Help the economy - invest in a franchise.
Tens of thousands of people made redundant last year have the potential to play a crucial role in the economy by investing in a franchise – according to Andrew Pearce franchisor and founder of A B C Photography.
Mr Pearce suggests that by investing redundancy packages wisely, people can start their own business without the challenges faced by individual start-up enterprises.
Around 3.7 million people have been made redundant since the recession in 2008 - one in seven of all employees - according to new research.
The average redundancy package, according to the Chartered Institute of Personnel and development, is around £17,000 for public sector workers and in the region of £9000 for private-sector employees. An initial investment in an A B C Photography franchise is as low as £14995 including equipment, training and 2 years franchise fee.
According to the British Franchise Association’s 2011 survey, one in five new franchisees came from unemployment or had recently been made redundant. Mr Pearce confirms that enquiries from redundancy candidates into his franchise operation, A B C Photography, have been on the increase over the last 12 months.
“If more than 100,000 redundant people were able to successfully invest in a franchise they would become a new battalion for the private sector in the battle to grow the country’s economy.” – Business Franchise March 2012.
In spite of continuing economic pressures on the economy as a whole, franchising in the UK continues to expand. This year we see:
- A net increase of 29 systems leading to a total of 929 franchises
- A corresponding increase in the number of units by 4% up to 40,100
- A modest growth in full-time employment in proportion to the increase in units in operation, allied to a real increase in part time jobs; indicative of an industry kept sustainable by its flexible labour resource
- Leading to an overall contribution of £13.4 billion to the economy
Structurally, the industry is maturing with more ‘larger’ systems (100 units+) and indications of a rise in the number of larger franchised units employing more people and with higher turnover.
Although increases in average turnover figures are only incremental (4%) and profitability is only marginal for around half of franchisees, the proportion of loss-making franchisees is less than 1 in 10 for the first time since 2007 and there is less sign of profitability pressure on newer franchisees.
In two-thirds of cases, franchisors make the start-up process more straightforward by rolling all costs together into a single fee. Where there is a single cost, the range is from £14,000 for a Personal Services franchise, up to £105,000 for a Catering franchise.
90% of franchisees have satisfactory relations with their franchisor, the highest proportion recorded over the past ten years.
4 in 5 franchisees (81%) believe they have a competitive advantage (over other small businesses) as the result of running a franchised business. This is particularly true of the customer-facing franchises in Store Retailing and Personal Services. - BFA