Martin Flanagan: Franchising moves to unsung hero of Scotland’s economy

Occupancy rates at InterContinental Hotels Group has slumped in oil-producing regions. Picture: PA

Occupancy rates at InterContinental Hotels Group has slumped in oil-producing regions. Picture: PA

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Franchising can sometimes idly be thought of as a frippery to the mainline economy.

Somewhat useful in providing access to the business world for entrepreneurial spirits, and an additional channel for a business to grow its brand name, but essentially an activity that plays at the margins of GDP.

However, latest estimates for Scotland give the lie to that myth. Data from the British Franchise Association (BFA) shows franchising accounted for an estimated £800 million of the Scottish economy in 2015, with the BFA forecasting that at current growth rates this could rise to at least £1 billion by 2020.

I bet many people will be surprised that there are 2,200 franchisee-owned businesses in Scotland and that last year they created 32,000 jobs. Clearly, then, in reality we are not talking about marginal GDP contributors, but rather something closer to unsung heroes.

Let’s hope the Scottish franchise week, which runs later this month with the aim of pushing the sub-sector’s profile well above the parapet, is successful.

It is much the same story throughout the UK. The BFA says franchising’s turnover UK-wide tops £15bn. There is also a virtuous circle at work.

Local businesses have a symbiotic relationship with big-name brands, each helping the other to grow, boosting employment and generating wealth in communities north and south of the Border.

Getting in on the action as well is the support network of professional services, from lawyers to accountants, to provide expertise for sometimes pretty inexperienced franchisees to get to grips with running their own show for the first time.

As part of the franchise week, which runs from 16 May, there will be a bespoke seminar on how social media – the 21st century’s version of the bush telegraph – can help franchisees get their businesses known quickly in the public eye.

Given the financial potential for the country, the event deserves support.

Hotels share oil’s woes

Unsurprising that InterContinental Hotels Group has admitted that revenues have slumped at its hotels in oil-producing regions, from the Middle East to the Americas, amid low oil prices. The Aberdeen hotels industry has plenty of scars in this regard.

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