Growth in the Franchising Sector in 2009

Nick Strong

ucking the trend of the current economic climate, business format franchising remains robust. The focus of franchising is the documentation and replication of proven and profitable best practice. With this system a secure and growing franchise is built for customer, franchisee and the franchisor who owns the brand and know-how.

Latest advancements in the UK economy are promising. UK consumer confidence is at its highest level for over twelve months, according to a survey published by Gfk NOP market research. The poll revealed that consumer confidence is now just behind the level of April 2008, and that confidence in the economy as a whole is at its optimum level since August 2007. "This is now the third consecutive month that we have seen a rise in the index - suggesting a definite upward trend - and it's largely driven by the public's perception that the next twelve months will be better for both our own personal finances and particularly for the economy in general," said Rachel Joy from Gfk NOP.

In addition, job losses fell steeply from approximately 47,000 to 7,000 from the start of 2009 to mid-April, which is consistent to data collated by Warwick Business School. The business school found there were approximately 24,000 job losses in the four weeks to mid-December, 47,000 in January, 24,000 in March and just 7,000 in the four weeks to April 12th. If these statistics provide an accurate predictor then the labour market could bounce back sooner than economists forecast. "Although the data are not an indicator of unemployment per se, I think the steep fall in the 'announced job losses' gives a pretty good indication that the labour market is recovering somewhat," said Thomas Prosser, researcher at Warwick university.

This news is timely for franchising growth and franchisee traders on the cutting edge of the UK economy. With job losses slowing and public confidence on the up, franchise systems with a proven track record and their franchisees should see an upward trend moving forward into 2009.