Independent Business vs. Franchise Business: Where Should You Invest?

Over the past 22 years, NatWest have conducted a BFA survey that gives an overview of how the franchise sector performs along with data on investment opportunities for those looking to start up a new business. 

The annual survey shows that 8-12% of franchise businesses leave their franchises. This is for a variety of reasons, including retirement, selling the business and ill health but in recent years only 1% of losses have been due to financial failure, marking a significant positive trend in the success of franchise businesses. 

In comparison, a five year study into independently owned businesses has shown that only one in five of the companies was still in business at the end of the study. It is hard to pinpoint the reason 80% of independent businesses failed but it does serve to prove the longevity and resilience of franchise companies. 80% of franchises remain in business which is likely due to the level of training provided in well-established businesses. They have more scope to expand and implement innovative ideas while independent businesses often don’t have that head start in the business world. 

In conclusion, franchise businesses are more likely to be successful, continuing trade for many years, longer than an independent startup can. This helps to offer job security and financial stability in the economic world and can go a long way towards guaranteeing a profitable future.