In the world of franchising, titles matter. That said, what each one actually does is what really shapes a brand’s success.
We hear it all the time: “Wait, who owns what?” or “Who’s in charge of what exactly?” And we get it, there are a lot of franchise terms out there to make communication an extra challenge to franchise owners.
In this post, we’re cutting through the confusion and laying it out straight: what each role means, who’s responsible for what, and how the relationship works when it’s firing on all cylinders.
What Does a Franchisor Do?
They Build the Brand, and Then Guard It Like a Hawk
Franchisors are the architects of the entire operation. They’re the ones who created the concept, proved it works, and now scale it through others.
That signature look, that consistent product, that recognizable experience across every location? That’s all on the franchisor.
From logos to training manuals, it’s their job to define the playbook and make sure every franchisee sticks to it. Think of them as the head coach. They set the game plan so the whole team can win.
Take McDonald’s, for example. A Big Mac has to taste like a Big Mac in Brooklyn, Boise, or Bangkok. That kind of consistency is baked into every guideline, every standard, every system the franchisor rolls out. That’s how brands scale trust at a global level.
Providing Support and Training
One of a franchisor’s most important roles involves offering franchisees comprehensive support.
This typically includes initial training programs, ongoing operational support, and marketing assistance.
FranData reports that emerging franchisors spend 19% of their initial franchise fee on training, ranging from 16% to 31%.
Legal and Financial Obligations of Franchisors
Franchisors must comply with federal and state franchise laws, which include preparing and regularly updating the Franchise Disclosure Document (FDD).
This document provides potential franchisees with detailed information about the franchise opportunity and must be received at least 14 days before signing any contract or paying any money to the franchisor.
On the financial front, franchisors invest heavily in research and development to keep the brand competitive.
They also manage the collection of franchise fees and royalties (typically ranging from 4% to 12% of a franchisee’s gross sales).
Benefits of Being a Franchisor
Sure, being a franchisor means responsibility, but the upside can be huge.
With the right systems in place, your concept can multiply across cities, states, and even continents. Subway, for instance, grew from 200 stores to over 40,000 in just 20 years through franchising.
Then there’s the revenue model. Initial franchise fees + recurring royalties = a stable, scalable stream of income that fuels further innovation. It’s a growth engine that gets more powerful with every new franchisee onboarded.
But here’s the secret sauce: your franchisees are more than operators—they’re local experts with skin in the game. Their feedback, hustle, and market insight often spark ideas that ripple across your entire network.
The smartest franchisors know this isn’t a one-way street. They use franchise tools (like a franchise CRM that actually works) to keep the feedback loop tight, automate the busywork, and give everyone in the system what they need to succeed.
When your franchisees win, so does your brand. Let’s look at the other half of the franchisor vs. franchisee balance.
What Does a Franchisee Do?
The Operational Backbone
Franchisees are the boots-on-the-ground that make the whole thing work.
They put skin in the game, launch local operations, and work to turn the brand promise into real results. From hiring staff and managing inventory to delivering customer experiences that hit the mark every time, franchisees keep the system running strong.
They’re the ones answering phones, solving problems, building community trust, and keeping the brand consistent. Because let’s face it: your logo might bring people in, but it’s the local execution that brings them back.
And when franchisees are backed by smart franchise tools, they’re going beyond running a unit and working to grow a business.
Brand Consistency Champions
One of the most important responsibilities of a franchisee is to maintain brand consistency. This involves strict adherence to the franchisor’s operational guidelines.
Take Subway again. A franchisee must use approved ingredients and follow specific sandwich-making procedures to ensure a uniform customer experience across all locations.
Financial Stewardship
Franchisees must excel at financial management.
This includes paying royalties and marketing fees to the franchisor (typically 4% to 12% of gross sales, according to the International Franchise Association).
They also handle local marketing efforts, which can account for an additional 2% to 5% of sales. Proper financial stewardship is essential for the long-term success of the franchise.
Contractual Commitments for the Franchisee
The franchise agreement serves as the foundation of the franchisor-franchisee relationship. It outlines several key obligations for the franchisee:
- Payment of initial franchise fees and ongoing royalties
- Maintenance of specific operating hours
- Procurement of supplies from approved vendors
- Participation in national marketing campaigns
- Regular reporting of sales data
Potential franchisees must conduct thorough due diligence before making a decision.
