£15.1 billion franchise sector sees record highs
Published: 08 January 2016
Is 2016 the year when you become a franchisee? New research has revealed that the UK’s franchise sector is booming, with all-time highs reported in turnover, employment and the number of franchisee-owned businesses.
According to the British Franchise Association/NatWest Franchise Survey 2015, franchising contributed £15.1billion to the economy last year and employs 621,000 people, with both figures up more than 10 per cent since 2013.
The number of franchisee-owned businesses topped 44,000 in 2015, over one-third of which are run from home. What’s more, the performance of those businesses also set new benchmarks, with 97 per cent reporting profitability and over half turning over in excess of £250,000.
Home-grown success is converting into export success: four out of every five brands in the UK are domestically owned, with 38 per cent expanding their business model overseas and a further 11 per cent considering doing so in the future.
The study also revealed that failure rates continued to be low, with less than one per cent of franchisees closing their business in the past 12 months. Franchisee-franchisor relationships are at their strongest recorded level, with nine in 10 franchisees satisfied.
Brian Smart, director general of the bfa, said: “Good franchising continues to deliver serious dividends for Britain’s economy, creating businesses, jobs and wealth for local communities across the country. Established trends of strong profitability and very low failure rates over the last 20 years highlight the benefit of self-employment through franchising, a path that more and more individuals are taking.
“The outstanding performance of the sector, in good economic times and bad, shows the power of the franchise model and its impact on the UK’s business landscape increases each year.”
Andrew Taylor, NatWest head of leisure, retail and franchise, commented: “Franchise offers a truly compelling alternative to start up operations with global and national brands, tried and tested operating systems and processes, and huge marketing support so it is no wonder we have seen a steady growth in entrepreneurs investing in franchises. This survey paints a picture of a sector in good health, with great potential and ambition and our dedicated franchise teams based across the UK remain committed to supporting the industry in the best possible way.”
The report also suggested that an increasing amount of younger people are entering the franchise sector, with one in five franchisees under 30 years old. The ongoing business support enjoyed by franchisees means it is a sector well-suited to younger aspiring entrepreneurs, who may not have previously gained substantial business experience.
