by more than 30 percent between 2005 and 2006—a growth rate that took five years to achieve from 2000-2005 and 10 years to accomplish from 1990-2000.  This growth reflects the growth in franchising generally, and the increased financial resources that accompany such growth provide IFA with the financial resources necessary to invest in new initiatives that promote and protect franchising and its global growth and expansion. 

All of these accomplishments and milestones achieved over the years would make those franchise entrepreneurs who founded IFA in 1960 proud.  Continued support and hard work from within the franchising community—especially your efforts to enlarge the body of knowledge and best practices during the IFA annual convention—makes a difference.  For proof of that difference, you need look no further than the IFA’s growth over the past few years.  Your individual contributions, attending the convention and sharing your experiences with others who, in turn, participate and support the IFA, are the key to our success.  Microcosm or not, the IFA convention reflects the current state of franchising, both qualitatively and quantitatively.  By both measurements, franchising is enjoying unparalleled growth.

As Rogers and Hammerstein famously put it in “The Music Man,” “you’ve got to know your territory.”  If your territory is franchising, the IFA convention is the best place to get to know it.