Millions of people dream of business ownership, dream to ditch the nine to five lifestyle and regain control of their careers, becoming their own boss. For most of them, the dream never becomes a reality. And most of them, it’s the same reasons – lack of security, anxiety at the prospect of failure, and lack of awareness of where to even start. Starting up a business from scratch comes with many risks and beginner mistakes, even for avid entrepreneurs. But there are actually several routes to business ownership. You can start up a business from scratch as discussed, you can buy an existing business – expensive but cashflow from day one – or you can invest in a franchise.
What is franchising?
Franchising refers to a method of business expansion where a business owner will license out the rights to trade to a third party – such as you. The investor (the entrepreneur purchasing the rights to trade) gets exclusive rights to run the business in their own area for the duration of the renewable franchise agreement.
The main benefit of franchising for the franchisor is increased awareness f their brand – through scaling their business, brand and operations throughout a greater area. Through royalty fees, the franchisor builds on their capital. The main benefit for the franchisee – the person investing – is access to a proven brand name, a business in a box (everything is included for the franchise investment, such as equipment, starting stock etc), and ultimately, a more successful route to business ownership. Franchising benefits both parties greatly, and as a franchise network grows, so does the authority of the brand and its success. There are many successful franchise brands in the UK, McDonalds, Wiltshire Farm Foods and OSCAR Pet Foods to name a few.
Top Franchise Opportunities of 2023
According to the British Franchise Association and NatWest 2018 franchising survey, just 1% of franchisees failed in the surveyed period due to commercial failure. A staggering 93% of franchisees claimed to be profitable – a figure which isn’t too far off the 79% profitability rate claimed by Yell Business’s “Take The Leap” survey for the business startup counterpart, but it is important to emphasise that there are many benefits of franchising over starting up a business alone, from increased purchasing power to a proven business model and full training and support. Here are some of the top franchises to invest in, in 2023, based on profitability, demand and range of opportunities available.
Food Franchises Have Demonstrated Resilience
Despite the global COVID pandemic and recent economic struggles across the UK, food franchises have continued to demonstrate resilience and demand. It was thanks to delivery franchises and businesses that the public were able to continue ordering from local restaurants and businesses. Many food businesses were able to adapt, sustaining profit and turnover via the additional revenue streams opened up during the pandemic.
Food franchises are widely regarded as one of the most profitable types of franchises in the UK and there are a number of entry points available which mean businesses can start from a number of budgets. Kiosk based businesses are growing in popularity thanks to their lower footprint, lower operating costs whilst retaining good turnover in high footfall areas. Typically a kiosk based food franchise – or the growing in popularity Bubble Tea kiosk franchises – can be started from as little as £40,000 investment. Premises based franchises in the food sector typically cost upwards of £200,000. Regardless of the type of business model selected, franchisees benefit from training and support provided by the franchisor plus access to partners and suppliers who are able to offer competitive prices on products and services thanks to group purchasing power.
Pet Franchises are in Growing Demand
In the UK, over 60% of the population has at least one pet according to 2023 statistics. Up from 52% from recent surveys, this figure saw rise over the COVID pandemic. This is an attractive figure for investors looking to buy a franchise, given that regardless of their territory size, they can expect at least half of it as prospective customers. With over 30 million cats and dogs in the UK in 2023, services rendered for these types of pets remain the top choice for franchise owners. That said, pet franchise opportunities are very diverse and many pet sitting franchises are able to cater for a range of different animals. Pet food supply franchises remain one of the best types of businesses, able to cater for (no pun intended) a wide range of clients and animals (including exotic).
Demand For Care Franchises Will Never Die
A service which will always be in demand is healthcare. Amongst the most profitable types of franchises for sale in the UK, home care and care home franchises are in equal, recession-proof demand. Thanks to advances in medicine and healthcare, longer life expectancies and a growing population in general, the need for healthcare continues to rise.
Whilst both of these top types of franchises are in strong demand, home care franchises are the most popular choice amongst entrepreneurs looking to get in to business ownership namely because of their flexibility when it comes to running the business. Home care franchises are normally operated management style. Management franchise opportunities in the UK can often be run from home because the franchisee’s responsibility will be managing a workforce of carers. Not needing any healthcare experience makes home care franchises attractive to anyone looking to get into the world of business ownership. It is the carers who carry out the work, whilst the responsibilities of the franchisee include marketing the business, recruiting staff and establishing a client base within the territory.
Home care franchises can typically be started from under £30,000. Home based, your main expenses will be marketing the business and recruiting staff. A similar figure should be retained in working capital so you can continue marketing the business until a return on investment has been achieved. Care home franchises will often be in the region of £60,000 assuming you already own care home premises.
Franchising – A Top Choice for Entrepreneurs
Franchising is a well supported sector in the UK thanks to the high profitability and success rate. The supportive framework that is franchising means entrepreneurs can get into business “for themselves but not by themselves”, with almost every country across the world having a franchise association. In the UK, the British Franchise Association has partnered with many banks, lenders and partners who are in favour of franchising. As such, many high street banks can lend up to 70% of the franchise investment, putting in reach the prospect of business ownership to many who would otherwise feel stuck in employment. Franchisors are eager to find the right fit for their franchise network, and won’t try to “sell” franchises to people. In relation, franchise consultants are eager to help those looking to buy a franchise and those looking to franchise their franchise their business, making sure the right choices are made by both parties.
From franchising exhibitions to associations, franchise solicitors, award ceremonies and consultancy firms, franchising is a well supported route to business ownership and is one that should be explored by anyone looking to go down that route. Covered in this article are just a few different types of franchises but in fact there are over 1,000 franchises in the UK – some can be invested for less than £5,000 total investment. Could you be a business owner this time next year? Discover franchising and that dream could soon become a reality.
