Franchisees, Are You Entrepreneurs For Good?
Franchise Key:
Franchising can be the key to success for a business, but is the franchisee a real entrepreneur? The franchisor has created a concept; but what about the franchisees who are using it locally?
What must be judged is the capacity of creating wealth and assuming risks. Turnover and risk are two indivisible aspects of the creation of any enterprise. If the candidate franchisee is only looking for a job, he will transform the franchise into a national employment agency.
Franchisees are in contact with clients on a daily basis; they know about their needs and know how to answer them. They develop and improve.
The franchisee invests his own funds, he borrows from the bank, he assumes the fitting out of the point of sale and manages it, and he hires and manages employees…
In order to create value, he certainly uses a system which was developed by someone else; but he assumes the risk.
Franchisees must be the franchisor’s associate, in a strategic relation that is necessary both for their financial results and their self-gratification (having participated to decision making). They are co-entrepreneurs.
The franchisor is thus an entrepreneur for good. The only difference is that in order to escape the financial and competence constraints, he accepts to bind by other constraints. Those new constraints result from his adhesion to a concept created by someone else; he must respect those constraints like all other franchisees so as not to weaken the concept.
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