AMERICAN FRANCHISE ASSOCIATION

ABOUT THE AMERICAN FRANCHISE ASSOCIATION ("AFA"):

A Non-Profit, 501(c)(3), Tax-Exempt Organization

The American Franchise Association traces its roots to 1983.  As a Non-Profit organization, approved for Tax Exempt Status by the Internal Revenue Service under Internal Revenue Code Section 501(c)(3), the Association is organized for educational and charitable purposes. None of the income of the Association inures to the benefit of any individual, and the Association strictly adheres to its tax exempt purposes.

OUR MISSION:

To Educate The Public About Franchising In The United States

Franchising is a large and important part of the U.S. economy and American culture.  Franchising plays an important role in our society.  The purpose of the American Franchise Association is to educate the public about franchising in the United States.

HISTORY AND EVOLUTION OF THE AMERICAN FRANCHISE ASSOCIATION:

The American Franchise Association’s history is well documented.  Mario Herman, in his historical account of the History and Evolution of Franchising, wrote:

"To counter the claims of abuse in franchising, the International Franchise Association (IFA) instituted self-policing mechanisms including a Code of Ethics, and organizations such as the American Association for Franchisees and Dealers (AAFD), and the American Franchise Association (AFA) began to flourish. The stated goal of these entities was to educate regulators, franchisors, and franchisees on a "win-win" approach, and "level the playing field" for all concerned."

The American Franchise Association was originally formed and funded by companies and franchisee groups as diverse as Budget  Rent a Car, Burger King, Quality Inns, and Meineke Mufflers, with initial funding provided by a grant from the accounting firm, Ernst & Young.  In total, more than 20 franchisee organizations representing over 30,000 franchise owners were responsible for forming the American Franchise Association in 1983.

The American Franchise Association is led by its Executive Director, Gordon Mace, who traces his history in the franchising industry to more than 40 years ago in the petroleum industry, when he first started working with Shell Oil Company. In 1970, the U.S. had 181,000 franchised gasoline stations, that accounted for nearly 55% of all franchise.

FRANCHISING IN AMERICA:

In 1970, California became the first state to regulate the sale of franchises. In 1978, the Federal Trade Commission (FTC) adopted its own set of rules and regulations.  

Today, many States regulate the sale and marketing of franchises, with some requiring registering the offering, and others regulating the termination of franchise agreements.  While each State's franchise laws must be individually consulted, a number of links discussing State regulation of franchising are provided below.

U.S. retail products and services from franchise establishments exceed $34 billion U.S. dollars annually. The franchise industry employs more than 8.5 million individuals in the U.S., from over 770,000 establishments.

Franchised companies are expected to add nearly 200,000 new jobs in 2014.

The Gross Domestic Product (GDP) of the franchise industry is estimated at $493 billion, or roughly 3.5% of GDP.

While there are more than 253,000 franchised restaurants in the U.S., the fastest growing areas are found in business services and the real estate sector.

FRANCHISING NEWS AND TOPICS OF INTEREST:

13 Mistakes New Franchise Owners Make and How To Avoid Them:

http://www.forbes.com/sites/karstenstrauss/2014/05/27/13-mistakes-new-franchisees-make-and-how-to-avoid-them/

Entrepreneur Magazine's Top 10 Franchises of 2014:

http://www.entrepreneur.com/slideshow/230384

Investigative Report On Franchise Profits:

http://www.entrepreneur.com/slideshow/230384

Foreign Businesses Franchising In The U.S.:

http://www.entrepreneur.com/article/225955

Franchising Chicken Wings:

http://www.entrepreneur.com/slideshow/220646

Franchised Restaurant News:

http://m.nrn.com/ 

Multi-Unit Franchise Ownership:

http://www.entrepreneur.com/article/234012

State Franchise Laws

• California: California Dept. of Business Oversight, Franchise Division

• Hawaii: Hawaii Department of Commerce and Consumer Affairs

• Illinois: Illinois Attorney General Franchise Information and Publications

• Indiana: Indiana Secretary of State, Securities Division

• Maryland: Maryland Attorney General, Securities Division

• Michigan: Michigan Attorney General - Franchise FAQ

• Minnesota: Minnesota Department of Commerce - Franchises

• New York: New York State Attorney General - Franchise Law

• North Dakota: North Dakota Securities Department - Franchise Law

• Oregon: Oregon Dept. of Consumer Business Services, Division of Finance & Corporate Securities

• Rhode Island: Rhode Island Dept. of Business Regulation, Division of Securities Regulation, Franchising Section

• South Dakota: South Dakota Dept. of Labor & Regulation, Division of Securities, Franchise and Business Opportunities

• Virginia: Virginia State Corporation Commission, Division of Securities and Retail Franchising

• Washington: Department of Financial Institutions, Division of Securities, Franchise Registration and Exemption

• Wisconsin: Wisconsin Dept. of Financial Institutions, Securities & Franchising Division:

VALUABLE LINKS:

Here are links to experienced franchising lawyers, service providers and valuable franchising articles.

The American Franchise Association does not endorse nor recommend any of these law firms or service providers, but instead provides this information for general educational purposes.

Please email us at americanfranchise@gmail.com to include or exclude your information from our listings.