New research reveals a complex and mixed picture of franchising

Drawing on a range of data sources published by the Office for Students (OfS), as well as insights gained from a series of QAA forums and specially organised roundtable events, and from QAA's own enhancement review work, a new QAA report – Is growth outpacing quality? The changing shape of franchised higher education – challenges the assumptions around the state and value of franchised provision in UK higher education.

QAA has published this report alongside a new resource providing advice on meeting the OfS condition on subcontracting, and a related case study from Buckinghamshire New University, both available exclusively for QAA members.

QAA's research has found that different kinds of franchises are delivering significantly different outcomes. It has shown that small-scale partnerships (often involving specialist providers or local colleges) generally produce positive outcomes for students. It has also observed that rapid growth in franchising has led to poorer outcomes for many of its students – and specifically that large-scale partnerships which have grown rapidly over a short period of time are disproportionately failing to meet the baseline thresholds set out by the Office for Students.

This research has found:

• Between 2019-20 and 2023-24, UK domiciled student numbers in full-time, first-degree franchised provision increased by 343 per cent, compared with just 2 per cent growth in student numbers on courses delivered directly by awarding institutions.
• Business and management programmes account for 78 per cent of the growth in franchising, and, by 2023-24, 72 per cent of franchise students were studying business and management.
• Although 28 per cent of all OfS-registered providers are responsible for some amount of franchise provision, just nine lead providers award 70 per cent of full-time undergraduate franchise provision. Six of these nine had more students taught by franchise arrangements than taught directly in 2023-24. For three of those providers, over three-quarters of their provision was franchised.
• In 2017-18, no delivery providers were larger than 1,000 students. By 2023-24 there were at least six that had over 1,000 students, two of which had over 7,000 students. In just five years, one delivery provider has become the largest provider of full-time, undergraduate provision in the UK.
• Student outcomes are more likely to be below OfS thresholds for large, rapidly growing partnerships. Of partnerships that grew by over 1,000 students between 2020-21 and 2023-24, 65 per cent fell below the OfS continuation threshold and 73 per cent below the completion threshold set by the Office for Students. All partnership arrangements serving more than 5,000 students fell below the continuation, completion and progression thresholds.

"Our findings suggest that the situation is much more complex than we see portrayed by newspaper headlines which sometimes tar all franchised provision with the same negative brush," said report author Rebecca Robinson, Data Analyst at QAA. "Many small and specialist partnerships deliver positive outcomes. We need to focus our scrutiny on the areas of higher risk, rather than imposing catch-all responses which may unnecessarily burden, penalise and even stigmatise franchise arrangements that are working really well – responses which don't do enough to address those that pose real risks to the student experience, academic standards and public confidence. Rapid growth doesn't automatically mean lower quality. But if it isn't supported by robust oversight and appropriate resourcing, the mechanisms that protect academic standards can weaken and outcomes can fall below sector expectations and regulatory thresholds."

"Financial pressures have pushed some providers towards large-scale franchising in a bid to boost their incomes," added Helena Vine, Head of Public Affairs at QAA. "But these pressures have also limited the extent to which this expanded provision can resource appropriate levels of oversight. This isn't about blaming those lead institutions. It seems clear that financial, regulatory and policy conditions have contributed to this growth in franchising as much as than the actions of individual providers. But it's also clear that we're now in a situation in which many students are being failed by a system which was designed to have precisely the opposite effect."

Alongside this new report, QAA has also published a new resource exclusive to QAA members which provides advice on meeting the Office for Students' E10 condition on subcontracting. This guidance emphasises the importance of ensuring that students’ needs are prioritised over financial considerations, and that franchising offers clear benefits to the student experience, such as through flexible delivery models, filling cold spots in provision, and providing accessible pathways through further and higher levels of learning. It also stresses that subcontractual arrangements should be founded upon robust strategic rationales, as well as feasibility and resourcing assessments, regulatory compliance and due diligence. It also highlights the crucial importance of approval and monitoring processes, effective mechanisms for the management of complaints, whistleblowing and academic conduct issues, the rigorous oversight of recruitment and admissions activities, and the protection of the interests of students.

QAA members can read a clear, informative and valuable case study published in collaboration with colleagues from Buckinghamshire New University, which details how the development of its revised oversight framework reflects a strategic position which stresses that partnership arrangements must be subject to continuous, evidence-based scrutiny, and which has embedded proportional risk management and quality assurance across the full lifecycle of its partnerships, from initial due diligence through to ongoing monitoring and, where necessary, intervention or exit.

"These two resources valuably complement our new report on franchising," said Helena Vine. "While our report portrays the complex and sometimes problematic state of this area of provision, our E10 resource advises on how providers may most effectively meet these challenges – and the case study from BNU shows how one provider has been working in practice to do so. Sustainable partnerships must be developed on the basis of rigorous research and robust evidence-based rationales, built around the interests of students, graduates and employers as their core concern."