Franchising relies on a strong, mutually-beneficial relationship between franchisor and franchisee. It offers a middle ground between independent business ownership and operating under corporate ownership, which provides an array of benefits to both parties.
But when you become a franchisee, just how much of a say do you have, and what are the realities of franchise ownership?
Do You Own the Business as a Franchisee?
Franchisees function as independent business owners but within a wider franchise system. While they have the right to operate under the franchisor’s name, brand and business model, they do not own these things; they still wholly belong to the franchisor.
However, franchisees do have ownership of their franchise unit and are responsible for the daily operations and subsequent successes or failures. While franchisees are provided with the support and benefits that come with operating under the umbrella of an established brand, it is up to them to utilise these advantages and run the business in a way that ensures it can thrive.
So, yes, franchisees are business owners, but within the parameters of the franchise model.
How Does Franchise Ownership Work?
Franchisees pay an initial franchise fee and ongoing royalty fees to gain and maintain the right to operate under the franchisor’s brand. When a franchisee buys a franchise unit (or multiple units), they essentially become their own boss, albeit one who must still adhere to the expectations set out in the franchise agreement.
Autonomy When Running a Franchise
The level of freedom franchisees are given will vary depending on the industry and the specific franchisor. Generally, franchisees have limited independence when it comes to things surrounding brand consistency (store design, products sold, messaging, etc) and the established operational systems. However, as this is what you’re buying into as a franchisee, this is not necessarily a problem.
A good franchise agreement will clearly state in which areas franchisees will be granted greater levels of autonomy. It will also define the expected standards and guidelines that must be adhered to.
Franchisees tend to have the most autonomy around:
- Day-to-day operations
- Staff hiring and management
- Strategic decisions within the guidelines
- Adapting to challenges posed by the local market
Here at Esquires Coffee, we work closely with our franchisees to ensure they understand the set guidelines while being able to maintain a good level of day-to-day business freedom and make the most of the support systems in place.
The Role of the Franchisee
As the owner of a franchised unit, franchisees are responsible for heading up the business, managing the financials, ensuring smooth daily operations and directing staff. They must also represent the brand according to the guidelines and ensure that standards are maintained.
Good Franchise owners must have a diverse and ever-expanding skill set, with strong leadership and business management skills.
The Benefits of Franchise Ownership
Different types of franchise agreements offer the best of both worlds, giving you the chance to be your own boss and run your own business while doing so with the support and backing of an established, already successful brand.
While there may be more restrictions when it comes to being a franchisee over being a traditional independent business owner, there are also fewer risks. Franchises generally have a much faster path to profitability than independents, thanks to the built-in brand recognition, product consistency and proven business model.
Esquires Coffee franchisees also get access to a robust system of support, as we help set you up for success from the very beginning, providing ongoing help and market expertise throughout your franchise journey.
Ultimately, while a franchisee may operate within the guidelines set up by the franchisor, they are business owners responsible for the daily operations and profitability of their store.
If you’d like to find out more about franchise ownership or buy a coffee shop franchise with Esquires, why not get in touch or fill in our application?
