For more on this part of the insurance industry:
Franchise operations insurance financially secures franchisors and franchisees—people who run or own a business under a larger brand name. It can help cover incidents such as:
There are over 48,000 franchise units operating across the UK. Staff, premises, branding and service delivery all need insurance to keep the system running smoothly.
A cleaning franchise firm could face serious costs if a subcontractor damages a client’s property. Without the right public liability (PL) cover, the franchisee might have to pay for repairs and legal fees on their own.
In franchising, one mistake can harm the brand and stop the business from trading. That’s why having tailored insurance in place is key to staying prepared when something goes wrong.
Some franchisees are running several sites under one agreement. This raises demand for bundled insurance. Insurers are also offering tailored cover as more brands are following ESG rules.
Online and app-based franchises are driving demand for cyber and data protection policies as well. But along with these trends are emerging hazards in the sector, like:
One poorly run franchise can hurt the brand and lead to claims. Some smaller franchisees also skip cover to cut costs, which adds risk across the group.
Brokers should review cover closely and suggest crisis or media insurance if needed.
A franchise operation is a business run by someone using another company’s name, brand, and systems. The person running it is called a franchisee, and they follow rules set by the franchisor.
The franchisee pays fees to use the brand and must keep up the same service and quality. Franchise operations insurance helps safeguard both sides from financial and legal risks in this setup.
Each type carries its own hazards and may need different levels of franchise operations insurance.
These are the main people and businesses who may need franchise operations insurance:
The right cover protects against problems that can affect income, reputation, or legal standing.
Most UK franchise businesses will need a mix of the following policies:
Some franchisors also ask for extra cover like stock, building or media liability insurance. Brokers should check the agreement to tailor each policy.
Costs can start from around £5 per month for basic cover, such as PL insurance. Full cover for a small franchise may range between £500 and £2,000 per year. Prices vary based on:
Some policies are bundled by franchisors, while others are arranged separately by franchisees.
Franchises often grow faster and get support with training, tools, and marketing. But there are limits to control, and all units share the risk if one fails.
Insurance helps manage these hazards and protects both the brand and the local business. That’s why franchise operations insurance is key from the start.
