Many aspiring franchisees waste their time targeting the wrong sectors, reveals the FranchiseSales.co.uk quarterly survey.
The global survey of franchisors and franchisees, whose average age is 43 and 80% of whom are male, also revealed the most popular sector among franchise seekers as fast food, remaining recession-proof in times of squeezed incomes and unemployment.
Franchisees
Fast food’s popularity with franchise buyers – 34% of those surveyed are interested in the sector – is unsurprising given that franchise seekers are mindful of difficult trading conditions. Asked what they wanted in a franchise opportunity, 56% of would-be franchisees require a sector that is relatively recession-proof. Almost as important, with 56% affirmative responses, is the potential to become wealthy, followed by a well-known brand name (54%).
Work-from-home franchises, whose low start-up costs and overheads are attractive in tough times, were the second most popular sector - with 31% of respondents interested - followed by distribution (30%), and retail (26%) franchises. One in five (20%) franchise seekers are interested in master franchises – buying rights to sub-franchise within a given territory.
The survey suggests that many franchisees are searching for the wrong kind of franchise. While just 29% of franchise seekers would consider only franchises in which they have experience, 42% of franchisors say experience in the sector was essential. Only 7% indicate that it is unimportant.
Asked to rank in order of importance reasons for choosing franchising rather than starting a business, lower risk of failure was considered the most important, followed by franchisor support, enabling franchisees to focus on their core strengths.
Of those researching franchise opportunities, 47% are impressed with franchisors so far, with only 16% unimpressed. Around a third of franchise seekers use trade and print press to research franchises, while roughly the same proportion visit exhibitions and trade shows.
Franchisor
Franchisors from many sectors ranked in order of importance reasons for adopting franchising as a model for growth. The most important factors were greater efficiency and customer satisfaction, followed by low capital expenditure, enabling businesses to grow rapidly.
The vast majority of franchisors say sales skills, people management skills, administrative skills and ability to raise finance are essential or desirable attributes in prospective franchisees. That nearly half – 49% – consider it essential for franchisees to suggest improvements to the business model is surprising, given the perception that franchisees need only follow a proven formula to succeed.
Franchisors feel a positive impact from the recession concerning franchisee recruitment. Asked to what extent soaring unemployment and redundancies are boosting the pool of available talent, 77.5% say significantly, of which 32.5% say this applies to both the volume and quality of candidates, 25% in terms of volume but not quality, and 20% in terms of only quality.
Thirty-four percent of franchisors use online advertising such as pop-ups and banner ads, but this hasn’t eclipsed old media, with 39% still using trade and other print press and 29% exhibiting at trade shows.
Jump to franchise buyer results
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Profiling Questions
Please select your age group
|
Answer Options
|
Options
|
| 18-25 |
5.4% |
| 26-33 |
15.2% |
| 34-41 |
19.9% |
| 42-49 |
26.9% |
| 50-54 |
15.8% |
| 55 and over |
16.8% |
|
|
What is your gender?
|
Answer Options
|
Options
|
| Male |
84.8% |
| Female |
15.2% |
|
|
What country do you live in?
|
Answer Options
|
Options
|
| Australia |
7.9% |
| Canada |
16.5% |
| France |
0.9% |
| Greece |
0.0% |
| India |
17.6% |
| Ireland |
3.8% |
| Malaysia |
0.9% |
| Mexico |
0.2% |
| New Zealand |
0.2% |
| Portugal |
0.7% |
| Singapore |
0.2% |
| South Africa |
9.7% |
| Spain |
0.9% |
| Thailand |
0.4% |
| UAE |
2.0% |
| UK |
16.3% |
| USA |
6.5% |
| Other |
15.6% |
|
|
Are you a franchisor or franchise buyer?
|
Answer Options
|
Options
|
| Franchisor |
8.1% |
| Franchise Buyer |
91.9% |
|
|
Please rank in order how important the following factors were in choosing to buy a franchise rather than start a business from scratch:
|
Answer Options
|
1 - most important
|
2
|
3
|
4
|
5 - least important
|
| Lower risk of failure |
51.8% |
22.5% |
16.7% |
4.1% |
3.2% |
| Easier to raise finance |
31.9% |
27.5% |
21.1% |
8.8% |
8.8% |
| To avoid stress and long hours of start-up phase |
26.3% |
25.1% |
22.2% |
10.5% |
13.5% |
| Can concentrate on what I do best and leave marketing, etc to franchisor |
33.9% |
26.9% |
21.3% |
7.3% |
7.3% |
| Prefer to follow proven system than having to make tough decisions |
30.1% |
25.7% |
22.8% |
11.1% |
7.0% |
|
|
Which sector(s) are you interested in?
