Driven by the UK’s entrepreneurial spirit and with 90% of franchisees reporting profitability1, it's easy to understand why franchising is experiencing significant growth.
Latest figures show franchising contributes £17.2bn a year to the country's economy, while also employing 710,000 people, and Barclays is lending its support to continue the sector's success.
Barclays has been working with franchising clients for many years now, but in 2018 it launched a specialist Franchising team. The team, led by Tony Geary, National Head of Business Development, is sharing its industry knowledge, expertise and insights with both franchisors and franchisees, as well as providing the vital financial support they need.
Much to offer
Tony believes Barclays has much to offer the franchising sector: “We’ve been around for 300-plus years as a bank, so we have a wealth of knowledge,” he says. “We also provide local business managers – someone on the ground you can meet face-to-face, which can be extremely important to some businesses when they're starting out.
Our experience means we know what we're looking for in a franchisee – someone with the relevant skills or experience
“Franchisees are offered bespoke credit terms, bespoke pricing and a single point of contact from our Franchising team. And our experience means we know what we're looking for in a franchisee – someone with the relevant skills or experience plus a detailed business plan, particularly around working capital requirements.”
Tony adds: “Fundamentally, franchising is a partnership, and at Barclays we have something to offer both sides of that partnership – a package that's helped us to build successful relationships with franchisors and helps franchisees to achieve their entrepreneurial ambition.”
One of Tony’s first actions has been to appoint Liahll Bruce as Franchise Development Manager to work with franchises across the UK.
Liahll says: “Franchising has become an attractive proposition as people see the value of being self-employed but partnering with businesses that can support them with the strength of their brands, networks and market experience.
“Among franchisees we've seen a recent trend for diversifying portfolios,” he says. Traditionally, the franchisee investor model was to expand the number of franchises with the same brand, but now there's increased appetite for cross-sector investment; for example, operating both fast-food and retail businesses.
“This could be down to a desire to limit exposure to a downturn in any one sector, or awareness that a franchisee has good transferable management skills.”
While the franchise model has historically been most commonly seen in the retail, hospitality and leisure sectors, Barclays is seeing growth in all types of franchising industries and Liahll is confident there are opportunities opening up for new players in this space. One example is business services, where outsourced accountancy, consultancy or similar services are proving increasingly popular with SMEs.
Sustainable franchise model
For would-be franchisors, Liahll explains, it's important to first invest some time in understanding what's involved. “Historically, some brands have focused simply on collecting their franchise fee rather than on building a sustainable franchise model that works over the long term.”
To address this, recruiting franchisees that are the right fit is obviously vital. And once a good match is made, continued training and support for a franchisee will also bolster their chances of success.
If a business already operates other franchises, their performance will of course be a good guide to the support it can offer future franchisees and expand its franchised operations.
Concluding Liahll says: “Barclays is working hard to deliver what its clients need – something I'm passionate about – and to identify new franchising opportunities and ways to support the sector.”
Find out more about our Franchising team, visit https://www.barclays.co.uk/business-banking/brokers/franchisees