Member Article

Franchise industry thrives in downturn and battles unemployment

Franchise industry creates 73,000 jobs while UK unemployment rises by 180,000

Businesses claim franchising model provides competitive edge

In these austere times, it is heartening to get some positive, good news in the midst of all the doom and gloom. At Be Franchising, we are delighted to report that the latest survey of the franchising sector, by NatWest and the British Franchise Association (bfa), shows franchising is more than playing its part in re-balancing the economy. While other sectors have struggled, the franchising industry has punched well above its weight over the past year in key areas such as growth, job creation and export.

While UK GDP grew by 0.7% in 2011, the franchise industry increased its economic contribution by 8% as turnover rose to £13.4billion. While other sectors contracted over the year, 9 out of 10 franchise businesses posted a profit last year – reducing loss-makers to pre-recession levels and franchisee failures at just 2.6%.

What’s more, in sharp contrast to a UK-wide rise in unemployment of 180,000 in 2011, the franchise sector increased employment by a total of 73,000. This comes as the number of franchising systems operating right across the UK increased to 929, with 40,100 franchise business units employing 594,000 staff.

As Graham Mylchreest, managing director at Be Franchising says, “Franchising is a powerful business format that offers individuals the benefit of working within a tried and tested brand, with standardised products and ongoing support from experts who are best in their class. But, it’s not just individuals who are waking up to the advantages of franchising. Here in the North East, we have been working with a whole host of successful businesses who are turning to franchising as their preferred method of business expansion. The switched on entrepreneur knows that by partnering with highly motivated, self funded and committed franchisees, they can rapidly expand for a fraction of the cost and time it would take non-franchised companies.”

Interestingly franchising often offers businesses a route into exporting too. The survey revealed that one in three is already trading overseas and that trend will continue to grow, as 38% of non-exporters plan to do so in the future.

Whilst franchising may not be a panacea, these impressive statistics point towards a business format that must surely be worth further investigation for those who are serious about business development.

For more information businesses or individuals can talk to Graham Mylchreest at Be Franchising on 0845 602 7988 / 07507 843547 or email info@befranchising.com

Be Franchising is a not-for-profit organisation.

This was posted in Bdaily's Members' News section by Graham Mylchreest .