The State of Franchising In The UK (franchise sector)

The State of Franchising in the UK

A survey by the British Franchise Association (BFA) in conjunction with Natwest has shown some interesting statistics.

The first thing to consider is that during 2011 UK GDP grew by only 0.7%, whereas the UK franchise sector increased it’s economic contribution by 8%. During this same period franchise turnover rose to £13.4 bn. Add to this that 9 out of 10 UK franchises posted a profit during 2011, which meant that loss making franchises reduced to pre-recession levels.

You can add to the above that whilst UK unemployment rose by 180k in 2011, the franchise sector increased it’s workforce by 73k.

The numbers show the UK franchise sector bucking the economic trends.

The Number of UK Franchises

Have a look at this graph;

BFA Franchise Survey System Numbers

 

The really interesting part for us was the;

  • Increase in volume of franchises from 244 in 1988 to 929 in 2011
  • The 2008 recession saw a stagnant year of franchise growth but crucially, no decline

Which Franchise Is Best?

This is one of the most common questions we get asked. The answer is that there is no single answer and it really is a case of ‘it depends’.

What we commonly say is that do you really know what franchises are out there? Most people will say the obvious culprits, the likes of;

  • McDonalds
  • Dominos
  • Subway
  • Starbucks
  • Costa

But, if you take a walk along any high street the majority of the names will be franchised, you may not have realised that the following are franchises;

  • Clarks Shoes
  • O2
  • Cash Converters
  • CEX
  • Pizza Hut

These are just the public facing brands. Franchise options really do exist from very low entry costs up to multiple site purchases with likes of KFC.

Financing Franchises

The high street banks remain the main source of franchise finance, providing 81% of facilities in 2011. There are signs that financing is moving wider, especially for established businesses.

All pretty good news for a sector in pretty good shape.

If you are a franchise owner looking for finance then give us a call on 01293 541333, we do offer niche specialism in this sector and can off quality advice.

Any comments about this article then please add them above, or contact us via the website here.

By David Farmer

Leave a Reply