How to leave your driving instructor franchise: a step-by-step guide

You've done the maths. The franchise fee is eating into your income, you've got enough pupils and experience to stand on your own, and you're ready to go independent.

The switch itself is where it goes wrong. Leave in a rush and you can end up with no car, no insurance and pupils who don't know how to reach you. Plan it and you can teach under your own name from the day the franchise car goes back.

Step 1: Read your contract

Before you do anything else, dig out your franchise agreement and read every page. You need to know:

• Notice period. How much notice you have to give, whether it is tied to the end of your contract term, and whether it must be in writing. BSM's franchise page, for example, lists a 24-month contract with notice due 12 weeks before the end of the term (BSM).
• Early termination charges. If you leave before the contract end date, what does it cost you?
• Car return terms. When the car goes back, what condition it needs to be in, and what you pay for damage or extra mileage.
• Restrictions after you leave. Some contracts limit where you can teach for a period afterwards. Whether a clause like that can be enforced depends on its wording, so take legal advice rather than guessing.
• Pupil data. What the contract says about pupil contact details and who holds them.

If anything is unclear, pay for time with a solicitor who handles commercial contracts before you give notice.

It also helps to know what you are paying now. Our comparison of driving instructor franchise costs sets the brands side by side, with each covered in detail on its own page: AA driving school franchise cost, BSM franchise cost, RED driving school franchise cost and Bill Plant franchise cost. The franchise cost calculator turns the weekly fee into an annual figure next to what the same diary earns independently.

Step 2: Give notice at the right time

Work backwards from the date you want to go independent. If your contract ties notice to the end of the term, that date may be fixed for you, so find it first.

Use the notice period for the set-up work:

• sourcing your car and insurance (steps 3 and 4)
• setting up your booking system and online presence (steps 6 and 7)
• telling your regular pupils you'll be carrying on as an independent (step 5)

Step 3: Sort your car

You need a dual-control car ready on the day your franchise car goes back. The options:

• Lease one. Some lease companies and ADI specialists offer cars with dual controls already fitted. Ask for the delivery date in writing.
• Buy one and have dual controls fitted by a specialist. You need the capital or finance up front, and the car is yours. Our expenses guide explains how a dual-control car is treated for tax.
• Hire short-term from an ADI car hire company to bridge a gap if your own car isn't ready on day one.

Order early. If the car arrives before your end date, you get time to learn it. If it arrives after, you're off the road with no income.

Step 4: Get your own insurance

ADI motor insurance is a specialist product. Check the policy covers:

• business use for paid driving instruction
• dual controls, which some insurers list as a named extra
• pupils driving the car

Get quotes from brokers that offer driving instructor policies, and compare the cover as well as the price.

Your new insurance must start on the day your franchise cover ends. The Road Traffic Act 1988 bars anyone from using a car on a road without insurance in force, so a one-day gap is a day you can't teach.

You'll also want public liability insurance, which covers injury claims from pupils or third parties, and professional indemnity insurance, which covers claims about your instruction.

Step 5: Tell your pupils

Your franchise may say its pupils belong to the franchise. What your contract says about pupil data matters here, so read it before you do anything.

What you can do:

• Tell current pupils in person, during lessons, that you're going independent and will keep teaching in the same area
• Give them your new contact details and booking link
• Let them decide whether to stay with the franchise or come with you

What to avoid:

• Using the franchise's CRM or database to bulk-contact pupils. That could breach your contract.
• Criticising the franchise to pupils
• Contacting other instructors' pupils

Pupils booked with you, so tell them yourself. "I'm going independent from [date], here's how to book with me directly" is enough.

Step 6: Set up your booking system

From day one, pupils need a way to book, pay and see their lessons. A text thread and a paper diary won't keep up.

What to look for:

• Online booking. Pupils book from your booking link or website.
• Lesson diary that syncs to the calendar on your phone
• Payment tracking. Who has paid, who owes, and how many hours are left on a block
• Pupil records. Progress notes, test dates and contact details in one place
• Automated reminders so you're not chasing pupils about tomorrow's lesson

Orbit does all of this and is free for instructors. Your booking page is under your own name, not a franchise brand. Set it up during your notice period so it's ready on day one.

Step 7: Build your online presence

Start while you're still with the franchise:

• Google Business Profile. It's free. Set it up and get it verified early, because verification is out of your hands.
• A simple website or booking page. Your name, area, prices and a booking link is enough to start. Orbit gives every instructor a public booking page you can use as your website.
• Social media. A Facebook page and an Instagram account in your own name.

The franchise handled your marketing before. Now it's yours, and a listing set up early has longer to start showing in local searches.

Step 8: Check your HMRC registration

If you've been paying the franchise fee as a self-employed franchisee and filing Self Assessment returns, you're already registered and nothing changes. If you have not sent a tax return before, you need to register and tell HMRC by 5 October after the end of the tax year you started (GOV.UK). Registering gets you a Unique Taxpayer Reference (UTR).

Key dates:

• The tax year runs from 6 April to 5 April
• Self Assessment tax returns are due by 31 January after the tax year ends
• Any tax you owe is due by 31 January. If last year's bill was £1,000 or more, you usually also make payments on account towards the next bill, due by 31 January and 31 July (GOV.UK)

Step 9: Set up Making Tax Digital

Making Tax Digital for Income Tax applies to sole traders whose qualifying income (turnover from self-employment and property, before expenses) is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. HMRC decides from an earlier tax return: the 2025-26 return for the April 2027 start. Check your turnover, not your profit. At £35 an hour, 20 paid hours a week for 43 weeks is £30,100.

MTD requires:

• Digital records of your income and expenses, kept in compatible software
• Quarterly updates, due 7 August, 7 November, 7 February and 7 May, each covering the tax year so far (HMRC)
• A tax return through your software, submitted by 31 January after the tax year ends. You stay registered for Self Assessment; quarterly updates do not replace it

There are no penalties for missing a quarterly update deadline in 2026-27. From 2027-28, each missed deadline earns a penalty point, and 4 points means a £200 penalty. Our Making Tax Digital for driving instructors guide has the full rules.

Orbit is built on HMRC's MTD for Income Tax API. Lesson payments taken through Orbit are recorded automatically and expenses are categorised, so your quarterly figures build as you work. Orbit is completing HMRC's software recognition process, and live submissions to HMRC open once HMRC approves it; until then, send updates through software on HMRC's compatible list.

Accounting packages such as FreeAgent, Xero and QuickBooks also work with MTD, but you'll need to enter or import your lesson income yourself.

Step 10: Set your rates and policies

Independence means you decide:

• Your hourly rate. Find out what other independent ADIs in your area charge, and don't undercut yourself to win pupils.
• Block bookings. A small discount on 10-hour blocks brings income in up front.
• Cancellation policy. 24 or 48 hours' notice, with a charge for late cancellations and no-shows, applied the same way every time.
• Payment terms. Pay up front, pay as you go, or blocks. Taking payment online cuts down on cash and chasing.

A sample timeline

Your notice period sets the dates. For a franchise with 3 months' notice:

Work out what the move is worth before you give notice: the franchise cost calculator puts your current fee next to what the same diary earns independently.