What legal forms can a franchise take?

The short answer is any. The majority of franchisors are limited companies - only one or two franchisors operate as a partnership. The obvious reason for this is that franchisors don’t want to be personally liable, either to their franchisees or to anyone else, and in a partnership all the partners are liable for the actions of each other.  In relation to franchisees, franchisors usually allow franchisees a free hand to decide whether to operate as a sole trader, partnership or limited company. A small number of franchisors oblige their franchisees to adopt one of these formats.  It does not make much difference in relation to the liability that a franchisee has to a franchisor. This is because, whether or not a franchisee operates as a sole trader/partnership or limited company, the one or more individuals that have set up the business will almost inevitably be personally liable to the franchisor, because they will be required to give guarantees that they will ensure that the franchisee complies with the terms of the franchise agreement.