‘FRANCHISING IN BRITAIN’ SERIES

L
NA
The Lloyds Bank Plc/IFRC Franchising in

FR
O

AN
I
AT
Britain series comprised 3 volumes:

CH
RN

IS
TE

E
IN
Vol.1
RE

E
TR
SE
1 Prospective Franchisees, (Hatcliffe,
AR

N
CE
CH
Mills, Purdy & Stanworth), 1995

2 Franchising in Figures, (Purdy,

Stanworth & Hatcliffe), 1996

THE INTERNATIONAL FRANCHISE 3 Secrets of Success, (Silvester,

RESEARCH CENTRE (IFRC) 1993-2007
University of Westminster, London, UK.
"The International Franchise Research
Centre (IFRC) is committed to
improving the understanding of
franchising. This is achieved by the
publication of impartial research and
by the encouragement of informed
debate."
Franchising operates in a dynamic environ-
ment, with new issues and challenges
emerging, including: globalisation, coping
with competition, disclosure, industry
regulation, managing relations with
franchisee associations, franchisee
recruitment & market saturation.
Stanworth, Purdy & Hatcliffe), 1996
Vol.2
1 Cloning Success, (Silvester,
Stanworth, Purdy & Hatcliffe), 1997
2 Franchising Your Business: Getting
Started, (Stanworth, Purdy &
Hatcliffe), 1998. A more recent version
- I franchised my business, so can you
(2002) - is also available.
3 Franchisee Success: Perceptions &
Barriers, (Nunn, Stanworth, Purdy,
Thomas & Hatcliffe), 1998
Vol.3

Against this backdrop, the IFRC was
established in 1993 by Professor John
Stanworth (Director of the Future of Work
Research Group at the University of
Westminster), supported by Brian Smith (ex-
BFA Chairman, franchisee, franchisor and
author), and Chair of its Steering Group.
FOUNDER MEMBERS
Founder members and sponsors included:
Barclays Bank, the British Franchise
Association (BFA), Dyno-Rod, Franchise
Development Services Ltd., Lloyds Bank
(now Lloyds Banking Group), Mail Boxes
Etc., Midland Bank (now HSBC), Prontaprint,
Rosemary Conley Diet & Fitness Clubs,
Royal Bank of Scotland, The Swinton Group,
and Wragge & Co.
1 Fifth Annual Strategy Seminar:
Breaking Out Of The Home Market,
(Stanworth & Purdy, Eds., papers by
McCosker, Scott, Hoy & Harris), 1998
2 Franchising: The Gender Dimension,
(Nunn, Purdy, Stanworth & Hatcliffe),
1998
Web versions
The above reports are now available online,
in Acrobat format, published January 2011,
via http://www.scribd.com/SME_Research
LIABILITY DISCLAIMER
The information and analysis in each report
is offered in good faith. However, neither the
publishers, the project sponsors, nor the
author/s, accept any liability for losses or
damages which could arise for those who
choose to act upon the information or
analysis contained herein.

