8 Reasons Why Starting a Franchise Is a Great Way to Boost Your Local Economy
Thereís no denying that the UK economy is not at its strongest right now. But if youíre looking for a career change, starting a franchise is a fantastic way to boost your local economy. You can find lots of great reasons why right here.
Starting a franchised business offers many personal benefits. But one that you might have overlooked is how much it can drive economic growth and create jobs in your community. Boosting the local economy is more important than ever, considering the UK is currently facing a magnitude of economic challenges brought on by the COVID-19 crisis. However, there are lots of reasons why starting a franchise unit is a smart idea during a recession, so you shouldnít let this deter you from taking the leap.
Franchising contributes over £17.2 billion and 710,000 jobs to the UK economy (The British Franchise Association/NatWest Franchise Survey 2018). These figures have both increased by 14 percent since 2015. Regional economies have benefited from the franchise industry. Again since 2015, there has been a seven-percent economic growth in the North East, 18 percent in Wales, 11 percent in Yorkshire and 14 percent in the East Midlands. So, itís safe to say that franchising plays a crucial role in the creation and maintenance of jobs and driving the economy in the UK. Letís now look at eight reasons why launching a franchise can positively impact the local economy and create jobs.
1.You get assigned a region to operate in
In the majority of cases, when you become a franchisee you get a specific region designated to you. This means that you have exclusivity to trade in this area and it stops you from competing with the other franchisees.
2. You hire local talent
Next, you can recruit local talent within your region. In doing so, you are proving new employment opportunities that didnít exist before. Unfortunately, due to the pressure put on businesses during lockdown, many employees have faced redundancy, particularly in the hospitality sectors. But this actually presents an opportunity to new franchise unit owners. Letís say you start an exciting new restaurant concept; there is a possibility that there is already going to be highly skilled, talented waiting and management staff seeking employment. Not only does this make life easier for you, but you are also providing jobs and driving economic growth at the same time.
Thanks to franchising, more people are starting their own business and more jobs are being created. These figures show that whatever your background, with the right attitude and ambition you can thrive. Ė Pip Wilkins, Chief Executive of the British Franchise Association (bfa).
3. Support jobs and businesses beyond your direct employees
As well as you providing jobs to people who work at your franchise unit day to day, you are also giving work to the people who are transporting your products, working in warehouses that distribute the supplies and operating the factories that supply the goods. Your everyday ordering of supplies and use of local services boosts the economy in your area. Carl Reader, Joint Chairman at d&t chartered accountants, commended franchising for its positive economic impact.
"Iím delighted to see that once again the franchise world has broken its own barriers. In particular, the whole industry should be celebrating the contribution to the UK economy Ė the GDP contribution and employment numbers prove just how much of a vital role franchising plays in the UK business landscape."
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4. Decreased employee turnover
One of the most under-appreciated sources of financial strain for businesses is the cost of recruiting and training new employees and the loss of productivity in doing so. Lots of franchises help franchisees with hiring staff through tried and tested practices, so you can save money in the recruiting process and be confident you are employing the right people for the job.
5. Your taxes support the local community
The taxes a new franchise unit pays support schools, road repairs and emergency services in the local area. Lots of franchisees also support non-profit organisations, sponsor sports teams, donate to charities and volunteer their employeesí time. This attracts customers to the business, helping ensure it stays afloat, thus keeping money in the community.
6. Fantastic training packages
Many franchise brands have developed comprehensive training packages to educate new franchisees and their employees. After all, the success of your franchise unit means success for the franchisor, so the franchise team usually do all they can to help you succeed.
Having tried and tested, on-the-job training programmes helps people in the local community learn new, useful skills without having to receive a qualification elsewhere. Starting a franchise unit therefore means the local community consists of more skilled workers that earn a better income. This employee training then results in more consumers purchasing the product or service your franchise unit can now offer.
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7. Franchises have a high success rate
Itís thought that almost half of new businesses fail within the first year, while franchise units have a higher survival rate. This is largely down to operating under an established brand with an existing customer base and receiving marketing support. As well as providing a level of security for franchisees, this has also allowed franchising to have a positive growth cycle and become a very lucrative industry.
As franchises have a high success rate, this also means you can continue to grow your business, retain and hire new staff, potentially even expand to more locations, and importantly, continue to contribute to your local economy.
8. You can help other local businesses
The excitement of a new franchise unit opening in the area could bring more interest from consumers in surrounding areas. While visiting, they might then shop at nearby businesses. Often, a franchise unit launching helps other business owners meet their sales goals, which in turn results in them hiring more people and maybe even paying more taxes.
A community affair
Starting a franchise unit will allow you to operate under a brand name with national and perhaps even global recognition, but the beauty of the model is that you still employ local people who then spend their earnings in your local community. If you want to find out more about the franchise opportunites out there, head to our UK franchise directory.
If youíre an existing franchise owner, you might also be interested in how you can boost the economy during the COVID-19 crisis by franchising your business.
Becky Martin, Point Franchise ©
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