Updated April 2025
Within a franchise system, there are two distinct roles – franchisor and franchisee. Both parties work together to grow and run a successful franchise business. While the franchisor provides the framework, support, and brand recognition, the franchisee is responsible for managing day-to-day operations and maintaining the business’s standards. Each role comes with its own set of responsibilities, and understanding these roles is key to navigating the franchise world successfully.
Franchisor Responsibilities
We often use the word “purchase” when talking about getting a franchise business, but it’s important to understand that the franchisor isn’t selling a business to a franchisee. Rather, the franchisor is selling the right to operate a business using the established system of that franchisor’s brand.
Like any company, a franchisor wants to increase the value of its business. Using a franchise model, the franchisor opens as many successful locations as possible to extend the reach of the business and increase the value of the brand. As the franchise grows, the franchisor’s revenue grows because it brings in more royalties.
Therefore, it’s in the franchisor’s best interest to support its franchisees so the entire business is healthy and can grow for the benefit of everyone involved.
The franchisor is responsible for the following:
- Marketing strategies – Franchisors typically manage large-scale, brand-wide marketing efforts that promote the franchise at a national or regional level. Additionally, they often provide local marketing guidelines or ready-to-use materials that franchisees can implement in their own communities to supplement broader campaigns.
- Product & service strategy – Franchisors are responsible for the research, development, and continuous improvement of the products and services offered under the brand.
- Manage franchise territories – Franchisors will ensure that all franchisees have a large enough territory to sustain them without infringing on another franchisee’s territory.
- Training – Franchisors will provide ongoing training for franchisees and their employees and/or training materials for franchisee employees.
- Communication with the franchisee – This includes an evaluation of franchisees on a regular basis as well as providing advice on running the business whenever a franchisee requires it.
- Business development opportunities – Many franchise systems offer growth paths for franchisees who want to scale beyond a single unit. This may include opportunities to open multiple locations (known as multi-unit franchising), secure exclusive territory rights, or become area developers responsible for recruiting and supporting other franchisees.
- Vendor recommendations – Franchisors often provide a list of approved vendors to ensure quality and consistency across locations. These vendors typically offer discounted rates or exclusive deals negotiated for the entire franchise network.
In addition to all of these responsibilities, franchisors will often assist their franchisees with market research when choosing a location as well as helping negotiate their lease agreements. Some franchises even help secure financing or provide financing themselves.
Franchisee Responsibilities
As part of a larger network, a franchisee’s success contributes to the overall strength of the brand, benefiting all other franchisees. When customers have a positive experience at one location, they are more likely to seek out the same brand in other cities. In this way, exceptional service from one franchisee can attract customers to other locations, creating a mutually beneficial cycle across the entire network.
As a franchisee, a business owner is responsible for the following:
- Financial commitment – Franchisees must be prepared to invest in the franchise, which includes paying the initial franchise fee and ongoing royalties, upfront equipment or setup costs, and possible contributions to a marketing fund.
- Time commitment – It’s vital to put in the time necessary to run the business, which includes learning the system through training, overseeing operations, and staying engaged even in semi-passive models.
- Choosing a location – While most franchisors will help with this process, franchisees must find, lease and build out a location for the new franchise.
- Team leadership – Franchisees are responsible for hiring and training employees according to the franchisor’s system. Many franchisors provide training materials for entry-level employees and offer training for management-level employees, but franchisees are responsible for training their entry-level employees.
- Operational compliance – It’s essential to run the business according to the franchisor’s standard. Whether it’s marketing according to brand guidelines or consistently delivering approved products and services, franchisees are expected to act as brand ambassadors and maintain service quality across all customer touchpoints.
- Communication with the franchisor – Franchisees should report regularly, ask questions when needed, and stay aligned with system expectations. Many franchise systems also encourage collaboration with other franchisees to share insights and best practices.
Ultimately, franchisees often handle a range of responsibilities—operations, customer service, inventory, payroll, and conflict resolution—especially in the early stages. Success requires strong organization and a hands-on approach until the business can sustain support staff or managers.
Interested in Becoming a Franchise Owner?
Each franchise is different and a franchise agreement will outline exactly what is expected of both parties involved. At the end of the day, both the franchisee and the franchisor are working together to build a stronger brand and grow the business. To find the perfect franchise, reach out to FranNet to schedule a free consultation today! An expert franchise consultant will match you with the right brand and walk you through the process from start to finish!