UK franchise sector reaches record highs of £15bn

24 February, 2016

The UK’s franchise sector is operating at record levels, new research has shown. Highs in turnover, employment and the numbers of businesses owned by franchisees have been reported.
 
According to the independently researched British Franchise Association/NatWest Franchise Survey 2015 franchising contributed £15.1bn to the economy last year and employs 621,000 people. These figures are up by more than 10 per cent since 2013.
 
In 2015 there were more than 44,000 businesses owned by franchisees. The performance of these also set new records, with 97 per cent reporting profitability and more than half recording a turnover in excess of £250,000.
 
Less than 1 per cent of franchisees had to close their business due to commercial failure last year, a long term trend which is continuing. 
 
Brian Smart, director general of the British Franchise Association, said: “Good franchising continues to deliver serious dividends for Britain’s economy, creating businesses, jobs and wealth for local communities across the country. 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.”
 
Andrew Taylor, NatWest head of leisure, retail and franchise, commented: “Franchise offers a truly compelling alternative to start up operations with global and national brands, tried and tested operating systems and processes, and huge marketing support so it is no wonder we have seen a steady growth in entrepreneurs investing in franchises. This survey paints a picture of a sector in good health, with great potential and ambition and our dedicated franchise teams based across the UK remain committed to supporting the industry in the best possible way.”
 
The report also suggested that more younger people are entering the franchise sector, with one in five franchisees that started their business in the past two years being under 30 years of age. The ongoing business support enjoyed by franchisees means it is a sector well-suited to younger aspiring entrepreneurs, who may not have previously gained substantial business experience.
 
Nathan Siekierski, co-founder and director of Jasper’s said: “This research is very encouraging and doesn’t surprise me. Franchising is a relatively safe way for entrepreneurs to experience the responsibilities of business-ownership without the pitfalls of starting up by themselves. They are able to leverage the years of expertise and experience of franchise owners as well as the continued development and innovations in everything from systems and marketing to products and services."