Franchise Opportunities

Becoming your own boss through franchising is an exciting prospect. The right franchise opportunity can provide a structured way to start a business with a proven model.

However, choosing the right one requires careful research and planning. In this guide, we’ll explore what makes a great franchise opportunity, incorporating expert advice from leading franchising professionals.

What to consider before buying a franchise

For John Pratt, partner at specialist franchising law firm Hamilton Pratt, researching franchise opportunities involves taking a logical and cautious approach. John says: "Under no circumstances should you be rushed or pressurised. The issues you need to consider are complex... Owning a business will mean pressures, sleepless nights, long hours, perhaps working at weekends, and not taking holidays in the early years. Is that for you and do you have the support of your family?"

Before committing, ask yourself:

• Is running a business the right fit for your lifestyle and ambitions?
• Do you have the financial resources to invest? Some franchise opportunities require significant capital beyond the initial investment.
• What industry excites you, and do you have relevant experience?
• Are you prepared to follow an established system, rather than creating your own processes?
• Can you handle the responsibilities of hiring and managing staff?
• Can you afford to live during the start-up phase when you’re still driving income?

It’s also important to fully understand the franchisor's support structure. Good franchise opportunities should provide training, ongoing support and marketing assistance. If these elements are missing or unclear, consider it a red flag.

How to research franchise opportunities

According to Brian Duckett, former chairman of The Franchising Centre, one of the best ways to assess a franchise opportunity is to speak with existing franchisees. "Most credible franchisors will let you have a full list of franchisees," he says. "Another way of gauging satisfaction is to ask if the franchisor or a third party regularly conducts a franchisee satisfaction survey."

In addition to these conversations, it’s important to do your own research. Use online resources to check the reputation of the franchise, and verify whether it is a member of the British Franchise Association (BFA).

If possible, spend time working in an existing franchise location – if you don’t enjoy the role, it’s unlikely to be the right fit for you.

You should also request a franchise disclosure document. This will give you insight into the franchise’s financial data, training support and legal obligations.

Be sure to speak with a range of franchisees, including both high performers and those who have struggled, to get a balanced view of the opportunity.

Understanding financial performance & projections

A key question when researching any franchise opportunity is this: how much money can I make? Shelley Nadler, legal director at international law firm Bird & Bird, stresses that financial projections should be carefully examined. "Even if you are provided with a great deal of detailed financial information, financial projections are not promises of performance," she explains. "The success of your franchise will depend on your own individual skills and commitment."

In the UK, franchisors are under no legal obligation to provide full details of the franchise that they offer. In fact, as franchising lawyer John Pratt explains, “Franchisors’ lawyers will generally encourage [franchisors] not to participate in the preparation of cash flow and income projections because, they argue, these are the franchisee’s projections with which each franchisee must be comfortable and should not be imposed by a franchisor.” 

BFA membership

Members of the British Franchise Association have to comply with the BFA’s code of ethics, which does require full disclosure. However, continues John, even this may not fully protect you as a franchisee. "If a member of the BFA does not provide all relevant information, whilst that will amount to a breach of the BFA’s Code of Ethics … it would not give a franchisee any rights to damages to compensate for the loss.”

Franchisors need to ensure that any financial information they give out is based on average performance and doesn’t paint “too glowing a picture” by providing performance data that relates only to the top-performing franchisees, explains John. “If franchisors were to do this, it could well amount to misrepresentation. That would then entitle a franchisee to claim damages.”

To assess the financial viability of any franchise opportunity:

• Ask for data on gross profit margins and break-even timelines.
• Request actual accounts used for projections (although bear in mind that you are not entitled to see these)
• Seek independent accountancy advice before committing.
• Consider start-up costs, franchise fees and ongoing royalty payments.
• Investigate financial support – some banks offer franchise-specific loans.
• Remember that a “guaranteed turnover” does not guarantee profit

Can a franchisor guarantee earnings?

A common misconception is that franchisors guarantee earnings. Legal director Shelley Nadler clarifies: "Very few franchisors will be prepared to give guarantees of financial performance... No franchisee should rely upon any financial projections as a guarantee that they will be achieved."

Alan Wilkinson, head of franchise development at The Franchising Centre, adds: "There are many examples of franchise businesses that generate six-figure income levels. However, within any one brand, there will likely be some franchisees that achieve this, and some that do not. A prospective franchisee should do their research."

Key takeaway? No earnings are guaranteed – your success in your chosen franchise opportunity depends on your own efforts and market conditions.

When will you start making money?

John Pratt outlines a typical profitability timeline for new franchisees, explaining that “the general rule of thumb is that franchisees make a substantial loss in the first year, break even in the second year, make a small profit in the third, and larger profits in the fourth and fifth year.”

Former chairman of The Franchising Centre, Brian Duckett, echoes this, suggesting that around the halfway point of your initial franchise agreement is when you should ideally recover your initial investment.

To estimate when and how you might become profitable, it’s wise to request performance data from similar franchise locations.

Make sure you have a sufficient financial buffer to cover the start-up period, as early losses are common. Choosing a franchise with strong local demand can help accelerate your revenue. It’s worth asking the franchisor about any initial marketing support they provide.

Finally, ensure you prepare a business and funding plan tailored to your own situation and goals.

What makes a franchise opportunity proven & reliable?

Brian Duckett advises looking at franchise track records. "The more franchised outlets that a system has operating – and the more those franchisees are happy with their business – the more proven is the franchise," he explains.

Signs of a strong franchise opportunity:

• Established franchisees with long-term success.
• A franchisor with multiple years of experience.
• Positive feedback from existing franchisees.
• Support from major banks willing to lend to its franchisees.
• A strong brand presence and marketing strategy.

Remember that just because a business works in other countries, it might not necessarily work in the UK. Also bear in mind that just because there are lots of franchisees in a system, it doesn’t mean they are necessarily doing well.

Final thoughts on finding the right franchise opportunity for you

Franchising offers a great opportunity to become your own boss while taking advantage of a proven business model. However, it’s essential to approach the process with care.

Start by doing thorough research – speak to existing franchisees, review financial documents and evaluate the support systems in place. Choose a business model that suits both your skills and your financial circumstances. Always seek professional advice from legal and financial experts before committing to any agreement.

It’s also important to ensure you have enough capital to cover your costs during the start-up phase, as early cash flow can be tight.

Pay close attention to the franchisor’s commitment to ongoing support, including training, marketing and operational guidance, as these factors can be key to long-term success.

By taking a strategic and well-informed approach, you’ll be in a strong position to find a franchise that aligns with your goals and gives you the best chance of success.

Browse an extensive selection of franchise opportunities at the top of this page, or browse by category.