Franchising continues to flourish, despite tough economic times
As the UK franchising sector continues to grow, banks are helping franchisees realise their ambitions and grow their businesses.
This article has been written by Cathryn Hayes, head of HSBC's dedicated Franchise Unit. The unit has been going for over 25 years and continues to work closely with the British Franchise Association (bfa) and its members in the development of ethical franchising.
Recession buster
Research has shown that UK franchise businesses have continued to grow and remain robust despite the recession. The franchise industry contributed £11.8 billion to the economy last year, an increase of £400 million from 2008.
Despite the downturn, many franchisees have continued to expand their operations, ready to take advantage of the opportunities available as the economy recovers. The proven franchise model and ongoing support from the franchisor means that franchisees have been better placed for growth compared to a conventional start up.
In addition, the lower risk profile of the franchise - for home based franchises, flexible franchises, etc, - means that funding is more likely to be available to quality applicants who can demonstrate they have a good understanding of their chosen franchise model, the skills needed to realise the opportunity, and a firm grasp on the financials of the business.
Finance still available for committed and eager potential franchisees
One recent example is Kay Berry, previously a civil servant, who wanted to run her own business. She was attracted to the Costa Coffee franchise for precisely the reasons franchising continues to be successful - it offered her a proven business model and the back-up of a successful franchisor.
Kay started out with her first store in Fleetwood which opened in 2005. Since then she has opened a further six stores in Whitehaven, Workington, Bowness, Keswick, Morecambe and Ambleside, and Costa have actively supported her growth ambitions. But it doesn't stop there!
HSBC recently assisted Kay with finance to open a further two stores and refinance her existing facilities. Finance for further expansion is planned for a year's time. HSBC won Kay's business after she became dissatisfied with her previous bank due to a lack of appetite to support the continued growth of her business and an absence of convenient local branches into which her takings can be paid. In addition, Kay was impressed with HSBC's professionalism and speed of response.
Kay's story shows that with the right product, franchisor support and finance package in place, franchisees can grow and develop their businesses even in the toughest trading conditions.
HSBC's Starting a Franchise Guide has more information on the planning and research required to start a franchise. Free copies are available to download from www.hsbc.co.uk/franchise or contact HSBC's franchise team at franchiseunit@hsbc.com
To view current franchise oppportunities, visit http://www.workingmums.co.uk/franchise-zone/
