Can anyone set up as a franchisor in the UK?

John Pratt Writes:

In the UK, there are no legal restrictions on anyone becoming a franchisor, but franchising is not about licensing an idea - it’s about licensing a proven business system that you know actually works if your franchisees follow the system.

In other words, all franchisors should have an existing and successful business, which they have then ‘pilot tested’ - a term you will hear often in franchising.

Pilot testing means that your existing business is not successful simply because of the brilliant people involved in it or because of its location, but can be successfully replicated by others following a tried and tested system and in different parts of the country.

In other words, the steps you have to take are:

1. Develop a successful, business that is fully operational.

2. Establish and document all the systems, processes and procedures that make your business successful.

3. Work with one or more pilot franchisees for a sufficiently long period to establish whether they’re able to replicate your success using your systems.

Only once all these steps have been completed should you consider franchising your business because it’s only at this stage do you have anything to sell to prospective franchisees.

John Pratt is senior partner at specialist franchise firm Hamilton Pratt and has advised franchisors for over 25 years.