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Types of Franchise Ownerships

By 27 January 2021No Comments

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At the last count, franchising was estimated to be worth at least £15 billion to the UK economy, employed more than 710,000 people and there were around 1,000 of them operating. Franchising is huge in the UK and other Western Nations. And it’s a growing phenomenon.

And it’s not rocket science to understand why. Not when you consider you’re buying into an already established and successful business, marketing and promotional materials are all supplied, and you have a whole host of mentors’ brains to pick – all of whom are not just in the same industry, but company. The result being that 97% of franchisees in the UK record an annual turnover of more than £250,000. Show us the start-up business that can equal that sort of sum in its first couple of years trading…

Once you’ve decided that franchising is the route you want to go down, there are other decisions to make. It’s not just about which company you want to become a franchisee with, for instance. You’ll also have to choose the type of franchise model you prefer. Here we describe the top three models in the UK today:

Types of franchises

Basically, the different types of franchises in the UK are split into three distinct types – business format, management franchise and product distribution franchise.

Business Format

This is the most popular type of franchise and the one most people are familiar with, even outside the franchise industry. It’s where you buy into a business and open your own outlet of it. Sandwich store Subway is a good example of this.


  • Can use the brand name
  • Business plan has already been written up
  • Promotional materials are provided
  • Great for someone just starting out in business
  • Pretty failsafe ie follow the system and you’ll succeed


  • There’s very little independence to ‘do your own thing’ ie uniforms and goods/service provision is the same throughout
  • The franchisor may have a lot of involvement in your business – whether you want it or not

Management Format

This type of franchise opportunity appeals to those who are more interested in the planning the strategic growth of a business rather than the day-to-day running of it. It’s less of a behind the counter and interacting customers approach, than an office-based role where you’ll manage a team from behind the scenes.


  • You’ll get the training and can tap into the experience of other management mentors
  • Excellent for those who have had previous management training since they can ‘hit the ground running’
  • Allows you to enter a sector you’ve never been in before since you’re only managing. Your team will have the necessary skills


  • You won’t get fully involved in the day-to-day running of the operation, so may feel a little ‘out of things’
  • You’ll have to pay for the skilled staff from your profits
  • This type of role requires a good ‘people manager’

Product distribution format. This is the type of franchise where the products or services of the franchisor are distributed or ‘sold on.’ Popular examples of these are the beauty and make-up franchise Avon and the candles company Partylite.


  • There’s more independence when it comes to selling ie you choose where to have a party and how to run it
  • The company provides materials eg brochures to help sell the products and games to use at parties
  • Flexible, so good for parents who work to fit around kids


  • Guidelines aren’t as comprehensive as other franchise models and no step-by-step business model to follow
  • No training given so newbies often flounder

Sourced Network Franchise

The way we work here at Sourced is with a degree of independence in terms of you choose your own property investment strategy and funding opportunities. However, you will get ongoing support and guidance from the Head Office, to make sure you succeed. We can fund your property projects through our platform too!

Training, materials and mentoring are always on tap and you’ll operate under the Sourced banner. Each Sourced franchisee has her or her own territory, but they can expand to an adjacent territory (or elsewhere) if there are no current Sourced franchisees operating in the area.

Interested in our Sourced Network property franchise opportunity? Then download our Prospectus today.

Image with the cover of the Network Prospectus - Download your copy

Sam Clayton

Franchise Manager