What is a Franchise? UK Definition, Examples & Market Guide

Introduction

If you’ve ever wondered “what is a franchise?”, you’re not alone. Franchising is one of the most popular ways to start a business in the UK, offering entrepreneurs the chance to run a proven business model with brand recognition, training, and ongoing support.

In this guide, we’ll break down the franchise definition, explore real-world examples, and provide a UK-specific market overview so you can decide if franchising is the right path for you.

Franchise Definition: What Does It Mean?

A franchise is a legal and commercial relationship between the owner of a brand (the franchisor) and an entrepreneur (the franchisee) who buys the rights to operate under that brand’s name.

• Franchisor → The company that owns the trademarks, systems, and brand identity.

• Franchisee → The individual or business entity that invests in using the franchisor’s system and pays fees or royalties.

👉 In simple terms: A franchise allows you to run your own business, but with the backing of a proven brand and business model.

Example: A McDonald’s in London is not owned directly by McDonald’s Corporation—it’s operated by a local franchisee who follows the company’s system.

How Does a Franchise Work?

Franchising typically involves:

1. Initial Franchise Fee – Payment to gain rights to use the brand.

2. Ongoing Royalties – A percentage of sales paid to the franchisor.

3. Training & Support – The franchisor provides setup guidance, marketing, and operational systems.

4. Territorial Rights – Franchisees may receive exclusive areas to operate in.

Benefits of Franchising

• Lower Risk – You’re joining a proven system.

• Brand Recognition – Customers already trust the name.

• Training & Support – Even beginners can succeed with franchisor guidance.

• Financing Options – Banks in the UK are more likely to fund franchises than brand-new startups.

Examples of Franchises in the UK

The UK is home to 48,000+ franchise units, across industries such as:

• Food & Drink: McDonald’s, Subway, Costa Coffee

• Retail: Boots Opticians, The Body Shop

• Services: Driver Hire, Snap-on Tools, Tutor Doctor

• Fitness & Wellness: Anytime Fitness, PureGym

The UK Franchise Market in Numbers

According to the British Franchise Association (BFA):

• The UK franchise industry is worth £15 billion+ annually.

• Over 90% of franchisees report profitability.

• Nearly half of all franchisees are under 30 years old, making it attractive to younger entrepreneurs.

Is a Franchise Right for You?

Choosing a franchise depends on your:

• Budget (franchise investments range from £10,000 to £1M+).

• Industry interests (food, retail, services, fitness).

• Commitment to follow a system instead of “reinventing the wheel.”

👉 If you’re exploring franchises in the UK, use our FranScan discovery tool to compare industries, investment levels, and opportunities.

Conclusion

A franchise is essentially a partnership between an established brand and an entrepreneur looking to start a business with lower risk. In the UK, franchising is thriving—offering a pathway for thousands of business owners to grow under trusted names.

If you’re considering joining them, start by researching industries, comparing franchise opportunities, and calculating your budget. With the right match, franchising can be your gateway to entrepreneurship.