Retail is the UK’s largest private sector, employing more than 3 million people and generating more than £420bn in sales year on year. According to RetailEconomics, in 2021, a third of consumer spending was made in the retail sector. With such huge figures, it makes sense to tap into this market. Every year, more and more people are discovering retail franchising as a way of owning their own business. The 2018 British Franchise Association NatWest survey reported 93% of franchisees claiming profitability and less than 1% of franchisees surveyed claimed unprofitable due to commercial failure. With the franchising sector contributing more than £17bn to the UK economy, why not consider franchising as the next step in your career?
What is a Retail Franchise?
Franchising is a business expansion concept that can be applied to any type of commercial business – not just retail. Franchising is where a the business owner licenses out the rights to trade as the brand and operating system, to entrepreneurs who become known as franchisees. These franchisees operate the franchise in their own area (called a territory), essentially as their own boss, running their own business.
Franchising isn’t employment, and franchisees benefit from running their own company, their own business and having a good amount of control about how the business operates. The franchisee will need to operate within the bounds of the franchise agreement and franchise operations manual, documents which ensure brand consistency and operations, making sure all franchisees operate in the same manner. Whilst this might sound like a drawback of franchising, maintaining brand consistency across all franchisees is one of the biggest factors that influences franchise network success.
Top Types of Retail Franchises
With retail making up such a big part of the UK economy and employment, it makes sense that there are many franchising opportunities within it. There are many retail businesses and shops for sale in the UK, most of which are available as franchises or franchise resales.
Let’s take a look at the top 10 types of retail franchises you can invest in.
Convenience Store Franchise UK
Along with supermarkets, convenience store businesses make up a large part of consumer spending in the retail sector. From clothing to groceries and liquor, convenience store franchises can be found in every town and city across the UK. While some convenience store retail businesses aren’t franchises (and therefore, units are opened up by the company itself), a lot of convenience stores are available as a franchise model.
Typically you will need a premises or land to open up a convenience store franchise, but if you don’t, many franchisors will be able to support you in finding one. Premises running costs and rental will form a big part of your overheads, but thanks to the demand for convenience stores, you should expect a good turnover.
In the UK, the main convenience store franchises are Londis, Spar and One Stop. Internationally, one of the most recognised brands is 7-Eleven.
Flower and Gift Franchises
Florist and gift franchises have diversified over recent years offering the potential for home based working. Home based franchises that operate in the flower and gift sector will work closely with the franchisor’s partners and suppliers and any client and customer bookings will usually go via them. This means you won’t need to hold any stock making this type of retail business very lightweight and low overhead.
Of course, there still demand for storefront retail units, and most flower and gift franchisors will include that as an option. The latter however usually costing considerably more than a home based business.
Flower, florist and luxury gift businesses may also offer the potential for additional revenue streams. That means, outside of selling flowers and gifts, franchisees will be able to cash in on other avenues. Some top types include event styling and flora for businesses. Envie Roses luxury gift franchises is a great example of a home based, retail, gift franchise.
Card Shop Franchises
Similarly to flowers and gifts, card shop franchises operate incredibly well as an independent retail franchise – one that doesn’t necessarily require other revenue streams to be extremely profitable. Card shop franchises will require a premises, unless it is a home based business which like luxury gifts, orders can be directed to the franchisor’s suppliers.
The premises, can often be one of several types, making card shop franchises suitable for a range of budgets. The storefront card shop route comes to mind first for many, but kiosks are growing in popularity. Kiosk franchises are usually established in high footfall areas such as transport hubs and shopping malls, not located in a shop unit, but in the middle of a concourse. These kiosks sell everything from calendars to cards. There are many types of card shop franchises, all of which take advantage of the booming retail sector.
