The UK franchise industry is now worth £12.4 billion, according to the latest survey published by the British Franchise Association (bfa) and NatWest.


The survey has found that during 2010 the franchise industry increased its turnover by £600 million to a total of £12.4 billion, a rise of five per cent. Since 2006, the sector’s turnover, and number of franchise systems, have both grown by 15 per cent, despite a UK GDP growth rate of 9.4 per cent in the same period.

The number of franchise systems operating in the UK has grown to 897 over the past year, increasing the number of franchise business units to 36,900. The survey has also reported that an extra 56,000 jobs have been created, taking total employment in the sector to 521,000.


The UK franchise industry is also performing well internationally, as around a third of UK franchisors have units located outside of the UK, and 38 per cent of domestic only franchises are planning to expand abroad.

Peter Ibbetson, Chairman Small Business at NatWest, said: “With 87 per cent of franchisors planning to expand in the year ahead, we’re already seeing strong demand for our new £100 million franchise fund. We bank more franchise businesses than anyone else so our discounted loans will play an important role in financing further industry growth.”

Four out of five surveyed say being part of the franchise model offers them a competitive advantage over similar businesses that aren’t. Appearing to be a larger business, standardised products and service, and quality expectations were cited as the three main advantages. Franchisors also see better prospects for themselves than the rest of the economy, with 75 per cent expecting improvements for their business over the next year while only 31 per cent expect the economy to pick up.

Brian Smart, Director General of the bfa, said: “Yet again franchising has demonstrated its inherent tenacity and stability, despite a tough climate last year. This means many more sustainable business start-ups and jobs have been created by ethical franchising – further helping the UK economy get back on its feet.”

The franchise model is becoming an increasingly attractive option for those looking to run a business for the first time. Two thirds of franchise businesses trading less than two years reported to make a profit. Average start-up costs also reduced for a second year to £46,000.

Published: