Posted on:November 4, 2021
In recent years, with many people losing their jobs, self-employment has become very common as many venture into the business world. While some have chosen to start their businesses from scratch, others have decided to franchise. These two moves have raised serious arguments on which path is better and whether a franchisee is an entrepreneur.
This article sheds light on the differences between the two and advises on the best option for you to consider.
What is the difference between an entrepreneur and a franchisee?
An entrepreneur is a person who manages and organizes an enterprise, mostly a business, with considerable risk and initiative. In simple terms, an entrepreneur is a business owner who takes financial risks by starting new ventures. An entrepreneur develops a business model, acquires the needed human and physical capital to run it, and operates it.
On the other hand, a franchisee is a person who procures and runs a franchise. A franchise is a license that allows a franchisee to use the franchisor’s name, logo, products and services, trademarks, business process, and knowledge regarding the business. A royalty fee is needed for this, and the franchisee must follow the guidelines set by the franchisor.
Is a franchisee also an Entrepreneur?
According to Paul Brown, a prominent franchisor and writer at Forbes, franchisees are entrepreneurs. His argument is very simple; just like entrepreneurs, franchisees manage and organize businesses with risks. They, too, encounter risks and manage their franchise as businesses.
While entrepreneurs encounter many risks in the market and work hard to overcome the risks, franchisees use the acquired wisdom of the franchisor to ensure minimal risks. They do not necessarily create a model from scratch, but they create one in the marketplace where the model was nonexistent.
Why do entrepreneurs make great franchisees?
Whether you opt to start your business from scratch or decide to franchise an already established business, the skills you need are similar. You must have creative, innovative, enterprising, leadership, communication, and critical thinking skills.
If you have these skills, you will make an excellent franchisee, especially if you are;
- Ready to own a business but needs guidance
- In possession of the needed capital but do not have an idea
- Interested in business ownership but desires the turnkey option
- Interested in certain venture ownership with maximum growth opportunity
Are all entrepreneurs suited to franchising?
A lot of freedom comes with starting your own business from scratch as an entrepreneur, as you get to decide everything. This freedom is not found in franchising as there is a set of rules and systems you need to observe for consistency purposes that benefit both the franchisee and franchisor.
For example, if you franchise a restaurant business, everything has to be the same as the parent restaurant, from the menu, decorations, and even operation. Therefore, it is safe to say that the franchise system may not be the preferred choice for every entrepreneur as most prefer having total control over their venture.
A franchisee is an entrepreneur who takes risks to start a business, build it, and deal with the challenges that come with it. The only difference is that they have decided to do this within an established brand.
If you are considering investing in an education franchise like Tutor Doctor, reach out to us now. We advise on every area of your business, including sales and marketing. We offer you all the marketing tools you need, such as a customized web page, local listings, and web optimization.
To learn more about the benefits of franchising with Tutor Doctor, reach out to our team.