how to open a franchise business in uk

6 Tips for Starting a Franchise in the UK

Full Answer

How to turn a small business into a franchise?

What Steps Do I Need to Take to Franchise My Business?

• Create a Business Plan. The first step to a successful franchise in Australia is a deep understanding of the market. ...
• Pilot the Operation. ...
• Prepare a Franchise Operations Manual. ...
• Create Franchise Agreement. ...
• Training of the Franchisee. ...
• Decide on Investment Costs. ...
• Choose an Ideal Franchisee. ...
• Set Up Management and Support. ...

What are the steps to open a franchise?

Steps to Open a Franchise

• Choose a franchise. This is arguably the most important step. ...
• Connect with the franchisor. Reach out to the company (there is likely a form, like this one ), to get more information about the company. ...
• Choose a location. What area will your franchise location serve? ...
• Create a business plan. ...
• Open your business. ...

How to successfully franchise your business?

• Present Your Business to Potential Franchisees. After identifying your goals, you may now sell your franchise business model to your prospective franchisees.
• Provide Hands-On Training. If you have a vision for your franchise business, your franchisees must share the same objectives with you.
• Work On the Ground. ...
• Implement The Organizational Culture. ...

What does it cost to franchise a business?

Franchise costs include the purchase of equipment and the start-up costs. You typically spend $18,500-$8500 to franchise your business. It depends on your franchise team, the industry you are in, and the level of support you need to decide what amount of costs you will incur.

How many franchisees are there in the UK?

What is the best website to buy franchises?

Why are newcomers drawn to the franchise industry?

Why is franchising good?

How long does a franchise agreement last?

Can you dig deeper into a franchise?

Who are the ex-soldiers in franchises?

See 2 more

How much does it cost to set up a franchise UK?

The initial franchise fee is usually the most expensive fee you have to pay on your journey to becoming a franchise owner. This fee can usually range from anywhere between £300 all the way to £250,000 and up, depending on which franchise you decide to make an investment in.

How do I start a franchise business UK?

Luckily, we've got all the tips you need to make the right decision and take the first step towards starting your very own franchised business.Do your own research. ... Book your place at a Discovery Day. ... Location is key. ... Secure your funding. ... Read the franchise agreement … then read it again! ... Seek out professional help.More items...•

Is franchise business profitable in UK?

93% of UK franchisees profit from their business, with 60% of them enjoying a turnover of more than £250,000.

How do I start my own franchise?

11 Key Steps for Opening a FranchiseSelf-Evaluation. What appeals to you about opening a franchised business? ... Pick a Franchise Consultant to Assist You (Optional) ... Research. ... Attend a Discovery Day. ... Speak to Other Franchisees. ... Find a Suitable Location. ... Choose a Franchise and Secure Funding. ... Sign the Agreement.More items...

Are franchises worth it UK?

Franchises report high profitability and significantly lower failure rates than startups, so it's no surprise it's a popular choice for those wanting to leave employment and take greater control over their working life.

What franchise makes the most money UK?

Top 100 Franchises in the UK 2021RankFRANCHISE NAMEIndustry1McDonald'sFast Food Franchises2AutosmartAutomotive Franchises3Domino'sPizza Franchises4Pizza HutPizza Franchises16 more rows

Do franchise owners get rich?

According to a survey done by Franchise Business Review*, the average pre-tax annual income of franchise owners in the U.S. is about $80,000. However, only 7% of franchise owners earn over $250,000 per year with 51% earning less than $50,000.

How much is KFC franchise UK?

On the Kentucky Fried Chicken UK website, the company states that aspiring franchise owners must have £5 million in assets and £2 million in liquid capital. The franchise fee, which is payable upfront, is approximately £38,000.

How do franchises get funding UK?

Choose a franchise loan and a lender Look for a lender that has experience of dealing with the franchise market. Most high street banks have specialist franchise teams or departments – and as they already lend to other franchises, they can often provide valuable insight into your financial projections.

How does franchise work in UK?

Essentially, a franchisee invests in the franchise business, but this doesn't mean to say they own a share of it. According to The Telegraph, a franchisee buys the rights to use a franchisor's trademark name, product, or technical operations.

