The bfa NatWest Franchise Survey 2015 reveals that the British franchise industry continues to grow, with record levels of turnover and profitability reported
It's no secret that the British franchise sector has been in rude health for the past few years. The combination of economic downturn and a surge in entrepreneurialism has seen many people break free of the nine-to-five to start their own businesses. And given the security that franchising offers first-time business owners, the growth of the sector shouldn't come as too much of a surprise. Now, thanks to the bfa NatWest Franchise Survey 2015, the sheer scale of this growth has been revealed.
The latest survey revealed that 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.
Satisfaction among franchisees is also on the up, with a record 91% saying they were 'mainly' or 'definitely' satisfied with their franchisor. Meanwhile, 80% of franchise brands in the UK are now domestically owned, with 38% expanding their business overseas and a further 11% considering doing so in the future. Finally, the report suggested that more young people are entering the franchise sector, revealing that one in five franchisees that launched a business in the past two years were under 30 years of age.
“Good franchising continues to deliver serious dividends for Britain’s economy, creating businesses, jobs and wealth for local communities across the country," said Brian Smart, director general of the bfa. "Established trends of 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. The outstanding performance of the sector, in good economic times and bad, shows the power of the franchise model and its impact on the UK’s business landscape increases each year.”
All in all, we'd say that's a pretty strong endorsement of the UK's franchise sector.