With the economy clambering back on the money train, it seems the franchise sector is bringing a fair bit to the party
When it comes to growing one’s business, it is oft said that franchising is the surest path to success. Indeed, many a stat in recent years has appeared to back up such a claim, and new research from the franchising industry has revealed that the sector has never been in ruder health.
Figures from the 2013 Natwest British Franchise Association Franchise Survey show that the proportion of franchisees who consider themselves to be ‘quite’ or ‘highly’ profitable increased to a level not seen since 2005, with no less than 92% of franchisees reporting profitability this year. The survey also reveals overall growth in the sector of 20%, compared to a 2.5% contraction in the wider economy since the downturn five years ago, and a current total contribution of approximately 13.7bn smackers to the nation’s coffers.
Impressive stuff, but a real pat on the back for the industry comes with the increase in the number of jobs, which now stands at 561,000 with over half of them being full-time roles. This denotes an increase of 20% over the past five years and the first time in UK franchise history that over a quarter of a million full-time jobs were recorded. In that sense, the franchising sector is certainly doing its bit to keep that pesky unemployment rate on the slide.
In terms of hard money though, the figures can't be labelled as anything less than encouraging, particularly on the start-up front. For, whilst 80% of new franchises can boast profitability over the past two years, the fact that one in four franchisees is now running multiple outlets just goes to show how and why the sector is growing and maturing at the rate that it is. Finally, as if evidence was needed of how franchising has taken hold in the UK, four in five brands operating a franchise model in the country are UK-owned and run, with one in four having taken its model overseas.
Things are definitely looking up and franchisors only expect their growth to continue through 2014 with almost nine out of ten stating they believe trading conditions will improve in the coming year. That comes as overall confidence among UK businesses continues upon an upward trajectory, as reported yesterday. Franchising is simply one part of the picture, but undoubtedly a significant one.
“The exceptional performance of the franchise sector since 2008 augurs well as the UK returns to business growth and prosperity", commented Brian Smart, director general of the BFA. "There are now nearly 1,000 franchise brands operating in this country across multiple business sectors, offering plentiful opportunities for those undertaking the necessary research and due diligence to join the franchise success story.”
There's not much more to say other than it's full speed ahead in 2014 for franchisors and franchisees alike.