IFA Franchisor Applicant Review Process
As the leading advocate for the franchise business model, the IFA recognizes the critical role we play in promoting the highest standard of conduct in franchising. This role is central to IFA’s mission to protect, enhance, and promote franchising and is increasingly necessary in our ongoing efforts to help shape public perception and governmental discussions about franchising.
Most IFA members are aware of our Open for Opportunity campaign to share the good news about franchising with the public, elected officials, and franchise regulators. The IFA would also like to inform you about a new internal procedure that will play an important role in helping equip the IFA to protect, enhance, and promote franchising for years to come. At the start of IFA’s 2023 Fiscal Year (November 2022), we began a new review practice for all new franchisor applicants for IFA membership before full IFA membership will be granted. The items reviewed by the IFA staff and officers to assess qualifications for full membership are standard documents that all franchisors already provide and certify in their applications and include such items as:
- a current Franchise Disclosure Document (FDD)
- audited financial statements, and
- any history of litigation or bankruptcy.
Carefully reviewing these materials for our new IFA franchisor member applicants enhances IFA credibility with regulators and legislators and the likelihood that brands who tout IFA membership in their franchise development programs are operating with higher standards as prospective franchisees consider their potential investments.
This review process is only the first step in increasing the role the IFA plays in supporting the success of the franchise business model. When disputes arise, IFA offers a facilitative ombudsman program to help franchisors and franchisees develop a plan for resolving the dispute that is fair and equitable while also keeping the respective rights and options of the franchisee and franchisor in mind. Those who engage the IFA ombudsman can expect privacy, confidentiality, diplomacy, respect, and a range of self-empowering de-escalatory measures to achieve a suitable resolution.
Taken together, new applicant review, conflict resolution, and public education help IFA and the greater franchising community uphold the highest standards, while helping improve prospective franchisees chances for success.