The short answer is yes, and the data backs it up. However, the most interesting takeaway is that franchising in 2026 looks very different to how it did a decade ago...

Domestic franchising, (i.e. national franchising within the UK) contributes £19.1 billion to the economy annually. There are now a record 1,009 franchise systems operating across the country, up 8% since 2018 (British Franchise Journal 2024). According to the British Franchise Association, the sector's twenty-year failure rate sits below 6%  - compare that to the casualty rate among independent start-ups. Even against the current economic headwinds, a 2026 BFA member survey found that 77% of members are confident about their business plans for the year ahead. Those are not the numbers of a sector in decline.

So, given the facts, what's actually changing? Not whether domestic franchising works, but where it's showing up and what it looks like.

The sectors that are growing

Store retail and vehicle services, the old pillars of UK franchising, have declined by 25% and 34% respectively. Personal services franchising has surged 53% since 2018 to fill the gap, which in practice means children's tutoring, pet care, domiciliary home care, and health and wellness concepts. None of it is particularly glamorous, but these are businesses solving real, every day problems and 89% of franchised units remain profitable.

Domiciliary home care deserves a particular mention because the UK's ageing population and a care system under extreme strain have created fertile ground for franchise operators. Several UK care franchises took podium finishes at the 2025 European Franchise Federation Awards in Brussels, which tells you something about the quality of what's being built here. 

Then there's competitive socialising where venues like Boom: Battle Bar and Red Engine combine games, food, and a night out under franchise models. They work because they offer something online retail can't: a shared, in-person experience.

The digital shift and "Franchise as a Service"

Online shopping now accounts for 28% of UK retail sales (ONS, late 2025). That figure alone tells much of the story about franchising's migration away from the shop floor.

Tech and digital services franchises are growing fast domestically. IT support for SMEs, digital marketing agencies and software-based service models all lend themselves naturally to franchising. The global franchise development services market grew from $7.65 billion in 2025 to $8.38 billion in 2026, with the adoption of digital franchise management platforms accounting for a major part of that growth (The Business Research Company, Franchise Development Service Market Report 2026). In short, national franchise networks are following the economy's lead.

For existing franchise networks, the shift to omnichannel and social commerce raises questions that didn't exist a decade ago. Who controls the online store? Who owns the customer data? How do you split online revenue between franchisor and franchisee?  These need careful answers in the franchise agreement, particularly given UK competition law constraints under the Vertical Agreements Block Exemption Order (VABEO). 

Perhaps the most significant development in domestic franchising is "Franchise-as-a-Service": cloud-based subscription models where operators access a franchisor's brand, systems, and support through a recurring fee rather than paying a large upfront franchise fee and committing to physical premises. Pay monthly, plug in, go. This sits alongside a broader democratisation of ownership, where low-cost, home-based, mobile franchise formats are making business ownership accessible to people who wouldn't have considered it five years ago. These models need less capital upfront and can often run from a home office. Online franchise platforms have expanded by 35% in the past two years alone, enabling faster matching between franchisors and prospective franchisees (Business Research Insights, Franchise Market Report 2026).

What this means for businesses considering franchising

For brands evaluating domestic expansion, franchising remains compelling, but the legal architecture around it needs updating. A franchise agreement drafted for a bricks and mortar network in 2015 simply won't cut it because it won't adequately address data sharing, platform usage, social commerce revenue splits, or the regulatory complexity that comes with omnichannel operations.

The UK still has no franchise-specific law - franchise arrangements sit under a patchwork of contract, employment and IP law, topped up by the BFA Code of Ethics and the VABEO. The House of Commons Business and Trade Committee has called for a statutory code of conduct, saying self-regulation is "no longer sustainable" (House of Commons Business and Trade Committee, Small Business Strategy report, February 2026).  Further, in the telecoms industry, more than 60 current and former franchisees have issued proceedings over alleged mistreatment and governance failings. The high profile case is likely to be heard next year, and it may prove the clearest warning yet that a statutory code of conduct is needed to bring more fairness to franchise practices.

So, what might a UK code look like? Australia's Franchising Code of Conduct (substantially remade in April 2025) is one reference point, with mandatory pre-contractual disclosure, cooling-off periods, good faith obligations, compensation for early termination if the franchisor exits, and civil penalties up to A$198,000 per breach. Saudi Arabia's 2019 Commercial Franchise Law takes a similar line: disclosure of documents at least 14 days before signing, registration with the Ministry of Commerce and court enforcement.

The two regimes aren't identical, but there are common threads: disclose upfront, register formally, act in good faith, or face real consequences if you don't. If the UK does adopt a statutory code, these are the key principles that we'd expect policymakers to include. 

Domestic franchising has changed shape – less high street, more home-based; less bricks and mortar, more software and subscriptions. But the core proposition hasn't moved: a tested system, someone else's capital, aligned incentives. Get the legal framework right and it still works.