Expanding your franchise model into international markets is a complex and detailed exercise to carry out, particularly for Turkish franchisors targeting the UK. The process requires an understanding of a number of important factors;
· The UK market and economy
· Regulatory and legal considerations
· Cultural influences
· Population and Geography
· Operational logistics
· Competitor review
· Financial considerations
· Etc.
That is when franchise consultancy support becomes invaluable, providing Turkish franchisors with the expertise and guidance necessary to successfully navigate the UK market.
However, the good news is that the UK is probably one of the most franchise friendly countries to operate in and here are some key statistics from the most recent Natwest Franchise Landscape report (2018) and in conjunction with the British Franchise Association. The Natwest reports have been commissioned frequently over a number of years until Covid and show a significant degree of consistency over that time. Therefore they are still useful when evaluating the UK franchise sectors potential for overseas investors looking to enter the UK market.
· A Significant Contribution to the Market and growing - In 2018, UK franchises contributed around £17 billion to the UK economy compared to £15 billion in 2015.
· Franchises Succeed - Tried & Tested is the franchise mantra and less than 1% of franchises fail each year. By contrast, figures suggest that about 60% of non-franchise SME start-ups cease operating within five years.
· Around 33% of Franchisees operate more than one Franchise - Which indicates that franchising works so well for a significant minority of owners that they are prepared to take on additional franchises. This is a further indication that franchises are an attractive proposition.
· The Number of Franchises has more than doubled over the past 25 years - Currently, there are around 48,000 franchise businesses in the UK. This is around twice the number that were operating 25 years ago.
· Regulation of the UK Franchise Sector – There are no specific statutory requirements that must be met prior to the offer and/or sale of a franchise to a franchisee. If the franchisor is a member of the BFA, then the franchisor must have operated at least one pilot unit for a reasonable time prior to granting franchises, therefore the franchisor is able to demonstrate that the business concept is successful.
For all the positives above that the UK franchising sector experienced in 2023, it encountered much of the same challenges as other industries throughout the year. Inflation and higher labour costs, particularly with a rise in the minimum wage. Despite those obstacles, the franchise sector continues to grow with a promising outlook for 2024
The UK franchise market is one of the most developed and sophisticated in the world. With a well-established legal framework, high consumer demand for diverse products and services, and a strong support network for franchises, the UK presents a lucrative opportunity for Turkish brands. However, entering this market also requires a thorough understanding of local consumer behaviour, competition, and market trends. The Franchise Company and its associates offer a comprehensive range of services that help Turkish franchisors identify potential opportunities and threats, ensuring that their market entry strategy is based on current trends and best practice.
Navigating the regulatory landscape is one of the most important aspects of international expansion to avoid mistakes and wasting time. The franchise sector in the UK is not heavily regulated but there is ‘best practice’ to consider as recommended by the British Franchise Association, which The Franchise Company are members of and therefore will advise about, such as disclosure obligations and other information. However, there are also some legal requirements such those covering intellectual property protection and employment laws. The Franchise Company and associates specialise in all of those areas, offering legal advisory services to ensure that Turkish franchisors comply with all UK regulations. This support helps mitigate risks and avoids costly legal mistakes, ensuring a smooth and compliant entry to the UK market.
The support available specifically for Turkish clients includes;
· Forming a UK based Company
· Applying for a UK visa to visit the UK as necessary to set up your UK business
· The legal requirements for a UK based director
· Setting up a bank account
· A written legal opinion regarding registration of trade marks and other intellectual property
· Leasing business premises
Cultural differences can significantly impact the success of a franchise. What works in Turkey might not resonate with UK consumers. The Franchise Company’s offices in Darlington and Istanbul will work closely to provide cultural adaptation strategies, helping Turkish franchisors modify their products, services, and marketing approaches to align with local preferences and expectations. The reverse can also work, UK franchisors seeking help to expand into Turkey. Understanding and respecting cultural differences can enhance brand acceptance and customer loyalty in the new UK or Turkey markets.
Localisation of Marketing Strategies
Effective marketing is crucial to establish a new franchise in a new market. UK consumers may respond differently to marketing messages than their Turkish counterparts. The Franchise Company can work with you to develop marketing strategies that consider local conditions and consumer behaviour. They can also help create campaigns that include digital marketing, social media, and traditional advertising to build brand awareness and generate demand.
A really important benefit that The Franchise Company can offer. Expanding into the UK involves setting up new operations, which can be daunting without local expertise. We have experience with providing operational support, including site selection, lease negotiations, design and fitout, supply chain management, and staff recruitment at every level. Our operational guidance ensures that the franchise can deliver a consistent and high-quality customer experience from day one.
Staff training is another critical area where we can help from our internal resources. The Franchise Company can design and implement comprehensive training programs tailored to the UK and ensuring that employees are well-prepared to represent the franchise brand effectively. This training covers everything from customer service protocols to operational procedures, ensuring a smooth and efficient transition into the UK market.
Expanding into an international market involves significant financial investment. We can work with you to develop detailed financial operating forecasts for your UK franchise business plus the investment required to establish your franchising company that will expand your brand throughout the UK. In many cases we can also help you to secure UK finance, whether through banks, or other means.
The Franchise Company has been operating successfully in the franchise sector for over 30 years and has a formidable reputation for delivering what the clients expected within a fee structure that represents great value. We also have an excellent network of trusted contacts and associates that also deliver great results.
The comprehensive support and guidance available from The Franchise Company together with their commitment to the success of your plans for UK expansion will be crucial to the long term success of your overseas expansion. That guidance helps Turkish franchisors mitigate risks and establish a strong foothold in the competitive UK market.