Request Callback

How Big Is the Franchising Industry?

You’ll have heard about why you should consider buying a franchise business, but you might question whether it’s a viable opportunity for you. What is the landscape for the franchising industry truly like? Thankfully, it’s thriving. Stats about franchising have revealed that this sector contributed over £17bn to the UK economy in 2018 – an increase of £2bn since 2015.

This wasn’t the only interesting figure to be revealed by the 2018 Franchise landscape report. Here, we paint the picture of the industry – from how big the UK franchise market is to the franchise trends for 2019.

Franchise market size

Units and franchisees

Number of Franchises U.K - Rainbow Int

Number of franchised units (000s)

To answer, ‘how many franchises are there in the UK?’, there is an estimated 48,600 units in Britain. This is a record for the sector, and also almost twice as many than there was 25 years ago. The number of franchise business owners is around 20,000, with the increase in units attributed to the fact that approximately 36% of franchisees own multiple ones.

Multi-unit ownership

In terms of owning multiple units, 9.6% of franchisees run six or more. This rise in popularity is likely down to the position of influence these franchisees manage to gain. Already owning one franchise means they have more bargaining power when buying another franchise, and also have the opportunity to purchase the most profitable units.

Sectors

You can expect the most profitability with the personal services and store retailing industries. They are the fastest-growing sectors in the franchise industry, achieving 6% and 7% growth respectively. The ones most commonly chosen by potential franchisees are personal, property, and business and commercial services. These types, such as specialist cleaning and restoration, are thriving as they are something people recognise as a need and not a want.

Franchising trends

Sex

Other patterns are in terms of demographics. For example, the franchise trend for 2019 appears to be the rise of the female. Whilst male franchise owners are dominant at 70%, around 65% of franchise unit employees are female. In addition, there is an increase in the number of female franchisees, jumping up by 20% since 2015 to 37%.

Age

This female popularity is particularly common among the under-30s – 52% of new franchisees within this age range are women. Franchisees under 30 are increasing in general, accounting for 18% of all franchisees. Whilst the typical age of a franchise business owner is 40, this proves that age or sex does not necessarily impact on success.

International locations

Running international operations is rising as well, with one in three franchisors doing so. We can expect this number to grow: 4% have it in their business plan, and 30% are considering it. This means the amount of franchise opportunities available should also increase in the future.

Regional distribution

There are plenty of franchises prevalent in the UK. The South East and West Midlands have historically been popular, but the last two decades have seen the number available to buy rise all over the country. This is in both rural and urban areas, with the latter being particularly popular.

Franchisee success

Employee numbers

Franchising Success - Rainbow International

Total number employed in UK franchising (000s)

 

Collectively in the UK, there are over 700,000 people working for franchises. Around 50% do so full-time, allowing a variety of different working requirements to be met. As this benefits both the business and employees, satisfaction levels are on the increase too.

Failure rates

The large employee numbers can be accredited to the chances of franchisee failure being incredibly low. About half of all non-franchised startups fail within five years, but less than 1% of franchises do. And those that do don’t necessarily shut down completely – often they are resold. Taking over an existing franchise business is particularly common (roughly half are resales) because of the mature systems involved in franchising.

Profitability

With franchise success comes higher earnings. Over 93% claim they are profitable, and above 50% are turning over more than £250,000 annually. A select few exceed the £2m figure. 20% also turned over more than the franchisor led them to expect. A record 14% of all franchisees say that they are highly profitable, and those who have been running for more than five years is slightly higher (19%). These factors have resulted in further increased levels of franchisee satisfaction.

Franchisee fulfilment

Homeworking

A happy work-life balance is a common reason to pick the franchisee life. And many can be operated from home, with the statistics showing that this is currently the case for 29% of franchisees (if you exclude those franchises that require a shop or retail premises, like retail businesses).

Franchisee relationship

Another big contributor to franchisee satisfaction is their relationship with the franchisor. Most are content with it: 48% find it excellent, and a further 31% deem it good. The top three benefits enjoyed were the support provided by the franchisor, perception of quality by others, and the adaptability of the standardised model they are given.

Choosing a franchisee

Other advantages many franchisees hope for include appearing as a larger business, sustainability, and less risk as you won’t be running the company by yourself. Whatever your reasons for wanting to buy a franchise business, you should make sure the franchisor can provide exactly the right amount of support for you.

Partner with Rainbow

Rainbow can offer an endless list of benefits. We’ve been operating for over three decades, making us one of the most established names in the industry. You’ll profit from our brand, allowing your franchise business to reap the rewards from the get-go.

With a five-week training course followed by an intensive 100-day launch support programme, along with continuous training and support, you’ll never be alone in ensuring the success of your franchise, but you’ll still have the freedom to make it your own.

We have territories available all over the UK too, so you can choose one that’s in perfect proximity to you. To discover more information about the hot franchises for 2019, request a callback from one of our team today.