Franchising, however, is one industry that has shown resilience and has repeatedly demonstrated remarkable steadfastness during these uncertain times.
The franchise model has emerged as a robust and triumphant blueprint. It offers ambitious entrepreneurs the backing of an experienced network and a reputable and established brand. Therefore, it’s hardly surprising that franchising is on an upward trajectory within the UK’s economic landscape, is now a firm way to grow a business.
According to the British Franchise Association (BFA), the franchising industry has continued to grow steadily over the past three decades, with over 46,800 franchised units operating in the UK and employing over 710,000 people in 2018. The industry now contributes £17.2 billion per annum to UK GDP, with 93% of franchisees profitable and less than 1% of franchisors closing due to commercial failure per year.
But, what makes franchising a winning strategy, and how does it offer resilience during unforeseen times?
Established business model
Embarking on a business venture during an economic downturn is daunting, particularly when it comes to securing funds. However, lenders often view franchises with a track record of success in a better light compared to independent start-ups, which are perceived as more volatile. Similarly, franchisees have the advantage of leveraging an already successful business model, avoiding the costly and time-intensive pitfalls, and directly embarking on their journey to success.
When investing in a well-established franchise, both experience and adaptability should be inherent to the business model. As a franchisee, you will benefit from a recognised brand, and the day-to-day operational model, which includes legal compliance, IT systems, supplier relationships, sales and marketing, will be robust. While adhering to the business model is essential, there’s room to make independent decisions within the model, allowing you to grasp new opportunities that may come along.
Franchising thrives on mutual success: the franchisor’s achievements should mirror those of the franchisee. This alignment is fostered through consistent communication and joint problem-solving. Yet, not all franchisor-franchisee ties are smooth, especially when economic downturns put earnings at risk.
Having a franchisor who is one step ahead of the curve is vital to the success of its franchisees, from the support and training provided to the infrastructure and franchise network. While a good franchisor evolves with challenges, franchisees take comfort knowing they’re aligned with a brand dedicated to navigating them through turbulent times.
We’ve implemented various strategies to support our Greensleeves franchisees through the myriad challenges they encounter, be it health-related, political, or economic. Amidst the pandemic, we introduced safeguarding and emphasised social distancing. Moreover, we bolstered our IT and technical support, ensuring our franchisees could continue to work efficiently and deliver the quality service that their customers expect. Such moments underscore our commitment to a genuine, prosperous partnership with our network.
The strength of a network
During challenging times, the backing a franchisee receives from their franchisor and the broader franchise network is invaluable. This built-in support system is why franchises often outperform independent businesses, who might find themselves isolated, particularly when the going gets tough.
Effective franchisors don’t just provide a comforting word; they leverage their collective strength to bring about cost savings, improved purchasing capabilities, and make a bigger impact with their marketing. The sense of community among franchisees further amplifies this strength. Unlike independent entrepreneurs, franchisees are part of a vast network of professionals from diverse backgrounds, each bringing unique expertise. This hive of knowledge and skills is ideal for brainstorming ideas and overcoming challenges.
While change often sparks creativity and stimulates new business approaches, a strong foundation remains pivotal. It’s uncertain what the business environment will look like once everything steadies again, or even how we’ll define ‘normal’ in the future. But one thing seems certain: franchising will continue to be a mainstay in the UK’s economy. Those who choose to invest in franchises during these times are likely to emerge as the success stories in the years ahead.