Many franchisors stipulate that as a condition, the franchisee must be an owner-operator also known as a hands-on-operator. However there are arguments for and against this philosophy – let’s take a look.
The Owner-Operator Franchisee
An owner-operator is the hands-on franchisee that works in the business and is actively involved in the day-to-day running of the operation. In this way, the franchisee has more control over the business and can make immediate decisions. Being an owner-operator usually means that you need less capital to grow the business but the process will probably take a little longer.
The Manager-Run Franchise
Where a franchisee employs a manager, the manager is responsible for the day-to-day running of the operation. In this way, normally the franchisee is working on the business rather than in the business speeding up business growth. The distinct advantage is to own multi-unit franchises, however, more capital will be required to pay the managers.
What to Take Into Consideration
The type of franchise will normally determine whether an owner-operator or a manager-run franchise will be successful. As an example, fast food chains with standardised operating methods can be easier to be manager-run than a franchise where high levels of expertise is necessary which will require an owner-operator.
Which option is right for you?
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