With so many UK franchise opportunities, you might be wondering where to get started. So to help you take the first step, here’s an overview of what it means to run a franchise, and suggestions for moving forward.
What is a franchise?
A franchise is a type of business opportunity where an established company gives you the right to trade under their name for a fee. In other words, the company lets you use their business elements like trademarks, names and marketing materials to set up a branch or franchise.
You’ll normally need an upfront investment to get started, and you’ll pay the company part of your profits. The usual costs you can expect include:
- Franchise fee: a one-time payment to buy into the franchise
- Royalty fee: ongoing payments you make for the right to use the company’s trademarks, names, etc.
Some franchises have additional fees, so always confirm these before you apply.
The main advantage of franchising is that there’s no need to build a customer base from scratch. However, you’re only running a franchise, not the business itself, so you won’t have much say in the direction the company takes.
If you’re considering running a franchise, here are five of the most popular UK opportunities.
1. Subway
Best known for its tasty sandwiches, Subway is a hugely popular fast-food chain with UK franchise opportunities.
According to Subway, it has one of the lowest startup costs for a business of its size and popularity. Your initial fee is only around £8,500. However, the total investment costs can run to more than £200,000 depending on the store location. You also pay 8% of your net sales in royalties and roughly 4% of net sales towards a marketing fund. So, the costs can add up.
- Potential earnings vary widely between stores, and Subway doesn’t publish this data.
- Before opening your store, you attend a two-week training course in Cambridge. You also have full access to support and mentoring from your nearest Development Office. They walk you through everything from leasing to daily operations.
- Agreements run for around 20 years.
If you’re brand new to franchising and looking for support from a stable, popular brand, Subway might be an option.
2. McDonald’s
No franchise opportunity list is complete without touching on the ever-popular McDonald’s! It’s a globally recognised brand and it’s still growing steadily. It’s a solid opportunity for franchisees with substantial capital.
- Startup costs are higher than Subway. You’ll need at least £100,000 upfront, but the total investment can run to well over £350,000.
- That said, royalty fees are lower (5%), but you’ll still pay around 4.5% in advertising funds from net sales.
- After your first year, the typical cash flow is £50,000+.
- Again, agreements are for 20 years.
What’s great about McDonald’s franchise opportunities in the UK is the comprehensive support you get. After the 26-week training programme, you have full access to ongoing support.
3. Drain Doctor
Drain Doctor is an emergency plumbing service open to new franchisees. They have contracts with big names like Nando’s, DHL and Wetherspoon, so you’ll receive a steady stream of work from the outset.
- The total investment is roughly £86,000 + VAT.
- They can help you secure up to 70% of your investment through bank funding.
- According to its franchise website, franchisees can eventually earn over £1 million per year.
- s a franchisee, you’ll receive ongoing mentoring and support, including a 12-week programme, and you won’t need prior plumbing experience.
You won’t be expected to do any plumbing or maintenance work, either – instead, you’ll be running the team.
4. Kumon
Founded in 1958, Kumon is a popular maths and English learning franchise.
- You pay around £3,000 upfront, and roughly £40,000 all in.
- Contracts only last five years, which gives you some flexibility to move on to other opportunities in the long run.
- You’ll work alongside a Local Area Manager to get everything up and running.
You’ll be involved in teaching the students, though, so you do need a degree for this UK franchise opportunity.
5. Anytime Fitness
Sure, lockdown means gyms are closed right now, but that won’t always be the case. Anytime Fitness is a 24/7 fitness facility, and it’s worth considering if you’re a budding franchisee in the UK.
- Contracts run between five and 10 years.
- There’s no royalty fee payable, but the total investment could exceed £550,000.
- You also need around £170,000 upfront.
Anytime Fitness franchises have a great track record – with around 97% of franchisees being successful – and you’ll benefit from extensive support.
Takeaway
A franchise offers a great opportunity to learn how to run a business, especially if you’re just starting out. That said, they still require an upfront investment, and you might prefer the freedom of just starting your own business from scratch.
If you do decide to pursue a franchise, remember that there’s a huge range of UK franchise opportunities out there. Explore as many options as possible to find the right fit for your goals, and talk to existing franchisees to learn what it’s really like working there.
And, don’t forget to get financial and legal advice before investing in any business.