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What’s the difference between a franchisee and a franchise owner?

Q.

What’s the difference between a franchisee and a franchise owner?

Author: Brain Duckett

answered by Brain Duckett

Chairman of The Franchising Centre

The answer to this question is a particular hobby horse of mine. There is only one ‘franchise owner’ and that is the franchisor, ie the business that developed the concept that’s the subject of the franchise and which owns the rights associated with that concept.

The businesses to which those rights are granted in order to operate clones of the proven concept and system are franchisees. They may be international master franchisees, regional franchisees, area development franchisees, unit franchisees or multi-unit franchisees, but they are all franchisees.

In essence, the arrangement is system leasing and, like any other lease, the lessee will be allowed to continue operating the lease provided they stay within its terms during the relevant period.

Confusing the terms runs the risk of giving franchisees a false idea of their place within the system and the sooner we stop referring to them as franchise owners the better.

Brian Duckett is chairman of The Franchising Centre, part of the world’s largest network of specialist franchise consultants.

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