The Carbon Reduction Commitment is a new UK based regulation
giving thousands of big organisations with outlets in the UK a
strong incentive to save energy. Participating organisations
include franchise networks. It is the responsibility of the
franchisor to ensure compliance across the franchise network.
All Franchisors that have units in the UK are affected.
How does this affect franchisors
based in the USA?
Foreign franchisors also need to comply with the new
legislation. To the extent that they have franchisees in the UK,
they will be treated in the same way as UK based franchisor. We
recommend that American franchisors appoint a local representative
to co-ordinate compliance with the scheme for them. FFW has
put in place an early action team to assist you with this
process.
What will franchisors have to
do?
All franchise systems that have units the UK will have to
consider whether they are obliged to purchase carbon allowances
from the UK government to cover the carbon footprint of their
network. Only networks which consume in excess of 6,000 megawatt
hours through so-called half-hourly electricity meters will need to
purchase allowances but all franchise networks may need to file
annual reports on their energy consumption.
How do franchisors find out if
they have to file a report?
All Franchisors will have to conduct due diligence into the
energy consumption of their UK based franchisees to establish if
they need to file an annual energy report or maybe even purchase
carbon allowances.
The following early action is recommended.
- Establish if there are any half-hourly meters in use by any of
your UK franchisees.
- Establish the total annual electricity consumption across your
franchised network and work out if it exceeds 6000 MWh.
If any half-hourly meters are found, a report will have to be
filed. If electricity consumption exceeds 6,000 megawatt hours,
electricity allowances will have to be purchased.
For further information, please contact Mark Abell, Chris Wormald or Babette
Märzheuser-Wood.