Executive Summary
Franchising remains a key and growing component of the wider UK retailing and services market. The number of franchises in the UK is growing annually and the number of sectors covered by franchise operations extends from confectionery to cosmetics and parcel delivery to unblocking drains. Franchising is now a widely recognised way for a brand, either domestic or foreign, to extend its reach and business throughout the UK, and globally in many cases. Franchising is also a major way for entrepreneurs to enter business.
The UK franchise market is growing in terms of the number of businesses, branches and total employment. The market was worth £8.9bn in 1999 in terms of turnover. However, 1999 was an exceptional year due to the fact that Allied Dunbar, the insurance company, franchised its sales force, providing a major boost to the figures. While this has caused an aberration in the last year's figures, it is also a sign of the future, with non-traditional franchising businesses such as financial services looking to franchising business models as a way to reduce overheads and improve margins.
Franchising is also moving in two major directions. Firstly, franchises are becoming increasingly international, with global brands being established such as Domino's Pizza, McDonald's and Jani-King. Secondly, the Internet is having a profound effect on many franchise businesses, from simply establishing web pages to start-up Internet-based franchises.
Europe has been slower than the UK to embrace franchising, although US franchises have successfully penetrated the Continent. However, British companies are in the forefront of the movement to establish franchising across the continent and interest in underdeveloped sectors, such as copy shops, is rising in continental Europe. Fast food restaurants and drugstores, in particular, have been successful franchises in Europe.
In future, the market is expected to continue to grow as more people seek their own businesses and self-employment. Key Note expects the total value of the franchise market to be £10.2bn in 2000, rising to £16.6bn by 2004.
Sixth Edition 2000
Edited by Louis Barfe
ISBN 1-85765-697-0
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