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Franchisee & Franchisor: The Different Roles in a Franchise

The business world can be cut-throat and competitive. Many people decide to enter the franchising world as a great way to get their foot in the door and get on the fast track to success. If you’re thinking of entering this world, or you’ve just arrived, there are some important things you need to be aware of in franchising. One of the first pieces of knowledge to learn are the terms “franchisee” and “franchisor” and the difference between them. Which is the purpose of the article that you’re currently reading.


What is a Franchisee? What is a Franchisor?

If you’re entering the franchising world, the franchisee is essentially you. You’re paying a business or the franchisor the right to their name, likeness, and the use of their products and services. Here’s an example of how this relationship works. If you’re looking to open a Starbucks franchise, you’re (the franchisee) paying for the right to open a location and sell the licensed products that Starbucks (the franchisor) manufactures. While you’ll make a profit from the sales you generate, Starbucks will be entitled to royalties and the initial start-up fee in the very beginning.

The Roles Both of You Will Play

Both the franchisee and franchisor have very important roles to play in the fast-paced world of franchising. Upon reaching an agreement with the franchisee, the franchisor is responsible for drafting all of the legal paperwork that must be attended to. This includes paperwork allowing the franchisee to use registered trademarks and intellectual property. Upon legal matters being attended to, the franchisor will be responsible for training the franchisee to ensure success at the new location.

While the franchisee will be overseeing the new franchise, it’s up to them to adhere to the franchisor’s guidelines. As a representative of the franchisor’s brand, a franchisee is expected to adhere to the same regulations and quality regarding the products and services they offer. During the initial start-up phase, a franchisor is expected to provide the building blocks to help the new franchise get off to a good start. This means providing all of the necessary skills to ensure success. Marketing, training, and problem-solving, are all important matters that must be touched upon

If you’re a business owner and looking to expand to franchising, or you’re someone who’s looking to enter the business world, we can help you get started. The fast track to success isn’t traveled without seizing the right opportunity, and we can help you make the right choice. Call us today at 833-372-6249.