Franchising allows entrepreneurs to effectively grow and scale their successful businesses in a uniquely profitable way. You can build a national (or international) established brand and provide hundreds of people the opportunity to own a business. To do it successfully, you need to understand the franchise relationship between the franchisor and franchisee.



The Role of the Franchisor

The franchisor is responsible for bringing the brand name and franchise system to life by creating a business concept that is proven to be financially successful and which is easily replicable by people without the same industry background or experience. The role of the franchisor is detailed in the legally required franchise disclosure document (FDD) with key details outlined here: 

The Operational Structure

The franchisor creates a structure of the business which is explained in the operations manual. The structure includes how products are ordered, how services are delivered, and your secured list of suppliers. The operations manual also includes timelines for franchise reports, recommended or required software programs, and the franchise strategy. Essentially, it is a business plan.

The Marketing Foundation

As the franchisor, you will also create the basis for all marketing materials and marketing efforts including the logo, brand standards and guidelines, taglines, advertising templates and support materials. The goal in marketing is that all franchises look and sound the same across all units. This consistency propels growing interest in your franchise model.

Training and Support - Upfront and Ongoing

For someone to pick up your operations manual and execute this business successfully, they need strong training and an ongoing support program to build and maintain confidence throughout their commitment as a franchise owner. The franchisor provides a detailed learning program to prepare the owner with the skills required to do the job and to train others. To keep owners engaged, the franchisor sets regular events such as annual meetings, networking, conference calls and product demos to stay connected to the people who are now ambassadors of the brand. A solid communications plan with your franchisees is critical to your success.

Choosing the Right People

Ultimately, the franchisor will decide who becomes a franchisee. You will evaluate potential franchisees as to their competence to put your business model into practice and maintain the standards that you have set. Every new recruit is a reflection of the brand overall, so the decision on which prospective franchisees to approve carries a significant result.

In choosing the right people, you will have some that stand out and you will have those who are less profitable. Your job is to keep them equally engaged, help where needed, and mentor them as required. If they are successful, you are successful, and you have a key role to play in making that happen.

Being the Visionary and the Leader

Another key role of the franchisor is that you are always monitoring the competition and looking for opportunities to do things better. You may not run the business but you will continue to run the brand, and you have to know how to invest your franchisees' money into results-based outcomes. You will investigate helpful technology, choose advertising campaigns, and negotiate your buying power with suppliers. 

As the franchisor, the decisions you make will result in people buying your franchise, or buying your competitor's franchise, and people want to buy into a successful vision. When comparing the roles of franchisee vs franchisor, Point Franchise provides some additional insight into the essential roles of the franchisor as well.

The Role of the Franchisee

The role of the franchisee is to run the franchise business as per the procedures and standards provided in the franchise operations manual. For example:

• Order inventory from approved suppliers and sell at approved prices.
• Market the business using supplied graphics, tag lines, color guidelines, and materials.
• Conduct daily operations while abiding by company standards.
• Pay fees and produce reports as per the franchise agreement.
• Hire staff you need to fill roles outlined in the business model.
• Attend required meetings and events and participate as requested.
• Comply with all local, state, and federal laws that pertain to your business operation.
• Act as an ambassador of the brand at all times.

When comparing the roles of franchisee vs franchisor, Fortune 500 has a more detailed article on the role of the franchisee to further illustrate these responsibilities.

Franchise Genesis is your Resource

Franchise Genesis is a full-service franchise consulting company, developed by franchise experts and aimed at helping small business owners turn their businesses into franchise brands. 

Knowing how much support to provide in your franchise model and where to leave creativity open for the franchisee is an important balance to achieve and is worth doing right the first time when it comes to establishing a franchise brand.

Fill out the submission form with Franchise Genesis for a conversation about our services and how they can guide you in this business development opportunity.