Carefully examining the Franchise Disclosure Document (FDD) provides detailed information about the franchise opportunity, including financial obligations and operational requirements.
Benefits of the Franchisee Role
Research shows that the one-year survival rate of new single-establishment businesses is about 6.3 percentage points higher for franchised than for independent businesses.
By joining a franchise, you benefit from a tested and successful business model. This significantly reduces the risks associated with starting a new venture from scratch. Franchisees can focus on executing a model that has already proven its effectiveness.
Franchisees gain access to established supply chains and bulk purchasing power. This can lead to cost savings in operations, as they can leverage the franchisor’s negotiating power to secure better deals on supplies and services.
Franchisees also benefit from national marketing campaigns. The International Franchise Association estimates that franchisors spend an average of $2 million annually on marketing. This drives brand awareness and attracts customers to franchisees.
Talking to current franchisees can offer valuable insights into the day-to-day realities of running a franchise and the level of support provided by the franchisor.
The success of a franchise system relies heavily on the symbiotic relationship between the franchisor and the franchisee. Let’s explore how this partnership functions in the next section.
Franchisors vs Franchisees: How They Work Together
Effective Communication Strategies
Successful franchise systems prioritize clear and consistent communication. Many franchisors use weekly newsletters, monthly webinars, and annual conferences to keep franchisees informed and engaged.
Domino’s Pizza hosts an annual global meeting where franchisees share best practices and learn about new initiatives.
Franchisors often implement franchise management systems to streamline communication. This tech allows for real-time updates on operational changes, marketing campaigns, and performance metrics.
Comprehensive Training and Support
Training forms a cornerstone of the franchisor-franchisee relationship. Initial training programs typically last between one to four weeks, covering everything from operations to marketing. 7-Eleven University offers a comprehensive 300-hour training program for new franchisees.
Ongoing support proves equally important. Franchisors often provide field support teams who visit franchisees regularly. These visits serve multiple purposes:
- Ensure brand standards maintenance
- Offer operational guidance
- Identify areas for improvement
- Share best practices from across the system
A survey by Franchise Business Review found that franchisees rate the support they receive from their franchisor using a Franchisee Satisfaction Index (FSI) score.
Navigating Conflicts and Disputes
Conflicts can arise in franchise relationships despite best efforts. Common issues include disagreements over territory rights, marketing strategies, or operational changes.
The International Franchise Association reports that about 1% of franchise relationships end in litigation each year.
To mitigate conflicts, many franchise systems implement structured dispute resolution processes. These often include:
- Internal mediation programs
- Franchise advisory councils where franchisees can voice concerns
- Third-party arbitration clauses in franchise agreements
Proactive franchisors also conduct regular satisfaction surveys among their franchisees. This allows them to identify and address potential issues before they escalate into major conflicts.
Leveraging Technology for Collaboration
Modern franchise systems increasingly rely on technology to enhance collaboration. Franchise CRMs offer features that streamline operations, increase sales, and improve customer retention.
The use of such technology can significantly impact franchise performance. For example, some franchisors report improved lead conversion and sales growth by implementing advanced CRM systems.
Continuous Improvement and Innovation
Successful franchise systems must foster a culture of continuous improvement and innovation.
Franchisors often encourage franchisees to share ideas for process improvements or new product offerings. This bottom-up approach to innovation can lead to system-wide enhancements that benefit both franchisor and franchisee.
Regular performance reviews and benchmarking also help identify top-performing franchisees. Their best practices can then be shared across the system, elevating overall performance.
Franchisor vs. Franchisee: Different Roles, One Goal
At its core, franchising is a team sport. The franchisor sets the playbook—building the brand, refining the system, and leading the charge—for the franchisee to take the field: bring the brand to life, win local customers, and drive day-to-day success.
When those roles click? That’s when franchises scale smarter, faster, and with a whole lot more confidence.
Tools like ClientTether streamline workflows and strengthen the connection between franchisor and franchisee. We believe the right tech ensures both sides of the partnership are synced up and moving forward together.
Franchising only works when both players win. So get clear on the role you play and make sure you’ve got the tools to play it well.
