The British Franchise Association (BFA) and NIC Services Group, the survey sponsors, have published the results of the 2024 National Franchise Survey, which for the first time is housed in the British Franchise Journal.
Pip Wilkins
The results of the survey revealed that the franchise sector contributes £19.1bn to the UK economy (an increase of £1.9bn since 2018), with an average turnover per franchise unit of £400,000.
The survey, the first to be published by the BFA since 2018, is the 32nd to be conducted by the association. The independent survey saw franchisors and franchisees of the BFA complete an online survey, with further interviews with directors and managers of franchises and franchisees, to give a fully comprehensive result.
In 2024, 1,009 franchise systems were operating (an 8% increase since 2018) with 50,421 franchise units, compared to 48,600 units in 2018, resulting in an increase of 4%.
The survey found that 89% of franchised units are profitable and those operating over five years are 60% highly or quite profitable.
Despite the huge impact of Covid-19, 66% of franchisors reported better trading than pre-pandemic levels. However, there has been a significant shift in work locations since the pandemic, with 50% of franchisees now operating from home.
Franchisors surveyed said they were optimistic about the outlook for the future of the sector with 87% expecting improvement in their company’s conditions and 53% expecting better general economic conditions. 65% of franchisors anticipated at least one unit resale in the next 12 months, an increase on 51% in 2018.
Significant growth has been seen in both the personal services and the hotel and catering sectors, which have increased by 53% and 34% respectively since the last survey. Conversely, transport/vehicle services and store retailing have noted declines of 34% and 25%.
Franchisees remain largely happy with 82% satisfied with their franchisors and 60% feeling their franchisor has met their expectations.
On the question of diversity and inclusion, 50% of franchisors recognise the importance of a diverse team. However, smaller operations may struggle due to limited resources.
Comments
John Spencer, chairman of NIC Services Group, a commercial cleaning and support services franchise, said: “As the former chairman of the BFA and with over 25 years’ experience in the franchising sector, I am delighted to be sponsoring the British Franchise Journal.
John Spencer
“The results highlight the fact that franchising continues to thrive, adapting as it does so well in times of economic adversity. The survey and journal provide a comprehensive overview of the UK franchise sector, and we hope it makes interesting reading for those both in and outside of the sector.”
Pip Wilkins, chief executive of the BFA, concurred: “The results of the survey make for gratifying reading. Since our last survey in 2018, the UK’s economy has weathered some of the toughest of storms and, like many UK businesses, we have seen our fair share of losses.
“However, as the survey demonstrates, we are bouncing back, with 66% of franchisors reporting better trading than pre-pandemic and 87% of franchisors are actively expecting an improvement in their company’s conditions.
“I would like to thank John and NIC Services Group for their generous sponsorship of this survey and the British Franchise Journal and their valuable ongoing support of the sector.”
The British Franchise Journal, celebrating the results of the survey, is available from the BFA website.
* A full report on the National Franchise Survey 2024 will be published in the next issue of Franchise World magazine.
Posted: 4th October, 2024