The Irish franchise sector is still growing!
As the Irish Franchise Association marks the 25th anniversary of its foundation, this landmark is an appropriate moment to review the development and current progress of this vibrant and dynamic business sector in Ireland and its prospects.
John Green, Chairman of the IFA, remains positive and believes that the mood of franchisors remains “upbeat”. He comments: “The Irish franchise sector is still growing; and there is no noticeable effect of the recession at this time. We find in the association that we are receiving a lot more enquiries for the past year from people investigating franchising as franchisees.” That is why he predicts a 22 per cent growth in turnover in franchising next year, 12 per cent growth in franchisors and 24 per cent increase in employment. “
John Cronin is also optimistic. Director and Master Franchisor for Ireland of PHQ – the international franchisor whose brands include Pizza Hut and which bought out Godfather’s Pizza in 2008, John “feels challenged but very positive about continuing opportunities for the PHQ by Pizza Hut brand in Ireland.” He believes growth for the franchise in the coming year will be between 10 and 15 per cent.
Tony Marsh, Sales & Marketing Director of UK-based Sign Express adds, “This year, in particular, we have had lots of enquiries from interested parties and expect new recruits during 2009 throughout Ireland.”
But why do these experts have such a positive view? There is a logical reason - and history – to back up their thinking.
Fiacra Nagle, CEO of O’Brien’s Sandwich Bars and Deputy Chairman of the IFA, elaborates: “The franchise market typically remains quite active even in times of recession; if people are receiving redundancy payments, for instance, it can be a chance for them to look at taking out a franchise and run their own business; however the banking situation will also have an impact and growth will be affected by the liquidity situation in the market.”
Fiacra also sums up the attraction - and advantages - of franchising to those who want to start up their own businesses, particularly now.
“In the current climate one of the most appealing aspects of buying a franchise is the much higher success rate associated with a new franchise business compared to starting up a new independent business. Many banks and lending institutions will often view a franchise business more favourably because of the proven concept and track record. Also, you have the support, knowledge and resources of an experienced management team to draw on; with franchising you are in business for yourself but never by yourself.”
This buoyant mood among both franchisors and prospective franchisees is well reflected in the strong positive advance interest in The Irish Franchise Exhibition, which takes place on 21 & 22 November 2008 at the Main Hall, Royal Dublin Society (RDS). Hundreds of potential investors have already registered their interest in attending while most leading Ireland-based franchisors, and many from the UK, are demonstrating their confidence in the market by exhibiting, offering exciting franchise opportunities.
David Tuck, who is responsible for organising the Irish Franchise Exhibition event as Franchise Sales Manager of Venture Marketing Group, observes: “The enthusiasm for the exhibition and commitment that we have seen recently from the public and from franchise companies backs up John Green’s confidence in the growth of the market.”
The franchise sector is now well established and an important contributor to the Irish economy both in terms of the employment it creates and the wealth it generates. There are now 310 franchised businesses within Ireland, making up a market that is worth over €2.5 billion and employs approximately 27,000 people.
The dramatic growth can be partly attributed to a confidence in the franchising model, as John Green explains: “I think that people understand the success ratio of franchising. It’s far more successful then a stand-alone business.” He believes the key to this faith lies in the security of established brands that people recognise and buy into. As international brands appear in Ireland, “they say, ‘oh yeah, I know that brand’ and that’s what they want to buy.”
Home-grown franchises account for a healthy 14 per cent of the market, while 36 per cent comes from the UK brands such as Cash Generator and Signs Express, 41 per cent from the US (including McDonalds and Subway) and the remaining nine per cent from the rest of the world.