What is the difference between a Franchisee and a Franchisor?

The Franchisee and franchisor are the two key players in a franchised system but they play two very different, yet interdependent, roles.

The Franchisor is the provider of the Franchise System and the Franchisee is the purchaser of the franchise business. Franchising is a business model based on replication, so many franchisors make the mistake of believing that their ideal franchisee should be a carbon copy of themselves, when, in fact, this could not be further from the truth.

In broad terms, the franchisor is an entrepreneur, an “ideas” person who has vision and belief, and who is prepared to back up their belief by taking action, sometimes on an idea that is not yet proven.

In contrast, a franchisee is a person who likes to follow established rules and systems. They want to own their own business BUT are not prepared to start it from scratch and would rather pay a franchisee fee to be allowed to operate using someone else’s business system. Below is a table outlining some of the differences between franchisors and franchisees.

Franchisor Franchisee
Entrepreneur Manager or technician
Comfortable with uncertainty Prefers security over uncertainty
“Ideas person”, visionary Task oriented. Implements rather than initiates
Perceives challenges as opportunities Perceives challenges as threats
Great at sales and marketing Prefers to be given jobs to complete. Good order-taker but not skilled sales person