International Franchise Research Centre Lloyds Bank Franchising In Britain - Web Versions 2011 p.1
OTHER PUBLICATIONS
The IFRC published extensively, including
journal articles, book chapters, conference
papers and a Special Studies Series (also
available via http://www.scribd.com/
SME_Research):
1 The Blenheim/University of
Westminster Franchise Survey: Spring
1993, 1993
2 Improving Small Business Survival
Rates via Franchising: The Role of the
Banks in Europe, 1993
3 Targeting Potential Franchisees:
Industry Sector Backgrounds and
Declared Areas of Interest, 1994
4 The Impact of Franchising on the
Development Prospects of Small &
Medium-sized Enterprises (SMEs) in
Europe, 1994
5 The Blenheim/University of
Westminster Franchise Survey: A
Comparison of UK and US Data, 1995
6 Developing a Diagnostic
Questionnaire as an Aid to Franchisee
Selection, 1995
7 Franchising as a Source of
Technology-transfer to Developing
Economies, 1995
8 Aspects of Franchisee Recruitment,
1996
9 Business Format Franchising:
Innovation & Creativity or Replication
& Conformity ?, 1996
10 London: A Capital City For Franchisee
Recruitment, 1997
11 The Effectiveness of Franchise
Exhibitions in the United Kingdom,
1997
12 Franchising: Breaking Into European
Union Markets, 1998
13 Succeeding As A Franchisor,
published jointly with Business Link
London Central), 1998
International Franchise Research Centre
14 Direct Selling: Its Location in a
Franchise Typology, 1999
15 Unravelling the Evidence on
Franchise System Survivability, 1999
16 Survey: Professional Services For
Franchising In The U.K., 2001
ACADEMIC LINKS
Close links were fostered with universities in
Rome and Pisa (Italy), Haute Alsace
(France) and Boston, Minneapolis and
Texas (USA), with a view to research
collaboration. Professor Pat Kaufmann of
Atlanta, Georgia, addressed our inaugural
annual strategy seminar, in 1994. Overseas
speakers in subsequent years included
Cheryl Babcock, Director of the Franchising
Institute, University of St. Thomas,
Minneapolis (1995), Professor Rajiv Dant,
University of Boston (1996), Professor
Francine Lafontaine, University of Michigan
(1997), Professor Claude Nègre, University
of Haute Alsace (1997), Colin McCosker,
University of Southern Queensland (1998),
Professor Frank Hoy, University of Texas at
El Paso (1998), Professor Jack Nevin,
University of Wisconsin-Madison (1999),
Professor Tom Wotruba, San Diego State
University (1999), Professor Bruce Walker,
University of Missouri, (2000), and,
Professor Wilke English, University of Mary
Hardin-Baylor (2000).
IFRC members were active supporters of the
International Society of Franchising, and
hosted the ISoF 2005 conference in London.
The IFRC ceased its research activities in
2007, when John Stanworth took retirement.
John Stanworth, Emeritus Professor,
University of Westminster
http://www.westminster.ac.uk/schools/
business
David Purdy, Visiting Fellow,
Kingston University
http://business.kingston.ac.uk/sbrc
January 2011
Lloyds Bank Franchising In Britain - Web Versions 2011 p.2
AUTHORS
Mark Hatcliffe is the national franchise
manager for Lloyds Bank Plc, based at their
UK Retail Banking Headquarters in Bristol.
He is responsible for their strategic
development in franchising.
David Purdy is a researcher supporting the
Future of Work Research Group. He has
specialised in small business research since
1985, and publications include authorship of
‘Risk Capital for Small Firms’, commissioned
by the Small Business Research Trust. He
has also co-authored studies investigating
Small Business Management Development
and Teleworking.
John Stanworth is the director of the
International Franchise Research Centre
and has been engaged in research into
franchising since the mid-1970s. He also
leads the Future of Work Research Group,
based at the University of Westminster, which
has a record of specialist research in
Teleworking, Small Business Development
and Human Resource Management. Studies
have been undertaken for many clients,
including The Department of Trade &
Industry, The Department for Education and
The Economic & Social Research Council.
Lloyds Bank plc/IFRC Franchising in Figures (1996)
LLOYDS BANK PLC/IFRC
FRANCHISING IN BRITAIN REPORTS
The Lloyds Bank Plc/IFRC report comprises 3
constituent Issues each year, focusing upon
franchisors, franchisees and franchising more
broadly. This second issue (Vol.1, No.2)
focuses upon the structure of franchising in
the U.K. The data has been derived from an
analysis of the main industry sources which
regularly publish detailed information on
individual franchises.
INTERNATIONAL FRANCHISE RESEARCH CENTRE
The International Franchise Research Centre
(IFRC) is committed to improving the
understanding of franchising. This is achieved
by the publication of impartial research and
by the encouragement of informed debate.
Membership is suitable for anyone with an
interest in franchising and further details are
available from the address on the rear cover.
ACKNOWLEDGEMENTS
The International Franchise Research Centre
is particularly pleased to acknowledge the
generous support provided by Lloyds Bank
Plc in sponsoring the research, analysis and
presentation of this report. However, it is
important to note that any opinions expressed
in this publication are not necessarily those of
Lloyds Bank Plc.
1
EXECUTIVE SUMMARY
Franchising is a topic which regularly catches
the eye of journalists and which receives
substantial press coverage. This is perhaps
not really surprising since the concept
encapsulates a whole range of business
interests at one go. For instance, it offers an
avenue into self-employment for would-be
franchisees. At the same time, it allows the
possibility of someone with a good idea
growing into a large business by means of
becoming a franchisor. Alternatively, it can
appeal to established large companies who
may wish to revitalise one of more of their
product or service lines by means of
‘conversion’ to franchising.
Despite the current popularity of franchising,
and the attention it attracts, our knowledge of
the industry is still rather threadbare. Very
little research of any quality has been carried
