1. What Is Franchise?
A franchise is a business model where one party (the franchisor) grants another (the franchisee) the rights to operate a business using its established brand, systems, and support in exchange for fees and ongoing royalties.
2. How Does Franchising Work?
- Franchisor: Owns the brand, business model, and trademarks
- Franchisee: Pays to use the brand and runs the business locally
- Operates under strict brand rules and quality standards
- Usually signs a contract for 5–10 years
3. Types of Franchise Models
- Product Distribution Franchise: The franchisee sells branded products (e.g., car dealerships)
- Business Format Franchise: Includes full branding, systems, and training (e.g., McDonald’s)
- Management Franchise: Franchisee manages operations and staff (common in B2B services)
- Investment Franchise: Large-scale operation requiring significant capital (e.g., hotels)
4. Common Franchise Sectors in the UK
- Food and drink
- Retail and e-commerce
- Health and fitness
- Cleaning and home services
- Childcare and education
- Pet care and grooming
- Automotive and valeting
- Property and real estate
5. Benefits of a Franchise for Franchisees
- Lower risk with a proven model
- Recognised brand name
- Training and support from franchisor
- Easier access to financing
- Exclusive territory rights
6. Responsibilities of Franchisees
- Pay upfront and ongoing fees
- Follow brand guidelines and operational rules
- Attend training and regular assessments
- Report financial data and meet sales targets
- Maintain service quality
7. Franchise Fees and Costs
- Initial franchise fee: £1,000 to £50,000+ depending on brand
- Ongoing royalties: Usually a percentage of turnover (5–15%)
- Marketing fund contributions
- Setup costs: Equipment, premises, staff, and inventory
8. Risks of Buying a Franchise
- Limited control over business decisions
- Ongoing fees even during slow periods
- Termination if brand standards aren’t met
- Dependency on the franchisor’s reputation and stability
9. How to Join a Franchise in the UK
- Research brands and industries
- Attend franchise exhibitions or discovery days
- Review franchise prospectus and financials
- Seek legal and financial advice
- Create a business plan
- Secure funding (loan or personal capital)
- Sign the franchise agreement
- Undergo training and launch operations
Frequently Asked Questions
What is franchise in simple terms?
It’s when you run a business under an established brand using their systems, name, and support.
Is franchising suitable for beginners?
Yes—especially those who want guidance and reduced startup risk.
Do I own the franchise?
You own the local operation, but not the brand—you operate under licence.
Can I sell my franchise?
Yes, with the franchisor’s approval and under agreed conditions.
Are there UK franchise laws?
No specific legislation, but contracts are governed by general UK commercial law.
Can I change the products or services in a franchise?
No—modifying the brand offering breaches the agreement.
Conclusion
So, what is franchise? It’s a powerful route to business ownership using a trusted brand and proven systems. Whether you’re starting fresh or seeking to grow, franchising offers structure, support, and brand credibility—making it ideal for many UK entrepreneurs.