The British Franchise Association/NatWest Franchise Survey is one of the most eagerly awaited reports in the franchise world, as it documents trends and gives insights into the franchise sector.
Franchising has been in robust health for many years, despite the U.K.'s economic downturn, but the 2015 Survey reveals how it continues to go from strength to strength.
Franchising contributed £15.1bn to the UK economy last year, an increase of 46% over the past ten years and up more than 10% since the last survey was published in 2013. According to the research, the sector now employs 621,000 people, of which 321,000 are in full-time employment. This also represents an increase of over 10% since 2013 and 70% over the last ten years. Reflecting an upward trend in employment, the survey revealed that a third of franchise-owned businesses now employ ten or more staff.
Further findings show that the number of franchise-owned businesses increased by 14% in the space two years, hitting 44,200 in 2015, with over half reporting an annual turnover of more than £250,000.
More impressive still, a record 97% of franchise-owned outlets reported profitability last year, with 56% saying they are 'quite' or 'very' profitable. This coincides with a low rate of commercial failure: just 1% of franchise businesses had to close their doors for this reason in 2015.
This low failure rate means that banks are keen to lend, as Andy Smith of Belvoir found out when he interviewed NatWest Franchise presenter, Matt O'Neil, late last year:
It was also interesting to note from the report that more young people are entering the franchise sector, revealing that one in five franchisees that launched a business in the past two years are under the age of 30.
Here at Belvoir, our recent intake of new franchisees included two young men both under 27!
Find out more by watching our videos >>> here.
Brian Smart, Director General of the BFA, commented:
"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 benefits 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 U.K.'s business landscape increases each year".
Source of quote
In 2015, 29% of franchisees owned more than one outlet, the majority having two or more businesses operating under the same brand. Five years ago, this figure was only 21%. One in five of those with one franchise unit reported plans to start another in the future.
While there are no guarantees in franchising, these key trends make it an attractive proposition to those looking to start their own business - franchising often being described as "self-employment with support".
Dorian Gonsalves, Director of Belvoir commented:
"Franchising in the UK is experiencing substantial growth as proven by the NatWest / BFA annual survey. It’s hardly surprising that more and more aspiring entrepreneurs are entering the sector with 97% of franchised units reporting profitability on an annual basis. With 900 brands to choose from and exceptionally low failure rates compared with traditional startups there are now more people employed in UK franchising than the population of Manchester.
The contribution of franchising to the UK economy is now over £15 billion, an increase of 46% over the past 10 years, and with franchising entering a phase of maturity in the UK it’s now viewed as being one of the key areas of growth in the UK economy. For anyone who wishes to run their own business in a safe, proven and profitable environment, franchising is a lucrative and rewarding route with a vast number of franchise models to choose from, many of which have a solid and consistent track record. Some franchise models also allow the franchisee to build a business which has a significant value which can be sold or cashed in when the franchisee wishes to exit or retire.
All of Belvoir's 200+ franchised offices are profitable except for very recent startups. Most units reach break even after around eighteen months of trading. Our established franchise units change hands for anywhere between £50,000 and £1million. With 1000 employees, franchisees and central office staff it's recognised as one of the leading property franchises in the UK."
The 2015 BFA/NatWest Survey should give prospective franchisees confidence in the model and that they have a much greater chance of success than going it alone.
Belvoir is a bona fide member of the BFA and you can find our accreditation >>> here.
Belvoir is an award-winning estate and lettings agency with over 200 successful offices around the U.K. If you would like to talk about being our next success story, please call us on 01476 570000 or email us on email@example.com
You can also follow us on twitter and discover more on our YouTube channel.