out and much of what has been undertaken
has been repetitive or undertaken largely with
the intention of attracting publicity rather than
informing good quality decision-making.
This current report, funded by the Franchise
Section of Lloyds Bank Plc, and produced in
collaboration with the International Franchise
Research Centre of the University of
Westminster, represents an important step in
the movement towards constructing a more
detailed and accurate picture of franchising in
Britain than any earlier research has ever
achieved. The intention is that each
succeeding report will build upon the
knowledge which earlier reports have
revealed rather than simply repeating it for
publicity or update purposes.
There has never previously been total
agreement even on the number of franchise
systems in existence in Britain at any one
time. The problem here lies partly with the
fact that there are no official government
statistics on franchising in Britain, nor any
country in the world now, including the USA.
Additionally, where businesses become
involved in the early stages of franchise
system development but then fail to get
established, there is debate on whether or not
they should ever be included in franchise
statistics.
The database which we have assembled in
order to produce this current report is not yet
2 Lloyds Bank plc/IFRC Franchising in Figures (1996)
perfect but is, beyond doubt, the most
accurate and comprehensive ever assembled
in Britain to date and has benefited greatly
from access to data assembled by The
Franchise World Directory (published by
Franchise World magazine), The Business
Franchise Handbook (Blenheim Publications
Ltd.) and The United Kingdom Franchise
Directory (Franchise Development Services
Ltd.). These 3 sources vary in their
comprehensiveness and range and also
overlap somewhat. None of these sources is
considered absolutely complete and, in
addition to making use of them, considerable
additional efforts of our own have been
expended in data cleansing, clarification and
reformulation.
Our findings show that there are at least 566
franchise systems operative in Britain. This
figure is arrived at only after excluding 63
companies for reasons of either apparent
absence of franchised outlets, lack of
available information or extreme youth.
Interestingly enough, 14 of these appeared in
at least 2 of the above directories. These 566
franchise systems operate 32,350 franchised
and 16,600 company-owned outlets (48,950
outlets in total). The published franchise
outlet size data for several companies were
amended where we were aware of the
inclusion of non-UK outlets.
A number of the analyses here include
comparisons between the portions of the
industry falling inside and outside the
influence of the leading representative body,
the British Franchise Association (BFA).
Accordingly, the sample comprises 127 BFA
members (22% of the above 566 systems), of
which 70 are full members, 27 associate
members, and 30 provisional members. It
should be noted that, whilst we believe the
representation in the ‘full’ and ‘associate’
groups is materially correct, we are aware
that the ‘provisional’ membership is under-
represented.
Industry sources indicate that, after a period
of astonishingly rapid growth in the 1980s,
franchising in Britain is currently going
through a period of ‘consolidation’ in the
1990s, having grown by a modest 12 per cent
in the period 1990-95 (£5.25bn to £5.9bn). If
the figures were to be adjusted to allow for
the effects of inflation, then we should see
British franchise industry turnover even
having contracted modestly during this period
from £5.25bn in 1990 to slightly less than
£5bn in 1995, calculated at 1990 prices.
However, despite this period of overall
consolidation, and things appearing to remain
very much ‘as they were’, we find that there
has in fact been considerable churning and
dynamism below the relatively calm water
line.
The picture which emerges is one of a fairly
calm and stable ‘core’ to the industry plus a
more turbulent ‘tail’ or outer ring. For
instance, the 12 largest franchise companies
(only 2% of the total) account for 12,599
(39%) of all franchise outlets. Against that,
30% of franchise systems have 5 or less
outlets and 43% have 10 outlets or less.
Given that more than 2 in every 5 franchise
systems in Britain have 10 outlets or less, it
can been seen that, if the smaller franchise
companies can grasp the growth nettle, we
could be looking at substantial growth by the
year 2000.
Overall, franchise companies have
approximately 1 company-owned outlet for
every 2 franchised outlets. However, much of
the company ownership is concentrated
amongst a relatively small number of
companies, particularly in the fields of beer
and milk distribution. By way of contrast, 23%
of franchise systems have no company-
owned outlets, 59% have none or 1, and 70%
have none, 1, or 2 company-owned outlets.
There is a similar polarisation when it comes
to the time lag between company foundation
and first franchise sale. Here 52% sold their
first franchise either during the year of
company foundation or, alternatively, the very
next year, whereas 23% displayed a gap of
more than 5 years, and 13% more than 10
years. We believe that, in the vast majority of
cases, the period in question amounts to the
period spent piloting the business which was
subsequently offered for sale by means of
franchising.
In our efforts to construct a database, it was
noticeable that accurate and precise
information on companies was not always
readily forthcoming. In nearly one case in
every six, the information signposting
"AOR" (Available on Request) appeared. In
the USA, UFOCs (Uniform Franchise Offering
Circulars) have emerged with statutory
Lloyds Bank plc/IFRC Franchising in Figures (1996)
backing in order to increase ‘transparency’ or
availability of information to those considering
purchasing a franchise. Previous research
published by the University of Westminster
indicates that comprehensive data on start-up
costs and potential franchisee earnings are a
relative rarity rather than the norm. Thus, if
