Franchise sector is an important component of the Irish economy
The franchise sector is an important component of the wider Irish economy. It is a sector that has shown great strength in recent difficult years. Such resilience can be shown by the fact that while employment in the general SME sector fell from the years 2006 to 2010, employment levels in the franchise sector over the same period increased by 70 per cent.
The franchise sector is a viable and attractive option for a number of people who have been made redundant in recent years and may wish to create a job for themselves through the franchise model with their redundancy monies.
The support of the Irish Franchise Association to these individuals, in particular, cannot be underestimated, given that in many cases these are first time business owners and often one person operations. The franchise route is also an avenue that existing entrepreneurs can take in order to grow their business, their name and their reputation.
As Minister for Small Business, John recognises the possibilities within the franchise sector in creating and sustaining jobs.
The most recent available job numbers show 42,000 full-time equivalent jobs in the sector, which gives us an idea of its future job creating potential.
The indirect benefits of the franchise sector are substantial. Whether it is through obtaining external resources that assists franchisees to run their businesses or through using suppliers, which in turn generates significant business and enables their suppliers and business networks to create further spin off employment opportunities. While recognising the valuable contribution made by international franchises John is particularly pleased that 20 per cent of all franchises in Ireland are indigenous.
Well-known names, such as Supermacs, Eddie Rockets, Hillbillies Chicken and others, lay testament to the ideas and dreams of our home grown entrepreneurs. Ideas that can be and have been developed into successful and profitable franchise models.
It is not just in the services industry, meeting consumer needs and wants, that the franchise sector is involved in. The area of health services, franchises such as Caremark, Comfort Keepers and Bluebird Care provide valuable assistance and support to the Department of Health and the HSE, in meeting the health needs of our citizens. Franchises are now found in almost every sector, be it accountancy or business services, cleaning, motor trade, retail, training, beauty and health care, gyms or courier services.
Franchising in a particular sector can have a beneficial effect for consumers and users of such services through the introduction and development of higher standards, greater competition and price competitiveness and greater sustainability of job creation.
In order to meet this challenge and further improve access to finance, key Government priorities for 2014 include:
Recent improvements in this area include the establishment of the Strategic Banking Corporation of Ireland (SBCI), which will ensure that our SMEs can take full advantage of investment and business opportunities as they arise by providing further options in the credit market.
The SBCI will provide over €500m of additional credit for SMEs and these SMEs will be able to access loans of a greater duration with enhanced terms and potentially at a lower cost.
Legislation will be enacted later this summer to set up this fund. This, along with the publication of the legislation on the Strategic Investment Fund, marks the delivery of another important commitment in the Programme for Government.
The Government has also introduced the Local Enterprise Office (LEO)structure throughout the country. Anyone interested in starting their own business, including a franchise, should contact their LEO. The LEOs support the indigenous micro enterprise sector in the start-up and expansion phases and stimulate enterprise potential at local level.
The LEOs are now the first stop shop for advice, direction, training and grant support for anyone wishing to start a business. Any start up, including a franchise, can use their LEO as a gateway to accessing finance from Micro Finance Ireland, which offers support in the form of loans of up to €25,000 to start up, newly established or growing microenterprises employing less than 10 people with viable business propositions that do not meet the conventional risk criteria applied by the banks.
This fund has a significant entrepreneurship focus and is open to anyone with a viable business proposal.
Anyone that may be interested in pursuing franchising as a business option could benefit from participating in the LEOs non-financial or 'soft' support programmes. All locally traded businesses, including start-ups can avail of non-financial assistance from their LEO in the form of a wide range of business advice and information services, management capability training and development programmes and e-Commerce training initiatives.
That is why we have developed and launched the Supporting SME portal which provides you with a road map as to the possible supports, financial and non-financial, available to your business depending on your sector, location and size. John encourages everyone to visit this portal out and familiarise themselves with the suite of developmental business supports which is available from State bodies and agencies.
We are now seeing some growth in the Irish economy. Such growth is largely the result of hard work of small business operators across the country, who have stuck with it over the past few years against all odds.
Building on the progress achieved over the last few years is now essential, continuing to strive towards the goal of creating the best environment to support businesses, competitiveness and sustainable job creation.
Ireland needs ambitious companies and entrepreneurs that not only dream, but make their dreams a reality. A reality that they can succeed here and the realisation that we, as a society, can not only help them succeed but share in their success.