Portsmouth-based franchise owner agrees with latest franchise survey results
Portsmouth-based franchise owner Steven Thatcher has agreed with the results of the latest franchise survey which reveals that UK franchising sector is outperforming small business growth with a 99.5% success rate
The BFA (British Franchise Association) has recently released the results of a survey[1] which reveals the sector is consistently out-performing non-franchised businesses and is one of the safest, most profitable ways to be a self-employed, small business owner in the UK today.
With 50% of new businesses failing within their first three years [2]and the Federation of Small Businesses’ latest SBI (Small Business Index) report for Q2[3], revealing plummeting figures across the board, the recent BFA survey reveals that in sharp contrast, the UK’s franchise sector is thriving.
The ‘commercial failure rate’ has dropped from 0.9% in 2018 to 0.5% in 2024, demonstrating the success of business format franchising.
Steve Thatcher began his Revive! smart repair franchise in Portsmouth over 20 years ago and has grown from being a ‘man in a van’ to employing six technicians plus admin staff.
Commenting on the survey he said: “The results of the survey showing that the majority of franchisees are profitable and have a higher chance of success makes perfect sense to me.” He added: “the help and support from the franchisor makes all the difference and I’ve seen that develop over my 20 years growing my business locally. Quite honestly, I don't think I'd be where I am now without that help.”
Growth of franchise sector
In the first independent national franchise survey since 2018, the BFA and sponsors NIC Services Group, revealed that the franchising sector currently consists of 1,009 franchise systems and 50,421 franchised units up 7.9% and 3.7% respectively.
Contribution to the economy
The sector contributes £19.1 billion to the UK economy, a 12% rise from £17.2 billion in 2018. The average turnover of a franchise unit is £400,000 and 89% are profitable. They have also dropped their historically low commercial failure rate from 0.9% to 0.5%.
Why franchising succeeds
The success of the franchising sector is widely considered to be based on two things, the use of tried and tested business methods and the support of an experienced franchisor. It is also agile enough to respond quickly to changing economic conditions and consumer demands, as demonstrated during Covid-19. Ryan White, MD of pet care franchise We Love Pets confirms: “We came out of the Covid pandemic stronger than ever and we are recruiting on average twenty new franchisees a year, all of whom are profitable and loving their new lives.”
Small business struggles vs supported businesses
Understandably, small business owners are worried about the future with the most recent Q2 SBI report revealing that: “the broad negative scores across the different sectors indicate growing pessimism amongst small businesses regarding their performance over the coming quarter”[4], and an article in the Independent [5]in January 2024 reported that: “The number of company insolvencies hit a 30-year high in 2023, as firms suffered amid high interest rates and cost pressures”.
‘Significant profits’
Conversely, the UK franchise sector is optimistic and growing. Jasdeep Thandi, who owns four Anytime Fitness gym franchises across the UK said: “I’m currently making a significant profit from my gyms so yes; things are going really well. I honestly think if you are doing a good job, you can make your money back in a year.”
Personal Services driving growth
Huge growth has also been seen in ‘Personal Services’ franchises sector (pet care, domiciliary care, children’s tutoring etc), making it the fastest growing sector in UK franchising, with a 53% increase in size since 2018 and 92% of their franchises are profitable.
RAF pilot to domiciliary care franchise owner
Tim Corry, who left a career in the RAF as a Puma and Chinook pilot to run his own domiciliary care franchise, Guardian Angel Carers in Farnham and Guildford explains: “Starting your own business is a scary thing but with a franchisor beside you, it is much less daunting. Demand for our services is high and we are proud to offer a first-class service to our clients.”
‘Better than pre-covid trading’
Optimism is now widespread across the franchising industry with 65% of franchisors saying they are trading at better than pre-covid levels and 87% saying they expect to see an improvement in their company conditions.
Pip Wilkins, Chief Executive of the BFA (British Franchise Association) said: “The results of the FSB’s SBI for Q2 make for gloomy reading but the results of our latest survey demonstrate unequivocally that there is still a way to own and run your own business, safely and profitably in the UK. The franchise sector is not just surviving but thriving and we truly believe that franchising is the future rout to successful small business ownership in the UK.”
To find out more about owning your own franchise visit www.thebfa.org