the British franchise industry hopes to see
self-regulation rather than statutory-regulation
as the driving force for the industry in the
future, standards here may have to become
an increasingly vital issue.
SUMMARY OF FIGURES
The following text, and some supplementary
detail, is shown adjacent to the corresponding
figures.
■ Figure 1 shows that the most important
franchise sector, in terms of numbers of
franchise systems, is ‘Business Services’,
followed by ‘Specialised’, ‘Food
Franchising’, ‘Home Care Services’,
‘Motorist Services’, ‘Property Care’, ‘Walk-
in Retail’, Distribution Services’, ‘Cleaning
Services’, ‘Health and Beauty’, ‘Estate
Services’, ‘Leisure and Travel’, ‘Delivery/
Haulage’ and, finally, ‘Fast Print’. The
common element linking almost all
franchise activities is their service element
which bodes well for the growth potential
of franchising in an increasingly service-
oriented economy.
■ Figure 2 shows that many franchise
systems are fairly small in terms of
numbers of franchise outlets. In fact, 43%
have 10 outlets or less, 59% have 20
outlets or less and 79% have 50 outlets or
less. Against that, 11% have in excess of
100 outlets.
■ Figure 3 looks at the numbers of outlets in
the ownership of the franchise companies
themselves and demonstrates that most
franchise companies have few, if any,
outlets themselves. For example, 23%
have no company-owned outlets, 59%
have one or less and 70% have two or
less. Against that, 22% have 5 or more
company-owned outlets.
■ Figure 4 points to the relative youth of
many of the franchise systems currently
trading in Britain. Over half (57%) of
3
 franchise systems known to be franchising
in January 1995 have been managing
franchisees only since 1990 (based on the
date of first sale). At the other extreme of
the range, nearly one-third commenced
their franchise operation in 1988 or earlier.
■ Figure 5 indicates the lag between
company foundation and year of first
franchisee recruitment. Usually, this will
represent the period of piloting though
there may be specific cases where this is
not so. As the statistics demonstrate, 52%
of companies sold franchises in the year
of foundation or the year following. At the
other extreme, nearly a quarter had been
in operation for at least five years before
selling franchises.
■ Figures 6, 7, 8 and 9 show the sector
breakdown produced earlier in Figure 1
but, this time, broken down in a manner
allowing comparison of BFA members and
non-members and, also, different
categories of BFA membership. From
Figures 6 and 7, we can see that BFA
membership is spread fairly evenly across
the range of sectors and is similar to that
of non-members, albeit with strengths in
‘Cleaning Services’ and ‘Delivery/Haulage’
and an under-representation in
‘Specialised’ franchises. Figures 8 and 9
indicate a more complex picture with
‘Associate’ and ‘Provisional’ member firms
compensating for weaknesses in full
membership in some sectors. For
example, in ‘Business Services’, the BFA
is highly reliant upon ‘Associate’ and
‘Provisional’ members to bring it up to
strength. The same is true of the
‘Specialised’ and ‘Walk-in Retail’ sectors.
The reverse is true of sectors such as
‘Home Care Services’, ‘Distribution
Services’ and ‘Cleaning Services’.
■ Figures 10, 11, 12 and 13 examine the
spread of franchise outlets over the
sectors with reference to BFA
membership. Figures 10 and 11
demonstrate that over half of the total
franchised outlets of BFA member
companies lie in the fields of ‘Food
Franchising’ and ‘Distribution Services’.
Figures 12 and 13, on the other hand,
display dramatic variation between
different grades of BFA membership. The
associate and provisional categories are
4 Lloyds Bank plc/IFRC Franchising in Figures (1996)
often strong where the full member
category is weak, for instance, in
‘Business Services’ and ‘Health & Beauty’.
The opposite is true in the ‘Food
Franchising’ and ‘Distribution Services’
sectors.
■ Figures 14, 15, 16 and 17 examine the
spread of company-owned outlets over the
sectors with reference to BFA member-
ship. Figures 14 and 15 demonstrate that
80% of BFA-member company-owned
outlets and 73% of those of non-BFA-
members are located in 3 sectors:
‘Distribution Services’, ‘Food Franchising’
and ‘Walk-in Retail’. Figures 16 and 17
show sharp differences across the 3
categories of BFA membership.
■ Figures 18 and 19 show typical overall
franchisee start-up costs against
categories of BFA membership. Here we
find fairly strong links. For instance,
looking at the ‘less than £10k’ category,
we find only 7% of full BFA member
franchises here, compared with 19% for
associate members, 37% for provisional
members and 39% for non-members.
Conversely, if we look at franchises
costing £100k and over (Figure 19), we
find 18% of full-BFA member franchises
here compared with 7% of associate
member franchises, 3% of provisional
member franchises and 3% of non-BFA
member franchises.
■ Figures 20 and 21 demonstrate sector
differences across typical overall
franchisee start-up costs, the greatest
differences being ‘Business Services’,
‘Food Franchising’ and ‘Fast Print’, with
the former offering many low cost
franchises and the latter 2 offering
typically high cost franchises.
■ Finally, Figures 22, 23, 24 and 25
demonstrate the time lag between first
franchise sale and categories of BFA
membership. Comparing BFA members to
non-members (Figures 22 and 23) we see
almost no difference. For instance, we see
53% of BFA members first selling
franchises in the year of foundation or
within 1 year. The comparable figure for
non-members is 52%. If we look at firms
with a gap of six or more years, the
statistics are 25% for BFA members and
 23% for non-members. Once we look at
different categories of BFA membership,
dramatic differences do appear (Figures
24 and 25). For example, looking at
systems which franchised within 1 year of
foundation, we find only 42% of full
members, 60% of associate members and
73% of provisional members. Looking at
firms with a gap of six of more years, we
find 35% of full BFA members, 14% of
associate members and only 10% of
provisional members.

