An increase of 5% on 2009, claims the latest British Franchise Association/NatWest Franchise Survey
In line with this expansion, the bfa believes around 521,000 people work within the franchise industry (465,000 in 2009) and 897 franchise systems operate in the UK with a total of 36,900 units, compared to 842 and 34,800 respectively in 2009.
Other highlights of the survey include:
• Four in five franchisees reckon that being part of a franchise has given them a competitive advantage in the last year. Appearing to be a larger business, standardised products/services and quality expectation were cited as the three main benefits.
• The average start-up cost for a franchise is £46,600.
• Average franchisee turnover is £335,000, the same as the 2009 figure.
• Only one in ten franchisees is making a loss.
• Two thirds of franchisees trading less than two years are making a profit.
• Running costs are felt to have increased in 2010 (particularly energy costs) and a higher proportion of franchises felt they had to increase their prices.
• Dealing with red tape still takes up a significant proportion of franchisees’/franchisors’ time, but the survey points to an easing of this burden in 2010.
• The average age of a franchisee is 47, and stands at 39 among newer recruits. Currently only one in twenty franchisees is under the age of 30; one in five new recruits fall into this age bracket.
• A third of new franchisees have a degree. However, franchising remains a career opportunity for those with less formal educational backgrounds - one in ten new entrants have no qualifications.
• Franchisors see better prospects for themselves than the rest of the economy, with 75 per cent expecting improvements for their business over the next year, while only 31 per cent expect the economy to pick up.
Primary research with both franchisees and franchisors was conducted between December 2010-February 2011.
“Yet again franchising has demonstrated its inherent tenacity and stability, despite a tough climate last year,” says Brian Smart, director general of the bfa.
“This means many more sustainable business start-ups and jobs have been created by ethical franchising - further helping the UK economy get back on its feet.”
