The Role of a Franchisee And A Franchisor
Understanding Your Role As Your Franchise Operator
Operating a franchise is not like running any other business. As a franchisee, you’ll have a unique set of responsibilities and obligations depending on the franchisor you have invested with. The same can be said about the franchisor.
Before you start your own franchise, it’s important to understand what your obligations will be and what kind of role you will play as a franchise operator. You’ll also need to know what the franchise operator will do for you.
In this article, we will go over both roles and explain the key characteristics and responsibilities.
What Is a Franchise?
A franchise is a business that is part of a chain (also known as a franchise) with numerous locations but is independently owned and operated by a sole business owner.
The franchise business owner essentially buys into the franchise and pays to use its branding and systems while receiving support from the franchise operator.
The franchisee must offer the same products and services as the franchise operator and does not have the ability to introduce new offerings outside of what is allowed by the franchisor.
What Is a Franchisee?
A franchisee is a business owner that owns and operates a franchise.
What Are the Responsibilities of the Franchisee?
A franchise owner, also known as a franchisee or franchise operator, acts in the same manner as any other business owner.
The franchise operator is responsible for getting the business up and running and providing the financial backing, whether it’s self-financed or through a loan. This includes start-up costs, a franchise fee, and royalty fees that must be paid to the franchisor.
The franchise operator must also hire and train a team of staff to run the business and manage and oversee the day-to-day operations and finances of the business while following the standards and systems of the franchisor. A franchisee will also be responsible for marketing the business.
Unlike other business owners, however, a franchisee will have access to support from the franchisor when it comes to training staff and using its systems. A franchise operator also has full access to the franchisor’s brand recognition, customer base, products and services, branding, and systems.
What Is a Franchisor?
A franchisor is the parent company that owns the rights to the franchise business and licences its branding and business model to franchisees.
What Are the Responsibilities of the Franchisor?
When a franchisee starts their franchise, they must sign what is known as a franchise agreement with the franchisor. This agreement outlines the duties and responsibilities of both parties.
The role of a franchisor depends on what is included in the franchise agreement, however, most franchise agreements require a franchisor to provide the franchisee with ongoing support and training when it comes to:
- Setting up the business
- Training staff
- Using its systems
- Marketing the business
Behind the scenes, franchisors must also work on improving and developing their franchise system while ensuring consistency between all franchise locations.
Characteristics To Look For In a Franchisor
For any prospective franchisee looking for a franchisor to invest with, it’s important to look for a franchisor that offers the following:
Lots of Ongoing Support
While most franchisors will offer their franchisees ongoing training and support, it’s important to choose a franchisor that offers more than just the bare minimum. A good franchisor wants its franchisees to succeed and will offer plenty of support whenever you need it, whether it’s by phone, video chat, or in-person meetings.
Marketing Recommendations and Guidance
While most franchisees are responsible for their own marketing, many franchisors will offer support in this area. Some franchisors will even provide its franchisee with a marketing plan.
If your franchise is your first business endeavour, marketing can be a bit of a challenge. Therefore, having this kind of support and guidance will be incredibly valuable to you.
Is Being a Franchisee Right For You?
If you are looking to be an entrepreneur and are considering entering the franchise business, it’s important to take several factors into consideration. Running a franchise isn’t for everyone, so before you make such a big commitment, do plenty of research into different franchisors and ask yourself the following questions to help determine whether being a franchisee is right for you:
- Are you ok with not having a say when it comes to the business systems, branding, products, and services?
- Are you willing to follow the franchisor’s systems and guidelines?
- What kind of role do you want to play in your business?
- How much time and money do you want to invest in your business?
- Are you excited by or interested in your chosen franchisor’s line of business?
- Can you afford the royalty payments and franchise fee?
- Are you willing to work with a franchise lawyer to help you review disclosure documents and the franchise agreement?
If you’ve answered yes to the above questions then becoming a franchisee may be a good move for you. However, you still should be consulting with your family and even other franchisees to make sure you are ready for the commitment that a franchise requires.
Why You Should Join the Gorilla Bins Franchise
Looking to partner with a franchisor with a long track record of success that also offers lots of support? Look no further than Gorilla Bins.
Gorilla Bins is Ontario’s leading waste management business and the fastest-growing franchise of 2022. With several locations across the Greater Toronto Area, we have achieved a sales growth rate of 328% over the past five years.
We also provide all of our franchisees with extensive training, coaching, support, and marketing to help them be successful.
Contact us today to learn more about franchising with Gorilla Bins and how we can be the best franchise partner for your business.