It stands for Performance Handicap Racing Fleet, not Performance Handicap Racing Formula. PHRF is a "class" under the Racing Rules of Sailing and competitors in it must comply with class rules.
A key provision of those class rules is that a competitor be a PHRF member.
Here's how it works:
You join SAIL and get a certificate with your boat's handicap rating. There may be more than one rating, if you race the boat in different ways (e.g., with & without a spinnaker, in one-design configuration or not). You may opt not to join SAIL; the PHRF fee for non-SAIL members is $20.
These fees are -- if not the lowest -- among the lowest costs for PHRF in the US and have been at these rates for many years.
In determining your handicap rating, the PHRF Committee will consider your boat's predicted (or actual) performance in conditions pertaining to the Rocky Mountain region. It will look at ratings for similar boats across the country and use velocity prediction programs if appropriate.
PHRF is not a static rating system; it is performance based. In other words we compare how one yacht performs compared to another and adjust the ratings so every yacht has an equal chance to win. If you feel that a rating is incorrect, then you can appeal any yacht‘s rating or another yacht’s rating. The SAIL PHRF Committee with representatives from all the clubs can make a fair non-biased adjustment to the rating.
Having SAIL PHRF issue ratings insures that a yacht will have the same rating anywhere in our region they choose to race. This is a requirement of SAIL for all participants in the Open Regattas on the SAIL Tour.
PHRF rules are part of the set of rules (.i.e., "class rules") that govern a race, and a yacht can be protested for breaking them just as a yacht can be protested for breaking the RRS. For a protest to be valid, the protesting party must hold a SAIL PHRF Certificate. If you are tired of being beaten by a yacht with that extra long spinnaker pole or oversized headsail, PHRF can make adjustments to a rating to allow for non standard modifications to a yacht. Everyone wants a level playing field when they race; requiring SAIL PHRF Certificates helps insure that no one has unfair advantage.