Just how transferable is a university degree course? In the latest issue of The Manager, Alistair Somerville Ford, chief executive of the Institute of Commercial Management, tells the story of Onn Kok Ow, an Asian businessman who holds a British degree. Yet he has neither set foot in Britain, nor does he speak much English.

"Tuition leading to his degree examinations was provided by a local school in Hong Kong, and his course of study was developed not by the university that awarded him his degree but by a private college in Malaysia that acts as the regional agent and representative for a British university. Furthermore, his final examination papers were set by the Malaysian agent and Ow's work, all of which was in Mandarin, was marked by local Chinese contract lecturers working for the agent."

Ford claims Ow's case is not unusual. The franchising of degrees by British universities is now big business. Of Ow's fees only a quarter went on teaching costs, leaving the rest as profit to be divided between the agent and the university.

Franchising has been a boon to cash-strapped universities. Enjoined to earn their livings, they have increasingly turned to partnership agreements with further education colleges in this country and private providers overseas, capitalising on their validating powers. If hamburgers and clothes can be franchised, why not degrees? We already have the spectacularly successful examples of the London external degree and the Open University. What is wrong with other universities getting in on the act?

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Nothing, so long as the essence of the degree is retained. And there is the rub. Degree quality is elusive. It is not just what can be written down, but a subtle amalgam of students, staff and facilities. On paper Oxford and Cambridge degrees, for example, may look no different from those of other universities. But by common consent they count for more. Where a degree is obtained is often as important as the subject or the class, if not even more so.

It is misleading therefore if a graduate of a university has never been there. Franchisers would argue that off-campus students are full students with the rights and responsibilities that entails, but it is hardly the same as being there.

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The crucial thing about a London external degree is that it is identifiably external. The university has had this provision since 1858 and it has paved the way for colleges from Owens, Manchester to Leicester to come of age as universities. The London external degree examinations are set and marked by the university itself, and are recognised as equivalent to, and perhaps harder to succeed in at a distance than, the internal examinations. Open University degrees have also earned a high reputation and again depend ultimately on examinations set and marked by the university.

Not only are many franchised degrees indistinguishable from internal degrees, but they are often examined locally. Franchising universities sometimes moderate the papers and second mark scripts, and the same external examiners may be involved as for the internal candidates. Franchisers may also point to visits from staff and supplying course outlines and book- lists. But these are scarcely sufficient safeguards, if recent press reports are to be believed.

It appears that the Swansea Institute, which franchises degrees of the University of Wales, is being investigated for allowing too much academic and financial control to pass to a foreign commercially motivated agent. The Southampton Institute, which franchises degrees of Nottingham Trent University, has closed its venture in Athens after a very critical report from the ÖйúAƬ Quality Council. A lecturer in Singapore who criticised a Bradford-franchised degree course has been sacked and threatened with legal action (THES, October 25), a sure indicator of how much is at stake.

The British Council fears that the failure to ensure proper controls will irretrievably damage the "priceless reputation on which the whole thing rests". The ÖйúAƬ Quality Council has audited operations in five countries - Greece, Spain, Hong Kong, Malaysia and Singapore- and is due to report soon. It is believed to favour a voluntary code of practice for overseas collaborations.

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But is this enough? Marketing degrees abroad is a cut-throat business. Educational qualifications are neither products nor services, but make demands on "the customer". Being user-friendly is likely to mean reducing requirements and lowering standards.

To protect our reputation and guarantee standards, it should be mandatory for franchised degrees to be labelled as external and for the final examinations to be set and marked by the awarding university. Anything less runs the risk of killing the golden goose.

Alan Smithers is professor of policy research and director of the centre for education and employment research at Brunel University.