All you need to know: The rise of the Franchise

21st May 2015

All you need to know: The rise of the Franchise

Over the past 20 years there has been a dramatic shift in the nature of the UK economy as areas such as franchising have grown from a small niche market into a booming industry. According to research by Natwest and the British Franchise Association the franchise industry has boomed with the number of franchised outlets rising from just under 8,000 in 1994 to over 39,000 today. 

Established Brands 

Some of the most recognisable franchised brands are in the fast food sector including the likes of McDonald’s, KFC, Subway, Pizza Hut and Domino’s Pizza. Between them these brands operate almost 5,000 franchised outlets across the UK and are constantly looking to expand. Subway has invested over £200m in the UK market and now has over 2,000 stores. 

Other areas where franchising has become a big player include tutoring, cleaning services, building maintenance and residential lettings. Belvoir is a UK based residential lettings franchise that now has over 160 offices nationwide and is looking to add 40 more by 2018 whilst Tutor Doctor, a leading one-to-one home tutoring service now has over 200 franchisees operating in 15 countries. 

New Franchises 

As well as a multitude of brands already established in the UK there are also a number of new UK based franchise brands such as Creams café, a coffee and ice cream franchise which has 19 locations and is looking to double that number over the next 6 months. 

There are also new franchise opportunities from abroad looking to expand into the UK market including Steak ‘n Shake, an American premium burger restaurant franchise that has over 530 locations in the US, and Smashburger another US based burger restaurant that is looking to open 35 UK locations. 

Investment 

The rising number of franchisees and franchise opportunities has led Allied Irish Bank to create a £50m fund exclusively for lending to establish franchisees in the UK who are looking to expand their operations. According to Gerard O’Keeffe, the head of AIB’s UK business “The franchise market has experienced strong growth and shown itself to be resilient to the challenges of economic cycles”.

If you are interested in finding out more about franchising please feel free to contact us for a free consultation to see how we can assist you with the financial aspects. 

Written by Andy Blake, Senior Accountant

 

 

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