If I Buy A Franchise, Who’s In Control Of The Business?

Brian Duckett writes:

Assuming you’ll be the majority shareholder and will take day to day responsibility for the operation of the business, you will be most definitely in control. However, the purpose of that business will be to operate, under licence, an outlet of the franchisor’s system.

You will therefore be obliged to ensure the business operates in accordance with the franchise agreement and the operations manual, so there will be several things that must and must not be done.

In effect, you will be in control of ensuring the business and its employees do everything that should be done to the required standard.

That’s where the difference comes in when comparing a franchised outlet to an independent start-up. You will own the business, you will be in control of it, you will responsible for its financial performance, but you cannot just do what you want.

You will have been trained what to do, will receive constant monitoring and support to ensure you do it properly and will be responsible for and in control of what happens every day. However, if you fail to operate that business as you should, the right to control it may well be taken away from you.

It’s not about being a robot, however, as you’ll have the opportunity to decide, for example, which of the franchisor’s marketing and sales methods you use and how often you use them.

Brian Duckett is chairman of The Franchising Centre, part of the world’s largest network of specialist franchise consultants.