Can anyone start a franchise?

Before you can get your operation going, you'll need to have enough initial capital as well as an overall net worth before even considering starting a franchise. Unless you're independently wealthy, you may have to borrow money. Start with commercial banks since they fund many types of franchises.

Do franchises make a lot of money?

Buying a franchise might seem like easy money, but those royalties and fees will quickly cut into profit margins. The majority of franchise owners earn less than $50,000 per year.

How much money do you need to start a franchise?

Franchise startup costs can be as low as $10,000 or as high as $5 million, with the majority falling somewhere between $100,000 and $300,000. The price all depends on the industry, location and type of franchise.

How do franchises get funding UK?

Choose a franchise loan and a lender Look for a lender that has experience of dealing with the franchise market. Most high street banks have specialist franchise teams or departments – and as they already lend to other franchises, they can often provide valuable insight into your financial projections.

Can you open a franchise with no experience?

And that's just how it's always been. Most people don't realize that they can have all of this and more through their own franchise. The best part is that there is no experience or education necessary to owning your own franchise. The only thing that is required is a drive for success.

Can anyone start a franchise?

Before you can get your operation going, you'll need to have enough initial capital as well as an overall net worth before even considering starting a franchise. Unless you're independently wealthy, you may have to borrow money. Start with commercial banks since they fund many types of franchises.

How Can You Choose the Right Franchise Business?

There are a few criteria to consider when choosing the right franchise business:

What is a franchise business?

A franchise is a type of business that offers an entrepreneur the opportunity to buy into a proven and successful business model. Buying a franchise means you get all the benefits of running your own company, but with the backing of an established brand. The best thing about franchises? You can find one in just about any industry or niche! Starting a franchise in the UK can be an exciting experience, but it’s also daunting. There are many different aspects to consider and you need to make sure that you’re making the right decision.

What is a Franchise?

A franchise is simply a business agreement between a franchisor and a franchisee, where the franchisor grants permission to the franchisee to sell or produce goods or services using its trademark. There are various types of franchise businesses such as food and beverage outlets, retail stores, and service-based businesses like dry cleaners. There are also businesses that provide consulting services for other entrepreneurs who want to start their own franchise – these are often known as “business coaching” franchises. Franchises can be both residential (a coffee shop) or non-residential (the right to use a commercial premises).

How do you Get Started?

As a franchisee, you will need to sign a legal agreement with the franchisor before you can start operating. A good contract will protect both of you by ensuring that everyone knows what compliance standards are expected, which rights and responsibilities belong exclusively to one party or another, and how any disputes should be handled.

How Does a Franchise Agreement Typically Work?

In the UK, and in most of Europe and the US, the most important elements of a typical franchise agreement will include:

How Can You Fund A New Franchise Business?

Apart from the initial investment, there are several ways to fund your new franchise business:

What are the Potential Downsides of Opening a Franchise Business?

One of the key downsides to opening a franchise is that you are giving up your creative freedom. The franchisor will decide how much you will sell, how to design the store and what uniforms your employees will wear. If you want a more customized business experience then opening up on your own might be better for you. There are also risks associated with owning a franchise like having to pay an ongoing royalty fee and large upfront costs that can put pressure on any small business, particularly if you don’t have a lot of startup money or collateral.

How to Start a Franchise

Franchising is a unique concept of business and has been in the market for more than fifty years successfully for the most part. It is helping the business owners to reach more customers, generating more revenue. If you decided of entering the business world with franchising, you are making the right decision.

Free Franchise Matching Service Enquiry Form

Searching for the ideal franchise? Don't search for hours use our Free Franchise Matching Service. Just complete the form below & receive details of franchise types you select PLUS a copy of our FREE Franchise Guide straight to your inbox!

How to franchise my business

If you already run your own successful business, you may well be considering the benefits of offering franchises. Perhaps you’re wondering how to franchise my business in the UK, and whether your operational model will work for others?

Benefits of setting up a franchised business operation UK based

Just about any UK business can be transformed into a franchise model, so long as it can be operated nationally and is already profitable. One major benefit of franchising your business operation is that you acquire a variety of owner-operators prepared to put the work into their business and achieve success.

