Record Profits Attract Savvy Entrepreneurs To Franchising
Easier:
With 93% of all franchising units making a profit and the industry worth a record £10.8 billion, the lure of Franchising as an attractive business venture has never been greater.
The NatWest and British Franchise Association survey reveals the secret to the industry’s consistent success is down to an influx of savvy start ups, not the expected gold rush of wild eyed would be entrepreneurs.
Whilst the industry has grown at a staggering rate (44% in 10 years), the consistency of its overall performance is built on the success rate of new entrants. Last year more franchising systems set up than closed (75 Vs 58), suggesting a greater level of consideration when choosing franchises. The total number of individual franchise units also increased by 11% in the last 2 years.
Selecting a franchise for the right reasons is instrumental to future success according to Mark Scott Head, National Franchise Manager, NatWest, who comments: ‘Instead of trying to match the business with their own personal interests, we’ve seen a positive shift towards those looking for long term growth. Those looking to start up can also help themselves by first talking to existing franchisees and consider choosing an established brand.’
With the number of franchise units reporting a profit averaging out at 92% since 2000, new entrants are increasingly confident when entering the market, focusing on long term gains, not start up costs. Affordability is clearly much less of an issue, with only 9% citing this as their main reason for choosing a franchise, compared to 22% of those surveyed last year. The fact that average initial start up costs have fallen £2,300 to £44,000 in the last year will be encouraging news for new start ups.
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