Franchising is the way to go for many successful business people in Ireland with the sector having just recorded growth of 15 per cent to €2.4 billion in revenue.
The figures just released in the latest All-Ireland 2010 Franchising Survey conducted by UCD Michael Smurfit Business School in association with Ulster Bank, further reveal that 4,086 different franchise outlets now operate throughout Ireland, generating 42,927 full-time equivalent jobs.
The survey also shows that franchising has become a much more affordable option for those interested in starting up in businesses and that training options for franchisees interested in trading in established brands hold particular appeal.
A breakdown of the figures show that more than half of existing franchises in Ireland are in the service sector, with food and drink being the most popular industry, while one-third of franchisees operate in the retail sector.
In relation to the origin of the franchise business, indigenous Irish franchises account for nearly one-fifth of the market, up from 14 per cent in 2006;
UK franchises account for more than one-third of the market, followed by the US, with new entrants recorded from Australia, Spain, and the Far East.
As regards finance and personal investment required, the research showed that the average initial franchise fee now stands at €24,638 and the average working capital at €21,873, down from €39,300 in 2006. Similarly there has been a significant decrease in total set-up costs which have dropped from an average of €226,000 in 2006 to €124,330.
Average management services fee charged to franchisees in Ireland recorded an increase from an average of 6.5 per cent in 2006 to 8.1 per cent in 2010. However, in relation to the advertising contribution franchisees make to the central marketing fund, this has decreased from an average of 2.2 per cent in 2006 down to 1.9 per cent, while one-fifth of franchise owners do not solicit any marketing contribution from their franchisees.
With training being part and parcel of all franchise agreements, including introducing new skills, products, methods, and procedures, the survey showed there is now an increasing trend for short-term training, with half of franchise owners opting for a two week or less training period.
"We are delighted that this survey confirms the continued strong growth in the franchise industry here despite the adverse economic conditions,” said Irish Franchise Association chairman David Killeen. “Recessionary times are normally good for franchising and the findings of the 2010 survey clearly demonstrate the vibrancy of the sector and its capacity to generate jobs and wealth in Ireland.”
Further information on www.irishfranchiseassociation.com
