Types of franchises, and where we fit in
Franchising offers an exciting opportunity for entrepreneurs to own a business with an established brand, a proven business model, and support from the franchisor.
In the UK, franchise businesses span across numerous sectors, providing a diverse range of options for those looking to invest. Whether you’re interested in food, health services, retail, or home care, the UK franchise landscape has something to offer.
What are the different types of franchise businesses available to potential owners in the UK?
Product Distribution Franchises
A product distribution franchise is a business model where a franchisor grants a franchisee the right to sell or distribute its products within a specified area or region. In a product distribution franchise, the franchisee doesn’t typically offer a complete range of services associated with a business but instead focuses primarily on selling or distributing specific products. The franchisor typically provides the product line, marketing support, and guidelines on how the products should be presented and sold.
Examples of industries that utilise this model include automotive, soft drinks and beverages, consumer electronics and fashion.
Benefits such as working alongside an established brand, owning an exclusive territory and lower startup costs, make product distribution franchises an appealing proposition.
Business Format Franchises
A business format franchise is a type of franchise where the franchisor provides the franchisee with a comprehensive package that includes not just the brand name but also the business model, marketing strategies, operational guidelines, and support systems necessary to run the business. This package allows the franchisee to replicate a successful business model in a new location while following a set framework laid out by the franchisor.
Examples of industries that utilise this model include fast food restaurants, retail, automotive services, education and tutoring, cleaning and maintenance.
Benefits such as a proven business model, ongoing support and training as well as a faster set up, make business format franchises popular.
This model is especially attractive for individuals who want to own a business but prefer the security and guidance provided by a larger, established company.
Management Franchises
A management franchise is a type of franchise where the franchisee primarily focuses on managing the business operations rather than being involved in hands-on tasks such as the direct provision of services or production. In this model, the franchisee typically hires and supervises a team to run the business according to the franchisor’s systems and standards.
In essence, the franchisee is more like a business manager overseeing operations, while the franchisor provides the brand, system, training, and ongoing support.
Examples of industries that utilise this model include hotel and hospitality, fitness and health clubs and restaurants.
Benefits of this franchise model include scalability, access to proven systems, less financial investment, as well as ongoing support. Home Instead is an example of a management franchise.
This model is appealing to individuals who have strong managerial and organisational skills but might not want to get too involved in the operational or hands-on aspects of the business.
Investment Franchises
An investment franchise is a type of franchise model where the franchisee primarily invests capital in the franchise but may not necessarily be involved in the day-to-day operations. Instead, the franchisee’s role is more focused on providing the financial resources to help establish or grow the business. This model is particularly suited for those who want to invest in a franchise without actively managing the business.
Examples of industries that utilise this model include hospitality and hotels, senior care services, retail chains and fitness centres.
Benefits of an investment franchise include reduced involvement in daily operations, scalability and support & training.
The investment franchise model is a great option for those looking to invest in a business but not necessarily manage it directly.
Conversion Franchises
A conversion franchise is a type of franchise where an existing, independently owned business transitions into a franchise system. Instead of starting a new business from scratch, the owner of an established business decides to join a larger franchise brand. The business converts to operate under the franchise’s name, branding, processes, and support structure, while still maintaining its existing location, staff, and operational setup.
Examples of industries that utilise this model include retail, restaurants, automotive services, fitness and hospitality.
Benefits of conversion franchising include access to marketing resources, increased profit potential and established brand recognition, making it an attractive option for business owners looking to leverage the power of an established franchise while maintaining their existing business setup. It offers significant advantages in brand strength, support and growth potential.
Job Franchises
A job franchise refers to a business model where an individual (the franchisee) purchases the rights to operate a business using the name, branding, products, services, and operational systems of an established company (the franchisor). The franchisee typically pays an initial fee and ongoing royalties in exchange for the right to use the franchisor’s business model and receive support.
Examples of industries that utilise this model include food and beverage, retail, fitness, education and tutoring, healthcare and beauty, cleaning and maintenance.
Benefits of this franchise model include a proven business model and marketing power.
Online Franchises
An online franchise is a business model where an individual (franchisee) operates a franchise remotely or through an online platform, leveraging the established brand, products, and services of a parent company (franchisor) without needing a physical storefront. This model often involves offering goods, services, or digital products over the internet, allowing franchisees to reach customers globally or within specific regions.
Examples of industries that utilise this model include food and beverage, education and tutoring, fitness, retail, consulting and coaching.
With lower overhead costs, flexibility and the potentials for global reach, online franchises are becoming increasingly popular due to the rise in e-commerce, digital services, and the shift towards remote work and learning.
Single Unit vs. Multi-Unit Franchises
A single unit franchise is the most common type of franchise model, where a franchisee owns and operates a single franchise unit. The franchisee is responsible for the day-to-day operations, staffing, and management of that particular location.
The benefits of a single-unit franchise include a lower investment, focused attention and are often easier to manage. Examples include fast food, retail and fitness.
In a multi-unit franchise model, the franchisee owns and operates multiple franchise locations. This often involves a larger investment and more managerial responsibilities as the franchisee has to oversee several units.
Benefits of a multi-unit franchise include economies of scale, operational synergies and growth potential. Examples of multi-unit franchises include food and beverage, health and fitness and retail.
Single-unit franchises are popular with first-time franchisees or those who want a smaller, more manageable business. Whilst multi-unit franchises are suitable for experienced entrepreneurs looking to scale their business quickly and increase their market presence.
Both models can be successful depending on the franchisee’s experience, available capital, and growth goals.
Master Franchises
A master franchise is a business arrangement in which a company (the franchisor) grants an individual or entity (the master franchisee) the rights to operate a franchise in a specific territory, usually a country or a large region. The master franchisee not only operates their own outlets but also has the authority to sub-franchise to other individuals or entities within the designated area. This model allows the franchisor to expand rapidly without the need to manage each individual location, while the master franchisee benefits from the brand’s established system.
Examples of industries that utilise this model include food and beverage, fitness and health, retail and services, education and training, hospitality.
Benefits of this type of franchise include rapid expansion, scalability and local knowledge.
Where Home Instead Fits In
As a management franchise, Home Instead fits in well to the UK franchise landscape as a leading player in the home care sector.
Individuals coming into Home Instead require no care experience, however being caring, compassionate and having the skills to be an effective leader are good qualities to open a franchise with Home Instead. The owner will be responsible forbusiness growth, with a team of care professionals managing and delivering quality care.
Its unique position as a service-oriented franchise focused on quality and personalised care, combined with strong market demand and a well-established brand, helps it maintain a competitive edge in a growing and vital industry.
Become a Home Instead franchisee
Book a call with our Franchise Development Manager Luke Spellman. He can give you the information you need on what it means to run a home care franchise with Home Instead.