Franchise sector reaches new heights

The research, looking at the five years since the country entered recession in 2008, shows a 20 per growth compared to a 2.5 per cent contraction in the overall economy during the same period.
    
The survey calculates that the sector contributed some £13.7bn, or just under one per cent of UK GDP, to the economy in the last 12 months. That means once again the sector has grown at a quicker rate than the economy as a whole.
    
Over a quarter of a million full-time jobs were recorded for the first time in UK franchising history out of total employment in excess of 560,000, an increase of 20 per cent over the last five years.
    
With around four out of every five brands operating a franchise model in this country being UK-owned, domestic success is translating into export success with one in four expanding their business model abroad. And franchisors expect their growth to continue through 2014 – almost nine out of 10 stating they believe trading conditions will improve in the coming year.

Long-term trends
Impressive long-term trends continued at the franchisee level too, with 92 per cent reporting profitability and one in four running multiple outlets, reflecting a maturing and growing industry. Of those new to the industry (up to two years), 80 per cent are already turning a profit.

Brian Smart, director general of the bfa, commented on the findings: “UK franchising offers thousands of people each year the opportunity to take on their own sustainable business, in turn creating employment for many thousands more – a success that has continued through hard economic times while other parts of the economy have struggled.
    
“The exceptional performance of the franchise sector since 2008 augurs well as the UK returns to business growth and prosperity.

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.”
    
At a regional level, the franchise model has confounded economic trends even in some of the areas worst-hit by economic difficulties over the previous five years. Every part of England and Wales recorded growth in franchise turnover, with Wales increasing by 33 per cent, the north west by 27 per cent and the north east by 14 per cent. The south east continues to lead the way with a remarkable 42 per cent growth since 2008.

Graeme Jones, head of franchising at NatWest, was delighted with the new survey’s results. He said: “Franchising in the UK continues to deliver real benefits for the economy and the growth achieved over the past five years is a standout achievement.

“Optimism remains high, underpinned by profitable trading and opportunities both here and overseas. In the thirty-plus years that NatWest has had a specialist franchise team, this is the most robust set of results from our annual survey and we are delighted to continue our support for the sector.”

The people behind the numbers
Analysis of the demographics of franchisees confirms that franchising continues to provide a bright future for people from all walks of life. With so many business sectors represented in modern franchising, each with their own ideal franchisee profile, it’s a sector that targets, and is suitable for, almost all backgrounds, ages and skill sets.
    
The average age of a franchisee continues to be in the late 40s, with age groups from 31 to 65 years old extremely well represented. It’s also a sector without gender bias, many businesses being most suited to women; 30 per cent of UK franchisees are female, a figure which has grown steadily in recent years and represents double the proportion of the overall national SME average for female-led business ownership (15.5 per cent according to BIS).

When it comes to satisfaction levels, records have been broken again. 84 per cent of franchisees declared they were happy with their relationship with their franchisor, a good sign that yet more franchises are operating ethically and fulfilling their obligation to provide full support to their network.
    
With business confidence tentatively increasing as the UK economy breaks free from its shackles, expectations within the sector are high. Could it be the right time for you to think about becoming a business owner and reaping your own rewards? If you still feel unsure that you might have what it takes to run your own business, make the most of your skills and set your own pace, then you’re certainly not alone. It’s worth looking at a real-life example of why franchising is the right option for many in the public sector

Case Study: Karen Bowe
Karen Bowe started her Birmingham-based Concentric Lettings Franchise in January 2012, having previously worked for her local council in the social sector, and before that for the NHS

It was a completely new start for Karen, and totally different to anything she had experienced before. She was used to working in a team, for big organisations, with holidays, sick leave, security and very little pressure; running your own business from scratch alone is very different.
    
Karen’s main concerns before starting out on her won were the potential isolation of working on her own, and being very targets-driven and financially-focused.
    
She explains: “I could not believe the isolation of sitting in your own office on your own, being the only one responsible for making stuff happen; it felt quite overwhelming at first.
    
“But then I realised that I was not alone, I was part of a network and this kept me strong. We have a ‘bell policy’ here at Concentric and I love it; when someone in the network does something great we just have to ring the hub and bells will start ringing, we even have our own bell here now that we ring ourselves when we do a good deal!
    
“There is always someone to talk to, I join the fortnightly group Skype meetings and discuss with all the other franchise business owners what is working for them, and love the sharing nature of those calls. I have a weekly meeting with my franchise development manager Mark and trainer Jo at the hub and they are always on call whenever I have any little questions too, so you are never alone really. I’m so glad of their support.”
    
Since she joined the Concentric network, Karen has built up an extensive knowledge of the industry in a very short space of time and is now planning to take her ARLA qualifications. She was also awarded the best new starter in the company’s 2012 awards ceremony.
    
The support of her franchise has been critical in helping Karen get off to such a strong start and growing her business. For example, when she took on a new member of staff, Natalie, she was sent to the Concentric Lettings hub to be trained up. Karen says: “It was great to be able to send Natalie over to the hub for training, and have her up and running straight away.”

Further information
www.thebfa.org

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