With the uncertainties surrounding the break from the EU, budding British entrepreneurs can remain confident in the franchising sector
These are troubled times for business. Many high street names disappeared last year. Recent profit warnings have been issued from ASOS in the online sector and Halfords on the bricks and mortar front. Meanwhile, Debenhams has posted its third profit warning in less than a year. Lay-offs have been announced at Jaguar Land Rover and Ford. Amidst all this, economic forecasters are warning a no-deal Brexit will be very bad for the UK economy.
One might think that with all this uncertainty now is definitely not the right time to be considering launching a new business. But that could be overlooking the opportunities that continue to exist, particularly in the franchising sector.
It's a fact franchising as an industry has performed well in every economic downturn over the last three decades. It contributes £17bn to the UK economy and employs nearly 750,000 people. So my advice is to view the current business pessimism as an opportunity.
Having done that, it’s still sensible to be very selective and only consider franchises that operate in areas dealing with recession-proof essentials. Gimmicky and luxury sectors would be a no-no for me, as would ones that can easily be overtaken by advances in technology.
I'd also be wary about franchises that need a commitment to a high street presence or a large outlay on shop fitting. My rationale is that rents are tumbling fast as increasing numbers of businesses are using Company Voluntary Arrangements to reduce their rent. That gives them an advantage over businesses that aren't in that situation. Some retail industry franchises could be in that category. Any business that's selling a product in competition with Amazon or the major supermarkets is also probably worth avoiding. The price competition there is just too hot to handle.
Even at this stage, the impact of Brexit on franchising in political, legal and financial terms is still uncertain. But uncertainty should not lead to stagnation. Standing still should not be an option. If you want to move forward you have to take the first step.
So, the bottom line is this: now is a great time to be starting a franchised business as long as you choose wisely. Invest your money and commitment in a well-established company in a sector that deals with an essential product or service. While the faint-hearted are looking at the future like rabbits in the headlights, view franchising as a beacon of light in the fog of these hazy times and seize this great moment of opportunity.