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In addition to the European Code that it has adopted as a member of the EFF, the British Franchise Association (BFA) has adopted an Extension and Interpretation of the Code that contains further indications on its application and on how some of its terms should be understood. As regards disclosure, this Extension and Interpretation states that "[t]he objectivity of recruitment literature (Clause 3.2) refers specifically to publicly available material. It is recognised that in discussing individual business projections with Franchisees, Franchisors are invariably involved in making assumptions which can only be tested by the passage of time".1

In October, 1994, the Italian Franchise Association (Assofranchising) adopted internal Regulations integrating the European Code. These Regulations entered into force on 1 January, 1995.

The American International Franchise Association (IFA) has a Code of Ethics which is a recitation of the goals to which the members of the IFA aspire. It is underpinned by an enforcement mechanism for violations of the Code, the sanctions ranging from a reprimand to suspension and termination of IFA membership.

The Franchise Association of Southern Africa (FASA) has adopted a Code of Ethics and Business Practices which in Appendix 1 gives details on the disclosure document required. It should be noted that the information that should be disclosed in accordance with this Code is considerably more detailed than that required by the European Code. The Code also calls for fairness in the dealings between franchisors and their franchisees2 and for every effort to be made on the part of the franchisor to resolve complaints, grievances and disputes with its franchisees with good faith and good will through fair and reasonable direct communication and negotiation, failing which consideration should be given to mediation or arbitration.3

Of the other Codes of Ethics or Practice that have been adopted mention may be made of that adopted by the Canadian Franchise Association, (CFA) the Franchise Association of New Zealand (FANZ), the Philippine Franchise Association (PFA), the Singapore International Franchise Association (SIFA) and the Hong Kong Franchise Association (HKFA). Of these the Code of Ethics of the Hong Kong Franchise Association is of particular interest, as it does not only contain provisions of general applicability, it also contains provisions that relate specifically to the franchisor, others that relate to the franchisee and others yet again that relate to franchise consultants. A point of interest is the fact that the franchisee is required to "provide full and frank disclosure of all information considered material to facilitate Franchisor's selection of an appropriate franchisee for the franchise business".4


1 Clause 2
2 Clause 15
3 Clause 17
4 Clause 19.

 

 

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