{"id":1549775,"date":"2026-09-04T15:22:07","date_gmt":"2026-09-04T13:22:07","guid":{"rendered":"https:\/\/lexpress-franchise.com\/en\/articles\/what-is-a-franchise\/"},"modified":"2026-02-10T14:26:05","modified_gmt":"2026-02-10T12:26:05","slug":"what-is-a-franchise","status":"publish","type":"post","link":"https:\/\/lexpress-franchise.com\/en\/articles\/what-is-a-franchise\/","title":{"rendered":"What Is a Franchise? A UK Guide to How Franchising Works"},"content":{"rendered":"\n

The British Franchise Association’s 2024 National Franchise Survey put the sector’s contribution to the UK economy at \u00a319.1 billion across 1,009 systems and 50,421 units. Unlike France or the United States, the UK has no franchise-specific statute. This guide sets out what a franchise actually is, how the agreement usually works, and how it compares with a licence or an independent start-up.<\/strong><\/p>\n\n\n\n

\n\n\n\n

Franchising sits alongside licensing, symbol groups and independent trading as one of several ways to run a UK business under someone else’s brand, and the terms are often used loosely. This article sets out what a franchise actually involves, how the agreement is usually structured, and how it compares with the alternatives, before looking at the different ways a franchise network can be organised and what the sector’s own figures say about its size.<\/p>\n\n\n\n

What is a franchise?<\/h2>\n\n\n\n

A franchise is a commercial arrangement in which a franchisor<\/strong> licenses a franchisee<\/strong> to run a business using its brand, systems and know-how, in exchange for fees and ongoing payments. The franchisee owns and operates a separate legal business, typically trading as a sole trader, a partnership or a private company limited by shares, and carries the trading risk and the day-to-day running of the outlet. The franchisor retains ownership of the brand, the operating system and the underlying intellectual property, and sets the standards the franchisee agrees to follow under the franchise agreement. Business format franchising, where a complete operating system is licensed alongside the brand, is the model most UK franchises use.<\/p>\n\n\n\n

How a franchise agreement works<\/h2>\n\n\n\n

What the agreement typically covers<\/h3>\n\n\n\n

A franchise agreement is a commercial contract, not a disclosure document, since none exists in the UK. It sets out what the franchisor licenses, what the franchisee pays, and the standards both sides commit to. The terms below recur across most UK franchise agreements, regardless of sector.<\/p>\n\n\n\n