The franchise industry is in robust health, with a third of potential franchisees planning to invest up to £30,000 in the right opportunity over the next 12 months, new research has revealed.The survey, by Bibby Financial Services, found that two per cent of budding franchisees were aiming to invest up to £50,000 while five per cent were willing to pay out £75,000, should the opportunity arrive.
The future appears bright for the industry, which survived last year’s economic downturn almost totally unscathed. Nearly four in ten potential franchisees feel their prospects will improve over the next year, with a further 18 per cent believing the sector will expand significantly.
Few wannabe franchisees feel the government’s current policies have any impact at all on franchising, with just nine per cent saying that ministers have harmed the industry.
Almost half of existing franchisors polled said that they key to business success was to have a versatile product or service, while cash flow management, a unique business concept and a positive attitude were also popular responses.
A quarter of those questioned said that, above all else, franchisees need an effective marketing campaign in order to succeed.
David Robertson, chief executive of Bibby Financial Services, said that the franchise sector has evolved into a £9.5 billion industry providing over 326,000 jobs.
“Compared to starting up a business on your own, franchising can provide a relatively safe route.
“The success rate of franchise businesses speaks for itself – 600,000 businesses start up in the UK each year, of which, one fifth of these will cease trading in the first 12 months.
“In comparison, franchised firms have a success rate of 90 per cent – and that’s after five years of trading.
“With 91 per cent of franchisees claiming to be profitable, there has never been a better time to take the plunge and invest in the franchise industry,” he said.