Group structure
Multi-site groups
A vet group adding a practice, a dental group buying another surgery and a franchisee opening a fourth unit share one problem. Growth means a new site, often a new legal entity, with little trading history of its own, while most lending assessments are built around one business with one set of accounts. This page is about that shape. Veterinary groups are the worked example further down, and the regulatory points there apply to vets only.
How money moves
Mature sites fund the next one before it can fund itself
In a multi-site business the established sites generate the cash, and the new site spends it first. The group carries the gap until the new site trades well enough to cover its own costs, and, for a franchisee, its fees.
Established sitesIncome
- Customers or clients served
- Takings collected at each site
- Surplus covers central costs and growth
A new or acquired siteOutflow first
- Purchase price, or fit-out and opening costs
- Customer base built up
- Trading history of its own, later
Franchise feesFranchisees only
- Initial fee on signing, plus any set-up costs
- Ongoing fee weekly, monthly or quarterly
- Usually a percentage of gross sales, whether or not the unit is yet profitable
The group's track record sits in the mature sites. The need for cash sits in the new one, which on its own accounts may look like a start-up.
The British Franchise Association's guidance on franchise agreements says the ongoing "Management Service Fee" or "Royalty" is typically "calculated as a percentage of the gross sales of your franchise business", occasionally as a fixed sum or the higher of the two, and that most agreements run for an initial fixed term, with five years common (BFA: what to look out for in a franchise agreement).
Where groups get misread
What a generalist lender sees, and what's actually happening
A new entity with almost no trading history
A new site run by a management team with years of history elsewhere in the group. The site is young; the operator isn't.
Group turnover as one business
Several sites or entities at different stages of maturity, sharing a brand, management and central costs, but not always the same accounts or cash position.
Franchise fees as an overhead that flexes with profit
An ongoing fee usually charged on gross sales, so it falls due as soon as a unit takes sales, whether or not that unit is covering its own costs yet.
Worked example
Veterinary groups
Veterinary practice shows the multi-site pattern at scale. The Competition and Markets Authority's final report on veterinary services, published 24 March 2026, says the structure of the industry has changed significantly over the past ten years through the growth of large veterinary groups, "which now own the majority (60%) of vet practices in the UK" (CMA summary of final report).
Regulation in the sector is changing too. The CMA describes the current regime as one that "applies to individual vets but not businesses or practices", and backs the government's proposed reforms that "would make veterinary businesses as well as individuals accountable to an independent regulator", funded by a levy on veterinary businesses in proportion to their size (CMA press release). A lender looking at a vet group may reasonably ask how those costs and obligations land on each practice. Veterinary practices are classified under SIC 75000, veterinary activities.
These points are specific to veterinary practice. Other multi-site sectors have their own regulators and classification codes, or none that matter to a lender, so check which apply to your own group rather than reading across from this example.
The measure that matters
Mature-site contribution, not group turnover
The useful numbers are what the established sites generate after central costs, and for franchisees after fees, and how much the newer sites are absorbing while they build up. That shows whether the group can carry its next opening or acquisition, and how long a new site has to reach break-even.
Applications often go wrong by leading with the wrong level of detail: group figures when a lender assessing a specific new site wants that site's position, or one entity's thin history when the real strength is the group behind it.
Where finance fits
A group question, answered with existing facilities
A facility can carry a new site until it matures. It can't make a site that won't cover its own costs and fees into a profitable one.
If the business genuinely trades as one site with no multi-site complexity yet, a standard facility is simpler and usually cheaper than building group structure for its own sake.
Sources
Where these points come from
- Franchise feesBritish Franchise Association: what to look out for in a franchise agreement
- Vets: marketCMA: veterinary services for household pets, summary of final report (24 March 2026)
- Vets: regulationCMA: CMA concludes market investigation with major reforms to veterinary sector
- Vets: SIC codeCompanies House: standard industrial classification of economic activities
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Adam Parker
Founder of Muswell Rose Consulting Ltd, which trades as Established Finance · former Managing Director of Penny, an invoice finance business, with 15+ years across mortgages, commercial finance and fintech lending.
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Practical questions
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To start, just a description of what’s actually happening in the business. If it progresses, the specialist partner will ask for the usual things: recent accounts, a sense of turnover and trading history, and details of the specific need.