Lloyds Bank plc/IFRC Franchising in Figures (1996) 5

 Figure 1: U.K. Franchisors - Sector Breakdown (% of 566 systems)

Fast Print
Leisure/Travel 2%
3%

Delivery/Haulage
Estate Services 2%
4% Business Services
■ Figure 1 shows that the most
19%
important franchise sector, in terms
of numbers of franchise systems, is
‘Business Services’, followed by Health & Beauty
‘Specialised’, ‘Food Franchising’, 5%
‘Home Care Services’, ‘Motorist
Services’, ‘Property Care’, ‘Walk-in
Retail’, Distribution Services’, Cleaning Services
‘Cleaning Services’, ‘Health and 5%
Beauty’, ‘Estate Services’, ‘Leisure
and Travel’, ‘Delivery/Haulage’ and,
Specialised
finally, ‘Fast Print’.
10%
■ The common element linking almost Distribution Services
all franchise activities is their service 6%
element which bodes well for the
growth potential of franchising in an
increasingly service-oriented
economy.
Walk-in Retail Food Franchising
8% 9%

Property Care Home Care Services

8% 8%
Motorist Services
8%
 Figure 2: Distribution of Franchise Outlets per U.K. Franchise System

Franchisors Cumulated
1-5 Franchise Outlets........................... 171 30.2% 30%
■ Figure 2 shows that many franchise 6-10...................................................... 75 13.3% 43% median = 50%
systems are fairly small in terms of 11-20.................................................... 86 15.2% 59% ~ 14 Outlets
numbers of franchise outlets. In fact, 21-50.................................................... 113 20.0% 79%
43% have 10 outlets or less, 59% 51-100.................................................. 58 10.2% 89%
have 20 outlets or less and 79%
101-200................................................ 35 6.2% 95%
have 50 outlets or less. Against that,
11% have in excess of 100 outlets. 201-500................................................ 19 3.4% 98%
501-1,000............................................. 4 0.7% 99%
■ Figure 3 looks at the numbers of 1,001+.................................................. 5 0.9% 100%
outlets in the ownership of the
franchise companies themselves TOTAL 566 100.0%
and demonstrates that most
franchise companies have few, if
Excluding Franchisors having: i) a 1995 date shown for the sale of the first
any, outlets themselves. For
example, 23% have no company- franchise outlet, or, ii) no franchise outlets
owned outlets, 59% have one or
less and 70% have two or less. By
contrast, 22% have 5 or more Figure 3: Distribution of Company Outlets per U.K. Franchise System
company-owned outlets.

■ The median is the mid-point of a

Franchisors Cumulated
distribution, where 50% of the No Company Outlets............................ 129 22.8% 23% median = 50%
sample has a greater value than the 1 Company Outlet................................ 204 36.0% 59%
median value, and the other 50%, a 2........................................................... 64 11.3% 70%
lesser value. In Figure 2, for 3........................................................... 25 4.4% 75%
example, the median lies at
4........................................................... 19 3.4% 78%
approximately 14 franchise outlets.
Because of the measurement bands 5........................................................... 11 1.9% 80%
selected, a precise median cannot 6-10...................................................... 39 6.9% 87%
be obtained directly from the tables, 11 plus................................................. 75 13.3% 100%
but the underlining in Figures 2, 3, 4
and 5 indicates approximately where TOTAL 566 100.0%
the median lies for each
measurement.
 Figure 4: Year of First Franchisee Recruitment for U.K. Franchise Systems

Franchisors Cumulated
First franchisee sale in 1994................. 82 14.5% 14%
1993..................................................... 79 14.0% 28%
1992..................................................... 57 10.1% 39%
■ Figure 4 points to the relative youth 1991..................................................... 56 9.9% 48% median = 50%
of many of the franchise systems 1990..................................................... 48 8.5% 57%
currently trading in Britain. Over half 1989..................................................... 32 5.7% 63%
(57%) of franchise systems known
1988..................................................... 19 3.4% 66%
to be franchising in January 1995
had begun managing franchisees 1987..................................................... 25 4.4% 70%
only in the 1990s (based on the sale 1986..................................................... 30 5.3% 76%
of the first outlet to a franchisee). At 1985..................................................... 22 3.9% 80%
the other extreme of the range, Between 1980-4................................... 73 12.9% 92%
nearly one-third commenced their Between 1975-9................................... 13 2.3% 95%
franchise operation in 1988 or Before 1975.......................................... 21 3.7% 98%
earlier. Data not available................................ 9 1.6% 100%
■ Figure 5 indicates the lag between
company foundation and year of first TOTAL 566 100.0%
franchisee recruitment. Usually, this
will represent the period of piloting
though there may be specific cases Figure 5: Time Lag Between Company Foundation and
where this is not so. As the statistics Year of First Franchisee Recruitment
demonstrate, 52% of companies
sold franchises in the year of
foundation or the year following. At Franchisors Cumulated
the other extreme, nearly a quarter Same Year (Foundation/sale)............... 190 33.6% 34% median = 50%
had been in operation for at least 1 Year lag............................................. 102 18.0% 52%
five years before selling franchises. 2........................................................... 46 8.1% 60%
3........................................................... 27 4.8% 64%
4........................................................... 31 5.5% 70%
5........................................................... 23 4.1% 74%
6-10 Years............................................ 56 9.9% 84%
11+ Years............................................. 75 13.3% 97%
Data not available................................ 16 2.8% 100%

TOTAL 566 100.0%

 Figure 6: Number of U.K. Franchisors - Sector vs. BFA Membership

107
■ Figures 6, 7, 8 and 9 show the
sector breakdown produced earlier
in Figure 1 but, this time, broken
down in a manner allowing 82
comparison of BFA members and
non-members and, also, different
categories of BFA membership.
58

