Franchise ownership is an ideal starting point for individuals who want to own a business but don’t want to assume the risks of starting a new business from the ground up. If you already own a business, becoming a franchisee can help you expand your business portfolio.
If you are starting to explore the franchise world, you may have asked yourself what is the difference between a franchisee and a franchisor. Here’s a look at what makes a franchisee and a franchisor different, including respective roles and responsibilities.
What Is a Franchisee?
A franchise is a business that is formed and run by the franchisee. Franchisees are typically small business owners operating third-party retail outlets. As part of their franchise agreement, they get to set up shop at a location where no other franchises within the brand are located within a certain mileage or drivetime.
By doing so, the franchise can be protected from competition and ensure its long-term success. In order to accomplish this, the franchisee must be properly trained, licensed, and brand compliant.
Responsibilities Of A Franchisee
The responsibilities of a franchisee include:
- Establish a franchise at a specified location
- Provide customer service
- Operate or oversee the operations of the business
- Offer the products and services that are approved
- Operate the business according to the franchise agreement
- As part of this responsibility, the franchisee is also responsible for ensuring all processes and procedures are followed at its facilities
What Is A Franchisor?
A franchisor is an entity that grants a license to operate a business to a franchisee. Typically, a franchisor will provide the franchisee with a training program, guidance in finding a location for the business, marketing, and support services.In return, the franchisee agrees to comply with the terms and conditions of the franchise agreement. A franchisee will also be required to pay royalties and other fees to the franchisor. Some well known franchises include; McDonald’s, Subway, KFC, and Dunkin Donuts.
Franchisor Role and Responsibilities
The responsibilities of a franchisor include:
- Creating a brand and scalable business model
- Providing support services to franchisees
- Responsible for protecting the intellectual property rights of their franchisees.
- Maintaining uniform policies and procedures among franchisees.
- Responsible for providing the franchisee with training.
- Creating Marketing and PR Materials
Franchisee VS Franchisor?
Essentially, a franchisor owns a business model that is licensed, while a franchisee pays the franchisor to use the business model, including the brand, products, services, and processes in an established territory for a specified period of time.
Simply put, the franchisee runs the business on a daily basis. They handle the hiring, training, and firing of employees. Meanwhile, franchisors are responsible for securing qualified franchisees and training them in every aspect of operating the franchise and following the brand standards.In the relationship between a franchisee and a franchisor, there is a legal document called a Franchise Disclosure Document, which must be provided to the franchisee a minimum of 14 days prior to signing the franchise agreement, which is a legal and binding agreement.
Getting Into Business as a Franchise or Franchisor?
There are pros and cons for both franchisees and franchisors. Explore both opportunities as they relate to your particular situation and remember to stay current with franchise trends to give yourself the best chances for success.
Are You Interested in Becoming a Franchise Owner?
Workout Anytime is rapidly growing. With the growth comes great opportunities to open your own gym and have the life that you’ve been dreaming of. Our proven playbook for success has thrust our franchise into one of the fastest-growing franchises in the health and fitness sector.
Workout Anytime is rapidly growing. With the growth comes great opportunities to open your own gym and have the life that you’ve been dreaming of. Our proven playbook for success has thrust our franchise into one of the fastest-growing franchises in the health and fitness sector.
There’s never been a better time to pursue your passion. Contact us at 770-809-1425 or visit our website to learn about opening a high value / low cost, 24 hour gym franchise.
