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Should Your Franchise Be BBB Accredited?

While the BBB will rate all types of businesses with a letter grade, only some companies earn accreditation. Those that do receive bragging rights and BBB services — but are they worth the price?

January 17, 2023

Most consumers are familiar with the Better Business Bureau (BBB), which is considered a mark of quality by many. But while the BBB will rate all types of businesses with a letter grade, only some companies earn accreditation. Those that do receive bragging rights and BBB services — but are they worth the price?

The Better Business Bureau is a nonprofit founded in 1912. At the time, scams ran rampant, with consumers having little recourse. Soon, ordinary people became suspicious of advertising, which was bad for reputable businesses. The BBB created a way to name and shame bad actors so consumers could have more confidence in their merchants of choice. Today it rates companies and investigates consumer complaints.

Becoming BBB accredited is relatively simple. Business owners can fill out an online form and then supply additional information to the BBB, like banking information, records of customer complaints, licenses, and bonds. The business must also agree to a code of conduct and maintain a BBB rating of B or higher. Crucially, however, accreditation comes with a fee. Businesses will pay hundreds of dollars in annual dues to maintain their accreditation.

A Seal of Approval

Some people believe the cost is worth the benefits they receive. BBB-accredited companies receive assistance in resolving disputes through mediation, which helps businesses maintain a positive rating. Since they don’t want to lose their favorable rating, others believe that BBB accreditation helps them keep standards high. Finally, some consumers still view BBB accreditation as a seal of approval and are more willing to trust businesses that have it.

It’s worth noting that the BBB still assigns grades to businesses that are not accredited and will accept complaints about them. So, you may have a rating whether or not you asked for one. Some business owners argue that BBB gives higher ratings to businesses that pay for accreditation, which BBB denies. Either way, you should know the BBB considers complaints but not reviews when determining a rating.

So, is BBB accreditation worth your time and money? Research has shown that many baby boomers value it. But younger generations are much less likely to notice BBB accreditation; Google reviews, Yelp, and other websites have taken the BBB’s place. Businesses with older or mixed-age clientele may see an increase in business by becoming accredited. But those that serve a primarily younger demographic are less likely to see a return on their investment.

West Coast Franchise Law

If you have any questions about franchising, please contact the experienced franchise and business law attorneys at West Coast Franchise Law today at (206) 903-0401 to discuss your situation. Nate Riordan is a 2023 Franchise and Bankruptcy Super Lawyer with over 20 years expertise helping clients achieve their business goals.