Entrepreneur vs Franchisee

Published On: Sunday, November 4, 2018

Are they the same thing?

nEntrepreneurs & Franchisees are more like cousins than identical twins.

Definition of Entrepreneur: a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Definition of Franchisee: an individual or company that holds a franchise for the sale of goods or the operation of a service.

Both are owners of a business or enterprise – but how they go about this ownership, creation and success is very different.

Being an entrepreneur begins with your passion. When you’re an entrepreneur you create the business model and the systems, process & procedures needed for the business to operate -hopefully – successfully.

Being a franchisee begins with believing in a system that has already been created, proven and then following that process. When you’re a franchisee you bought the rights to operate someone else’s business model to help the company grow as a whole.

Both are business minded ventures. They require self-discipline, management skills,operational skills. However, in one scenario you’re creating the proverbial wheel in the other you’re following the wheel that someone else built & you believe will work. Being in business for yourself, like anything, has it’s pros and cons. Start Ups generally have a failure rate of 50% in the first 5 years. Getting the support, making the correct decisions, having enough capital….as lack of funding is the #1 reason business fail.

Financing For entrepreneurs this is more difficult to obtain as nothing has been proven yet. They are building an idea on paper to show the bank. It is far easier for franchisees to get financing b/c they are buying the rights into an established proven system that the bank can see results.

Autonomy Some entrepreneurs have more autonomy unless they are answering to a board, investors or partners. A Franchisee has agreed to the outlined terms & agreements with the franchisor prior to owning the business.


Sometimes the autonomy for an entrepreneur can have its own pitfalls as they are doing it on their own and figuring out as they go along. For a franchisee the extensive training and ongoing support is a an alluring aspect of franchising thus creating a less riskier investment. The franchisor is also able to provide it’s family of franchisee the benefits of group purchasing, pricing, marketing and other benefits.

Daily Functions Both are responsible for the day-to-day functions – inventory, marketing, staff, and any financials. A franchisee as the options of operating at a semi-absentee level depending on the franchise whereas an entrepreneur is fully hands on.

Neither one is right or wrong, as some have done both. Just depends on which one is right for you at what time in your life.

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