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What is a Franchisee? In the UK and in 2014


The basic franchisee definition is fairly simple: a business partner who purchases the right to sell a franchisor's product or service under the franchisor's trade name, paying upfront and ongoing fees in return for the licence and support. However, at Franchise Direct we always want to know more details about prospective franchisees so that we can perfect our services to them, and that is why we conduct the Prospective Franchisee Survey every year. This article will point out the most noticeable results of the UK's 2014 survey, compare them to the statistics of the US survey, and see how they weigh against our findings in the past.

What is a Franchisee? In the UK and in 2014


The UK Prospective Franchisee Survey 2014

Click here to read the full results

The survey's 22 questions were split into five sections, the first being Franchisee Demographics. One striking statistic in this section was the ratio of men to women looking into starting up a franchise. According to a survey conducted a year ago by the general trade union GMB, half of the work force in England, Wales and Northern Ireland are women. Yet only 24% of the potential franchisees in the survey were female, less than a quarter of respondents. Another notable finding was that 89% of the participants already had management experience. This could be to their advantage when setting up an enterprise of their own, but also shows that those who lack experience in an authoritative business position are reluctant to become their own boss, even when guided by a franchisor.

The Researching questions revealed that potential franchisees are conducting a decent amount of investigation into the franchise industry, using a variety of sources for information and not rushing into the process – 68% were planning to take longer than three months to buy a franchise. One area most respondents had yet to explore was the franchise expo or trade show, as 70% had never been to one before. Two major expos in the UK include Franchise Opportunities Live and The National Franchise Exhibition, both of which are set to take place in the next two months.

The third section, Financing, revealed that 75% of future franchisees are planning to go it alone, rather than make the investment as part of a group. This may explain why only 29% are able to fund the project completely themselves, with the other 71% needing financial aid from sources such as banks, family and friends, and grants. Speaking of help, the Support section showed that the accountant is much more popular than the franchise consultant, with 71% of respondents claiming they plan to or have already seen the first, and 45% saying they plan to or have already received services from the second.

Section five examined the types of franchise that were the most popular. No particular industry stood out, although food was the winner at 29%, closely followed by business opportunities at 28% and internet at 27%, while pest control managed a meek 1%. Full time versus part-time/either stood at nearly half and half. And what was the most important factor for people when they are choosing a franchise? Brand recognition? The training and support provided? No! It was, of course, the potential earnings.


The US Prospective Franchisee Survey 2014

Click here to read the full results

What is a Franchisee? In the UK and in the USThe US survey was conducted in April 2014 and received 450 replies. While the majority of the results were similar to those found in the UK survey, there were some clear differences. The answers portrayed an image of a younger, more cautious crowd, with the strongest age category being 40-49 in comparison to the UK's older 50-59. Fewer people had operated or managed a business before, which may be one reason why they were planning to spend considerably longer researching before they bought a franchise – while 61% of the UK respondents aimed to buy within six months, only 32% of US participants were planning the same time frame. Furthermore, while only 4% of the UK surveyed were willing to wait more than 24 months before buying, 13% of the US said the same.

Another point to note in the US survey was the popularity of the food franchise. At 43% it very much stood out from the other 30 categories, with coffee coming next at 28%, a franchise type also in the catering industry. While food was the favourite franchise in both countries, it was 14% more popular in the US than in the UK.


How Have UK Franchisee Statistics Changed in the Last Three Years?

Franchise Direct carried out surveys on UK franchisees in the years 2014, 2013 and 2011. Most results stayed steady during that time, such as 'I want to be my own boss' being by far the favourite reason for deciding to start a franchise, and over 80% of respondents having had management experience.

However, there have been some gradual changes. The number of respondents who were unemployed at the time of the survey has risen steadily over the last three years, as can be seen in the following table:

Statistics from UK prospective franchisee surveys







Surprisingly, this clashed with the amount that potential franchisees were willing to invest, with more than £50,000 standing at 13% in 2011 but rising to 20% this year, perhaps reflecting the banks' increasing willingness to lend again.

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