Guidance

Franchise arrangements for higher education providers

Published 20 March 2026

Applies to England

© Crown copyright 2026

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This publication is available at https://www.gov.uk/government/publications/franchise-arrangements-for-higher-education-providers/franchise-arrangements-for-higher-education-providers

This guidance should be read alongside the government’s response to the consultation on strengthening oversight of partnership delivery in higher education: Franchising in higher education.

Background

Protecting public money in higher education is essential to ensuring that taxpayer and student investment is used effectively to:

  • support high quality provision
  • expand opportunity
  • deliver positive outcomes for students and the wider economy

Significant public funding flows into the sector through tuition fee and maintenance loans and targeted grant funding. It is vital that this investment is managed responsibly and for its intended purposes.

Robust oversight helps to:

  • maintain confidence in the higher education system
  • ensure value for money for students and taxpayers
  • support a financially sustainable sector that can continue to contribute to national growth and social mobility

Who this applies to

This guidance is for providers delivering any level 4 course or above, including those on postgraduate courses (level 7 and above). It does not apply to apprenticeships, or students studying for modules or credits only.

What we mean by franchising

Our definition of franchising is in line with the Office for Students (OfS) definition of ‘subcontractual partnership’.

Franchising in higher education

The government’s response to the consultation on strengthening oversight of partnership delivery in higher education was published in December 2025: Franchising in higher education.

From academic year 2028 to 2029, higher education providers delivering courses through franchise arrangements will be required to be registered directly with OfS where they have 300 or more franchised students. They will need to do this unless an exemption applies.

This will be a condition of continued eligibility for public student finance for new students.

Existing students

The government response makes clear that: ‘Franchised courses will continue to be designated for student finance for existing students. Existing students are those students who started their course before the implementation year.’  

This means that any student on a course that started before the implementation year (academic year 2028 to 2029) will still be eligible for student finance until they finish that course.

Franchised student headcount

The threshold is a headcount measure of all franchised students on courses that are designated for student finance. It counts franchised students across all partnerships that a franchised provider might have.

The Department for Education (DfE) will use the data definitions used in the OfS data – namely the definition of ‘subcontract’ for the purposes of this headcount measure.

This is published in the OfS subcontractual partnership size and shape of provision data, which captures a single academic year.

Apprentices are not counted towards the threshold as their funding is overseen directly by DfE.

Including all franchised students at franchised providers for the threshold will ensure that the focus is not only on protecting public money but also on the quality of higher education at franchised providers.   

Students in scope of threshold count

Subcontracted out students (registered at lead provider, taught at delivery provider) including:

  • full time students
  • part time students
  • online delivery
    students
  • domestic students
  • international students
  • students studying for a L4+ qualification
  • publicly funded students
  • self-funded students

Students not in scope

This includes:

  • non-subcontracted students (directly registered at the delivery provider)
  • apprentices
  • students studying for credits or modules only

Margin of error

We do not propose to operate a ‘margin of error’ for providers who exceed the threshold.

We believe that individual providers will be best able to judge the margin of error they need to allow themselves to ensure that they remain under the threshold if they are not registered with OfS.

We will consider appeals on a case by case basis, including in the implementation period.

We will publish further information on the appeals process in due course.

In the first 2 years of implementation, providers will be able to appeal the DfE decision that their numbers exceeded the threshold. The provider can do this if they reasonably believe that it had a student population of less than 300 in the academic year prior to the determination of the franchised provider’s student population.

Correction year

Where a provider goes over the threshold while unregistered, it may be subject to a correction year.

The correction year will mean that courses that a franchised provider delivers will be de-designated for student finance for new students for the following academic year, even in cases where the provider has registered with OfS in the interim. 

