Should British franchises be worried about the EU referendum?

The Conservatives' general election victory means a vote on the UK's EU membership will now take place before 2017. But should franchises share the same concerns as the wider business community?

Should British franchises be worried about the EU referendum?

With the general election now a speck in our rear-view mirror, attention has turned to the impending referendum on Britain’s membership of the European Union (EU). The Conservatives’ shock victory on May 7 means that Britain will go to the polls at some point in the next 18 months, as promised by prime minister David Cameron and officially announced in the Queen’s speech last month.”

At the time of writing the prime minister, who wants us to remain in the EU, was halfway through a week of talks with EU chiefs, including European Commission president Jean-Claude Juncker, which it was hoped would conclude with some agreeable new terms for the UK’s membership. “

While the impact of a Brexit on British businesses is uncertain, a UK that is not in the EU would undoubtedly be a lot different to one that is. Predictably, entrepreneurs and business leaders are very wary about upsetting the status quo, such are the unknown implications of an exit for the investment landscape, recruitment and the export market, among other things.

But what about British franchises? Should they be as worried about the impending referendum as the wider business community? “

“The sooner the better,” Linda Price, founder and director, Swimtime

The referendum itself should not be a worry to businesses as a good product or service will always find customers and overcome any political restrictions, whether the UK decides to remain part of the EU or not.”

“What should be of concern is the disruption and the lack of certainty that a long, drawn out referendum will bring. The referendum is pencilled in for 2017 but the government, having won the right to hold it through the election, should be looking to give people the right to decide as soon as possible.”

The UK franchise sector is strong at the moment, with 92% of franchises posting profits. Current economic conditions favour scalable and flexible business models – and franchising is a sector that is designed to support start-up businesses. Companies that can export their products, services and, in the case of franchising, their business model, are much more likely to prosper long-term.”

All of this means that I would not want the UK to talk itself out of rising economic momentum through a prolonged period of introspection. Let’s get the debate done and dusted and let businesses adapt to the new landscape sooner rather than later.

“We just need to wait and see,””Matt Levington, co-founder, Business Doctors

The in-out referendum will undoubtedly have an effect on the UK economy, though it’s currently unclear which way that will be in the long- and short-term, no matter what the result. Either way, it’s pretty obvious that some companies will be affected more than others. For instance, companies may benefit from the reduced costs if they are freed from EU regulations but then it is possible the economy might also suffer from reduced foreign investment and demand for exports if the UK is seen as isolated from the rest of Europe.

Franchise businesses will be affected in much the same way as all other businesses on a macro scale. But again it comes down to the individual nature of the franchise as to how any particular franchise will feel the impact.”

Business Doctors works to help businesses across the UK of all shapes and sizes to achieve their vision. That puts us in a prime position to witness the effects on different types of businesses, so really we must remain unbiased, as calling for a vote one way or another would be beneficial to some of our clients and detrimental to others. “So essentially we just need to wait and see.”

Adam Pescod
Adam Pescod