How to Franchise Your Business in the UK: Six Steps
Ready to take your business across the UK?
Julie Clabby, co-founder of Familia, grew her own business into a national franchise network before helping other founders do the same. In this video she sets out the six-step framework for franchising a business successfully, drawing on years of building a network herself.
Whether you are considering franchising or have just started, it gives you practical steps you can act on straight away.
Watch time: 10m 51s
The six steps in brief
Franchising means licensing someone else to use your brand and run a copy of your proven business in another part of the UK. You provide the training, systems, support and know-how, and in return they pay you a royalty, usually a percentage of turnover or a flat fee. Because franchisees invest their own capital, you can grow faster than you could alone. For more detail, read our guide on how to franchise your business.
1. Run a pilot. Stress test your marketing, pricing, product and service so you know they can be repeated elsewhere. The pilot must run without you at the helm, because franchisees will have to run it without you by their side.
2. Make the numbers work. The pilot has to make enough profit for a franchisee to pay the royalty and still earn a good living. Royalties typically run from 3% to 10%, sometimes 15%, depending on the sector. With only a few franchisees at first the income is modest. The real return comes at 10, 20, 50 or 100 units. You also need the capital to get franchise-ready, from systems to legal agreements.
3. Map your territories. Each franchisee gets a protected territory. Use your pilot’s customer data to size them properly rather than drawing outlines on Google Maps. Too big and you give away opportunities. Too small and franchisees can’t make a living.
4. Put the legal side in place. Your franchise agreement should be drafted by a specialist franchise lawyer, not generated by AI. Register your trademarks before you start, and prepare NDAs, business plan templates and a prospectus.
5. Write the operations manual. Today this is usually an online portal with videos, guides, downloads and quizzes. Document everything, because anything left open to interpretation will be interpreted differently and dilute your brand. It becomes the franchisee’s reference from day one.
6. Recruit your first franchisees. Your first wave sets the culture of the network, so choose carefully. Recruitment is a two-way process, and the territory goes to the best candidate, not just the first to pay.
Mistakes to avoid. Don’t go too soon, because any weakness in the pilot is repeated across the network. Don’t underestimate the support new franchisees need, as many have never run a business before. And expect your own role to change from operator to coach, mentor and leader of the network.