So, how to franchise a business in the UK

As the business lead for your company, you know all the ins and outs of running the operation. If you want to set up your company as a franchise, you will need to get your operations manual down in writing. This will be the “Bible” that your franchisees will work to.

How to secure franchise funding?

Secure your funding through your franchise’s lending partners or a bank.

Why do franchises have discovery days?

Most franchises will run discovery days for prospective business partners to get a better feel for the company and meet the people who run it. You should arrive having thoroughly researched the opportunity and prepared questions to ask. Many discovery days will allocate time to discuss the franchise agreement in detail, so you should find out exactly what the franchise requires of you and offers you in return.

Can you go back to a franchise agreement?

The franchise agreement is a legal document and once you’ve put your name to it, you can’t go back.

Can franchisors give exclusive territories?

Depending on the type of business they operate, some franchisors will be able to allocate exclusive territories to individual franchisees. This is often the case for businesses in the transportation or delivery sectors, or for other businesses that visit clients or customers in their home or workplace, such as home care businesses.

Can you skip the franchise step?

This step should never be skipped, as once you’ve signed and are legally bound to the franchise, it can be very difficult and costly to get out of the agreement. If there is anything that you fundamentally disagree with, the franchise is likely not the one for you and it’s time to go back to the drawing board.

Do you need approval from a franchisor for a high street?

For static businesses like restaurants or shops, location is key, and – if franchisors don ’t offer support with site selection – franchisees should seek out a site which benefits from a high customer footfall, like a high street or shopping centre. This will, of course, need approval from the franchisor, but if you’ve chosen a site that’s well placed and suitable for the business, it’s likely to be given the thumbs up.

What is franchise consultant?

Much like an estate agent is a good ally in the purchase of a home, a franchise consultant has industry-specific knowledge and can relate possibly complicated topics (including the content of agreement and disclosure documents) to you in a more understandable way.

What is franchising training?

One of the most appealing aspects of franchising for those wanting to open a business is the training component. The number of staff members needed to run the operation will depend on the type of franchise chosen, but franchisors usually provide training (a combination of classroom and practical experiences) to the franchisee and at least one other manager. A copy of the operations manual is also typically presented at this time.

What happens if a franchisor's agreement is rigid?

If the franchisor's agreement is more rigid, it isn’t a cause for concern. Remember, franchises are based upon a proven system and the consistency of the brand. If the franchise agreement for the brand you chose is overly negotiable, it could be a sign that the business is in trouble, and a cause for deeper investigation.

What does a franchisor do?

The franchisor will delineate certain parameters for your territory. In addition, most franchisors assist with site selection. If you choose a suitable place for business on your own, the franchisor will have to approve your location before you can move forward.

What is a franchise discovery day?

A Discovery Day is an in-depth meeting between the franchisor and one or more franchisees. It can take place at a local outlet, but most likely will happen at the company’s corporate office. Often the potential franchisee (s) in attendance can ask questions, and will see presentations about what the franchisor can offer. If done at the corporate office, a tour of the different departments and introductions to franchisee training and support personnel are common.

Do franchisors need insurance?

will vary as well. The franchisor will probably have background knowledge of the permits and insurance needed to operate their business system. However, it’s a good idea to check with local authorities to ensure compliance.

Is franchising more flexible?

Some franchisors are more flexible about negotiating certain terms in the franchise agreement (like lease parameters). If that's the case, it’s a good idea to seek counsel from a lawyer with franchise-specific experience to find the best solutions for your particular situation. If the franchisor's agreement is more rigid, it isn’t a cause for concern. Remember, franchises are based upon a proven system and the consistency of the brand. If the franchise agreement for the brand you chose is overly negotiable, it could be a sign that the business is in trouble, and a cause for deeper investigation.

What is franchising a business?

Franchising is essentially having a business template or framework to work from, and adopting it. The general concept involves the franchisor (the original business owner and typically the founder of the enterprise) sharing the concept of the business with franchisees, who will benefit from running a company attached to an established brand, with a proven concept and consumer loyalty.

