Publication
UK Franchising: A review of the Evidence.
Published: 21 July 2026
ERC SOTA Review No 71
Associated Themes
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Business Growth -
Entrepreneurship -
Finance -
Global Entrepreneurship Monitor ( GEM )
Franchising, in the UK, has become a widely adopted business model, allowing entrepreneurs to operate under established brands while benefiting from proven business systems and ongoing support. Definitions of what constitutes franchising differ (Blair & Lafontaine., 2005; Combs, Michael & Castrogiovanni., 2004; Lafontaine.,1992), but all have the same overarching principle. It is a system, built on contractual agreements, where one firm, the franchisor, grants or sells contractual rights to another firm, the franchisee, that allow them to use its trademarks, resources and general business systems in return for fees and royalties.
It is estimated that franchising employs roughly 770,000 people in the UK, with average turnover per franchise around £386k-£400k (British Franchise Association, 2024). But with recent high-profile franchise disputes[1] drawing attention to the limitations of the UK’s self-regulated franchising system, this review examines what is working well within the UK model, where key risks and weaknesses remain, and explore the effectiveness and ineffectiveness of regulatory approaches adopted in other countries. The latter of which is of great importance as the potential for the UK to adopt formal legislation has been the subject of debate in Parliament (Bowley & Drakes., 2025)
This review is set out in three parts. The first part will look at franchising data from the 2025 Global Entrepreneurship Monitor (GEM) both globally and demographically on the UK. The second part will look into the literature available on the UK franchising industry and challenges faced by franchisors and franchisees. The third part will offer insights from other franchising models in different countries. The focus will be on the US, one of the largest and mature franchise markets in the world; France, one of Europe’s largest franchise markets; and Australia, regarded as one of the most regulated franchise systems in the world. The review concludes by considering the policy implications arising from the evidence.
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