In the UK, franchising is a thriving industry worth over £15bn to the economy. Yet, despite its significant contribution, many people are still unaware of what franchising entails and the types of businesses that operate as franchises. So, what exactly is a franchise?
There are various forms of franchising, including those used for distributing films, music, and games. However, for the purpose of this article, we will focus on business format franchising. This type of franchising involves replicating an already established and successful business using franchising documentation, agreements, and training. Some of the key documents used when franchising a business include the franchisor’s business plan, the franchisee’s business plan, franchise agreement between both parties, franchise prospectus, operating manual, and training manual.
Any business can operate as a franchise, provided that its operating method can be transferred, and the new local market is the same as the existing local area. These businesses could range from automotive franchises that provide alloy wheel and smart repair services, recruitment franchises that cover various sectors including hotel and hospitality, to food and catering franchises such as corporate catering franchises, pizza franchises, and Indian food franchises. Additionally, some of the largest global hotel brands are franchises, which they have used to expand their brands without acquiring properties.
Franchising has a massive impact on the UK economy, assisting in the set-up of new small businesses and providing valuable services to local communities. It is a fast-growing industry, with home-based franchises being a highly sought-after option for those seeking improved work-life balance. Overall, franchising offers a viable way for small businesses to achieve significant success while minimizing risk.