■ From Figures 6 and 7, we can see

49
that BFA membership is spread
fairly evenly across the range of 47
120
sectors and is similar to that of non- 25 47
members, albeit with strengths in 47
‘Cleaning Services’ and ‘Delivery/ 45
100
Haulage’ and an under-
Business Services
representation in ‘Specialised’
Specialised 36
franchises.
Food Franchising 80
31
Home Care Services
Motorist Services 30 Number
Property Care 60 of
24 Franchisors
Walk-in Retail

Distribution Services 19 40
Cleaning Services

Health & Beauty

14
20
Estate Services 12

Leisure/Travel
0
Delivery/Haulage
ALL (566)
Fast Print
Non-members
BFA Members
 Figure 7: U.K. Franchisors - Sector vs. BFA Membership (%)

19%
20%

10%

9%
8%
8% 20%
8%
18%
8%

Business Services 16%

10% 6%
Specialised
14%
Food Franchising
5%
Home Care Services 12%
5% Proportion
Motorist Services
of Sample/
10%
Property Care Sub-sample
4% (BFA Status)
Walk-in Retail 8%
Distribution Services 3%
6%
Cleaning Services
2% 4%
Health & Beauty

Estate Services 2% 2%

Leisure/Travel
-
Delivery/Haulage
ALL (566)
Fast Print
Non-members
BFA Members
 Figure 8: Number of U.K. Franchisors - Sector vs. BFA Membership Classes

107

■ Figures 8 and 9 indicate a more

complex picture with ‘Associate’ and 82
‘Provisional’ member firms
compensating for weaknesses in full
membership in some sectors. For 58
example, in ‘Business Services’, the
BFA is highly reliant upon 49
120
‘Associate’ and ‘Provisional’ 47
members to bring it up to strength. 47
The same is true of the ‘Specialised’ 47
100
and ‘Walk-in Retail’ sectors. The 45
reverse is true of sectors such as 7
11 7
‘Home Care Services’, ‘Distribution 36 80
Services’ and ‘Cleaning Services’. Business Services
Specialised
31
Number
Food Franchising 30
60 of
Home Care Services Franchisors
Motorist Services 24
Property Care 40
19
Walk-in Retail
Distribution Services 14
20
Cleaning Services
12
Health & Beauty
0
Estate Services

Leisure/Travel ALL (566)

Delivery/Haulage Non-
Full members
Fast Print
Associate
Provisional
 Figure 9: U.K. Franchisors - Sector vs. BFA Membership Classes (%)

37%

26%
19%

40%
10%

9% 35%
8%
8% 30%
8%
8%
Business Services 25%
Specialised 13% 6% Proportion
Food Franchising of Sample/
20%
5% Sub-sample
Home Care Services
(BFA Status)
Motorist Services 5%
15%
Property Care 4%
Walk-in Retail
3% 10%
Distribution Services
Cleaning Services 2% 5%
Health & Beauty 2%
-
Estate Services

Leisure/Travel ALL (566)

Delivery/Haulage Non-
Full members
Fast Print
Associate
Provisional
 Figure 10: Number of U.K. Franchise Outlets - Sector vs. BFA Membership

7,358

■ Figures 10, 11, 12 and 13 examine

the spread of franchise outlets over 5,122
the sectors with reference to BFA
membership.
3,874 4,294
■ Out of a total of 32,350 franchised 3,484
outlets associated with the sample,
12,974 (40%) belonged to BFA
members. 2,685 8,000

2,415
■ Figures 10 and 11 demonstrate that 7,000
over half (53%) of the total 2,145
franchised outlets of BFA member Food Franchising
2,008 6,000
companies lie in the fields of ‘Food Distribution Services
Franchising’ and ‘Distribution Specialised
Services’. Business Services 1,384 5,000

Motorist Services Number

1,136 of
4,000
Cleaning Services Franchise
994 Outlets
Walk-in Retail
884 3,000
Health & Beauty

Delivery/Haulage 809
2,000
Home Care Services
632
Property Care 1,000
484
Leisure/Travel
0
Fast Print
ALL (32,350)
Estate Services
Non-members

BFA Members
 Figure 11: U.K. Franchise Outlets - Sector vs. BFA Membership (%)

27%
23%
26%

20% 16%

13%

30%
8%

7%
12% 25%
Food Franchising 7%
Distribution Services 6%
Specialised 20%
Business Services 4%
Motorist Services Proportion
4% of Sample/
15%
Cleaning Services Sub-sample
3% (BFA Status)
Walk-in Retail

Health & Beauty 3% 10%

Delivery/Haulage 3%
Home Care Services
2% 5%
Property Care
1%
Leisure/Travel
-
Fast Print
ALL (32,350)
Estate Services
Non-members

BFA Members
 Figure 12: Number of U.K. Franchise Outlets - Sector vs. BFA Membership Classes

