What Is A Franchise?

What is franchising? Who is a franchisor and who is a franchisee?

Lady franchisor

What is a Franchise? What is Franchising?

If you’re looking to step away from employment and take on the responsibility of being your own boss, then you’ve likely heard of, or will hear of, the term “franchising”. If you’re looking to be your own boss, there are several different routes you can go down, but the main two are starting up a business yourself, and investing in a franchise.

What is Franchising?

In the context of entrepreneurship, business-format franchising is where an established business expands their reach, by allowing other entrepreneurs to trade as their business. The two primary parties involved in franchising are the franchisor and the franchisee. By investing in a franchise, many of the risks of running a business are eliminated. This is because the franchisor has made mistakes, and worked around these and implemented changes to ensure the success.

The franchise business will follow a structure which is simple to replicate, allowing for consistent expansion through franchisees.

What is a Franchisor?

The franchisor is the party that owns the intellectual property of the business being franchised. The franchisor owns the business and makes the initial decision to franchise the business, by granting the rights for franchisees to trade under the franchisor’s brand. The franchisor will go through a considerable amount of work to set up the franchise and ensure it is successful. Part of setting up the franchise will include establishing a Pilot Franchise.

The franchisor will be responsible for delivering brand positioning, group marketing and onward development of the business. This might be through research and development of new products and services, delivered through franchisees. The franchisor will also be responsible for profiling and recruiting new franchisees. But what is a franchisee?

What is a Franchisee?

The franchisee is the party investing in the franchise. If you’re looking to be your own boss and buy a franchise, then you’ll be the franchisee. This could be a local area franchisee, or a master franchisee, but the definitions for master franchising are out of the scope of this article.

The franchisee will purchase the rights to trade as the franchisor’s business. This will usually be called a license fee, a franchise fee or part of an initial investment. The investment which the franchisee pays will often cover aspects such as startup equipment, training, support and rights to trade. Ongoing, there might be a royalty fee or management service fee to pay, because this will often cover ongoing marketing, support and R&D.

Similarly to the franchisor, the franchisee also has responsibilities. It is important that the franchisor’s rules and operations manual is followed, so that the entire franchise network deliver the same message.

What is a Pilot Franchise?

Whilst not compulsory, a pilot franchise is strongly advised. A pilot franchise enables the business owner to set up a first franchisee to determine whether franchising is feasible. Once the franchising documentation has been compiled, such as the franchise operations manual, the franchise can be tested through a pilot operation. Assessing the success of the pilot franchisee, changes can be made to the business, so that future franchisees can also trade successfully.

Why Invest in a Franchise?

There are many benefits associated with franchising, but as with anything, there is still the risk of failure. But as we’ve discussed, franchising cuts out a lot of the risks. If you can see yourself running your own business, then franchising is a fantastic route to go down.

When starting up your own business, you’ll be starting from scratch. You’ll be making mistakes, many of which will cost either time and/or expense. But with the franchising model, you’ll be benefitting from training, support and a proven brand.

Luckily for many, there are already a hugely diverse range of franchises out there. Most businesses can actually be franchised in some form. If you have a passion for customer service, then maybe a pet franchise could be for you. Or if you have a passion for food, then there are a range of food franchises out there. One of the reasons many people start up a business themselves, is because they are unaware of the franchising concept, or feel they can go it alone! However it’s important to emphasise that by going it alone, you won’t have the training, support and help that you get with a franchise.

How Much Do Franchises Cost?

This is an impossible question to answer. Because franchises can include absolutely anything in the way of support, equipment and marketing, franchises could cost anywhere from £0 right into the millions. If you’re looking at a simple vending franchise, the investment could be anywhere down to less than one thousand pounds. You’ll be buying some initial stock, some machines and the rights to trade. From there on, your responsibility would be building clients and restocking machines.

However higher end franchises such as restaurants, will in most cases, require store fitout. From ePOS systems to customer seating, and depending on the credibility of the brand, investment for higher end franchises could be upwards of £200,000.

Franchising is a fantastic way to own your own business. One of the myths of buying a franchise is that you need experience, and that’s simply not true. Franchisors will provide training and support in aspects such as finance, marketing and recruitment. Speak to the franchisor to decide whether a franchise is the right option for you! The opportunity to meet and speak with franchises presents itself at franchise discovery days and exhibitions, as well as through the contact forms on this website. Take the next big step in your career with franchising.

Trending Top Franchises

Here are some top Top Franchises that are currently looking for franchisees in your surrounding areas. There are many benefits to being your own boss, why not learn more about some of the below?

Popular
An image showing Spitting Pig Franchise logo

Spitting Pig Franchise


Join the UK's leading hog roast franchise with over 28 franchisees already ...

