Franchise Bulletin: March 2015 - Premises based franchising - choosing the right model for the outset?

For any franchise which is premises based, it is crucial to ensure that the right premises model is chosen by the franchise from the start. In England and Wales there are two separate models which tend to be used and which for the purposes of this article are referred to as the Sub-Lease model and the Direct Lease model. Which model is chosen will be dictated by the franchisor but the choice of model revolves around the answers to three basic questions. These are

Who wants to have the control of the premises?

Who is going to carry the greater risk in relation to the premises?

What level of financial resources does the franchisor have?

Sub-Lease Model

Direct Lease Model


The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.