The secondary title is a little misleading. As we all know, franchising is often not smooth sailing, and expansion into new markets always comes with unique challenges particular to the country you are looking to move into. This is no different when looking to expand into the United Kingdom.
However, it doesn't have to be painful--with the right research, help and advice, your transition into the market can be streamlined and successful.
Let's quickly get the elephant in the room out of the way: Brexit. At the time of writing this article, the UK was in limbo, where delaying the departure from the European Union would only be possible if the Parliament approves the Prime Minister's deal.
However, one thing is for certain, the impending removal of the UK from the European Union has not damaged the franchising industry at large in the United Kingdom. In fact, it's veritably booming.
In December 2018, the British Franchise Association released the bfa NatWest Franchise Survey looking at the franchise landscape. What was reported was record-breaking in many areas. While there are around 10,000 business-format franchises in the U.S., the United Kingdom continues to grow, with 935 recognized franchise systems now operating. We're not up to the kind of scale in the U.S., but franchise systems have always increased since we started running the survey more than 20 years ago.
There has also been a 10 percent increase in the number of franchise units in the last three years, with 48,600 franchise units now in operation in the UK--franchising is growing and showing no signs of slowing down. Turnover generated in the franchising industry has also reached record heights, with an annual turnover of [pounds sterling]17.2bn, up [pounds sterling]2.1bn since 2015, and contributing 1 percent to UK GDP. Ninety-three percent of franchisees claimed profitability in 2018 too, with 60 percent of franchise units turning over more than [pounds sterling]250,000 ($330,000) annually. This success is beneficial for the franchisor as well.
There has been a significant increase in multi-unit franchisees since 2015, as people are taking on local businesses and expanding by adding more territories or acquiring units with a different franchise system. This rise, from 29 percent to 36 percent, shows that people are coming into franchising and not only staying, but expanding, highlighting the benefits of the industry.
And back to Brexit--our analysis shows that...