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What does a Franchise Owner do?

By Cassie L. Damewood
Updated Mar 02, 2024
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A franchise owner buys a business that is part of a chain of companies with the same name and the same or similar products or services. It may be an independently-owned franchise or one that is co-owned by the franchise owner and the umbrella company. The owner may personally manage the business’ daily operations or hire a staff to do so.

A person who invests in a franchise has several benefits over a private business investor. Although a substantial down payment is usually required, the bulk of the monetary investment is normally spread out over a period of years. A plan to co-own the business with the franchisor is often an option that further reduces the monetary outlay. An independent business owner is typically responsible for the whole investment, traditionally financed through a bank or other lending institution.

The franchisor commonly provides a detailed business plan that clearly outlines the projected expenditures for marketing, staffing and inventory as well as expected revenues over the first year or two of operation. A new business owner who buys a privately-owned company frequently has minimal guidelines to aid in the success of her venture. Franchisors normally have in-house advisors and consultants who provide advice to new franchisees.

Before investing in a franchise operation, a franchise owner normally studies the demographics of the proposed geographic area of operation. This research typically reveals the buying habits of the local residents, their median income and the projected rate of population growth. The existence of competitive businesses and their financial success is generally included in the study.

A considerable number of franchise owners have their interest piqued through firsthand experience in working for a company. For instance, if someone works as a server or manager for a fast food restaurant and is impressed by the product quality and personnel management program, he or she may choose to invest in that company as a franchise owner. This familiarity is often as asset for the investor.

A high level of energy and dedication to hard work are normally required of a franchise owner. Following the prescribed business plan of the franchisor is generally advised, so attention to detail is typically important. The ability to manage and motivate employees is normally considered an asset for a person in this position.

There are no formal educational requirements to become a franchise owner. A bachelor’s degree in business administration, economics or marketing is often helpful for a business owner’s success. Skills in accounting and bookkeeping are generally considered helpful in the maintenance of business records and preparation of financial reports for the franchisor.

Practical Adult Insights is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
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