The franchise industry in the United Kingdom has demonstrated significant growth over recent years, solidifying its role as a vital component of the national economy. This expansion is evident through various metrics, including economic contributions, employment figures, and the increasing number of franchise units.

Economic Contribution

The franchise sector’s economic impact has been substantial:

• 2018: Contributed approximately £17 billion to the UK economy.
• 2024: Increased to £19.1 billion, marking a 12% rise since 2018.

This upward trajectory underscores the sector’s resilience and its growing importance within the broader economic landscape.

Number of Franchise Systems and Units

The expansion of franchising is further reflected in the rising number of franchise systems and units:

• Franchise Systems: Grew from 935 in 2018 to 1,009, representing a 7.9% increase.
• Franchise Units: Increased by 3.7%, from 48,621 in 2018 to 50,421.

This growth indicates a robust interest in franchising as a viable business model for both franchisors and franchisees.

Employment Impact

Franchising has significantly contributed to job creation:

• Employment Figures: The sector employs over 700,000 individuals across various industries.

This highlights franchising’s role in supporting employment and contributing to the UK’s labour market.

Success and Profitability Rates

Franchising continues to outperform traditional start-ups in terms of success and profitability:

• Success Rate: An impressive 99.5% of franchises succeed, compared to a 50% failure rate among start-ups.
• Profitability: Approximately 89% of franchise units report profitability.

These statistics underscore the stability and potential financial rewards associated with franchising.

Average Turnover

The financial performance of franchise units is noteworthy:

• Average Turnover: Each franchise unit achieves an average turnover of £400,000.

This figure reflects the substantial revenue-generating potential of franchised businesses.

Franchisee Demographics and Expansion

The franchise sector is attracting a diverse range of entrepreneurs:

• Multi-Unit Ownership: Approximately 29% of franchisees operate multiple units, indicating confidence in the franchising model.
• Young Entrepreneurs: One in five new franchisees is under the age of 30, highlighting the model’s appeal to younger demographics.

These trends suggest a dynamic and evolving franchise landscape in the UK.

Conclusion

The franchise industry in the UK has exhibited consistent growth, with significant contributions to the economy, employment, and entrepreneurial activity. High success and profitability rates, coupled with increasing interest from diverse demographics, position franchising as a robust and attractive business model. As the sector continues to expand, it is poised to play an increasingly pivotal role in the UK’s economic future.

For a deeper understanding of the franchise industry and practical advice on navigating the market, explore further resources and articles that provide valuable insights into this thriving sector.