The world of franchising is both phenomenal and fascinating. Impressive statistics are released almost annually, highlighting just how successful the industry is.
The bfa and NatWest 2018 franchising survey was released late last year, detailing some excellent results regarding UK franchising. We have compiled ten of the top franchising facts sourced from the survey, and if these don’t impress you, what will!?
1. £17.2b was generated in the franchising industry
The first, and most impressive, key fact that the bfa NatWest report highlights is that franchising is adding more to the UK economy than ever before. Franchising’s total contribution to the UK economy is estimated to be over £17 billion - over £2 billion since the last stats in 2015. This figure is calculated based on the average turnover for franchises, times the number of units. The report suggests that the increase is directly related to the larger franchised businesses.
2. 935 franchise system currently operate in the UK
Since the last report, the number of active franchise systems operating in the UK has only increased from 929 to 935 – up by around 0.6%. Nonetheless, the number of active franchise systems in the UK has doubled since 1996, when there were only 244 systems.
3. There are estimated to be 48,600 franchised units in the UK
Whilst the number of franchise systems in the UK may only have increased by 0.6%, the number of franchises units has increased by almost 25%. This increase is largely down to the hotel and catering sector, home to some of the biggest systems like pub, fast food and coffee shop chains. Subway, for example, was estimated to have around 1500 units 10 years ago and now has around 2,000.
4. 710,000 people are employed in franchising
With so many franchise systems operating in the UK, opportunity for employment is better than ever before. 710,000 people are now employed in UK franchising, in a mix of both part and full-time jobs. Additionally, there is a good gender mix, with 70% of franchisees being male and 65% of those employed in franchise businesses being female. 37% of new franchisees are women, this figure has increased by 20% since 2015.
5. Franchises are less likely to fail
Various studies suggest that around half of non-franchised start-up businesses fail within the first five years of running. One reason for this is down to lack of funding. The bfa and NatWest survey notes that banks in the UK have typically favoured lending to franchises businesses rather than stand-alone small businesses. Franchised businesses are less likely to fail as they have the benefit of an established brand and proven business model behind them.
6. Franchising systems in the UK continue to be predominantly UK owned and run
In the UK it’s not a case of franchises being owned and run by two separate people in two different countries. 4 in 5 of UK franchise systems are run and owned by the same person.
7. Around 1/3 of franchisees now operate multiple units
Multi-unit ownership is also increasing, as 36% of franchise owners reported that they own more than one unit. This figure has risen by 7% since 2015. One reason for the increase may be because more units mean a bigger market presence, quicker growth, and ultimately, the potential to make more profit.
8. Franchising in the UK is becoming more widespread
Over the past two decades, franchising has become more widespread across the UK, as opposed to previously when it was very concentrated around the South East and West Midlands. Franchises are still focused around the main urban centres, where a greater population density allows for a larger potential marketplace.
9. 93% of franchisees claimed profitability in 2018
Franchises profitability levels remain high, with 93% of franchisees claiming profitability in 2018, meanwhile over two-thirds of franchise units that have been operating for five years or more reveal they are quite or highly profitable.
10. Competition is fierce
Competition for larger franchises, in particular, is fierce. Over a third of the larger systems the bfa and NatWest spoke with receive more than 400 leads annually from all sources. Of course, franchises can’t see every candidate who applies, so many franchises have systems in place to narrow down the number of potential candidates for interview.
Does this all sound appealing? Check out our opportunities pages to find the perfect franchise opportunity for you. There has truly never been a better time to get into franchising!