What Is the Difference Between a Franchisee and Franchisor?

While a franchisor is an established entrepreneur with a licensed business model, a franchisee is a person or corporation that owns and operates the business using the business model licensed by the franchisor.

Franchising describes the business relationship between the franchisor and franchisee. When opening a franchise, the franchisee agrees to run their own business under the same business name for a fee. The specific franchise agreement determines the relationship between the franchisor and franchisee.

What is the relationship between the franchisor and franchisee?

The franchisor is an experienced business owner who provides a well-developed franchise business model that the franchisee invests into. The franchisor is essentially the “mentor” in the relationship, offering industry experience, proven business models, training materials, and guidance to contribute to the franchisee’s success.

In many cases, reputable franchisors provide initial training and ongoing support to help their franchisees grow a successful business. Some franchisors also offer helpful tools to ensure the long-term success of their franchisees, such as business management software, inventory management systems, and marketing materials.

What is the role of the franchisor?

The role of the franchisor will vary depending on the specific business model and the franchise agreement. Above all else, the franchisor offers the franchisee a valuable opportunity to run their own business without the common risks of independent startups.

Some common franchisor responsibilities include:

  • Allowing the franchisee to provide services under the business’ brand name
  • Providing initial training on how to grow the business and perform day-to-day operations based on their proven business model
  • Provides on-site training and support leading up to and after the grand opening day
  • Offering an approved list of vendors and suppliers for necessary equipment and materials
  • Providing effective marketing programs and advertising materials
  • Providing guidance in terms of developed business practices
  • Ensuring that the franchisee receives ongoing support with operations, marketing, administration, and more

What is the role of the franchisee?

After the franchisee pays the initial franchising fee and signs the agreement, they agree to represent the established business. Franchisees generally have the following responsibilities:

  • Developing the franchisor’s business in an established location and protecting the brand’s reputation
  • Covering different types of costs to establish their business
  • Investing time to learn about the business’ standards and operations
  • Closely following business and operational practices and procedures
  • Following the business marketing strategy using brand usage guidelines

When both the franchisor and franchisee keep up their responsibilities and obligations outlined in the franchise agreement, both parties can enjoy the benefits of a successful, thriving business.

Turn Your Entrepreneurial Dream into a Rewarding Career

Are you thinking about investing in a reputable franchise? At Smokin’ Oak Wood-Fired Pizza, our unique combination of fast-casual and sit-down dining keeps our guests coming back for more. When you open a franchise with Smokin’ Oak Pizza, our experienced restaurant veterans are available to support you every step of the way—from opening your doors to maximizing your restaurant’s profitability.

Whether you’re interested in hands-on or semi-absentee ownership, we’ll go the extra mile to help you build a pizza franchise into a lucrative business in many territories. Contact us today to learn more about our franchise opportunities.


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