The 21-page circular from the Further Education Funding Council includes a model contract for colleges entering into franchising agreements and a set of control tests which flesh out previous funding guidelines.
But David Mason, principal of York College of Further and Higher education, which runs a number of such courses, said the document represented a significant shift in policy by the FEFC.
"The application of the new controls retrospectively cannot be justified given the FEFC encouragement to date," he said.
York has franchised courses leading to coaching qualifications in football, basketball, table tennis and karate. "This is significantly different to the guidance already given and has the potential to shut a great deal of them down. We are running courses under the old regime and suddenly the goalposts have moved."
The stumbling block, he says, is the requirement to oversee student enrolment. "These courses are running in all sorts of places across the country. Realistically, we can't be there all the time."
David Houlston, education officer at the National Coaching Foundation, who has helped to advise colleges and sports awarding bodies on setting up franchised courses, said around 60 colleges ran coaching courses and that there seemed little reason to change the quality assurance standards already agreed with the FEFC. But he added: "Many of the agreements I have seen fit exactly the requirements of the contract."
The Association for Colleges gave the circular a cautious welcome and applauded the publication of clear guidelines. "Until recently there has been little guidance on where the limits of franchising might lie, or what constitutes acceptable practice," said the AFC's Ngaio Crequer.
"But it is equally clear that the new rules will impose limits on the way franchising can develop and will mean that franchising cannot be a low-cost route to expansion. This will have an impact on the rate at which colleges can expand."