In what has been the most unstable and difficult years in franchising history, it is safe to say that all business owners are glad to see the back of 2020. The Covid-19 pandemic has left businesses on their knees; many have had to furlough staff or shut down their operations altogether as a result of lockdown restrictions. As the hospitality and retail industry struggles to thread water due to social distancing guidelines, other industries have adapted their business models and moved a lot of their operations online in order to keep the company running - signalling what is likely to be a growing trend heading into 2021.
Adaptive Franchising
The franchise industry has been no exception to switching up business models to suit the current environment, with some companies even proving that even in the face of adversity, a franchise model comes with built-in flexibility and resilience.
Speaking in his franchising blog, Richard Pakey of Lime Licensing Group noted that most franchisors are incredibly receptive to a changing environment;
"Some franchisors too are starting to adapt their offering to 2021 thinking, now, more than ever, looking at how they can make it easier to attract new franchisees to fund their own future growth to become more resilient, often rewarding early adopters or being ever more creative in how the franchisee can buy-in and even offering to help them build something that is even more repeatable and scale-able than franchising would have traditionally been historically, and it is the franchisors that have spent 2020 ‘pivoting’ or adapting that are now seeing the benefit of making those changes, which will continue in 2021 whilst others potentially have to play catch-up, but in doing so will make their franchise offering less appealing, at least in the short to medium term as others mop-up what they have left of the table."
The UK Franchise Industry
Although most countries continue to navigate the pandemic, the promise of vaccines rollout in early 2021 allows for hope that there will be some sort of return to ‘normal' by the end of the summer and a chance for businesses to rebuild. Even with the uncertainty of Brexit and the impact it will have on trade and the economy, the UK franchising industry will continue to grow and is still a strong investment option for budding entrepreneurs.
While the UK market braces for a harsh recession, it is important to note that franchising traditionally does well in difficult economic climates due to a number of factors. As workers face unemployment and redundancy, they are motivated to find alternative employment options. Franchising not only offers them a chance to be self-employed but the opportunity to invest in a resilient business model. According to a 2018 NatWest/British Franchise Association survey revealed that less than 1% of franchisors face closure due to commercial failure.
Opening a franchise provides investors the flexibility to create their own schedule and work the hours that suit them. Even before the pandemic forced employers and businesses to switch to remote work, the 2018 NatWest/British Franchise Association survey indicated that 40% of franchised systems had the potential to be operated from a home office (work from home franchises). This figure will have increased exponentially by the end of 2020.
With a hybrid office/work from model looking more likely for the future, home-based franchises are likely to continue to see a boom over the course of 2021.
What the Franchises Expect From 2021
Although it has been impossible to predict market trends since the pandemic hit, many franchises experienced a record number of enquiries throughout 2020, indicating that there is a strong appetite for franchising in the UK. Additionally, 2020 has seen an increase in popularity in online franchises, cleaning franchises and delivery franchises, with that trend looking to continue over the next year.
Even with the uncertainty of the next financial year, franchises are still optimistic about the future. Mike Parker, Managing Director of cleaning franchise Minster Cleaning, is confident there is room for growth in the franchise industry:
“It’s going to be challenging economically, but that will bring opportunities. We hope to find franchisees for several new territories and I’m optimistic about their growth potential in a market looking for reliability and expertise. On top of that we have several franchisees reaching retirement age, so there’s likely to be the chance for people to invest in some established businesses too.”
Due to the pandemic, Virtual Assistant franchise SmartPAhave seen the forced shift to remote work and are now preparing to expand their offerings to more sectors as the trend towards WFH continues:
"Business has changed for good. Remote working is the new normal. SmartPA continues to lead the market in the virtual business support sector, accruing over a decade of experience in delivering world-class service to clients of all shapes and sizes. It has fuelled immense growth in demand, with Covid accelerating a cultural shift from organisations to seek out improved ways to work, channels to spur growth and routes to achieve greater efficiency. And with a wide community of SmartPAs working successfully with us, we are constantly broadening our offering into more sectors and bringing in customers from SMEs to Corporates and non-profit/government organisations who view the genuine benefit of how we can revolutionise the way they work. There has never been a better time to join our community of SmartPAs."
As we say goodbye to 2020, franchising is primed to flourish over the next few years, with 2021 being a fantastic starting point for those who want to dip their toes into a robust and lucrative industry.
So why wait? Browse our directory of innovative and unique business opportunities and start your franchise journey today.