One motivation of people entering franchising is to effectively ‘buy themselves a job’. However becoming a franchisee is actually far more complex than ‘buying a job’, it’s actually a business you’re buying.

Franchisee and Employee Differences

Unlike being an employee, it’s your finances that are tied up with the business, so if your franchise unit struggles you may struggle, which may also impact your family.

Also you don’t get the same leave entitlements as if you were an employee.

If you get sick or want to take recreation leave it’s up to you to cover the costs of covering your absence.

And it’s not as easy as applying for a new job and then giving your few weeks notice if you decide it’s time to move on.

Franchise agreements are legally binding documents, and it takes time and money to sell a franchise.

The sale may also have tax implications, and the franchisor has to approve the replacement franchisee.

As an employee you’re often given a selection of key areas to focus on, which generally match your strengths, and other specialists look after areas outside your expertise.

Franchise training and skills

Although franchisors provide field support and franchise training, the skills you require as a franchisee are likely to go beyond the training provided and in most cases you’ll need to be able to run every aspect of the business.

Franchise networks may provide specialist training, but it usually only covers specifics to the individual franchise, such as how to prepare or deliver the product, how to use the franchise network’s computer systems and so on.

In addition to the franchise training provided by your franchisor you may also need general business training and skills, such as bookkeeping, recruitment, managing staff (depending on the franchise) and more.

Franchisee mindset

We’ve also found people who enter franchising with the ‘buying a job’ mindset tend to experience higher rates of conflict in the franchise relationship.

This is because these franchisees generally see the franchise relationship more as an employer/employee relationship, whereas franchisors see it as a partnership.

Although franchisors provide franchise field support, after the initial start-up phase franchisees are required to become largely independent in day-to-day operations.

Another issue surrounding the ‘buy yourself a job’ mindset is these franchisees have a tendency to assign themselves a wage, similar to the one they had before entering the franchise, which is not always realistic.

You need to set your wage at what it would be if you were to replace yourself, such as by bringing a manager into the franchise, which may be a lower salary than you’re used to.

As a franchisor you’ll make your life a lot easier if you ensure prospective franchisees are aware of the difference between buying a franchise and ‘buying a job’, and as a franchisee you’ll be much better prepared if you realise it’s a business you’re buying.

Other franchise myth blogs

• Franchise Myth #2: Be Your Own Boss
• Franchise Myth #3: Franchising is less risky
• Franchise Myth #4: Franchising is an easy lifestyle
• Franchise Myth #5: If I buy a franchise it's mine forever
• Franchise Myth #6: Franchises are cheaper than independent business