Coffee Shop Franchises
Coffee and food retail has continued to see constant demand and growth throughout the years, making it a top recession proof franchise opportunity. Either operated as a kiosk, a coffee shop or a mobile coffee van, there are entry points into this lucrative sector through franchising, suitable for a range of budgets. Going down the mobile coffee van option and thanks to franchise finance options out there, you may only need £10K of your own funds to get a coffee van business off the ground. Most franchisors are able to help with site selection and finding a suitable premises if you go down the kiosk or storefront retail route for owning a coffee shop franchise. The latter requiring £35K min of your own funds for a kiosk, and upwards of £100K for a storefront unit, excluding working capital.
Opportunities for home based working are opening up all over the internet, and one that stands out the most is e-commerce. Specifically dropshipping franchises, but other eCom ventures are out there. Dropshipping is a low overheads, potentially high returns route to an online retail business. The franchisor will typically have a supplier. When a customer orders online either through your franchisee website or a big company such as Amazon, the order goes through you to the franchisor’s supplier, and the supplier ships the product. You make profit from the sale, while not needing to handle or ship any goods.
Ecommerce and drop shipping franchises are usually highly competitive because unlike traditional franchises, you don’t operate in a specific designated territory. So, make sure you carry out due diligence before investing.
Vaping and CBD Franchises
CBD, an abbreviation of Cannabidiol, is a type of chemical that has been made available through retail businesses. CBD franchises follow very strict regulations to comply with the law, and thanks to this regulation, there is very limited official competition. The CBD retail sector is a growing market but as with any franchise be sure to carry out due diligence before investing. Vaping franchises are also increasing in prominence. Vaping franchises for sale will often require a storefront premises.
Automotive Retail Franchises
The automotive retail market shows no sign of slowing. There are now more drivers on UK roads than ever, and support for electric vehicles continues to grow. As gas stations continue to increase their capabilities to serve electric vehicles, demand for these types of vehicles is becoming lesser of a concern amongst drivers. And as petrol and diesel vehicles become phased out, it is automotive retail franchises that will benefit greatly. Many drivers look second hand when purchasing a car, and it is auto retail businesses that are commonly the most cheapest. As people begin to ditch their fossil fuel cars, it is automotive retail that people will look to, as they become aware, the e-vehicle market is becoming more and more supported by businesses.
Ice Cream, Confectionery and Gelato Franchises
According to Statista, the volume of ice cream sold in UK retail each year exceeds 400,000 metric tons. With sales steadily increasing to over £1.3bn in recent years, it is clear that ice cream is one of the biggest food retail sectors in Great Britain. What’s more, to support year round demand for the franchisee’s services, ice cream businesses for sale are diversifying their range of products to include deserts such as Gelato and confectionery.
Most ice cream franchises operate on a storefront retail basis, but kiosk and mobile franchises may be available depending on the franchise.
Pet Food Franchises
If you love pets, there are a number of pet food retail franchises for sale in the UK. These are most commonly run as van based businesses. Franchisees will usually hold stock (although not always), and their typical day will consist of delivering pet foods to customers. Unlike some of the other types of retail franchises we’ve covered, pet food businesses for sale are a unique entry point into retail in that they’re usually low investment, van based, solo operated whilst still being a customer engaged roll.
Some top types of pet food franchises in the UK include Husse, Trophy Pet Foods and Oscar Pet Foods. All of these are van based retail, and have diversified to support a wide range of pets and animals.
Vending offers a low investment, highly scalable entry point into the world of business ownership. Namely because the franchisee can purchase however number of vending machines or boxes they wish, rent these out to businesses and start however small they wish. A hands-off type of business, vending sales operate without any necessary interaction from the franchisee. The franchisee’s roll will be to supply these machines to the business sector, keep the machines stocked, whilst profiting from the machine’s sales. The franchisee can start off small with a limited number of machines, running the business alongside existing commitments, or maximise their turnover by running the business full time. Vending retail franchises don’t usually cost more than £5,000, but the cost will vary depending on the entry point the franchisee chooses.
Should You Invest in a Retail Franchise?
Retail is one of the biggest sectors in the UK and contributes a substantial sum to the economy. Demand for retail shows no sign of slowing, and both storefront, kiosk, mobile and online businesses are all seeing profit. With so many different types of retail franchises out there, why not explore the market and see what opportunities are right for you?