UK Franchises Thrive with 99.5% Success Rate as Small Businesses Struggle
A recent survey by the British Franchise Association (BFA) has revealed that UK franchises continue to flourish despite challenging economic conditions, with a 99.5% success rate in 2024. The data highlights the resilience of franchises compared to independent small businesses, many of which have faced increasing closures and financial pressures.
According to the BFA survey, franchise failures have dropped from 0.9% in 2018 to just 0.5%, showcasing franchises as one of the safest routes to successful small business ownership in the UK. The report arrives amid warnings for small business owners from the Federation of Small Businesses (FSB), whose latest Small Business Index report shows an increasingly pessimistic outlook among UK entrepreneurs.
Fulham-based franchisee Dan Tregoning, who owns three Mathnasium tutoring centres across London, has expanded his business over the past five years with support from his franchisor. Tregoning stated, “Franchising offers an invaluable network and guidance, making it easier to grow, even during turbulent times. Without that support, expanding would have been much harder.” Tregoning’s business now spans Fulham, Notting Hill, and Hammersmith and employs over 50 staff.
The BFA’s survey also found that the UK’s franchise sector has grown significantly since its last independent review in 2018, now comprising 1,009 franchise systems and over 50,000 franchise units, reflecting increases of 7.9% and 3.7%, respectively. Franchise contributions to the UK economy have risen by 12% to £19.1 billion, with 89% of franchise units operating profitably.
Pip Wilkins, Chief Executive of the BFA, noted the findings as an indicator of the franchise sector’s strength amid economic uncertainty: “With rising insolvency rates among independent businesses, our survey shows that franchising offers a viable, profitable model that empowers owners with a network of support and tried-and-tested business strategies.”
Several franchisees shared their experiences of the sector’s resilience, particularly through the COVID-19 pandemic. Ryan White, Managing Director of the pet care franchise We Love Pets, highlighted the sector’s adaptability: “We emerged stronger from the pandemic and now recruit around 20 new franchisees each year, all profitable and passionate about their new roles.”
Franchise success is largely attributed to the support of experienced franchisors, proven business models, and a capacity to respond quickly to market changes. Franchises in personal services sectors—such as pet care, home care, and children’s tutoring—are the fastest-growing, seeing a 53% increase in size since 2018. Domiciliary care franchisee Tim Corry, who operates Guardian Angel Carers in Farnham and Guildford, believes franchising offers a less daunting route into business ownership. “Franchising means having guidance along the way, which makes starting a business feel far more manageable,” he explained.
Despite the overall economic pressures on the UK, franchising remains a growth sector. The BFA survey reported that 65% of franchisors are currently trading above pre-COVID levels, with 87% optimistic about future performance. Franchisee Jasdeep Thandi, who owns four Anytime Fitness gyms, stated, “Franchising has been highly profitable, and I was able to recoup my investment in under a year.”
As the broader economy continues to navigate rising costs and interest rates, franchising appears to offer a beacon of stability and growth for small business ownership, providing a model for success amid wider uncertainty. To find out more about owning your own franchise visit www.thebfa.org
