The Dark Side of Franchising: How Lack of Regulation in the UK Fuels a New Breed of Rogue Franchisors

At the heart of this emerging trend is the practice of selling non-exclusive franchises. Traditionally, each franchisee is granted a defined geographical territory in which they have the sole right to operate the business model. This exclusivity ensures the franchisee is not in direct competition with others from the same brand and that the franchisor’s focus remains on supporting a manageable number of partners. But the new model throws this principle out the window. By offering non-exclusive rights, franchisors can sell an unlimited number of franchises, often within the same region or market.

This approach has triggered an explosion in franchising numbers for some companies. One prominent example, that only has a small number of staff, claims to have 900 franchisees. That seems implausible for any business attempting to offer real support. Another company—operating in the mental wellness sector—boasts of having signed up 30 franchisees in the first 30 minutes of its launch, 50 in a single day, 100 within a week, and 215 in just three months. A third enterprise in the virtual personal assistant space operates similarly, with a continually growing number of franchisees onboarded in rapid succession.

Such growth is only achievable when franchisors abandon selectivity and instead adopt a franchising philosopy of “accept anyone who pays”. There is no careful vetting, no rigorous selection process, no serious concern about whether the franchisee has the right background, temperament, or resources to succeed. The franchisor’s interest lies solely in collecting initial fees—often several thousand pounds—and securing ongoing monthly payments, usually locked in for a minimum of five years.

What makes this franchising model particularly concerning is how it reshapes the training and support systems within these franchises. Personalized coaching, operational guidance, and one-on-one mentorship—once hallmarks of a quality franchise—are replaced by generic online tutorials and pre-recorded content. Franchisees are left to navigate the business largely on their own, with minimal real-time support. This do-it-yourself approach is cheap to run and scales easily, but it comes at an enormous cost to the individuals involved.

The irony is especially painful in cases where the franchisor’s brand promises to help others. One such business markets itself as being at the forefront of promoting mental wellbeing. Yet the system it operates is structurally set up to fail most of the very people it recruits. Franchisees lured by promises of running a meaningful and successful business end up underprepared, unsupported, and overwhelmed. Many will quietly withdraw, their investment gone, their confidence shattered, and their sense of self-worth deeply affected. For a company that purports to promote mental health, the contradiction is staggering.

Perhaps most disturbingly, this type of franchising isn’t happening in the shadows. It is, in fact, being celebrated. Industry events have offered speaking platforms to the founders of these companies, giving them legitimacy and visibility. Their appearances at major franchise exhibitions suggest a level of endorsement that sends a troubling message: that high-volume recruitment, even with little chance of franchisee success, is not only acceptable but admirable.

This tacit approval from within the industry highlights the broader issue: the UK franchise sector is unregulated. Unlike other business models that may be governed by specific standards or oversight bodies, franchising in the UK lacks any formal legal framework or regulatory body. There are voluntary associations, but membership is not mandatory, and their ability to enforce ethical standards is limited. This legal vacuum has created fertile ground for opportunistic franchisors who can legally, if not ethically, build hugely profitable businesses while delivering minimal value to their franchisees.

The damage caused by this franchising business model is manifold. First, it misleads aspiring entrepreneurs. People are sold a dream—of financial independence, of being their own boss, of making a difference—only to discover that the support and opportunity they expected was never really on offer. Second, it undermines the credibility of the franchise industry as a whole. When so many franchisees end up failing and feeling duped, public trust in franchising declines, and serious, ethical franchisors suffer by association.

It’s also worth considering the broader societal impact. The rise of these high-volume, low-support franchises not only wastes the time and money of individuals but also risks their emotional wellbeing. People invest not just capital but hope, ambition, and self-belief. When the promised path to success turns out to be a conveyor belt to failure, the personal toll can be significant. This is especially poignant in businesses purporting to support others—like those in the mental health or personal development sectors. Instead of empowering individuals to help others, these franchises often leave their recruits disillusioned and defeated.

The franchising profits, meanwhile, keep rolling in—for the franchisors. With minimal operating costs and a virtually limitless pool of potential franchisees to tap into, the margins are enormous. And without regulation, there’s little to stop them. They can rebrand, launch new initiatives, and expand their marketing reach to lure in the next wave of hopefuls.

So, what needs to change? At a minimum, the UK franchise sector must move toward regulation. This could include mandatory disclosure requirements, legal obligations around territory exclusivity, and standardised support commitments. There should also be a publicly accessible register of franchisors and franchisee numbers, providing transparency on how many people are involved and what turnover looks like. Furthermore, industry bodies must take a stronger stand against these exploitative practices—rather than celebrating the volume of sign-ups, they should be evaluating the long-term success of franchisees.  

Potential franchisees also need to be better informed. Currently, many are drawn in by slick marketing and unrealistic promises. They often sign up without independent legal advice or a proper business plan. Raising awareness about the importance of due diligence, and encouraging potential franchisees to speak with existing ones before signing any contracts, is essential.

Franchising can still be a powerful business model when executed with care, integrity, and genuine partnership. But if the current trajectory continues unchecked, the UK risks turning franchising into a synonym for exploitation. The industry must decide whether it wants to be a pathway to sustainable entrepreneurship or a machine for churning through hopefuls in pursuit of ever-growing profits.

The choice is clear—but without action, the consequences will continue to unfold. And behind every failed franchise, there is not just a lost investment, but a person left wondering where it all went wrong.