New record for the UK franchising industry

Franchising has hit a new record high with a contribution of £12.4bn to the British economy in 2010, according to the latest NatWest/British Franchise Association survey. All indicators are in the green, proving once more that franchising does well even in tough times.

Revenues have reached an all time high with the franchise industry turnover increasing by £600m (+5%) compared to 2009. At the same time, the number of companies franchising their operations in the UK rose to almost 900, a 6.5% increase on the previous year and a significant 15% increase on 2006.

The survey shows that 56,000 jobs were created last year, bringing the total employment in franchising to 521,000 in the UK, with the average franchising employing 11 people. Nine out of ten of franchises surveyed said they were turning profit, while three quarters are confident their business will improve over the next 12 months and 31% expect the economy to recover this year.

Brian Smart, director general of the BFA said: “This means many more sustainable business start-ups and jobs have been created by ethical franchising – further helping the UK economy to get back on its feet.”

The survey also found that the catering sector was the fastest growing in franchising. It includes restaurants and fast-food outlets such as pizza delivery service Domino’s which counts more than 650 outlets in the UK, creating 1,700 jobs last year and increasing sales by 19% to £485m.

For four out of five interviewees, being part of a franchise model is a competitive advantage, especially because of the appearance of being larger, standardised products and the expectation of a higher quality among consumers.

Finally, a third of UK franchisors have overseas outlets while 38% of those who only have domestic operations plan to expand abroad.

“Yet again franchising has demonstrated its inherent tenacity and stability, despite a tough climate last year”, concluded Brian Smart.