Back in 2020, Brexit was announced after the UK vote, leading to the UK separating from the EU. As expected, this created great opportunity for the country and presented some challenges, both seen and unforeseen. But now, four years on, as we look back on the effects of the decision, how did this change the business world? More specifically, how did it affect franchising in the UK?
It’s a question on many entrepreneurs’ minds, and for good reason. With changes in regulations, trade agreements, and consumer behaviour, the franchising landscape has undoubtedly shifted.
But does that mean the opportunities have dried up? Far from it. In fact, amidst the changes, franchising remains a viable and attractive business model for those looking to start or expand their ventures. Let’s dive into everything you need to know.
What changed in franchising after Brexit?
Honestly, not a great deal is the short answer. There were certainly uncertainties as new rules and regulations came into place and some bright new opportunities, but, if anything, the change was a positive one.
We say this because the franchising industry in the UK is nothing short of booming, with over 48,000 in operation, generating over £17 billion annually and employing more than 700,000 people – higher statistics than ever before.
So, what did change? Well, the greatest changes were seen in terms of operations and supply. New regulations and disrupted supply chains impacted franchises the most, as they did with every other business, but this didn’t seem to last.
Fast forward to today, and these issues seem to have been resolved, with the majority of franchises and their managers doing better than ever before.
The pros of franchising in post-Brexit UK
Despite the challenges, there are compelling reasons why franchising continues to be a smart choice for entrepreneurs in the UK:
- Established Brand Recognition: Franchising allows you to leverage the power of an already successful brand, saving you the time and resources it takes to build one from scratch. This recognition can translate into faster customer acquisition and increased trust. We’ve all heard of Starbucks, Costa, and so on. Regardless of whether the country is in or out of the EU, these are brands that stand firm.
- Proven Business Model: You’re not venturing into the unknown. Franchises come with tried-and-tested systems and processes, reducing the risks associated with starting a new business. These are platforms that can manage your supply lines outlined the current rules and regulations in their guidebooks, and provide support infrastructure.
- Ongoing Support and Training: Franchisees benefit from continuous support and training from the franchisor, empowering them to navigate challenges and optimise their operations.
- Access to a Network: Being part of a franchise network provides opportunities for collaboration, knowledge sharing, and collective marketing efforts.
- Potential for Growth: With the right franchise and dedication, you can expand your business and achieve significant financial success.
The cons of franchising in post-Brexit UK
Now, let’s not sugarcoat it. Brexit has brought about some challenges that potential franchisees need to be aware of:
- Economic Uncertainty: The economic landscape in the UK has been somewhat volatile since Brexit. Fluctuations in currency exchange rates, potential trade barriers, and shifts in consumer spending can impact the profitability of franchises. However, while this was deemed the main challenge, it doesn’t seem to affect anything now.
- Supply Chain Disruptions: The potential for delays and increased costs in the supply chain due to new customs procedures and border checks is a concern for many franchises.
- Labour Shortages: Some sectors have experienced labour shortages due to changes in immigration rules, which can affect franchise operations and staffing.
- Increased Competition: While franchising offers a proven model, it’s important to remember that competition can still be fierce. The success of your franchise will depend on your ability to execute effectively and stand out in the market.
How to make informed decisions and move forward
So, with both pros and cons on the table, how can you make the best decision for your entrepreneurial journey? Here are some key factors to consider:
- Your Risk Tolerance: Franchising can mitigate some risks, but it’s not a foolproof guarantee of success. Assess your comfort level with uncertainty and potential challenges.
- Your Financial Resources: Franchises require an initial investment and ongoing fees. Ensure you have the financial capacity to meet these obligations.
- Your Industry of Interest: Conduct thorough research on the performance of your chosen industry in the post-Brexit landscape. Identify any specific challenges or opportunities that may arise.
- Your Personal Goals and Values: Does the franchise align with your long-term aspirations and values? A good fit is essential for sustained motivation and success.
- The Franchisor’s Track Record: Due diligence is crucial. Scrutinise the franchisor’s history, financial stability, and support systems. Talk to existing franchisees to gain firsthand insights.
Remember, franchising is a partnership. Choose a franchisor you trust and feel confident working with. They’ll support you and handle the heavy lifting, giving you everything you need to instead focus on managing your business and ensuring it’s as successful as possible.
The verdict: is franchising still a golden opportunity in the UK?
In short, yes. While Brexit has undeniably brought changes and challenges, the franchising and business landscape in the UK remains ripe with potential. The key is to approach it with eyes wide open, armed with knowledge and a well-thought-out strategy.
Remember, franchising offers a proven pathway to business ownership, but it’s not a one-size-fits-all solution. Do your research, weigh the pros and cons carefully, and choose a franchise that aligns with your goals and values.
With the right mindset, dedication, and a dash of entrepreneurial spirit, you can navigate the post-Brexit landscape and build a successful franchise business in the UK.
