1. What Does It Mean to Start a Franchise?
To start a franchise means operating a business using an established brand, products, and systems under a franchise agreement. You pay fees to the franchisor in exchange for training, support, and the right to trade under their brand name.
2. Why Start a Franchise?
- Proven business model reduces risk.
- Ongoing training and support from franchisors.
- Brand recognition attracts customers.
- Easier to secure funding from banks.
- Access to supplier networks and bulk purchasing.
3. Types of Franchises You Can Start
- Food & Drink: Fast-food chains, cafés, restaurants.
- Retail: Clothing, convenience stores, specialist shops.
- Service-Based: Cleaning, tutoring, home care, recruitment.
- Health & Fitness: Gyms, wellness centres.
- Property & Travel: Estate agencies, travel agencies.
- Automotive: Car repair, valeting services.
4. Costs to Start a Franchise
- Initial franchise fee: £5,000–£50,000 depending on brand.
- Setup costs: Premises, equipment, stock (£10,000–£100,000+).
- Ongoing royalties: Typically 5–10% of monthly turnover.
- Marketing fees: Contribution to national advertising campaigns.
Example: A small service-based franchise may cost £15,000–£30,000, while a large restaurant franchise could exceed £250,000.
5. Legal Requirements to Start a Franchise
- Sign a franchise agreement with the franchisor.
- Register your business (sole trader, partnership, or limited company).
- Obtain relevant business licenses (e.g., food, alcohol, childcare).
- Comply with employment, tax, and health & safety laws.
- Take out business insurance (public liability, professional indemnity, etc.).
6. How to Start a Franchise Step by Step
- Research industries and brands.
- Evaluate the franchise agreement carefully.
- Create a business plan for funding applications.
- Secure finance through savings, loans, or investors.
- Choose a suitable location (if required).
- Complete franchisor training.
- Launch your franchise with marketing support.
7. Funding Options for Starting a Franchise
- Personal savings.
- Bank loans – Many UK banks have dedicated franchise lending schemes.
- Government-backed Start Up Loans.
- Franchisor financing schemes – Some brands assist new franchisees.
- Investors or partnerships.
8. Advantages of Franchising
- Reduced risk compared to starting from scratch.
- Faster business growth with brand support.
- Easier access to funding.
- Structured training and mentorship.
- National marketing campaigns handled by franchisor.
9. Challenges of Starting a Franchise
- High initial investment for well-known brands.
- Limited independence – must follow franchisor’s rules.
- Ongoing royalty fees reduce profits.
- Dependent on franchisor reputation.
- Long-term contractual obligations.
10. Tips for Success as a Franchisee
- Choose a franchise that matches your skills and interests.
- Research the franchisor’s track record and support.
- Understand all costs before signing.
- Network with other franchisees for advice.
- Focus on customer service and local marketing.
Frequently Asked Questions
1. How much money do I need to start a franchise in the UK?
Anywhere from £5,000 for small service-based franchises to £250,000+ for big restaurant chains.
2. Do I need experience to run a franchise?
Not always – franchisors provide training, though business skills help.
3. Can I get a loan to start a franchise?
Yes, most major UK banks offer loans to franchisees.
4. How long is a typical franchise agreement?
Usually between 5–10 years, with renewal options.
5. Do franchises guarantee success?
No, but they have higher success rates than independent startups due to proven systems.
6. Can I sell my franchise in the future?
Yes, but only with franchisor approval.
Conclusion
To start a franchise, you need to carefully research industries, secure funding, and follow the franchisor’s system. While it requires significant investment, franchising offers lower risk, brand recognition, and ongoing support, making it one of the most attractive ways to start a business.