In 2018, the franchise industry has never been more prosperous. The UK economy has maintained growth despite challenges such as rising inflation, a weaker pound, and of course our imminent departure from the EU. Employment and customer spending have not slowed despite the gloomy headlines. The OECD predicts steady economic growth in 2018 and 2019, albeit slower than we've seen in recent years.
There are approximately 1,000 franchise systems employing over 621,000 people and contributing £15.1 billion to the economy. Amazingly, half of those people in full time employment. According to the bfa/NatWest Franchise Survey, 97% of franchises are profitable and are enjoying a £250,000 turnover. Franchising has grown by 10% over the last four years and it shows no signs of slowing down.
Even in a sluggish economy franchising prospers, as we witnessed during the last recession. Research proves that both long and short-term growth trends tend to be very strong in this sector- even after the economic downturn in 2008. There has been a tremendous increase in the number of brands in the franchise sector and less than 4% of franchise businesses fail each year.
Franchising has also proven to be far more resilient than independent start-ups. Approximately half to two-thirds of new businesses fail within the first three years of operation. New franchisees, however, have the benefit of a sustainable business model and a built-in support network. This type of support means that they are statistically more likely to thrive during the early stages of their business.
Many people associate the likes of McDonald's and Papa John’s with the franchise industry, but they may be surprised to learn that franchise opportunities also exist in photography, education, gardening, sport, and much more. Franchising in the UK has grown so much over the past twenty years and there are franchise opportunities to suit a range of interests, lifestyles and locations.
It is really easy to get started with a franchisor. Experience is usually not required, since training and support is provided and this support usually continues for the duration of the relationship between the franchisor and franchisee.
CEO of the bfa, Pip Wilkins, predicts that care franchises will be a “big boom sector” in 2018, since they can respond quickly to the needs of the growing ageing population in the UK. 18% of people in the UK are over 65 years of age, while 2.4% are aged 85 and over and the UK population is expected to reach 74 million by 2039. Top quality care services for older people are in demand, which is why the likes of Radfield Home Care, Kare Plus and Clarriots Care are flourishing.
James Fry, COO for Clarriots Care, states: “Our industry is full of opportunity but the key to success is a true understanding of how to build a business focused on quality and compliance. Get this right, know your customer, look after your staff and the results will come."
"It sounds easy but if it was, there wouldn’t be so many failing providers (66% of CQC inspections last month were substandard) which is why franchising is this sector is so strong. We have built, developed and invested heavily into our policies and procedures over the last 10 years to ensure our franchise owners get the full benefit of working with us. Combine this with the UK’s current headlines surrounding our rapidly ageing population and it’s easy to see why franchising in the care sector can be so successful."
The care industry is worth an estimated £6 billion and has proven to be both recession and Brexit-proof. It offers franchisees the opportunity to give back to their community, as well as the chance to create a successful business and to learn new skills. It is the perfect career move for anyone with excellent communication skills, an entrepreneurial streak and a desire to enhance the quality of services in their local area. To find out more, take a look at some of the exciting care franchises on offer right now!
There are exciting events in store this year such as the bfa HSBC Franchise Awards and the International Franchise Show. We will have a stand at the International Franchise Show next month and we are looking forward to meeting all the exhibitors, speakers and visitors. This event is an excellent resource for anyone looking to learn more about the franchise industry and tickets are free, so it is worth a visit.
So far this month, we have seen a 7.5% increase in enquiries to start a new franchise compared to the same period last year. Many new franchisees are finding exciting partnerships through the Franchise Direct UK portal. Why not start your 2018 off the right way by joining them?