A lack of suitable franchisees is the British franchising sector's greatest obstacle to growth, industry leaders warn.
A joint survey of franchisors by the British Franchise Association (BFA) and NatWest found that over a third complain their biggest problem is finding people capable of running their outlets.
Over a quarter said they are finding it difficult to attract new franchisees because too many applicants lack sufficient skills and funds to start and run the new business.
Franchisors said they look for self-motivation and marketing experience in their potential franchisees, but they are not finding it. They do admit, however, that more targeted advertising would help them get their message out.
"The difficulty of recruiting the right kind of franchisee is almost certainly the greatest obstacle in the way of the development of franchising in Britain," said Sir Bernard Ingham, chief executive of the BFA.
"It is not a new problem. It has existed for years. Franchising has nonetheless steadily expanded. But it would grow faster if those who very much want to go into business on their own account made franchising their first option. I don’t think many would regret it."
The average cost of launching a franchise business in the UK is £70,000, a 53% increase since 2003, which explains why finding potential franchisees with suitable funds proves difficult, the BFA said.
Typically, about 40% of franchisees need to borrow money when starting up, usually in the range of £43,600, the survey found.