In practice, this will impact both a franchised provider and its lead providers in the following ways:

  • franchised providers will no longer be able to deliver courses designated for student finance for new students.
  • lead providers who had intended to deliver a course through that franchised provider. will no longer be able to have that course designated for student finance for new students and will need to find an alternative delivery mechanism

Example of an appeal being upheld and resulting in a correction year

An unregistered franchised provider had more than 300 franchised students in academic year 2025 to 2026. Under the policy this means that the provider must register with OfS in order to have its courses designated in academic year 2028 to 2029.

The provider appeals this on the basis that it certifies its headcount is under 300 in academic year 2026 to 2027. The appeal is upheld meaning it is allowed to franchise unregistered in academic year 2028 to 2029.

If the provider is then found to have misrepresented their headcount (and that they had 300 or more franchised students) without being registered with OfS, they would be subject to a correction year.

This means their courses will not be designated for student finance for new franchised students in 2029 to 2030 (the correction year), even if they have registered with OfS by 2029 to 2030.

Lead providers franchising to this provider will still be able to have their courses designated for student finance for new students in the 2028 to 2029 academic year as this decision will already have been made. However, they will not be able to have courses delivered by this provider designated for student finance for new students in 2029 to 2030.

Impact on students who interrupt their studies

In a franchising arrangement, the student’s contract is with the lead provider, with which they are registered. The lead provider should make sure that the student can return to their studies and should offer suitable arrangements for the student to do so. 

Any students who suspend their studies prior to a ‘correction year’ taking effect should be allowed to return to their studies. The correction year only applies to new students.

Exempt providers

The following bodies, when acting directly as franchise delivery partners, will be exempt from the requirement to register with OfS:

  • state-funded schools
  • academies and academy trusts
  • federation or federated school
  • further education corporations
  • sixth form college corporations
  • designated institutions
  • providers of National Health Service (NHS) services (including an NHS trust established under Section 25 of the National Health Service Act 2006)
  • police and crime commissioners
  • local authorities
  • government departments
  • the armed forces
  • mayoral combined authorities

Joint venture partnerships with exempt bodies or registered providers

All joint ventures are in scope of this policy, except for the exemption already announced in the consultation response for joint medical and pharmacy schools owned by 2 or more registered providers.

This means that all joint ventures will have to register with the OfS if over the threshold, even if all the owners of the joint venture are themselves bodies which would be exempt. This is because the joint venture is a separate legal entity.

OfS registration for joint ventures

OfS continues to assess eligibility for registration on an individual basis.

The principles it applies when considering whether to make an exception – such that a provider is eligible for registration even where it meets the majority, but not all, of the relevant characteristics – are set out in paragraph 79 of the OfS Regulatory Framework.

We recognise that some providers currently delivering franchised provision are structured as subsidiary companies of registered higher education institutions. This means that such entities may need, under the existing OfS registration arrangements, to seek a specific exception in order to register.

In the case of common or overlapping ownership of franchise providers, OfS would be likely to place weight on the principle ‘how far registration of the provider would allow for regulatory alignment with other government departments or agencies’ in considering whether an exception should be made.

Such providers should still apply for registration if they are over, or forecast they will go over, DfE’s student number threshold.

Providers can speak with OfS before submitting an application if they are unsure about any eligibility matter. OfS will not normally be able to make a formal decision on eligibility without seeing the full detail of a provider’s application.

Preparing for OfS registration

Providers should familiarise themselves with OfS regulatory advice 3. This sets out guidance that applies to providers that make an application for registration with OfS on or after 28 August 2025.

Reference: Regulatory advice 3: How to register with the Office for Students – Office for Students

Providers currently based outside of England but not in the devolved administrations are in scope. They will need to consider whether or not they meet the definition of ‘English provider’ in OfS’s eligibility criteria to determine their decision-making regarding any application to register.

Lead providers and franchised providers in the devolved administrations are not in scope of the policy. Higher education is devolved and OfS is only the regulator of higher education in England.

OfS activities

OfS. is also undertaking a range of activity in the interests of protecting public money. It has:

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