Franchising during a Record UK Recession
Joel Caws - Technical Director, Select Your Franchise
I read in a BBC news article this morning that the UK economy contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.
The BBC report continued that this makes this current recession the longest since records began in 1955. This will likely come as bleak news for businesses up and down the country, especially in the retail sector with Christmas approaching.
So how does this news fair in the franchise market?
Historically, franchising has been resilient to recession and while no business, whether franchised or non-franchised, is not without its own risk the general feeling in the industry is still positive. In fact, some of the most popular franchise chains you can see on the high street saw growth during recessionary times.
The heart of a franchise opportunity is its proven system which if followed correctly, coupled with the backing and support of a good franchisor, results in an effective business which should be robust enough to ride out the down times as well as thriving when the economy is on the up.
Franchising could be a good route back into business for many that have already fallen victim of this current downturn, however as with any investment it should be considered and researched carefully. Anyone considering a franchise should take time to meet franchisors of interest, get to know their operation, study their background, speak to their existing franchisees and consult their bank and a good franchise solicitor for further help and support.
For a good list of UK franchises there are many online franchise directories as well as franchise publications and exhibitions that take place across the UK.
Tags: economy, franchise, franchise market, franchising, joel caws, recession
November 28th, 2009 at 6:23 am
Franchising is a proven business model but it never gave false promises of guaranteed 100% success. It is imperative that interested investors, even existing franchisees to do a lot research that will help them minimize failure rates. The success of a franchise business is a combined effort of the franchisor, franchisee, employees and financial institutions. There is a need for transparency for it to work best for the franchisees. One has to consult a proven and reliable Franchise Guide Book to educate and empower one’s self in this kind of business.
November 30th, 2009 at 5:04 pm
Thanks for the addition Jason. Good to see you mentioned transparency as this is an important factor in the process. Its important that prospective franchisees are informed and have done all the research they need to make an informed choice. Transparency from a franchisor encourages trust and confidence in any prospective franchisee.