Franchising Market Report 2010
Key Note Publications Ltd, February 2010, Pages: 109
This Market Report examines the UK franchising market, which has proved to be fairly resilient during the recession. Franchising covers almost every area of the economy, so, as well as being well represented in the UK, it is also fairly robust. Although the total value of the market was estimated to have fallen in 2009, both the number of franchisors and the number of franchised units continued to rise, which, given the depth of the recession, is considered extraordinary by some.
More than 20 new franchises were launched during 2009. The authors estimate that, allowing for some closures, the total number of franchisors in the UK rose by 2% in 2009. For historical reasons, the market is split into dairy and non-dairy franchises. In 2009, there were an estimated 35,015 non-dairy franchised units and around 2,000 dairy units.
The whole philosophy of franchising revolves around brands and their profiles. Some of the most famous business names in the UK operate as franchises, including: The Body Shop, Cartridge World, Domino's Pizzas, Dyno-Rod, KFC, McDonald's, Minster Cleaning, Molly Maid, Northwood, Prontaprint, Snappy Snaps, Subway and Thorntons.
The turnover of the franchising industry was estimated to have decreased by 7% in 2009, to £10.6bn, which resulted in a decline in profitability. Although many franchisors and franchisees have remained in business during the recession, they have seen their profit margins decline.
The investment required in a franchise varies considerably, from as little as £5,000 to more than £250,000. However, many franchises seem to require an investment of around £15,000 to £20,000.
The profile of franchisees is changing; for example, the numbers of women and Asians taking up franchises in the UK is increasing. This trend is also reflected in the nature of some of the newer franchises, such as those based around ethnic and oriental foods. Another feature of the industry is the growing trend among UK franchisors to set up overseas.
The authors forecast a marginal increase in franchising turnover for 2010, with the number of franchised units and also the number of franchised systems continuing to grow ahead of turnover.
Executive Summary
1. Market Definition
REPORT COVERAGE
MARKET SECTORS
Franchise Types
Investment Franchise
Management Franchise
Executive Franchise
Retail Franchise
Distribution Franchise
Mobile-Servicing or Job Franchise
MARKET TRENDS
Contracting Market Size
More Franchisors
Growth in Resales
Variable Profitability
Growth in Multi-Franchises
Internationalisation of Franchising
ECONOMIC TRENDS
Population
Table 1.1: UK Resident Population Estimates by Sex (000), Mid-Years 2004-2008
Gross Domestic Product
Table 1.2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2004-2008
Inflation
Table 1.3: UK Rate of Inflation (%), 2004-2008
Unemployment
Table 1.4: Actual Number of Unemployed Persons in the UK (million), 2004-2008
MARKET POSITION
2. Market Size
THE TOTAL MARKET
By Gross Annual Turnover
Table 2.1: The Total UK Franchising Market by Gross Annual Turnover (£bn), 1999-2009
By Franchised Units
Table 2.2: Total Number of Franchised Units in the UK (excluding dairy), 1999-2009
Table 2.3: Total Number of Franchised Units in the UK (excluding dairy) by Sector, 2005-2009
Figure 2.1: Estimated Total Number of Franchised Units in the UK (excluding dairy) by Sector (%), 2009
Franchised Systems
Table 2.4: Total Number of Franchised Systems in the UK (excluding dairy) by Sector, 2005-2009
OVERSEAS ACTIVITY
3. Industry Background
RECENT HISTORY
NUMBER OF FRANCHISORS
EMPLOYMENT
Table 3.1: Total Number of People Employed in the Franchising Industry (excluding dairy) in the UK (000), 2001-2009
REGIONAL VARIATIONS IN THE MARKETPLACE
Table 3.2: Regional Distribution of Franchised Units (%), 2008
HOW ROBUST IS THE MARKET?