7,358

■ Figures 12 and 13, on the other

hand, display dramatic variation 5,122
between different grades of BFA
membership. The associate and 3,874 4,294
provisional categories are often
strong where the full member 3,477 3,879
category is weak in, for instance, 3,246 8,000
‘Business Services’ and ‘Health &
2,685
Beauty’. The opposite is true in the 7,000
‘Food Franchising’ and 2,415
‘Distribution Services’ sectors.
2,145 6,000
2,008
Food Franchising 5,000
1,321
Distribution Services 1,384
Number
Specialised 4,000 of
1,136
Business Services Franchisors
Motorist Services 994
3,000
Cleaning Services 884
Walk-in Retail 809 2,000
Health & Beauty
632
Delivery/Haulage 1,000
Home Care Services 484
0
Property Care

Leisure/Travel
ALL (32,350)
Fast Print Non-members
Full
Estate Services
Associate
Provisional
 Figure 13: Number of U.K. Franchise Outlets - Sector vs. BFA Membership Classes (%)

30%

23%
20%
29%

27%
16%

13% 35%

30%
8%
7%
25%
7%
Food Franchising 6%
Distribution Services 20% Proportion
Specialised 4% of Sample/
Sub-sample
Business Services 4% 15% (BFA Status)
Motorist Services
3%
Cleaning Services
3% 10%
Walk-in Retail
3%
Health & Beauty

Delivery/Haulage 2% 5%

Home Care Services 1%

-
Property Care

Leisure/Travel
ALL (32,350)
Fast Print Non-members
Full
Estate Services
Associate
Provisional
 Figure 14: Number of U.K. Company Outlets - Sector vs. BFA Membership

6,352

■ Figures 14, 15, 16 and 17 examine

the spread of company-owned 4,544
4,222
outlets over the sectors with
reference to BFA membership.

■ Out of a total of 16,600 company-

owned outlets associated with the 3,070
sample, 7,785 (47%) belonged to
BFA members. 7,000
1,801

■ Figures 14 and 15 demonstrate that 6,000

80% of BFA-member company- 905
owned outlets and 73% of those of Distribution Services

non-BFA-members are located in 3 Food Franchising 620

5,000
sectors: ‘Distribution Services’, Walk-in Retail 593
‘Food Franchising’ and ‘Walk-in Specialised
442
Retail’. 4,000 Number
Health & Beauty
426 of
Motorist Services Company
352 Outlets
Business Services 3,000
267
Leisure/Travel
164 2,000
Home Care Services

Estate Services 73
1,000
Delivery/Haulage 51

Property Care 10 0
Cleaning Services
ALL (16,600)
Fast Print
Non-members

BFA Members
 Figure 15: U.K. Company Outlets - Sector vs. BFA Membership (%)

48%

38%

39%

27% 27%

17%
50%
11%
14%
45%

5% 40%
Distribution Services
Food Franchising 4%
35%
Walk-in Retail 4%
Specialised 30%
3%
Health & Beauty Proportion
3% of Sample/
25%
Motorist Services Sub-sample
2% (BFA Status)
Business Services 20%
Leisure/Travel
2%
15%
Home Care Services 1%

Estate Services 10%

Delivery/Haulage 5%

Property Care
-
Cleaning Services
ALL (16,600)
Fast Print
Non-members

BFA Members
 Figure 16: No. of U.K. Company Outlets - Sector vs. BFA Membership Classes

6,352

■ Figures 16 and 17 show sharp

differences across the 3 4,544
4,222
categories of BFA membership.

3,039
7,000

1,801
6,000

905
5,000
620
Distribution Services
593
Food Franchising 4,000
442 Number
Walk-in Retail of
Specialised 426 Franchisors
3,000
Health & Beauty 352
Motorist Services 267
Business Services 2,000
164
Leisure/Travel
73
Home Care Services 1,000
51
Estate Services
10 0
Delivery/Haulage

Property Care
ALL (16,600)
Cleaning Services Non-members
Full
Fast Print
Associate
Provisional
 Figure 17: No. of U.K. Company Outlets - Sector vs. BFA Membership Classes (%)

68%

48%

38%
41%

27%
70%

32%
60%
11%

5% 50%

Distribution Services 4%
Food Franchising 4% 40% Proportion
Walk-in Retail 3% of Sample/
Sub-sample
Specialised 3%
30% (BFA Status)
Health & Beauty 2%
Motorist Services
2%
Business Services 20%
1%
Leisure/Travel

Home Care Services 10%

Estate Services
-
Delivery/Haulage

Property Care
ALL (16,600)
Cleaning Services Non-members
Full
Fast Print
Associate
Provisional
 Figure 18: Typical Overall Franchisee Start-up Cost vs. BFA Membership Classes

191

■ Figures 18 and 19 show typical

overall franchisee start-up costs 170
against categories of BFA
membership. Here we find fairly 144
strong links. For instance, looking at
the ‘less than £10k’ category, we 200
find only 7% of full BFA member
franchises have compared with 19% 109 180
for associate members, 37% for
provisional members and 39% for 160
86
non-members. Conversely, if we
look at franchises costing £100k and 140
over (Figure 19), we find 18% of full-
BFA member franchises here 54
120
compared with 7% of associate 52 Number
member franchises, 3% of 100 of
Franchisors
provisional member franchises and 37 80
3% of non-BFA member franchises.
26 63
60
Less than £10k

