The news you’ve been waiting for…

Yes, the eagerly awaited franchising survey (commissioned by the BFA and sponsored by NatWest Bank) has been released.

And very interesting reading it makes, too!

First of all, the big picture…

There are 34,600 franchisees across the UK and there are 838 known franchise operations (up 29 on last year). Collectively they generate £11.4bn of income for the UK economy.

467,000 people are employed directly by the franchise industry and this is a whopping 1.6% of the UK workforce.

And what about some of the detail?

The survey says (wasn’t that a line from a famous game show?) that, although franchising is feeling the pinch much like the rest of Enterprise Britain, it is actually fairing rather well. Although average turnover for all franchisees is down 9.4% to £326,000 just about the same percentage of franchisees as last year are reporting profitable operations – 90%, down just 1%.

There’s also stuff about the future with franchisees looking to protect themselves from the recession:

29% said they were increasing their advertising spend, 24% wanted to grow their client base, whilst 21% are working to improve productivity and only 15% are reducing their prices.

You can read all these stats by buying the survey (£20 to BFA members) or by doing what I did and reading the highlights in the Franchise World Magazine (www.franchiseworld.co.uk).

All these stats make for good reading but there are some other trends that are slightly more worrying – some to do with the recession as well as other, long standing issues in the franchise industry, which didn’t make it into the article.

For example, franchising, as an option for those wishing to get out of employment or indeed who have been forced out through redundancy is increasingly seen as a good thing. Indeed, recruitment pipelines are bulging. However, despite the banks’ protestations, they are still only lending to franchisees of franchisors who are most established and best known.

There is plenty of evidence to show that even franchisors who are well capitalised but haven’t been about for many years are still struggling to find funding for new franchisees. Even when the banks do lend, interest rates are often punitive. Last week I heard of a bank offering an interest rate of 7% over base rate… and that was for a small loan to a franchisee joining one of Britain’s very best franchise operations.

Longer term trends still indicate that something like 80% of all franchisees are men and the average age is 46. Surely, there must be opportunities for attracting more women and younger people into franchising. We’re missing a trick in the industry, not to mention a breadth of skills by not appealing to a wide enough pool of potential franchisees.

The problem is most franchisors are men and over the age of 46!

So, the franchise industry is proving to be resilient to the recession… but just think how good it could be!

Please leave a comment - we all like them