THE BRITISH FRANCHISE ASSOCIATION
GOOD NEWS ! IT ’S OFFICIAL : FRANCHI S ES ALMOS T NEVER FAIL1
PIP WILKINS Chief executive, The BFA
I
n October, we unveiled the BFA Journal, sponsored by NIC Group Services – the fi rst national franchise survey since 2018. Huge thanks go to John Spencer at NIC for sponsoring this survey ensuring we have data that allows
us to report on the growth and success of UK franchising. Conducted by BDRC, data was gathered through an online survey and telephone interviews with franchisors and franchisees, to deliver a well- rounded perspective of our industry. If you’re at the stage of looking into a franchise journey then we’ve got some very good news for you!
A safe haven Like any survey there were areas where we saw declines, many of which we can put down to the pandemic, cost-of-living crisis, and the subsequent shift in consumer habits, but overwhelmingly the results were positive and a testament to the stability of franchising, which has yet again proven itself to be a safe haven for British businesses, even in the stormiest of economic waters. The topline results are that franchising is profi table,
growing and a safe place to invest, be that as a franchisee or a franchisor.
Franchise growth The survey revealed that the UK franchise sector currently contributes £19.1billion to the economy each year and that the average turnover fi gure for a franchise unit is £400,000. The sector has grown by 8% since 2018 and now has 1,009 franchise systems. We’ve seen unprecedented growth (53%) in
the ‘Personal Services’ sector: pet care, children’s activities, domiciliary care etc and 92% of franchises in this sector are profi table (which probably explains why they are so incredibly popular and now count for half of all franchise systems in the UK.) Signifi cant
e e turnoer or a nchise unit is
growth has also been recorded in the ‘Hotels and Catering’ sector. 89% of all franchise units are profi table and the
entire sector is optimistic, with 65% of franchisors reporting better than pre-covid trading levels and 87% saying they expect to see an improvement in their company’s conditions soon. Happy days!
Franchisees almost never fail One of the most important fi gures is the ‘commercial failure’ rate of 0.5%, which is also down from 0.9% in 2018. ‘Commercial failure’ is when a franchise failed and the franchisee, literally or fi guratively, shut up shop. Looking at that fi gure from another angle, if only 0.5% fail, then 99.5% of franchise businesses succeed which, compared to the fact that 50% of all new businesses fail within their fi rst three years, is a staggering result, meaning franchises ‘almost’ never fail!
The British Franchise Association (BFA) After many years, working with the crème de la crème of franchise brands, we are fully aware that the combination of an experienced franchisor, a tried-and-tested business model, expert support and of course, a hard-working franchisee, are a recipe for success (99.5% of the time).
But don’t take our word for it; check out the Association's members and their franchise opportunities and discover your tomorrow with a franchise business.
Find out more about the BFA and the survey, which is available to purchase, at:
thebfa.org
1According to the latest BFA survey, the commercial failure rate is 0.5% down from 0.9% in 2018
https://www.thebfa.org/the-british-franchise-journal/
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