How British Franchising Is Dealing With Brexit
We’ve been hearing over the course of the past week or so what Brexit, Britain’s exit from the European Union, means to Europe and the U.K, but what’s its effect on franchising?
Chris Wormald, a partner with the Fieldfisher law firm in London, shared, with her permission, the following letter the British Franchise Association's CEO sent out to its membership. Pip Wilkins, the author of the letter, has taken over as CEO of the BFA from Brian Smart, who retired after 26 years at the helm. Wilkins, who has a long history with the BFA, most recently as its head of operations, was unanimously chosen to take over, in part because of her innovative suggestions for new initiatives, Wormald says. Wormald will share his views on Brexit in a future blog post.
“You will have noted that the BFA did not adopt a formal stance over the referendum. Franchising is a wide and varied business model and what is good for one business, may not be good for another. What really affects franchising now is consumer confidence.
There will be much analysis and comment on the impact of the UK economy and on business in the coming weeks. The franchising banks told us at our Annual Conference on Friday there would be no change to lending within the franchising sector, each case will still be taken on its own merits. We have also included a link to reaffirm there will no immediate contractual consequences for franchisors which has been prepared by two of our prominent affiliated franchise lawyers.
At this stage we do not know exactly what will happen but what we do know is that franchising is a good way for people to get into business. We have a 20-year history with a forced failure rate of less than 5%. That, along with other positive messages about franchising, will be the messages we continue to share as an Association.
We want to be clear that, for us, and for franchising, it is very much ‘business as usual.’ We will continue to work closely with the European Franchise Federation and reap the opportunities that it affords to guide and inform on franchising across Europe and I will continue to give all the attention and care to the BFA and UK franchising that my role demands."