My partners and I are considering purchasing four KFC restaurants around London. My share of the investment would exceed 200,000 pounds. How can I use franchise businesses for the Tier 1 program? What are the pros and cons of using franchises versus starting a new business or buying an existing one in this program?
Answers
The Immigration rules do permit franchise businesses to be used for your Entrepreneur visa application. The advantage is the franchise you will operate under is a well-known brand and already has a set business plan that is likely to be provided with the franchise agreement and it has an established presence in the UK. The disadvantage may be the lack of flexibility in how you can expand the business and the possible franchise restrictions you would need to follow as well as the research you would need to undertake in order to know the business structure well enough to answer all questions at the interview stage confidently. Given you are planning on purchasing four KFC branches, the chances of having 10 or more employees within the first three years of the visa you are granted is highly likely and this will therefore allow you to apply for an accelerated route to settlement. I hope this was of help.
In order to qualify for the Tier 1 (Entrepreneur) visa you must have 200,000 pounds available to invest in a new or existing UK business. There is nothing to stop you investing in a franchise business, and this option may have some advantages. For example, you will need to submit a business plan in support of your visa application to show that you are a genuine entrepreneur, which you may find easier to prepare where you are setting up a well-known franchise. Whilst it will depend on the particular circumstances of your case, you will need to ensure that you are able to become a director of your franchise business, and that you invest 200,000 pounds into the business once your visa has been granted (or before, should you wish). To extend your entrepreneur visa in due course, you will also need to show that your investment has resulted in the creation of at least 2 new full-time jobs for settled workers. Franchises traditionally offer less flexibility with regard to how you run your business, so you will need to ensure that your agreement with the franchisor gives you the flexibility to meet the requirements to extend your visa. Tier 1 (Entrepreneur) applications can be very complex, and it is advisable to instruct an immigration lawyer to help you navigate the process.
You have to remember that the money you spend on purchasing the franchise does not count towards the investment money.
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