Brexit. The word that business owners dread, politicians run from, and the general public are fed up of hearing about. It’s taken over the UK for months now, and with the original deadline being tomorrow (although now extended), what does Brexit mean for franchisees and franchisors?
Franchising is stronger than ever
The franchising industry has grown 46% since 2006 and now worth £15.1 billion! Franchising in the UK has never been better. With all the misinformation and confusion coming out of Parliament, how will Brexit effect UK Franchising?
With so much uncertainty on the matter and no agreed deal to leave, it is extremely hard to know the effects. Out of this uncertainty, comes one likely factor – consumer confidence will be affected.
What about the economy?
It has been estimated that our economy will suffer as a result of Brexit; however, the Bank of England has confirmed that it will be supporting the UK economy when we exit the EU. While they are unclear on the potential implications when making long term arrangements, there is no need to panic and make immediate changes to legal agreements when dealing with the EU. It is about waiting and identifying any adaptations to a franchise system which may benefit international trading relationships.
How will importing change?
Naturally, people will worry about the possibility of rising costs of imported goods. As large companies look to move operations into the EU, jobs may be affected. However, after the 2008 recession, many people have adapted to redundancy and made what might have been a negative situation into a positive opportunity.
How will Award Leisure be Affected?
During the 2008 recession, Award Leisure saw incredible success and grew, despite being a luxury retail company! The company saw little, if any, effects as a result of the recession and succeeded where many others failed. Brexit is nothing new and we are aware of the current discussions, Brexit presents nothing new nor do we foresee it presenting a huge challenge.
It would be expected that the luxury goods market would be impacted with people spending less during this uncertain time. However, the reality is that sales are up across our franchise network by 20%. If anything, we see it as an increased opportunity for investment into the UK from external buyers.
No one can give you a definitive blueprint of how franchising will change post-Brexit. However, what you can do is hold up your customer confidence, protect your franchise model, keep calm and carry on!