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Popularity of Franchising Rises in Britain Back

Popularity of Franchising Rises in Britain

Recent research conducted by the British Franchise Association (BFA) confirms what many have known for some time: the UK’s franchising sector is booming. Figures collated in association with NatWest for the 2015 BFA / Natwest Franchise Survey make it clear that levels of turnover, employment and franchisee-owned businesses are at an all-time high.

There are now over 44,000 franchisee-owned businesses in the UK, with a staggering 97% reporting profitability. In addition, over half of these turn over in excess of £250,000. The franchise sector contributed £15.1 billion to the UK economy last year, employing over 621,000 people in the process, which highlights the strength and prosperity of franchising as a business model.

Franchising is a term that many will have heard of but some may not recognise the benefits offered by such a business model. It effectively involves the franchisee buying the rights to use a trade name whilst having ongoing support and access to the franchisor’s experience and expertise. This removes much of the risk associated with establishing a business from scratch. It is statistically proven that far fewer franchisees fail within their first 3 years of trading compared to other start-ups. Less than 1% of franchise businesses closed in 2015 as a result of commercial failure. The franchisor has already tested and established the company, theoretically enabling a much quicker route to success. The BFA believe that people opting to go down the franchising route are more likely to receive support from the banks as they are thought less likely to fail.

Fortunately, the overall growth of franchising shows no signs of decline. NatWest highlight how British franchisees are pushing forward, with figures showing that one in five expect significant operational expansion within the next twelve months. Additionally, franchisors continue to pursue interests in this sector, with evidence of an increase in multi-brand operators who operate two or three brands within a portfolio of franchised businesses.

There are an ever increasing host of opportunities for potential franchisees who are attracted to the idea of a low risk, long-term business venture.

Key franchise stats in a nutshell:

  • There are 44,200 franchises now operating in the UK
  • The franchising sector turns over an estimated £15.1 billion per annum
  • There are currently 901 active franchise systems in the UK
  • 621,000 people employed in the franchise sector
  • The average franchisee is 49 years old
  • 91% of franchisees have a positive relationship with their franchisor
  • 33% of franchisees employ ten or more staff
  • 60% of franchisees operate from a shop or retail premises