HAPPY 25TH! 

Franchisees across Ireland have cause to mark a very special landmark this year as the Irish Franchise Association celebrates a quarter of a century of developing and promoting the industry.

The irony of this year's 25^th anniversary is that franchisees are facing an economic climate not unlike that of the early 1980s. Earlier this year the Economic and Social Research Institute pointed out that the economy would contract this year for the first time since 1983, forecasting a fall in gross domestic product of 0.4 per cent.

However, ESRI economist Alan Barrett also acknowledged that the economy is better placed to recover from the recession than it was in the 1980s. Back then, he observed, there was almost a collective sense of 'there is no way out of this'. In that context, the decision to establish a franchise association in Ireland was a major undertaking, although it has since proved to be an inspired move.

The father of the modern Irish Franchise Association was Cork-based accountant John Neenan of Neenan & Company Auditors and Accountants. During his regular business visits to the United States, he was much taken by the concept of establishing oneself in business through franchising and brought home some of the ideas he had observed on the other side of the Atlantic.

Gathering a band of like minded individuals, he established the Irish Franchise Association, which operated from his offices at Summerhill South in Cork City with Neenan assuming the title of director.

The profile (or lack of profile) of franchising in Ireland at the time makes his decision to establish a representative body appear even more insightful. In those early days, membership was dominated by UK based franchisors; the phenomenon of indigenous Irish franchisors was unheard of at that stage.

Early occupants of the hot seat now occupied by John Green included Jim Watson of Apollo Blinds and Don Rudge of Safe-Clean. The extent to which the membership was dominated by UK based franchisors can be determined from the fact that while meetings took place in Dublin, it was necessary to co-ordinate flight times to allow people to travel from all parts of the UK.

IFA chairman John Green acknowledged that John Neenan, operating under the title of ‘director of the Irish Franchise Association' was in the early years the heart, the head and the soul of the association, absorbing all the costs of the operation of the association into his own accountancy practice for many years until his untimely death in November 1996. At that point Bill Holohan and Sean McGarry stepped into the breach until John Green became chairman of the association in 1999, a position he has held ever since.

Twenty five years on, membership continues to grow strongly in spite of worries over the state of the economy. According to Green, the association has maintained strong growth this year with membership showing an increase of almost 10 per cent over the past 18 months.

In 2007 the Irish Franchise Association developed a new, cutting edge corporate identity, which has been rolled out across all branding and literature. "The new logo reflects the progressive nature of the association and its network of franchisors and franchisees," he said. "The new website also shows a new, modern face of the association and a fresh approach to the promotion of franchising in Ireland."
The silver jubilee of the Irish Franchise Association was celebrated at its formal awards ceremony on 20 November at the Conrad Hotel in Dublin.

"Franchising is a very vibrant industry and this has been achieved without any recourse to State assistance or intervention," explained Green. "I must say that our policy makers should not overlook the importance of the franchise sector. Numerous reports have highlighted the growing importance of the service sector in delivering future wealth and employment growth in Ireland and I think that the Irish franchise industry has a valuable contribution to make towards the shaping of future industrial and business policy."

The franchise sector has shown spectacular growth over recent years and according to the most recent Irish franchise survey, there has been a marked increase in turnover for the sector to €2.1 billion - representing an increase of more than two thirds since the previous survey - with around 270 active systems in Ireland providing in excess of 25,000 jobs.

The survey also recognised that the brand recognition that is an inherent part of franchising is a very attractive proposition for a shopping centre owner or developer. A walk around any of Ireland's shopping centres, which account for an increasing volume and value of retail sales, illustrates the pervasive presence of the franchise industry.

"These statistics are testimony to the importance of franchising and the growth is indicative of the buoyancy of the sector, which presents tremendous opportunity for people wanting to start their own business," Green noted. "There is still massive scope for new and different franchise systems to enter the Irish market, not to mention the potential for indigenous businesses to expand through the franchise route."

There is every reason to expect that Ireland will continue to be subject to the same penetration by franchise companies seeking new locations for their products and services, he added. "Irish consumers are brand aware and quality conscious, so any franchise with a strong brand identity and exceptional service quality will reap the rewards."

The adaptability and flexibility of all the franchising sectors in Ireland has added to overall economic growth by attracting a wide range of entrepreneurs and investors, he continued. "Franchising provides potential franchisees with a range of opportunities in more than one hundred lines of business, business formats, financing programmes and investment options."

The most obvious selling point, of course, is that franchising is a much lower risk option than starting a business on your own. "Judging by the numbers attending our seminars it is also becoming a viable option for existing business owners who are considering expansion at home and abroad."

There are numerous benefits to membership of the Irish Franchise Association for international and indigenous business alike. These benefits include increased credibility and publicity through the association's online directory and quarterly newsletter, while members can also attend exhibitions and awards, CPD (continuing professional development) and networking events.

The Irish Franchise Association lobbies Government and other influential bodies on behalf of the industry and also has a role in ‘policing' the industry. "We do come across examples of franchises who attempt to mislead or misinform potential franchisees," said Green. "This is why we have a rigorous selection process for membership and only take on ethical franchises with the four elements of legal agreement, training, operations manual and on-going support."

The declared objective of the Irish Franchise Association is to protect and further the interests of properly constructed franchising companies and by these means to establish and maintain a clear definition of ethical franchising standards to assist members of the public, media, potential investors and government bodies in differentiating between sound business opportunities and suspect investments.

In consequence of these aims, a code of ethics and strict criteria for membership are produced, both of which are constructed (amongst other things) to ensure that the franchisee is offered a viable business opportunity.

It is possible - although far from easy - to set up a bogus franchise, but it is a very misguided and short term strategy that would not last long, said Green, who added that since there is no specific law covering franchise businesses, proper legal advice prior to engagement is essential.

The association is keen to increase the value of membership, for example by introducing group schemes for services such as insurance and banking. Other initiatives include ongoing public relations activity to promote franchising in general, organising an annual conference, sponsoring research and benchmarking and making pre-Budget submissions.

In difficult economic times, the value of representative groups such as the Irish Franchise Association is even greater. While most of the challenges facing businesses in Ireland are common to all sectors, there will always be industry specific issues that need to be voiced to policy makers.

Despite the challenging economic climate, the association's chairman believes the outlook for franchising in Ireland is very positive. "Franchising is a significant contributor to new business start-ups throughout the country and there is nothing to suggest that this upward trend won't continue. On the contrary, franchising is making its mark around the world as established brands - and some newcomers - expand further and further into international markets, creating global brand awareness in the process."

For more information on the Irish Franchise Association contact John Green - john@chemdry.ie - or visit the website at http://www.irishfranchiseassociation.com/