New fund aimed to encourage franchisees

A £100 million fund has been launched by the Royal Bank of Scotland, aimed at supporting people who wish to set up new franchise businesses.

It is thought that the fund - which has fees of just one per cent and allows for capital repayment holidays - could help create as many as 1,800 franchises across the UK and up to 24,000 jobs.

The launch of the scheme has come at the same time as figures that have shown franchises to be a profitable and successful means of starting up a business. Franchises had a turnover of around £11.8 billion in 2009 and Cathryn Hayes, head of franchising at HSBC, has said that lending to franchises doubled in 2010 from its 2009 figure.

"We see it as safer than many start-ups because there is a record of how the main franchise has performed," she said.

Matthew Symons, who with his business partner, Harvey Brown, set up three new Subway franchises in Devon in October, said, "We have always been passionate about owning our own business and, by embarking on the franchise route, we have been able to establish a successful company with the support of a well-established network."