LEGISLATION
EU Competition Law
UK Competition Act
Trade Mark Act
Consumer Protection From Unfair Trading Regulations
KEY TRADE ASSOCIATIONS
British Franchise Association
The Franchise Alliance
4. Competitor Analysis
THE MARKETPLACE
MARKET LEADERS
Dairy
Dairy Crest Group PLC
Property and Maintenance Services/Home Improvements
Table 4.1: Selected UK Building Services Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Complete Weed Control Ltd
Countrywide Grounds Maintenance Ltd
Dyno-Rod Ltd
Freedom Group Ltd
Hotels and Catering
Table 4.2: Selected UK Catering Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
BurgerKing Ltd
Domino’s Pizza Group Ltd
Fast Food Systems Ltd (Southern Fried Chicken)
Kentucky Fried Chicken (Great Britain) Ltd
McDonald’s Restaurants Ltd
Wimpy GB Ltd
Other Companies
Cleaning and Renovation Services
Table 4.3: Selected UK Cleaning Services Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Chem-Dry UK Ltd
Jani-King (GB) Ltd
Molly Maid UK Ltd
Rainbow International Ltd
ServiceMaster Ltd
Other Companies
Commercial Services
Table 4.4: Selected UK Commercial Services Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Pirtek (UK) Ltd
Recognition Express Ltd
Stockcheck Ltd
TaxAssist Accountants Ltd
Thebestof.co.uk
Other Companies
Direct Selling/Distribution
Table 4.5: Selected UK Direct Selling/Distribution Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Card Connection Ltd
Card Line Greetings Ltd
The Global Travel Group Ltd
The Original Poster Company Ltd
Oscar Pet Foods Ltd
Riverford Organic Vegetables Ltd
Trophy Pet Foods Ltd
Other Companies
Domestic, Personal and Caring Services
Table 4.6: Selected UK Domestic, Personal and Caring Services Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Barking Mad Ltd
Bluebird Care Group Ltd
Pressing Matters Ironing Service Ltd
Rosemary Conley Diet & Fitness Clubs Ltd
Surecare Community Services Ltd
Other Companies
Employment Agencies, Executive Search, Management Consultancy, Training and Teaching
Table 4.7: Selected UK Employment, Search, Management Consultancy, Training and Teaching Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
CNA Executive Search Ltd
Expense Reduction Analysts International Ltd
Helen O’Grady (Children’s) Drama Ltd
Pitman Training Group PLC
Select Appointments Ltd
Stagecoach Theatre Arts PLC
Tumble Tots (UK) Ltd
Other Companies
Estate Agents, Business Transfer Agents, Financial-Services Providers and Mortgage Brokers
Table 4.8: Selected UK Estate Agent, Business-Transfer Agent, Financial-Services Provider and Mortgage Broker Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Bairstow Eves Countrywide
Belvoir Property Management (UK) Ltd
Martin & Co (UK) Ltd
Other Companies
Parcel and Courier Services
FedEx UK Ltd
Interlink Express Parcels Ltd
Other Companies
Printing, Design and Signage
Table 4.9: Selected UK Printing, Design and Signage Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Kall-Kwik UK Ltd
PDC Copyprint Ltd
Prontaprint Ltd
Other Companies
Retailing
Table 4.10: Selected UK Retailing Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
Bargain Booze Holdings Ltd
The Body Shop International PLC
In-Toto Kitchens Ltd
Sevenoaks Sound & Vision Ltd
Snappy Snaps Franchises Ltd
Thorntons PLC
Other Companies
Vehicle Services
Table 4.11: Selected UK Vehicle Services Franchisors by Number of Franchised Outlets and Total Investment Cost (number and £), 2009
ChipsAway International Ltd
Superseal International
Vendo PLC
Other Companies
MARKETING ACTIVITY
Exhibitions
5. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
6. Buying Behaviour
CHARACTERISTICS OF FRANCHISEES
WHAT FRANCHISORS LOOK FOR
7. Current Issues
CURRENT MARKET CONDITIONS
NEW ENTRANTS
Hotels and Catering
Property/Home Improvements
Health and Fitness
Retailing
Personal Care
Commercial Services
Cleaning
CORPORATE DEVELOPMENTS
8. The Global Market
OVERVIEW
9. Forecasts
INTRODUCTION
Economic Outlook
Table 9.1: Forecasts for the UK Economy (%, million and 000), 2009-2013
FORECASTS 2010 TO 2014
Table 9.2: The Forecast UK Franchising Market by Gross Annual Turnover, Franchised Units and Franchised Systems (£bn and number,) 2010-2014
MARKET GROWTH
Figure 9.1: Growth in the UK Franchising Market by Gross Annual Turnover (£bn) 2005-2014
FUTURE TRENDS
10. Company Profiles
Countrywide Grounds Maintenance Ltd
Dairy Crest Group PLC
Domino’s Pizza Group Ltd
McDonald’s Restaurants Ltd
Pirtek (UK) Ltd
Prontaprint Ltd
Select Appointments Ltd
Wimpy GB Ltd
11. Further Sources
Associations
Publications
General Sources
Government Publications
Other Sources
Key Note Sources
Key Note Research
The Key Note Range of Reports
- Countrywide Grounds Maintenance Ltd
- Dairy Crest Group PLC
- Domino’s Pizza Group Ltd
- McDonald’s Restaurants Ltd
- Pirtek (UK) Ltd
- Prontaprint Ltd
- Select Appointments Ltd
- Wimpy GB Ltd
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