An Introduction to Franchising a Business

  • Price: £3.60
  • Published: November 2014
  • Type: Business Information Factsheet
  • Format: PDF

Franchising can be an effective method of growing an existing business. In general terms, it involves one business (the franchisor) granting a licence to trade using its brand name and business model to another business (the franchisee). The franchisee pays an initial licence fee and ongoing service fees and is responsible for financing and managing the franchised outlet. The franchisor plays a continuing role in supporting the franchisee but, in the right situation, can benefit from cost-effective expansion.

Several of the world's biggest brands have built their business using a franchise model, including 7-Eleven, Subway, McDonalds and Burger King. Among the most successful UK companies that operate franchises are Avis, The Body Shop and Carphone Warehouse. According to figures published in 2014 by the British Franchise Association (BFA, www.thebfa.org/about-franchising/franchising-industry-research ) the UK has 930 franchise systems and a franchise industry worth around £13.7 billion.

This factsheet explains what franchising is and how it works. It provides information on franchise agreements and how to recruit franchisees.

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