Franchising 30 years on
On the eve of the publication of the latest NatWest/British Franchise Association UK Franchise Survey, Tom Endean, of the bfa, looks at how the franchise industry has changed since the first survey was published
It is at this time of year that the industry starts to look for the latest results from the annual NatWest/bfa Franchise Survey, which has now been running for 27 years and the become the key indicator of the health and change of franchising.
So with the survey set to show us how 2011 stands after three tough economic years, it is intriguing to reflect on what changes we have seen in the best part of 30 years of the industry.
Three decades ago, the British Franchise Association (bfa) was only a few years old, having been set up in 1977 by eight founding members – and the World Franchise Council was still a decade away from being established. At the same time, Sir Bernard Ingham, now the President of the bfa, had a very different role as Chief Press Secretary to Prime Minister, Margaret Thatcher.
The UK economy was an interesting place, with privatisation, public sector spending cuts and industrial unrest, meaning that some business sectors were under severe strain and unemployment passed 2,500,000 for the first time in 50 years. At the same time, however, the government was launching its first enterprise zones to help stimulate business and, of course, the early 80s saw the rise the young urban professionals, or ‘Yuppies’.
In franchising, the industry was in a very different shape to how it is today. It has seen a rise from an estimated 6,000 -7,000 franchise owners back then to the 35,000 operating in the UK today. The same can be said for the number of brands franchising where in the early 1980s there were about 200; 30 years later this figure has more than quadrupled. This has all meant that franchising now commands a much bigger part of the UK economy, with total revenue up from well under £1 billion to about £11.4 billion reported last year.
Over this growth period for franchising, the industry has created countless opportunities for people to start their own business under the safety and guidance of a franchise system. Many thousands have created whole new standards of living for themselves and their families; many have found better work life balances and others have found an enterprising side of themselves they didn’t know existed. Also, let’s not forget the many entrepreneurs who have franchised their businesses – many of which didn’t even exist as an idea 30 years ago.
This combined effort of franchisors, franchise owners and the unwavering advice and support of the professional advisors has created an industry that today employs nearly half a million people. That’s half a million people in an industry which has proven itself to be resilient and robust, even in the toughest of economic climates - which means they are safer jobs and it is a safer income for the economy. Let’s all hope that the next 30 years sees the continuation of this trend, which will build an outstanding support structure for the UK economy.
In a time from public spending cuts and a major Royal wedding to a time of ... it’s bizarre how some things repeat themselves. However, franchising has very much grown and will continue to grow.