Recession pressures do not seem to have affected franchise industry

According to the recent findings from the yearly NatWest/BFA survey, the franchise industry has contributed about £11.4 billion to UK’s GDP in the last year, despite pressures from the recession. It seems that the overall profitability levels continue to be strong and are along the same lines as those which were recorded a year ago.

There has been no change in the number of franchises trading beneficially, which remains at around 90%. It also compares favourably to the last recession which was in 1990 when the percentage of franchises that traded profitably was just 70%.

Turnover levels, however, have reduced a bit by 9% over the last twelve months from £360,000 to £326,000. The economic contribution of the franchise industry to UK’s economy has dropped by 8% considering the 12.4 bn which was recorded in 2007 to the 11.4 bn in 2008. In spite of this, a 5% increase has been recorded which compared to the figures of 10.8 bn in 2006 shows that the present figure is appropriate with historical averages.

Last year saw a wide expansion for many franchises. An increase of 3.6% of the total number of franchises shows that from 809 systems last year, the number has risen to 839 franchise systems this year.