The information you submit via our enquiry form is shared only with the franchise business(es) that you have selected.

The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.

By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.

You also agree to receive further newsletter email marketing from What Franchise.

Close

Franchising has an option to suit every budding business owner

Franchising has an option to suit every budding business owner

As well as a choice of hundreds of franchises operating in numerous sectors, investors can select from six different formats. Here’s a concise guide to each one

As the UK government looks towards businesses to spark an economic recovery, franchises will have a key part to play.

Figures out at the end of 2018 showed how as a business model franchising is thriving, generating £17.2 billion for the UK economy and employing 710,000 people. The statistics are significant for Scotland, with the British Franchise Association forecasting that the Scottish sector will be worth £1 billion this year.

An industry survey by the bfa and NatWest showed around 90 per cent of franchisees who own and operate their business using the brand, systems and support of a larger company have reported profitability annually for over 20 years running.

1. The business format franchise

You may also see this described as a second-generation franchise. Franchises of this type have two things at their core: a franchisee runs the business using the franchisor’s trade name or trademark and under this format, the franchisor must be able to hold influence and control over how the franchisee operates their business.

A business format franchise is popular because it allows people to buy a business with an established track record. Plus it makes it easier to trade and, hopefully, make a profit.

2. The master franchise

The difference between a business format franchise and a master franchise is that the franchisor grants a franchisee the right to sub-franchise within a chosen trading territory. Master franchising is a great opportunity for those looking to develop a network in one particular region.

But bear one thing in mind: when a master franchisee sub-franchises, the master franchise agreement requires the master franchisee to accept only the highest quality franchisees. This requirement is supported by the necessity to maintain high standards in relation to all obligations under the franchise agreement with the franchisor.

3. A franchise resale

This takes place when a franchisee sells its franchise business to another individual, corporation, partnership or limited liability partnership.

To buy a franchise resale, you would need to enter an agreement to purchase the business. This is usually a share purchase agreement or an asset purchase agreement.

A franchise resale is particularly attractive to would-be franchisees who want to avoid the start-up stage of a business, instead preferring to buy an enterprise that is already established and has a base of regular clients.

It means that once you’ve signed the agreement, you will potentially be running a profit-making business from day one.

4. The buy to let franchise

This is a specific type of franchise in the property market.

When you execute this kind of deal, you will be purchasing a letting agency where profits are made through a commission on the sale of a property. This process is the same as buying a franchise from a franchisor, so you would need to enter a franchise agreement, in addition to obtaining the relevant licences required by law.

5. The franchise buyout

This option does what it says on the tin. In a deal of this kind, a franchisee buys out the franchise. It means the franchisee will take ownership of the entire franchise network. This includes any franchisees existing under franchise agreements with the franchisor.

Completing a franchise buyout means you have total control, but it is worth noting that buying out a franchise is more expensive than buying an individual franchise, because the franchisor is selling complete ownership of its business.

6. The pilot franchise

A pilot franchise is established when a company intends to franchise its business concept, but before launching it wants to test the format, idea and systems to ensure it will work. Individuals who run pilot operations are known as pilot franchisees and will enable the franchisor to learn about the strengths and weaknesses of the business format in different regions and market conditions.

This means the business will be thoroughly tested and more likely to be successful. A pilot franchise usually only operates for a year or two.

The author

Katrina Leaf is a paralegal at Harper James Solicitors.

Exciting Franchise Opportunities

Post & Packing logo

Start your own Post & Packing franchise

Profit Chart
Funding Support Available ? Help is available. Check out our franchising funds guide.

Yes

Find Out More
Expected Revenue After 2 Years

265,000

Request Free Information
Find Out More
Post & Packing logo

Request Free Information

Send a free enquiry to Post & Packing for further information!

By sharing your email, you're agreeing to our privacy policy, cookie policy and terms & conditions.
Paris Baguette logo

Start your own Paris Baguette franchise

Profit Chart
Funding Support Available ? Help is available. Check out our franchising funds guide.

Yes

Find Out More
Expected Revenue After 2 Years

£1.5 - 2 million

Request Free Information
Find Out More
Paris Baguette logo

Request Free Information

Send a free enquiry to Paris Baguette for further information!

By sharing your email, you're agreeing to our privacy policy, cookie policy and terms & conditions.
Fat Phill’s  logo

Start your own Fat Phill’s franchise

Profit Chart
Funding Support Available ? Help is available. Check out our franchising funds guide.

Yes

Find Out More
Expected Revenue After 2 Years

N/A

Request Free Information
Find Out More
Fat Phill’s  logo

Request Free Information

Send a free enquiry to Fat Phill’s for further information!

By sharing your email, you're agreeing to our privacy policy, cookie policy and terms & conditions.
Betterclean Services Franchising logo

Start your own Betterclean Services Franchising franchise

Profit Chart
Funding Support Available ? Help is available. Check out our franchising funds guide.

Yes

Find Out More
Expected Revenue After 2 Years

Average net profit margin 20%

Request Free Information
Find Out More
Betterclean Services Franchising logo

Request Free Information

Send a free enquiry to Betterclean Services Franchising for further information!

By sharing your email, you're agreeing to our privacy policy, cookie policy and terms & conditions.
activ Digital Marketing Franchise logo

Start your own activ Digital Marketing Franchise franchise

Profit Chart
Funding Support Available ? Help is available. Check out our franchising funds guide.

Yes

Find Out More
Expected Revenue After 2 Years

£60,000 - £120,000

Request Free Information
Find Out More
activ Digital Marketing Franchise logo

Request Free Information

Send a free enquiry to activ Digital Marketing Franchise for further information!

By sharing your email, you're agreeing to our privacy policy, cookie policy and terms & conditions.
View all opportunities

Must Read Articles

View all Business Advice