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Franchising Market Report 2005
Key Note Publications Ltd, April 2005
This report examines the UK franchising market, although it excludes two kinds of business relationships that are similar to, but not the same as, franchising. These are motor vehicle dealerships and tenancy agreements in the public house industry.
UK franchising forms a significant component of the economy, with the turnover of the franchising industry in 2004 standing at an estimated £9.82bn. It has historically formed an innovative part of the economy, often introducing new products and services to the public. Franchising is particularly strong in retailing, food and business-to-business services.
Franchising is still an attractive proposition for individuals who want to run their own business. They are able to invest in a known brand where the business concept has already been tried and tested in the marketplace. Franchising is increasingly appealing to people who are aged 45 and over. These are individuals who have taken early retirement or who desire a change of direction in their career. More women are entering the franchising sector, which has traditionally been a masculine arena.
Two major trends are emerging in the industry. The first is that the market is maturing. At the same time, the length of time that most individuals have spent as a franchisee is also increasing, which has led to increased stability in the industry. However, the more negative market trend is that franchisers are finding it increasingly difficult to recruit new franchisees.
The franchising sector is attracting some new entrants, especially in the areas of food, health, leisure and personal services. Foreign entrants into the market are also proving important.
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