The annual NatWest/BFA franchise survey for 2013 has now been published, and makes very useful reading for anyone involved in franchising in the UK. It monitors the performance, attitudes and opinions of the franchise sector and thereby builds up a larger picture of the contribution of franchising to the British economy.
This year’s report shows continuing maturity within the sector, but reflects
the challenging economic environment. It shows that the franchise industry has grown at a far higher pace than the economy as a whole.
The report estimates that UK franchising currently achieves a total of £13.7 billion
(£13.4 billion in the last report). This is 1% of annual GDP and a 20% growth over
the recession, compared to the economy in general that has shrunk 2.5%.
Some 561,000 people are directly employed in the franchising sector, a 20% increase
during the recession. For the first time there are over 250,000 full time employees.
The average initial investment for a new franchisee is £52,000. This of course varies
dependent on the sector, up to £142,000 for Hotels & Catering. The average initial
investment on a resale is £64,000. 36% of franchisees reported that they bought
an existing unit when they joined the franchise.
The Franchisor-franchisee relationship is of great importance in determining the
success of a franchise business , and reassuringly 84% of franchisees regard their
relationship as satisfactory (the highest figure since 2001). Unsurprisingly those
dissatisfied tend to be those that are loss making.
88% of franchisors, and 54% of franchisees, expect improved trading conditions.
The information in this document is extracted from the 29th annual research study sponsored by NatWest. Copies of the survey are available from www.thebfa.org
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