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What is a Franchisor? How the Franchisor-Franchisee Relationship Works

Wondering how a franchise works? It’s important to understand the difference between a franchisor and franchisee, and how the franchise relationship works.

FRANCHISING 101

People have a lot of misconceptions about what makes a franchisor, but in essence, they are the person(s) or corporation that owns the trademarks and business model of a particular brand. The franchisor licenses the use of said trademarks, business model, and operational guidelines to the franchisee in exchange for payment. Some of the attributes of the best franchisors include:

  • Motivation to share their experience and know-how with their franchisees
  • Sharing of the tools, standards, and operational skills to run a successful business
  • Focus on ensuring that each franchisee excels to their highest potential within the brand

Great franchisors have all learned from their mistakes and can share lessons with their franchisees. As opposed to opening your own independent business, through a franchise you can benefit from the knowledge and well-earned expertise of a proven system that has weathered storms and developed strategies for success.

The “franchisee” is the person(s) or corporation that owns and operates the business using the trademark and business model system licensed from the franchisor. One of the great advantages of learning how to become a franchise owner is the knowledge that you will be going into business for yourself, but never be alone. The right franchise will provide you with the freedom but also the support you need to succeed. 

FINDING THE RIGHT FRANCHISE

Take your time to consider the advantages and disadvantages of franchising. If you have committed to the idea of owning a franchise, you still need to pare down your potential investment by industry, concept, startup costs, and various other factors. Finding the right franchise for you can be an extremely personal process, but here are some handy things to keep in mind, regardless of the market:

  • A Strong Reputation. Whether a franchise has five locations or 500, it’s important to align yourself with a brand that is positively regarded both locally and across public opinion. A good reputation can go a long way to provide built-in business when you first open your doors. 
  • Solid Financial Track Record. It’s worth researching a franchisor’s history of profitability, if they’ve managed to maintain financial strength, and where or why they have faltered. 
  • A Growing and Sustainable Market. Choose a market that is positioned for opportunity and growth for years to come. A hot and happening concept may be great in the short-term, but franchisors with long-term focus and growth potential will provide you with a richer business experience. 
  • Size Up the Competition. Many franchisors have already done the market research to find the ideal locations for their brand, but it’s equally important for you to do your own research. By getting a sense of what similar business concepts do well in certain areas, which others seem ill-positioned, and what neighborhoods are underserved by certain markets, you can focus on the type of franchise that will work best in your community.

The quality of a franchise brand, its overall reputation, and the distinguishing factors that set it apart from the competition are likely what drew you to it in the first place. You aren’t interested in just any other business opportunity. You want to invest in a growing brand that stands out from the competition and helps you make a long-lasting impression.

CONSIDER YOUR INVESTMENT

As you are selecting the right franchisor, some questions to consider include: 

  • What is offered in terms of training and ongoing support? The right franchisor will offer comprehensive training for franchise owners and a program model for your staff to ensure that everyone is fully prepared to run the business and provide the best possible services for the customers you are slated to provide for. 
  • What sets this brand apart? Within the wider salon industry, MY SALON Suite stands apart by offering prospective franchise owners the flexibility to run their business as they see fit while providing them the resources to encourage them to expand on their own time.
  • What is offered in terms of marketing my business? One of the major incentives to starting your salon business as a franchisee is the guaranteed backing of a winning marketing team. As opposed to opening your own independent enterprise, owning a franchise comes with the backing of a known brand and its team of industry experts who are always available to help make your business a success.
  • What return can I expect to make on my investment? Review the Franchise Disclosure Document (FDD). Item 19 of the FDD will give you detailed information about the franchise system including earning statistics. Not all franchisors provide Item 19, but when they do, it can help you get a sense of what to expect in terms of financial return on your investment. 

FRANCHISING WITH MY SALON SUITE

Recently ranked a Top Franchise by Franchise Business Review, MY SALON Suite is an exemplary franchisor in a growing, recession-resistant industry.

To learn more about franchising opportunities with MY SALON Suite, please visit us.