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Fair Franchising Standards

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In June of 1996 the AAFD unveiled the first ever balanced standards of Fair Franchising Practices for the franchising community. Now franchise buyers have objective criteria by which to judge a franchise opportunity. The AAFD's Fair Franchising Standards are assured a prominent role in defining franchise relationships into the future. Consistent with the AAFD's marketplace solutions to the problems facing the franchising community, the AAFD's Fair Franchising Standards will serve as the basis for accrediting forward thinking franchisors who recognize that endorsement of their franchising practices by the AAFD can pay enormous dividends in the franchising marketplace.

The mission of the FAIR FRANCHISING STANDARDS Committee of the American Association of Franchisees and Dealers is to develop standards relating to various business and legal aspects of the franchisor/franchisee relationship so that a more equitable franchise agreement becomes the standard for the franchise community which reflects and balances the legitimate business interests of the franchisor and the legitimate business interests of its franchisees.

The Fair Franchising Standards Committee was empowered by resolution of the AAFD's Trade Association Council to draft Fair Franchising Standards which will provide the basis for objective accreditation of franchising companies seeking the endorsement of, and membership in, the Association. Although the Committee was initially composed of franchisees and attorneys with a bent toward franchisee representation, the Committee immediately determined, with the approval of the Trade Association Council, to include franchisors and franchisor legal counsel and consultants who shared the conviction that the franchise community needs a viable and balanced code of standards to define fair franchising practices. The Committee has ultimately included more than 40 members, fairly balanced between franchisor perspectives and franchisee perspectives.

The Fair Franchising Standards Committee has a three year plan and goal to fully implement the AAFD's Fair Franchising Standards. The first year's goal to adopt these Standards has been substantially completed, although as a living code, the AAFD Standards will always be subject to amendment, augmentation and elaboration. The Committee's second year goal is to complete adoption of remaining proposed standards, draft a glossary of franchising terms, and to develop and approve commentary to aid in the interpretation of the Committee's intent and purposes in adopting each standard. The Committee's third year goal is to provide model language for a franchise agreement that would comply with the AAFD Fair Franchising Standards, and serve as a suggested Fair Franchise Agreement approved by the American Association of Franchisees and Dealers.