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What are franchises as a business model?

Level:
AS, A-Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 5 Feb 2023

A franchise is a business model in which an individual (the franchisee) operates a business using the name, products, services, and processes of a larger company (the franchisor). The franchisee pays the franchisor a fee for the use of its brand, as well as ongoing royalties based on the franchisee's sales. In exchange, the franchisor provides support and training to the franchisee, as well as access to its proprietary products, services, and processes.

Here are some real-world examples of franchises in the UK:

  1. Subway - Subway is a fast-food franchise that offers a range of sandwich and salad options.
  2. KFC - KFC is a fast-food franchise that specializes in fried chicken.
  3. McDonald's - McDonald's is a fast-food franchise that offers a range of menu items, including burgers, fries, and shakes.
  4. Premier Inn - Premier Inn is a hotel franchise that operates throughout the UK, offering budget-friendly accommodations.
  5. The Body Shop - The Body Shop is a cosmetics franchise that offers a range of beauty products made with natural ingredients.
  6. Papa John's - Papa John's is a pizza delivery franchise that offers a range of menu options and delivers to homes and businesses

These are just a few examples of the many franchises that operate in the UK. The franchise model can be an attractive option for entrepreneurs who want to start a business, as it provides the support and resources of a larger company, as well as the potential for access to established brand recognition and customer base.

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