Franchising Needs Tougher Regulations

What would happen if associations created a tightly regulated franchise industry? You know, one where being a franchisor member meant something more than just paying a membership invoice. One where the distinction of being a member of a franchise association meant you were vetted.

What if the same were true for suppliers? What if they were judged on results instead of being placed on a pedestal due to politics or personal connections?

What if being a certified franchise executive meant that you went through a rigorous exam – one as tough to pass as the CPA or the Bar? Sure, that would mean less people could enter this prestigious group, but it would give people a clearer formula for determining who’s best.

What if the franchise industry did random CFE testing (like steroid testing), in which they pulled random CFEs into a room and quizzed them on franchise basics? Would they all be worthy of their titles?

The SBA appears to have gotten some of this accreditation right. They help the would-be investor vet the process more by ranking brands. I’m not saying this is the only information investors need, but it’s part of the process.

I would welcome a more regulated franchise industry. One where brands, suppliers and franchisees have something to compete for based on data, testing and knowledge — not politics and power.

The Canadian Franchise Association seems to have the right idea, too. Whenever a new member requests to join the association, an email is sent asking if anyone has issues with the applicant. While not perfect (as politics are still involved), it is an interesting way to involve your members. At their annual convention, there are only a handful of suppliers who exhibit. That seems more protective.

Franchising represents such a large part of our economy; I would love to see the regulations get tighter. Tight enough so that having a certification means you’re responsible and committed to providing the best experience for those you represent.

I have written about unicorns many times, and clearly, this is another one of them. But, am I wrong for wanting a path of more resistance?