Is a franchisee an entrepreneur or not? This fundamental question is still baffling many stakeholders in franchising and entrepreneurship today. There seems to be no consensus in the business community. So what do you think?
On one hand, entrepreneurs who built their business from ground up tend to say that franchisees are more like managers and not entrepreneurs. First of all, let’s make it clear – there is nothing wrong with being a manager. Now we can discuss whether franchisees are entrepreneurs or not. There are a good number of rationalizations, which may explain why there are so many different opinions even among franchisors.
1 – Franchisor-Franchisee Relationship Model
We must remember that not so long ago franchisees were viewed as “branch managers” by some franchisors. Fortunately this perception is now becoming a thing of the past, which also brings about fundamental changes in the very profile of franchisees. Indeed, if franchisees are merely managers, their franchisors would be likely to pick people who have no — or little — entrepreneurial drive, or otherwise risk disagreements and conflicts due to differences in business visions. Today many franchise networks use business models or are at a level of maturity that would require a certain amount of entrepreneurship on the part of their franchisees. In fact, the more it is a partnership relationship between the franchisor and the franchisee, the more entrepreneurial sense the franchisee can have… to a certain extent, of course. A franchisee who is too much of an entrepreneur at heart is likely to become unhappy within a structured business environment that leaves little room for initiative.
2 – Business Model vs. Level of Entrepreneurship
The level of entrepreneurship that a franchisee should have varies greatly from one business concept to another. As some business models imply more routine than others, or the very franchise formula implies a high level of instruction and compliance, a franchisee with a manager profile would be a better fit than a hardcore entrepreneur. A person with a strong entrepreneurial sense would tend to question the existing procedures and methods, would be bored with any repetitive job and monotonous tasks, would resist guidance and supervision, etc. Franchisors must make sure they select the right type of franchisees whose desired level of autonomy (for them to be successful and happy) is in line with the level of support offered by the franchisor. Otherwise, conflicts may happen down the road. In some networks, having franchisees with a strong sense of entrepreneurship is very pertinent: to contribute to the development of the franchise banner (e.g. in a highly competitive segment) or to support the evolution of the business model in the case of a young network. Finally, some business models require the ability to perform in a context of uncertainty, where entrepreneurs are at their best. It is up to you to decide which entrepreneurial profile is the best match for your network, based on your business model, the level of your business maturity, your own personality, the investments required (risk-taking), etc.
3 – Entrepreneurs Start From Zero and Take All the Risks
One of the main arguments of those who see franchisees more as managers is the fact that franchisees have everything handed to them well-packaged, starting with the business model, methods and procedures, they are coached and supported, etc., while “entrepreneurs” must do everything themselves, building their business from ground up. Indeed, there is less risk involved when you start in a franchise network. In fact, it is even one of the many benefits of this business model. But still, starting a business, whether as part of a franchise or not, has its share of difficulties and perils, and requires hard work. Besides, if we apply the same logic, a person who takes over an existing business is not a “true” entrepreneur… Of course, he is! Every situation has its own challenges: while the franchisee can count on a large, strong parachute to support him and has access to a set of proven working methods from the very beginning to help him make his jump, he too has to take a leap into the unknown. It is his decision. He must take this step…
Here are some examples of entrepreneur definitions. They vary, but could easily apply both to those who start or buy a business and to franchisees:
What does it mean to be an entrepreneur?[1]
“An entrepreneur is an individual who has the courage to follow his dreams, to ignore the risks and to use his full creative potential to innovate.”
Valérie Bellavance
Senior Director for Quebec
Canadian Youth Business Foundation (CYBF)
“An entrepreneur is a person who takes action.”
Josée Cusson
Director of Operations
Canadian Youth Business Foundation (CYBF)
“An entrepreneur is someone who sees opportunities and solutions where others see issues and risks, and who knows how to make the most of these opportunities.”
Christian Bélair
President-General Manager
Regroupement des jeunes chambres de commerce du Québec (RJCCQ)
“An entrepreneur is a person who dares to take action and change life for better.”
Réjean Parent
President
Centrale des syndicats du Québec (CSQ)
“Becoming an entrepreneur is about giving yourself the freedom to excel.”
Louis Jacques Filion
Professor and
Member of the Rogers–J.A. Bombardier Chair of Entrepreneurship
HEC Montreal
The bottom line, everyone who is going into business must have a certain degree of entrepreneurship. Greg Nathan of the Franchise Relationships Institute pointed out that 40% of success rests on the shoulders of the franchisee himself. Therefore, franchisees must have a certain ability to take risks and a drive to go into business. Remember, it is important to evaluate the level of entrepreneurship needed in your network and to make sure that your recruitment process allows you to attract the right people. FlagFranchise can help you achieve this by preparing for you a comparison analysis of the entrepreneurial profile of your prospective franchisee and the desired profile for your banner.
Sylvie Grégoire, MBA, CRHA, Certificate in NeuroLeadership
President of FlagFranchise and Totem Performance organisationnelle
[1] http://www.jentreprends.ca/cest-quoi-un-entrepreneur
