ONE of Ireland's fastest growing business areas created almost 1,600 new jobs over the past three years but received little formal recognition for the massive expansion in its base.
Since 1992, the number of people full time jobs at franchise companies has increased by 47 per cent to almost 5,000, while hundreds of new spin off jobs in supplier companies have also been created by franchises such as McDonalds, Thorntons, Bewley's, and The Body Shop.
According to a survey by McGarry Consulting, the turnover of franchise companies in Ireland has more than doubled over the past three years and was worth £202 million in 1995.
The report, Franchising in Ireland, which was completed in conjunction with Bank of Ireland, showed a vibrant sector which was rapidly expanding. It showed that the turnover of the franchising sector has increased by 62 per cent since 1992, and has more than trebled over the past six years.
The average turnover per franchise unit increased by 7 per cent over the past three years and is now £342,464. Just under half of the franchise units have a turn over of between £150,000 and £350,000. The average turnover per employee has increased by 11 per cent since 1992, from £37,00 to £41,076.
There are 90 separate franchises operating in Ireland, an increase of 45 franchise systems on the 1992 figure. The number of franchise units has also grown by just over 50 per cent to a total of 590. The new arrivals included Gloria Jean's coffee shop, and the British fish and chips chain, Harry Ramsdens, which has outlets in Dublin and Belfast and boasts the former Republic of Ireland soccer manager, Mr Jack Charlton, as a minority shareholder.
Half of the 90 franchise systems operating in Ireland are British, while almost a quarter originate in the United States. Irish franchises such as Bewley's and Abrakebabra account for about 18 per cent of the market.
Dublin was a key location for the sector as three quarters of all franchises operating in Ireland have at least one outlet in the city. Northern Ireland, where 58 per cent of franchises have a presence, was also an important base. However, in spite of the dominance of Dublin, the regional spread of franchise units was quite even, as almost two thirds were outside the capital.
Men continued to dominate the Irish franchise business, accounting for 83 per cent of those involved. Franchising is also a younger person's business, according to the report, as 87 per cent of those who operated franchise companies in Ireland were under 50 years of age.
One in five of the franchise holders were unemployed prior to purchasing the franchise, and three quarters of them spent up to six months researching the company before deciding to buy the franchise.
Although the cost of setting up a franchise can differ, the survey found that the average total investment cost is £64,000. The franchise fee also varies but the average initial cost was £9,357 while the ultimate franchise owner would also take an average continuing fee of 7 per cent of the outlet's gross turnover.
This fee was for a series of management services provided by the franchiser, but the McGarry report found that many franchise holders in Ireland were not overly satisfied with the quality of services provided.
The survey also carried out a study to gauge consumers recognition and use of the main franchise brands in Ireland. It found that Bewley's was the most recognised brand (99.5 per cent), closely followed by McDonalds (99 per cent) and Kentucky Fried Chicken (98 per cent). Bewley's also headed the list of the 10 most used franchises, followed by McDonalds, Golden Discs and The Body Shop.
