As the UK looks to its businesses to lead the way to recovery, there are welcome signs of growth in the latest survey by NatWest and the British Franchise Association (bfa). Throughout 2010 franchising has further increased turnover by £600 million (+5%) to £12.4 billion. Franchising accounts for a turnover of approximately £700m in the East of England. Since 2006, the sector’s turnover, and number of franchise systems, have both grown by 15%, despite a UK GDP growth rate of only 9.4% in the same period.

The number of franchise systems operating in the UK has grown to 897 over the past year, increasing the number of franchise business units to 36,900. An extra 56,000 jobs have been created, taking total employment in the sector to 521,000. Franchising is also helping to drive international trade. Around a third of UK franchisors have units located outside of the UK, additionally, 38% of domestic only franchises plan to expand abroad.

Gordon Brock, Regional Director, Business Banking at NatWest, said: “With 87% of franchisors planning to expand in the year ahead, we’re already seeing strong demand for our recently launched £100m franchise fund. We bank more franchise businesses than anyone else so our discounted loans will play an important role in financing further industry growth.”

Four out of five surveyed say being part of the franchise model offers them a competitive advantage over similar businesses that aren’t. Appearing to be a larger business, standardised products/services and quality expectation were cited as the three main advantages. Franchisors also see better prospects for themselves than the rest of the economy, with 75% expecting improvements for their business over the next year while only 31% expect the economy to pick up.