Partner Article

Franchising industry proves resilient

The franchise sector has proved its resilience, and has contributing to battling the UK’s rising unemployment.

According to a survey by NatWest and the British Franchise Association, turnover in the industry has risen to £13.4bn, an 8% in economic contribution to the UK’s GDP.

While some sectors contracted over the year, 9 out of 10 franchise businesses posted a profit over the year, reducing loss-makers to pre-recession levels.

76% of those surveyed expect business to improve in the coming months, compared to only 44% of all SMEs.

A total of 73,000 jobs were created in the industry throughout 2011, as the number of franchising systems increased to 929.

Graeme Jones, head of franchising at NatWest and RBS, said: “The franchising model offers the benefit of appearing to be a larger business, standardised products and quality expectation – advantages all heightened in a downturn.

“Expectations for growth are high in the sector and we’ve invested in the largest specialist team of managers of any bank to ensure it happens.”

Brian Smart, director general of the bfa, said: “The last few years have put crippling pressure on businesses, creating some of the toughest trading conditions that many have ever seen.

“However, yet again we see the franchise sector proving its value by generating new sustainable business start-ups, jobs and revenue for an economy that desperately needs them.

“For those who are considering franchising this is obviously an encouraging sign, but we also stress the importance of thorough research and consideration before making any commitments.”

The survey suggests that strong export activity for goods and services may also have helped franchising better than most, with one in three already trading overseas.

This was posted in Bdaily's Members' News section by Tom Keighley .