Add to Enquiry Basket

Find Out More
An image showing Signarama Franchise logo

Signarama Franchise


Join Signarama, the world's largest franchise in the sign industry. We will...

Add to Enquiry Basket

Find Out More
Popular
An image showing Envie Roses Franchise logo

Envie Roses Franchise


A home-based franchise providing gifts and memories that speak straight to ...

Add to Enquiry Basket

Find Out More
Popular
An image showing The Franchise Consultant logo

The Franchise Consultant


The Franchise Consultant team are experienced franchise professionals who o...

Add to Enquiry Basket

Find Out More
Popular
An image showing Basilico Pizza Franchise logo

Basilico Pizza Franchise


Join an exciting new healthy pizza franchise using only the finest Italian ...

Add to Enquiry Basket

Find Out More
An image showing Countrywide Signs Franchise logo

Countrywide Signs Franchise


Run your own commercial and residential signage business with a Countrywide...

Add to Enquiry Basket

Find Out More
An image showing Active Future Franchise logo

Active Future Franchise


Help keep your community moving by becoming a franchise owner with one of t...

Add to Enquiry Basket

Find Out More
An image showing No Water Just Shine Franchise logo

No Water Just Shine Franchise


A unique new car valeting business model that requires no water! Discover t...

Add to Enquiry Basket

Find Out More
An image showing Husse UK Franchise logo

Husse UK Franchise


Join the UK's leading pet food supplier franchise and benefit from full tra...

Add to Enquiry Basket

Find Out More

Explore More with Franchise Planet


Latest Franchise News

Read the latest franchise news at Franchise Planet. How about one of the below similar articles?

5 reasons to invest in a gym franchise

5 reasons to invest in a gym franchise

Posted Friday July 23, 2021

Gyms are becoming increasingly popular, with membership numbers increasing worldwide. Gyms are a great place for people to increase their fitness levels, lose weight and enjoy social interactions with other...

Continue Reading...

Envie Roses Lands at Franchise Planet

Envie Roses Lands at Franchise Planet

Posted Wednesday December 21, 2022

Ring In 2023 With a Home Based Franchise Business We are delighted to welcome Envie Roses to the Franchise Planet franchise opportunities directory. Established in 2014, Envie Roses is a...

Continue Reading...

10 Reasons to Invest in a Coffee Shop Franchise

10 Reasons to Invest in a Coffee Shop Franchise

Posted Tuesday November 8, 2022

Coffee is one of the biggest markets on the planet. If you’re looking to be your own boss, then you’ve picked a fantastic franchise sector to explore. Because the coffee...

Continue Reading...

10 Reasons to Buy a Pet Franchise

10 Reasons to Buy a Pet Franchise

Posted Saturday October 8, 2022

Love pets? Looking to ditch employment and be your own boss? Surely those reasons are enough to encourage you to buy a franchise already, but if not, we’ve got 10...

Continue Reading...

What Are Merchandising Franchises and Should You Invest in One?

What Are Merchandising Franchises and Should You Invest in One?

Posted Wednesday March 1, 2023

With retail and merchandising worth billions to the UK economy, it makes sense that such a lucrative sector should have opportunities within franchising. Franchising is a great way to be...

Continue Reading...

What Are The Differences Between Franchising and Employment?

What Are The Differences Between Franchising and Employment?

Posted Wednesday February 22, 2023

Franchising is a great way to get in to business ownership. If you’re transitioning from employment into business ownership, you’ll be pleased to know that there are many similarities between...

Continue Reading...

Brush Up on Franchising

Franchising guides and articles

What is a Multi Unit Franchise?

What is a Multi Unit Franchise?

Posted Tuesday December 20, 2022

When it comes to franchising, the most common scenario will be opening up single units. A single unit is considered as an individual outlet and traditionally this will be the...

Continue Reading...

10 Mistakes to Avoid When Investing in a Franchise

10 Mistakes to Avoid When Investing in a Franchise

Posted Monday December 12, 2022

Now more than ever, more people are discovering the benefits of franchising as a means of business ownership. There are over 1,000 franchises in the UK, each with anywhere from...

Continue Reading...

What is a Franchisor? Franchising Explained

What is a Franchisor? Franchising Explained

Posted Sunday September 25, 2022

Whether you’re looking to buy a franchise or looking to franchise your business, you’ve likely heard of – or will hear of – the term “franchisor”. There are two primary...

Continue Reading...

Sign Up To Our Newsletter


Receive the latest franchise opportunities straight to your inbox. By signing up below we'll send you occasional newsletters and emails on behalf of franchises advertised on this website.

By signing up to our newsletter you agree to our privacy policy.

Subscribed by mistake? Don't worry - this is double opt-in, so you'll receive an email asking you to confirm your subscription. You can unsubscribe from our franchise newsletter at the bottom of every email as well.