Franchisee vs. Franchisor: Differences Explained
Franchise, franchisor, franchisee, oh my! If you’re part of a multi-location business or are a multi-location marketer, you might be unsure how the three terms differ — especially franchisee vs. franchisor.
In this article, we’ll define the relationship between franchisees and franchisors, how to write them grammatically, and share a few ways to improve your franchise marketing strategy. Let’s get started!
Franchise, Franchisor, Franchisee Defined
Before moving on to how these three terms work together, let’s define them. Note that there are other definitions for these terms, but these are the definitions for multi-location and franchise businesses.
Franchisor: The individual or company that owns the trademarks and/or business model and then often licenses both to the franchisee.
- Example: The franchisor is re-branding which will cause the franchisees to change their messaging
- Plural noun: Franchisers
Franchisee: The person or individual business that purchases a franchise from the franchisor uses the trade-marks and business model.
- Example: John Doe loved McDonald’s so much that he started and now manages his own Mcdonald’s franchisee.
- Plural noun: Franchisees
Franchise: A franchise is a type of license from a company that grants a franchisee access to a franchisor’s proprietary trademarks, business knowledge, and processes.
Note, “franchise” can also refer to the combination of franchisor and franchisee(s), or the business as a whole.
- Example one: McDonald’s granted the group a franchise.
- Example two: Since partnering with SOCi, the franchise is thriving.
- Plural noun: Franchises
Let’s use all three terms in a sentence. McDonald’s, the franchisor, granted John Doe the right to open a franchisee through their franchise program.
Also, note that a franchisor and franchisee can refer to a business or person.
Franchisor and Franchisee Relationship Explained
As mentioned earlier, a franchisor owns a franchise or the rights to one, its trademarks, and its business model. The franchisor is the leading company and brand. It can allow other small-business owners to open franchises under the franchise brand and trademark.
The franchisor and franchisee must work together to establish and maintain a solid and recognizable brand. If one or multiple franchisees perform poorly or have negative press, that can impact the franchise’s brand reputation.
Vice versa, a national scandal regarding a franchisor can also impact how consumers perceive the franchise’s brand, making it more challenging for franchisees to operate and conduct business.
How to Improve the Franchise Experience
Now, we’ll discuss how together, both the franchisor and franchisee(s) can improve the franchise’s brand and reputation.
When a patron visits one of your franchisees, they expect a certain level of consistency in the service they receive. Each individual franchisee’s service influences how consumers perceive your brand.
If visitors have a poor experience, it’ll likely leave a negative impression on them. Even worse, they may do one or multiple of the following: Not revisit the franchisee location, leave a negative review, or talk poorly about your brand to others or on social media.
Therefore, each franchisee must be consistent in the branding, messaging, and service provided to keep customers happy and returning.
Uphold the Brand Reputation
We touched on brand reputation earlier, but both franchisors and franchisees must uphold the franchise’s values and adhere to brand guidelines.
A single franchisee acting against the franchise’s values or operating guidelines can impact the franchise — sometimes making both local and national news. Similarly, internal strife or issues with the franchisor or owner that becomes public can negatively affect the franchise’s brand and reputation.
Update Training and Onboarding Practices
For franchisees to be successful, they need thorough training and support from the franchisor. Part of the franchisor’s business operations should include training and onboarding. Franchisors must send training material to all franchisees and ensure they implement operating standards correctly.
However, as consumers’ wants and needs change, so should your franchise company’s training and development. For instance, if you roll out a new online ordering app or work with third-party delivery services, you’ll need to ensure all franchisees know the app-ordering process and how to ensure orders are made in time.
It’s also essential to train your franchisees on marketing processes and what is expected from them in terms of marketing. If you need help improving your franchise marketing or updating your local franchisees’ business information, consider using SOCi.