What is the difference between a franchisee and a company owned store within a franchise chain? Why might one prefer to be a franchisee or the manager of a company owned store?

The biggest difference between a franchisee and a company owned store within a franchise chain is ownership of the company. In a franchisee the person who invested in the franchisee is the owner of the particular store that he invested in. However, the person who runs a company owned store in a franchise chain is not the owner of that store, but instead an employee of the company that runs the franchise chains.
When it comes to deciding which role is better to have in the debate of becoming a franchisee or a company owned store manager, there are several factors to take into consideration.
One factor is ownership, responsibility and liability-Franchisee investors are solely responsible for success or failure of the company once they sign up and pay to be a franchisee. The franchisee puts up the money for the business, and the franchisee is the one who suffers if the business does not succeed. In essence, a franchisee is an entrepreneur who is using someone else’s proven business concept, tactics, and brands in an effort to generate a profit for themselves. However, they do have somewhat more freedom in the way that they decide to manage the company than does a company owned store manager.
A company owned store manager is someone who the main company put in charge of running another location of the exact same store. The store is owned by that company instead of the manager, and thus the manager does not have as much freedom to run the store the way he wishes. He has to run the store the way the company requires using their policies and procedures. responsible for the success or failure of the business. A company owned store manager does not have to invest money in the store in order to make a profit, he is paid by the company. He is not an entrepreneur, he is still an employee working for the company. If the store fails, the manager will not be held financially liable, the company will.
Some more pros to being a franchisee is that the franchisee is his own boss and has freedom to run and lead the company as he sees fit. A franchisee has a personal investment in the business and is more likely to want to work hard to see is grow because the success of the business is a direct reflection of the his personal success. A franchisee is an entrepreneur with a plan that is proven to work, so its not as big of a risk as it would be trying to start your own business idea that one is not sure will do well in the market. A franchisee is given everything he needs to be successful with the proven business model once he pays his start up cost.
Some more pros to being a company owned store manager is that he doesn’t have to pay start up costs to run the store. He will not be personally liable if the store does not succeed. He is not taking any major risk, and he has a boss and rules to lead and direct throughout his daily business ordeals.
Whether one decides to become a franchisee or a company owned store manager is up to the individual. Anyone considering whether or not to become a franchisee should carefully weigh the pros and cons against their own personal and professional goals in life in order to make the best decision.
Sources:
“7 Eleven Continues to Convert Most Company-Owned Stores into Franchise Operations Convenience Retailer Offers Business Opportunity in Tough Economy.”¬†PR Newswire¬†(2008):¬†Westlaw Campus Research. Web. 27 Apr. 2011.
About these ads

Leave a comment

No comments yet.

Comments RSS TrackBack Identifier URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.