An Overview of the UK Franchising Industry
In 2018, the franchising industry contributed GBP 17 Billion to the UK economy, an increase of GBP 2 Billion since the previous statistics produced in 2015.
In 2018, there were an estimated 48,600 franchised units in the UK.
The fastest growing sectors are: Personal Services (entertainment and tutoring, personal trainers, pet services, etc.), with a 3.1% growth from 2013 to 2018; and Hotel & Catering, with a 2.4% growth in the same period.
Between the period of 2001 to 2018, the estimated total number of people working in franchising has grown at a CAGR of 3.3%; from 407,000 to 710,000.
Source: British Franchising Association and NatWest (2018)
UK franchising has grown consistently for several decades, welcoming a wide range of businesses across all sectors.
Growth in a trend towards younger business owners (18% of UK franchisees are under the age of 30), women in business (30% and rising), and multi-unit ownership (over one-third of franchisees own two or more outlets in either the same or multiple brands).
Around 90% of franchisees have reported profitability annually for over two decades – including through the dotcom and global financial crash recessions.
The power of a proven business model and support from a franchisor has proved itself over the long term. Franchising is well-known to thrive in times of economic difficulty, as workers look to secure their own future through self-employment and consumers turn to the safety of recognized brands for their purchases.
A PROVEN BUSINESS MODEL
The financial and valuation metrics for publicly listed companies that have a similar business model are as follows:
Source: Yahoo Finance (Info as of 17 Oct 2022)