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How Much Influence Does a Franchisee Have?

Our owner Rick Bisio argues there are both pros and cons when it comes to starting and inventing your own business on one end and joining a franchise system on the other, in a 2020 article for Entrepreneur. The fact is that both approaches have their merits but there’s a clear difference between the two; namely, the degree of independence that the owner can enjoy.

In the case of running your own business independently, the owner will employ the so-called ‘Boot-Strap Start-up’ approach where they’ll have to create every single aspect associated with their business, from marketing, product development, inventory, and service to employee hiring and firing, SEO, and so on.

On the other hand, there’s no need to trouble yourself over inventing a whole operating system when you’re a franchise owner as it’s already a given that a proven franchise system has all of the operating system aspects invented and working successfully. All that a franchisee is required to do once they join the franchise is to follow the existing system set by the franchisor.

Now, it’s important to understand that a franchisee who joined a franchise system is not actually purchasing the brand/system or the complete ownership of the product. The deal works much like a license agreement where the franchisee actually purchases the right to use the franchisor’s operating system.

There’s a huge value in having an entire business operating system already invented and set up for you, which is all the more reason why it should come as a given to follow the franchisor’s instructions and existing system approach. The whole deal is especially beneficial in the early stages of owning a franchise where the ins and outs of running a business are still a new and relatively unfamiliar concept.

Even though the operating system is already there to utilize and follow, a franchisee still gets some level of control in terms of making the necessary changes that would benefit the business and improve overall operations. In that respect, the daily operations are the franchisee’s responsibility while the franchisor is there to offer guidance.

That said, a franchisee also has the freedom to employ and fire people at their will and decide on the matters such as their pay and work schedules. Market pricing is also affected by the geographical area, which is another matter that a franchise owner takes care of on their own.

Once they feel comfortable with the overall process and accumulate enough years of experience from being a part of the system, franchisees can also suggest new ideas and solutions, thus allowing the entire franchise system to evolve. After all, a quality franchisor will always count on the franchisee’s experience and unique input in order to further benefit the whole system.

Click here to read the whole Entrepreneur.com article and get more insight and information on this topic.

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