The Role of the Franchisee in a Franchising Agreement

Joining a good franchise is like joining a family. You’ll be surrounded by people who want to see you succeed and you’ll have a great support system in place to help you succeed. However, your success also depends on how much effort you put into the deal.

Let’s take a look at some of the key responsibilities of a franchisee once you’ve signed a franchising agreement.

Investing in Your Business

While joining a franchise does give you a head start compared to starting a business from scratch, you’ll still need to make a significant financial commitment to get the business up and running. The obvious financial commitment is the initial franchising fee, but there may be other costs related to getting your specific business started. These could include things like equipment costs. You’ll also be responsible for paying ongoing royalty fees to the franchise. You may also be required to contribute to an advertising fund for the entire brand. Needless to say, you should check with your franchisor about all the financial commitments you’ll be required to make before you agree to join a franchise.

Spending Time on Your Business

Money isn’t the most important thing you’ll need to commit to your franchise. That would be the one thing you can never get more of: Time. Even if your franchise is a hands-off kind of model and you don’t need to be there to run it, you’ll still need to spend time setting it up and you’ll still want to keep tabs on its operation.

In franchising, you’re presented with a system for running the business that has been proven to work, but you still need to learn that system, which means hours of initial and ongoing training. You may also be expected to attend events like an annual conference for the franchise.

Leading Your Team and Acting as a Partner

Running a business means leading people. You might just start off with yourself as an employee, but as you grow, you’ll add people and you’ll need to teach them the business and act as an example to them. As you’re doing that, you’ll also need to uphold the standards of the brand you represent and follow the system the franchisor has developed.

Many franchises prefer to refer to their franchisees as partners because they are akin to partners in the business, all working together to promote the overall brand, which will help all franchisees and the parent company.

While acting as a partner to the franchise, there are four major responsibilities to adhere to:


  • Operate the franchise in accordance with the franchisor’s operating standards.
  • Build a customer base that is both strong and loyal by offering products and services that have been approved by the franchise and by providing customer service that is also in accordance with the franchise’s standards.
  • Ensure all your employees are trained properly and your franchise has adequate staff to handle demand.
  • Promote your individual business, the franchise brand and all its approved products and services in accordance with guidelines provided by the franchise.


Being a partner with your franchisor means also giving input to the parent company. Working together, sharing ideas and resolving issues are all expected from franchisees. Some franchises even have processes set up to gather and develop ideas from their franchisees. Since the franchisees are the ones on the “front line” with customers, they’ll probably be in a good position to offer suggestions to the parent company about improving the customer experience.

You may come up with a great idea you want to try out in your franchise. You can take your idea to the franchisor and if they like it, they’ll probably let you try it and monitor how it goes. If your idea is successful, the franchisor will likely roll it out across the whole franchise.

Communicating with the Franchisor & Other Stakeholders

As you learn about the franchise system you’ve joined, you have to make sure you understand it by asking questions if you need to, especially if something doesn’t seem right. It’s better to have it explained in the learning stage than to try and wing it later not really knowing what you’re doing.

You will likely also need to make regular reports to the franchisor about your sales and your expenses and you may be required to provide documentation to prove you are adhering to the franchisor’s minimum advertising guidelines.

If you’re running a business, obviously you’ll also need to be communicating effectively with others, like customers, clients, employees, suppliers and other people connected to your business.

Lastly, it can be beneficial to also communicate frequently with other franchisees to share ideas and best practices. Some franchises will have a process in place to facilitate this kind of communication between franchisees.

Organizing the Many Moving Parts of Your Business

Although you will be getting a lot of support from the franchisor, starting a business — even a franchise — will require a lot of work on your part, and that means performing many different roles. These will likely include managing the daily operations of your business, ordering the supplies you need, dealing with customers and suppliers, preparing the business’ payroll, resolving disputes that pop up and much more. Your business might grow to the point where you can take more of a hands-off approach and hire managers to do much of the day-to-day operating of the business, but for the first year or two, you should be prepared to be doing the lion’s share of the work. Of course, doing all of this takes great organizational skills, which you will need to thrive as a franchisee.

The most important thing is that you make a concerted effort to run your business well. By working with the franchisor and following all the guidelines given to you, you should have no problem running a successful franchise. Another key part of having a successful franchise is joining the right one. FranNet can connect you with the perfect franchise to fit your lifestyle and goals. Sign up for a free FranNet franchise search and consultation today.

Jul 31, 2017