What is a Franchise?

Franchise – (noun) an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, e.g., providing a broadcasting service or acting as an agent for a company’s products.

I am providing this definition to help clear up what I feel is a major misconception of what a franchise is. Often, I hear people say that they want to support a “small business” and then add, “but not a franchise or a chain.” When asked to elaborate, they will clarify that they want to support someone local – not a big (corporate) company. I completely understand the sentiment, and the many reasons why people feel that way, but I think (because they misunderstand the nature of a franchise,) these people are inadvertently excluding many “local” businesses from their “support.”

What many people don’t understand is that most franchise owners, aka ‘franchisees,’ are actually local owners.

Some business owners operate a startup. They come up with their own concept for a business (ie: a restaurant, store, newspaper, radio station, pharmacy, doctor’s office, veterinarian, delivery service, etc.) and decide what product(s) they will sell, or what service(s) they will provide. They create their own ‘brand,’ and they make the decisions on how they will handle all aspects of that brand.

The difference between those local business owners and a local franchise owner is that the franchisee chose to purchase the rights to operate an established company’s ‘brand’ and everything that comes with it. A franchisee PURCHASES the rights… they are not employees of this other company, they own the right to use the brand for their own business. The franchisee pays a royalty (which, in some cases, can be quite steep) to maintain the rights to use that brand; and in return, the franchisee continues to have access to everything that the franchise has to offer. The franchisees are also limited in the decisions that can be made about HOW that brand may be used, by regulations set by the franchise.

Neither type of business is better or easier than the other. They are just different, and business owners choose one over the other for various reasons.

I personally chose to purchase a franchise for one of my small businesses. I am a local person. I do own the business. There isn’t some ‘corporate backer’ for my business, should I fail. I am personally responsible for all debt and all risk associated with my business. It is 100% on my shoulders to succeed. I could have gone the startup route, but I felt that a franchise was what was best for me. My franchise business benefits from the nationwide brand recognition, and the Research and Development that the corporate team invests in new products and marketing. I couldn’t afford to do all of that on my own, so it made sense to me, personally, to buy a franchise over a startup.

Local business owners of all types are struggling in many ways in today’s uncertain climate, so back to my point about the statement, “I want to support a small business, not a franchise or a chain.” I’m not exactly sure why we would single out any particular group of businesses or a particular business model to support, except that maybe we are making a point about helping local people succeed in business, and want to help the local economy. If that’s the case, then we all need to take a closer look at those businesses because, we may be surprised by how many ‘chains’ and franchises are actually local, family-owned businesses.

In my opinion, though, we should be supporting all businesses. From what business owners are telling me, their two biggest problems right now are the shortage of staff and the shortage of supplies or items they sell! We are ALL in the same boat! Big, small, franchise, or start up – we are all in drastic need of employees!

Big, small, franchise, or start up – many businesses are also struggling with not having what their customers are trying to buy. Earlier this week, I sat in a meeting where an individual spoke out about his frustration that some businesses were low on or out of stock on many items that he regularly purchases. In some cases, lines were long and service was subpar. The blame was mainly being placed on too many people buying up the items on the shelves. That may be partly true, but I spoke to a large box store manager, and I was told that they simply aren’t getting in the supplies. They are also thin on staff to stock the shelves, but even more worrisome and frustrating is that the trucks just aren’t coming in with inventory to put on the shelves.

I typically go grocery shopping with my son each weekend. There are a few particular items that haven’t been in stock for quite some time (one being a certain brand of frozen pancakes that my son just can’t begin his morning without.) I have even gone out to several different stores looking for them, at various times, with no luck! I guess he will just have to eat the pancakes that dad makes!

Maybe you’ve also noticed that some of the shelves are looking sparse. Should we be concerned? As I mentioned in a previous blog, if we don’t have people to make the product, and no one to ship the product and no one to stock and sell the product, the result is rather simple!

Let’s support all businesses. Let’s find out what kind of support they need. I’m all for shopping locally, but maybe that’s not the most urgent of the needs our local businesses are facing. Maybe you know someone who has access to the items and supplies they are looking for, or have a contact at a transportation company or know of someone looking for employment in their particular field. You never know when you just might hold the keys to open doors for another business owner!

The Chamber has a page on our website where members can actually post their own job openings! I would love to see that page full of postings and I would love to see each of them getting filled!

In the meantime, the best way to find out how you can support neighboring businesses is to network with those business owners, and we have a perfect opportunity to do that while having a glorious day out with your family, Saturday, September 25th at the Annual Truck Raffle and Family Day at Hill Ridge Farms. We look forward to seeing each and every one of you there!