Franchising · 29 January 2016

Franchising surge sees industry valued at £15.1bn

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More than half the UK’s franchises now report a yearly turnover of £250,000 or more.

A 14 per cent surge in the number of new businesses set up in the last year means franchising is now worth a record £15.1bn to the UK economy, according to the latest figures published by the British Franchise Association (BFA).

The UK’s franchising industry is operating at an all-time high, the data revealing record levels of turnover and employment recorded by record numbers of franchisee-owned businesses. In 2015 alone, the number of franchise-owned companies reached 44,000, employing 621,000 individuals nationwide.

Representing an increasingly attractive career option for young people, the BFA found that one in five new franchises launched in the last two years were owned by people under 30 years old. Over a third of the new businesses established since 2014 were run from home, indicating that a demand for a more flexible work-life balance was increasingly being met by franchising.

With the successful trajectory of the franchising industry set to continue in 2016, the BFA’s director general, Brian Smart, hailed the growth model. “The outstanding performance of the sector, in good economic times and bad, shows the power of the franchise model. Its impact on the UK’s business landscape increases each year,” he said.

The average annual turnover of franchise businesses continues to rise. Over half the UK’s franchises now report a yearly turnover of £250,000 or more.

“Good franchising continues to deliver serious dividends for Britain’s economy, creating businesses, jobs and wealth. 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,” Smart continued to say.

Business Advice has encountered some highly successful franchised businesses since launching last year. Here are just a few of the growth industry’s fascinating case studies:

Health club chain Anytime Fitness
Children’s swim school provider Swimtime
Home care provider Home Instead Senior Care

The franchising industry’s 2016 events calendar kicks off next month with The National Franchise Exhibition. On 19 and 20 February, small business owners will be able to explore franchising options by meeting some of the UKs most successful and fastest growing brands at the NEC in Birmingham. The British & International Franchise Exhibition follows soon after, returning to London’s Olympia on 11 and 12 March.

Commenting on the BFA figures, director of franchise sales at Venture Marketing and organisor of the events, Adrian Goodsell, said: “With 97 per cent of franchise businesses showing profitability, the BFA report depicts an industry in excellent health.

“On-going business support makes franchising an excellent model for young entrepreneurs and offers a real alternative to going it alone,” he added.

Fans of the BBC’s hit show The Apprentice will no-doubt be familiar with franchising’s rising profile. Two of this year’s five final contestants pitched franchise-based businesses to Alan Sugar, but how do you know when to chose the franchising route?

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ABOUT THE EXPERT

Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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