How to invest in a franchise?

Here’s generally what the process of investing in a franchise entails: The prospective franchisee makes an inquiry, either via a franchise directory website or to the franchisor directly. The franchisor will send prospect information or a brochure covering the business or a Franchise Disclosure Document.

What is the investment fee for a franchise?

Investment Fee. The main investment fee is the franchisee fee, which is what you pay when joining a franchise. Including in the franchise fee is the permission from the franchisor to use the brand, name, logo, products, business model and services and replicating them with your business.

What is royalty fee?

Royalty fee: The royalty fee is an ongoing amount that is paid by a franchisee during the length of a franchise agreement in return for use of the franchisor’s systems, trademark and more. This ongoing fee - sometimes referred to as a management services fee - can sometimes be a flat fee, but is more often than not a percentage of the sales you receive from the franchise. Ongoing service fees are generally paid weekly or monthly to the franchisor, and the amount can vary, but it usually is around six to eight per cent.

What is a franchise agreement?

A Franchise Agreement is a legally-binding document signed by both the franchisee and franchisor, and must be fair and comprehensive. It is unique to the franchise and is not simply a prospectus but a bonafide legal document.

Why is franchise business so popular?

The franchise model is extremely appealing as there are business and investment opportunities catered to all budgets and lifestyles. Many budding entrepreneurs relish the opportunity to purchase a business that requires very little overheads or staff, which makes it a cheaper investment proposition.

Why do businesses adopt franchise models?

A tried-and-tested concept: The reason why a business will adapt a franchise model is because the business owner firmly believes that their concept can be easily adopted and perform well on a broader scale. A support system: Franchise businesses are renowned for offering a stable and professional support system.

What are the rules for a business?

Rules for your type of business. You may have other responsibilities depending on what your business does. Check if you need: licences or permits, for example to play music, sell food or to trade in the street. insurance. There are also rules you must follow if you:

What is the simplest way for 2 or more people to run a business together?

A partnership is the simplest way for 2 or more people to run a business together.

Do you have to pay business rates when you rent a house?

If you rent or buy a property, you may have to pay business rates. Small businesses can apply for a discount on business rates and some may pay nothing. Check if you can claim office, property and equipment as expenses.

Is a limited company separate from a personal company?

If you form a limited company, its finances are separate from your personal finances, but there are more reporting and management responsibilities.

Is it easier to be a sole trader?

Sole traders. It’s simpler to set up as a sole trader, but you’re personally responsible for your business’s debts. You also have some accounting responsibilities. Find out more about being a sole trader and how to register.

How many franchisees are there in the UK?

After all, there are more than 40,000 franchisees in the UK, but only 900 or so recognised business format franchises. That’s 44 franchisees to every franchisor. It’s likely, then, that most of you are reading this with the intention of joining an established brand as a new franchisee.

What is the best website to buy franchises?

Of course, DaltonsBusiness.com is the leading website for franchises for sale. Other online sources include the British Franchise Association (bfa), which has some 400+ member franchises. The bfa also runs seminars that show you how to start a franchise in the UK.

Why are newcomers drawn to the franchise industry?

Most newcomers are drawn to the franchise industry because they’re thinking about: becoming a franchisee. becoming a franchisor. selling to franchisors or franchisees. There are other motivating factors.

Why is franchising good?

It’s a blank canvas on which you can sketch out a new way of life. Because, while the skills you already have are transferable, new skills can always be acquired.

How long does a franchise agreement last?

A franchise agreement typically runs for five years, is weighted in the franchisor’s favour and won’t be amended to suit you. If you choose to take legal advice, make sure it’s from a specialist franchise solicitor.

Can you dig deeper into a franchise?

Then, when you have their approval, you can dig deeper into the franchise itself. You’ll be able to meet some franchisees. And, in time, you’ll get access to sensitive documents like the business plan and franchise agreement.

Who are the ex-soldiers in franchises?

Within the franchise industry there are ex-soldiers who’ve become procurement specialists. There are ex-premier league footballers who’ve become kitchen salesmen. And there are ex-housewives who’ve become high street retailers.