American dream

American dream

It is generally accepted the US is some years ahead of the UK in the
development of franchising. They did of course start a lot earlier than
most of us over here and have forged ahead, putting franchising on
the map around the globe. Many of the basic principles of business format franchising have been forged in the US but have been greatly refined here by the British Franchise Association (bfa) and others within the UK franchising industry. In fact, most of the trends and changes that have occurred in the UK could be previously witnessed in the US and so it is with reasonably certainty we can say that if it is happening across the pond it will happen here shortly.

The longevity of US franchising means many individual franchises are
mature and owners are selling their businesses on to new franchisees; in fact, many businesses will have been sold on several times over. In America the number of resale transactions each year is equivalent to 11 per cent of the entire franchise industry*, which, when you think about it, means each franchise will have about a 10-year life cycle and that can't be too far from logical reality.

Given the tendency for franchising statistics to be replicated over here in due course it will not be long before UK resale activity will reach this kind of level. There are about 32,000* individual franchise operations in the UK, so applying the American percentage we could be seeing some 3000 franchise resales occurring each year. This will present a wonderful opportunity for prospective purchasers seeking a less risky way of acquiring a franchise and enabling more people to realise their dream of operating their own business through franchising.

* Source - Frandata & Natwest/bfa survey
.
The domestic franchise industry has historically followed trends from its more developed US cousin.