What Is the Best Franchise Ownership Model for You?

Deciding whether to purchase a franchise is a hard enough challenge on its own. But that decision is intertwined with the process of determining what brand you want to align yourself with.

Even beyond those, you have another big choice ahead of you if you do buy a franchise: what type of franchise ownership model do you want?

It’s an important decision. It’s one that you’ll probably decide pretty quickly once you get immersed in searching for the right franchise. After all, you probably know yourself pretty well, and you know your financial situation. But it’s helpful going into the process with an understanding of three different franchise ownership models — and thinking about which one is right for you.

Owner-Operator Franchise Model

This is the type of franchise model for those who want to be intimately involved with the business. If you own a restaurant that sells burgers, for example, you might be flipping burgers in the kitchen one moment, behind the counter ringing up a sale the next, and then minutes later working in the back office on payroll.

Or maybe you have a franchise that services customers’ homes, such as selling or installing windows. In a situation like that, you may be the lead salesperson — or the only salesperson.

Then again, some brands offer franchise models where it’s almost like you’re investing in a job — you work out of your home office, and you’re the one setting up appointments and making calls. It may not be glamorous, but if you do it right, you make a big paycheck.

In any case, working as an owner-operator means you’re going to be using the proverbial elbow grease and getting your hands dirty. Maybe every day, for several years or longer. But for those who opt for this model, that’s OK because they own the place.

Absentee-Owner Model

This is the dream for many people — and a not so fun concept for the business owner who really does want to be involved.

As you might expect, this model means you’re a franchisee who rarely has step into your brick-and-mortar establishment. Your manager or management team handles your problems, like hiring and firing and scheduling employees. As much as possible, you remove yourself from the equation, stepping in only when the owner’s help is truly needed. Most of the time, you’re overseeing the big picture and working on your business elsewhere — and hopefully watching the money come in.

There are actually some franchises that won’t allow you to be an absentee owner. For instance, you may find that a dental practice or medical spa requires you to have a medical degree. Many franchises, however, do allow for absentee-owner models.

As you can imagine, owning a franchise as an absentee owner means you do have to be able to find smart and capable people to run your franchise. And you’ll also need to keep a close watch as often as possible. Otherwise, you’ll watch your investment start to slip without the ability to make quick changes.

In other words, you may be absent from the day-to-day operations, but you shouldn’t be completely absent from the business.

Semi-Absentee Model

This is often the model that owner-operators aspire to reach. You may be able to start off in this model; if you have the financial wherewithal, but it’s often a model that owner-operators take on after about five or ten years running their franchise.

In this situation, you’re involved but aren’t necessarily in your brick-and-mortar location every day. In fact, you may have several locations. You may even own multiple franchise locations throughout a city, state, or region.

You probably are spending most of your day in an office, making phone calls and sending emails, ordering inventory, and deciding how to spend your marketing budget. You’re definitely working and visiting your franchise locations and talking to your teams regularly, but you’re no longer carrying out the daily responsibilities of your employees behind the counter in the earlier restaurant scenario.

Choosing which model to target will require some self-reflection. How do you prefer to work, and which model might get you to your overall business goals in the most efficient way?

If you’re a people person and feel like owning three, four, or more locations would be stressful, you may be very happy being an owner-operator and remaining one. On the other hand, you might like the idea of being an absentee owner or semi-absentee owner and just working on building your business. Some people end up owning several different franchises, where they have, say, two or three burger restaurants and three or four convenience stores. They’re working just as hard as the owner-operator, but perhaps with less physical exertion.

That said, all of the franchise models have an appeal, and they can all help you attain your own vision of success.

Maybe you want the ability to take a vacation with confidence in the sustainability of your business operations while you’re away. You might just want to know that your retirement is going to be stable. You may even be thinking of passing on your business to your kids if they’re interested in taking over.

One thing is for certain. There is no one “best way” to go about owning a franchise, but there is a wrong way: ignoring the work. If you want to have a highly profitable and successful business, you do need to be committed, and a franchise you buy, especially if you’re an owner-operator or a semi-absentee owner, should be in a field that interests or excites you. But if you can check off those two boxes, really, your threshold to succeed is only limited by your energy and imagination.

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