|
Answer Options
|
Options
|
| Advertising/marketing |
11.7% |
| Automotive |
14.7% |
| B2B |
8.6% |
| Beauty |
10.0% |
| Care |
6.9% |
| Childrens |
8.3% |
| Cleaning |
9.2% |
| Consultancy |
12.2% |
| Distribution |
29.7% |
| Finance |
8.9% |
| Fitness |
7.2% |
| Fast Food |
33.9% |
| Food |
30.6% |
| Green |
12.2% |
| Home Services |
13.6% |
| Home Maintenance |
8.9% |
| Internet |
16.1% |
| Leisure |
15.3% |
| Master Franchises |
20.3% |
| Printing/Copy/Design |
9.4% |
| Property |
20.0% |
| Retail |
26.1% |
| Travel |
16.7% |
| Van Based |
10.0% |
| Work From Home |
30.8% |
| Other |
7.2% |
|
|
Which of these statements applies to you when choosing a franchise? (Please tick all that apply)
|
Answer Options
|
Options
|
| The brand name must be well-known |
54.1% |
| It must have the potential to make me very wealthy |
55.5% |
| I must have a significant degree of control over my working hours |
43.7% |
| I must have some experience in the sector |
29.1% |
| The sector must be at least fairly recession-proof |
56.3% |
|
|
How impressed have you been so far with the franchise opportunities you’ve researched?
|
Answer Options
|
Options
|
| Very impressed |
10.6% |
| Fairly impressed |
28.3% |
| Neither impressed nor unimpressed |
30.0% |
| Fairly unimpressed |
9.7% |
| Very unimpressed |
3.6% |
| I've only just started looking/haven't formed an opinion yet |
17.8% |
|
|
What other media are you using to search for franchise opportunities?
|
Answer Options
|
Options
|
| Other online classifieds |
72.3% |
| Trade and other print press |
33.1% |
| TV and radio |
11.4% |
| Exhibitions |
34.3% |
| Other |
6.9% |
|
|
Which sector(s) do you operate in?
|
Answer Options
|
Options
|
| Advertising/marketing |
7.9% |
| Automotive |
13.2% |
| B2B |
5.3% |
| Beauty |
7.9% |
| Care |
2.6% |
| Childrens |
5.3% |
| Cleaning |
0.0% |
| Consultancy |
18.4% |
| Distribution |
13.2% |
| Finance |
13.2% |
| Fitness |
2.6% |
| Fast Food |
18.4% |
| Food |
23.7% |
| Green |
2.6% |
| Home Services |
2.6% |
| Home Maintenance |
0.0% |
| Internet |
2.6% |
| Leisure |
2.6% |
| Master Franchises |
5.3% |
| Printing/Copy/Design |
2.6% |
| Property |
13.2% |
| Retail |
21.1% |
| Travel |
0.0% |
| Van Based |
2.6% |
| Work From Home |
13.2% |
| Other |
13.2% |
|
|
Please rank in order of importance the following factors for choosing franchising as a model for growth:
|
Answer Options
|
1 - most important
|
2
|
3
|
4
|
5 - least important
|
| Low capital expenditure, so easier to grow rapidly |
44.0% |
23.4% |
21.3% |
4.3% |
4.3% |
| Greater efficiency and customer satisfaction |
55.3% |
19.1% |
19.1% |
0.0% |
2.1% |
| Franchisees are more motivated than managers |
38.3% |
25.5% |
19.1% |
4.3% |
6.4% |
| Less catastrophic for a unit to fail than a company-owned store to fail |
29.8% |
25.5% |
23.4% |
8.5% |
4.3% |
| Franchising model suited sector |
31.9% |
29.8% |
12.8% |
6.4% |
10.6% |
|
|
When assessing a prospective franchisee, how important are the following attributes?
|
Answer Options
|
Essential
|
Desirable
|
Helps but not significant
|
Unimportant
|
Undesirable
|
| Experience in the sector |
33.3% |
27.8% |
33.3% |
5.6% |
0.0% |
| Experience running businesses |
50.0% |
37.5% |
6.3% |
6.3% |
0.0% |
| Enthusiasm and a positive attitude |
55.6% |
27.8% |
11.1% |
5.6% |
0.0% |
| Sales skills |
52.9% |
29.4% |
11.8% |
5.9% |
0.0% |
| Good people management |
55.6% |
27.8% |
11.1% |
5.6% |
0.0% |
| Administrative skills |
41.2% |
29.4% |
23.5% |
5.9% |
0.0% |
| Good at suggesting improvements to business model |
52.9% |
29.4% |
5.9% |
5.9% |
5.9% |
| Strong capacity to finance the purchase |
47.1% |
35.3% |
11.8% |
5.9% |
0.0% |
|
|
To what extent are soaring unemployment and redundancies boosting the pool of potential franchisees?
|
Answer Options
|
Options
|
| Significantly, both in terms of numbers and quality of candidates |
32.5% |
| Significantly, in terms of numbers but not quality of candidates |
25.0% |
| Significantly, in terms of quality but not number of candidates |
20.0% |
| To a modest extent, both in terms of numbers and quality of candidates |
2.5% |
| To a modest extent, in terms of numbers but not quality of candidates |
5.0% |
| Not noticeably |
15.0% |
|
|
Which other media do you use?
|
Answer Options
|
Options
|
| Other online classifieds |
54.8% |
| Other online advertising – popups, banners etc |
35.5% |
| Trade and other print press |
38.7% |
| TV and radio |
32.3% |
| Exhibitions |
29.0% |
| Other |
0.0% |
|
|
For detailed survey information plus further infographics please contact press@franchisesales.co.uk.
