Congratulations! You have signed the purchase agreement and now you are a proud owner of your own franchise business. But who is going to operate the business on a day-to-day basis?
For many franchise owners, buying into a franchise means leaving behind a full-time job in exchange for the flexibility and opportunity that business ownership can offer. For others it means maintaining their current profession while reaping the benefits of owning a business that runs day-to-day without them.
There are three main franchise ownership models – Owner-Operator / Executive / Semi-Absentee. Different franchise companies offer different models based on a variety of reasons. We will not get into those reasons here.
It is important to make sure the franchise ownership model you choose is the right fit and aligned with your lifestyle and financial goals.
Do you know what the differences are between the different models and what each means for you as the business owner? If not, here is a description of each:
Owner-Operator
This is a popular ownership model and is ideal if you are looking for an immediate career change.
With this type of ownership model you will be wearing all the hats. You will be heavily involved in not only the back-end of the business, but often times providing the product or service to the customer yourself in B2B and/or B2C settings. You will be filling every role of the business. This does not mean you will be a one-person operation. As an Owner-Operator you will still, where relevant, hire people to assist you in various functions, as your business grows. This is a good fit if you want to have more control over costs and maintain the total control and commitment over your investment and of course you save the cost of a General Manager. As the business grows, franchisees often evolve from the Owner-Operator model to the Executive model where they take on more of a Management role and do less of the day-to-day activities.
Executive Owner
This is also a popular ownership model among franchise companies. With this model you are the full-time CEO of your business, focused on big picture growth, managing employees, marketing, and scaling the business. You do not provide the product or service yourself but are responsible for every facet of the business. In some cases, owners in this role have an office manager handling day-to-day matters.
Semi-Absentee Owner
This model is less common but often more desirable for the franchisees. It is a more hands-off approach where you as the owner handle big picture growth and scaling the business while managing the manager of your business. You are not involved in day-to-day activities and you are not present at the physical location every day.
This model is less common as it is less popular among franchise companies. More often franchise companies insist that the owners (Franchisees) are more involved in the daily activities of the business. After all, the franchise company is relying on you, the franchisee, to make your business successful and theirs.
In some cases the franchise company will allow semi-absentee ownership from day 1 provided that a General Manager is hired before starting the business and is involved from the start of the discovery process, before the franchise agreement is signed. This model is ideal if you are looking to simply make a sound investment or make an additional income to supplement your salary, while keeping your day job.
Other companies that allow a semi-absentee model, however, require that the franchisee runs the business personally for some specified amount of time (as an Owner-Operator or Executive model) before converting to a semi-absentee model.
No matter which franchise ownership model you choose, franchising offers you a greater probability of success than doing it alone. What are your thoughts on ownership? Text or phone me on 440-673-8154 or email me craig@franalign.com and I will be happy to listen and discuss.
