A driving school franchise is a contract between a school and a self-employed instructor. The instructor pays a set fee and receives some combination of pupil enquiries, a liveried tuition car on the school's lease and insurance, booking and diary support, advertising, and use of the trading name. Lesson income belongs to the instructor, who sets or accepts the hourly rate within the terms of the agreement. A fee-only franchise supplies work and branding while the instructor keeps their own car. A car-included franchise bundles the vehicle, its insurance and usually servicing into a higher weekly figure. A percentage or pay-per-pupil model charges on introductions or on a share of turnover. A flat weekly fee is payable whether lessons are booked or not.
Paid instruction is regulated at the level of the individual. Section 123 of the Road Traffic Act 1988 permits paid instruction in driving a motor car only from a person whose name is on the register of approved instructors, or who holds a current licence, and requires that certificate or licence to be displayed on the vehicle. DVSA registers people, so a franchise agreement cannot supply, share or cover a badge. The duties that follow are equally personal. ADI registration runs four years and costs £300 to renew, a standards check normally falls every four years, and failing to book or attend one leads to removal from the register (GOV.UK, checked 6 September 2026). The voluntary driving instructor code of practice covering personal conduct, business dealings, advertising and disputes is declared by the individual through their DVSA registration and was last updated on 20 November 2025.
Two payment routes exist and the agreement should name one. Pupils pay the school, which passes lesson income on and deducts the fee; or pupils pay the instructor, who settles the fee separately. The VAT registration threshold of £90,000 of taxable turnover over twelve months applies to that instructor's own trading (GOV.UK, checked 6 September 2026). A pupil who has paid for ten hours and taken four holds a balance that must sit with an identifiable party once an instructor leaves. Test money sits outside the franchise: a car practical test costs £62 on weekdays and £75 in the evening, at weekends and on bank holidays, the theory test £23, and GOV.UK states that booking a car driving test for someone else is against the law and that an instructor is not allowed to do it (checked 6 September 2026).
Exit terms include the notice period and any restriction on teaching former pupils afterwards. Under the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022, in force since 1 June 2022, a non-compete obligation of indefinite duration or exceeding five years is an excluded restriction, as is a post-termination obligation unless it is confined to competing goods or services, limited to the premises the buyer operated from, necessary to protect know-how transferred to them, and no longer than one year. Falling outside the block exemption removes the safe harbour; the clause is not automatically void. Employment status is a separate question. Describing a franchisee as self-employed in the contract does not settle the question, since the tests look at control over rates, hours and the diary, and tax status and employment-law status can differ.
Look for per-instructor accounts with permissions that stop one franchisee seeing another's pupils, alongside an office view across every diary for allocating enquiries. Check that franchise fees are billed on a schedule with arrears visible per instructor, and that pupil card payments can be routed either to the school's account or to the instructor's, because the contract decides that and the software has to follow it. Insist on a per-pupil ledger of prepaid hours showing the remaining balance at any given date, and on reassigning a pupil, their balance and their lesson history to another instructor in one action. Ask directly how an exit works: a full export of one franchisee's pupils, notes and payment history in an open format, plus immediate revocation of their access. Check for per-instructor reminder fields for ADI badge expiry, standards check date, insurance and MOT. For tests, the system should hold the pupil's own booking reference and test date, since the pupil books the car test themselves. Finally, check that the system's access rights match the data controller and processor split in the franchise contract.
Checked on 6 September 2026 against GOV.UK (ADI fees and registration, ADI standards check, driving instructor code of practice, driving test and theory test fees, booking tests for pupils, VAT registration threshold), section 123 of the Road Traffic Act 1988, and the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022; DVSA fees and rules change, so re-check any figure before relying on it, and this entry is general information rather than legal advice.