13 55 40
£10k - £19.99k
4
20
£20k - £49.99k 1
0
£50k - £99.99k

£100k - £249.99k ALL (566)

Non-members
£250k+
Full

No data Associate

Provisional
 Figure 19: Typical Overall Franchisee Start-up Cost vs. BFA Membership Classes (%)

37%

39%

34%

30% 40%

35%

25%
30%

25%

Proportion
of Sample/
15% 20%
Sub-sample
(BFA Status)
14%
15%

Less than £10k

9% 10%
£10k - £19.99k
5%
£20k - £49.99k 13%
5% -
£50k - £99.99k
11%

£100k - £249.99k Provisional

1%
Associate
£250k+
Full

No data Non-members

ALL (566)
 Figure 20: Typical Overall Franchisee Start-up Cost - 'Top 6' Sectors

191

■ Figures 20 and 21 demonstrate

sector differences across typical
overall franchisee start-up costs, for 144
the most predominant franchises
(based on the number of different 200
systems in each sector). The
greatest variation in start-up costs 180
are between ‘Business
86
Services’ (107 systems overall in the 160
sector), ‘Food Franchising’ (49
systems) and ‘Fast Print’ (12 48 140

systems, not shown, but 50% in the

52 120
£100k-£249k band) - with the former
offering many low cost franchises Number
100 of
and the latter 2 offering typically Franchisors
high cost franchises. 26
80

60
4
ALL (566) 40

Business Services 20

Specialised 0

Food Franchising
Less than £10k

Property Care £10k - £19.99k

£20k - £49.99k
Home Care Services
£50k - £99.99k

Walk-in Retail £100k - £249.99k

£250k+
 Figure 21: Typical Overall Franchisee Start-up Cost - 'Top 6' Sectors (%)

45% 8% (Specialised: <£10k)

34%

34%

45%
25% 36%
31% 38%
40%

35%
15%
27% 30%

9% 25% Proportion
of Sample/
Sub-sample
20% (Sector)
5% 18%
22%
15%

1%
10%
ALL (566)

Business Services 5%

Specialised -

Food Franchising
Less than £10k

Property Care £10k - £19.99k

£20k - £49.99k
Home Care Services
£50k - £99.99k

Walk-in Retail £100k - £249.99k

£250k+
 Figure 22: U.K. Franchisors - Time Lag between Foundation & First Franchise Sale vs. BFA Membership

■ Finally, Figures 22, 23, 24 and 25 190

demonstrate the time lag between
first franchise sale and categories of
BFA membership.
152
■ Comparing BFA members to non-
members (Figures 22 and 23) we
see almost no difference. For
instance, there are 53% of BFA
102
members first selling franchises in
the year of foundation or within 1
200
year. The comparable figure for non-
members is 52%. If we look at firms
180
with a gap of six or more years, the
statistics are 25% for BFA members 160
38 46
and 23% for non-members.
140

Same Year (Foundation/sale) 27 120

Number
1 Year lag
31
100 of
Franchisors
2 56 80
23 75

3 60

40
4
20
5
0

6-10 Years 19
ALL (566)

11+ Years Non-members

BFA Members
 Figure 23: U.K. Franchisors - Time Lag between Foundation & First Franchise Sale vs. BFA Membership (%)

34%
35%

30%

23% 18%

17% 35%

30%

8%
25%

Same Year (Foundation/sale) 5%

20% Proportion
1 Year lag
5% of Sample/
Sub-sample
10% 15% (BFA Status)
2 13%
4%

3 10%
15%

4
5%

5
-

6-10 Years
ALL (566)

11+ Years Non-members

BFA Members
 Figure 24: U.K. Franchisors - Time Lag between Foundation & First Franchise Sale vs. BFA Membership Classes

190

■ Looking at different categories of

BFA membership, then dramatic
152
differences do appear (Figures 24
and 25). For example, for systems
which franchised within 1 year of
foundation (‘within 1 year’ may fall
within a range of 12-24 months), 102 200
only 42% of full members, 60% of
associate members and 73% of 180
provisional members. But for firms
with a gap of six of more years, we 160
find 35% of full BFA members, 14%
of associate members and only 10% 46 140

of provisional members.
18 120

27 Number
8 100 of
12 31 Franchisors
56 75 80
Same Year (Foundation/sale)
23
60
1 Year lag

56 40
2

20
3

0
4
15
5 ALL (566)

Non-members
6-10 Years
Full

11+ Years Associate

Provisional
 Figure 25: U.K. Franchisors - Time Lag between Foundation & First Franchise Sale vs. BFA Membership Classes (%)

34%
35%
40%

30%
33% 26%
30%
40%
18%

17% 35%

16%
30%

8%
25%
Proportion
5% of Sample/
20%
5% Sub-sample
(BFA Status)
21%
Same Year (Foundation/sale) 10% 15%
4% 13%
1 Year lag
13% 10%
2
5%
3

-
4

5 ALL (566)

Non-members
6-10 Years
Full

11+ Years Associate

Provisional