Select Page


Many people dream of someday opening their own business, but coming up with a business idea
and making it happen is difficult. For those who want to operate, run and control their own business without going through the struggles that cause a new business to sink, there is the option of becoming a franchisee.

A franchisee can provide many of the same benefits of being an entrepreneur. But when it comes down to it, is being a franchise owner really the same as being an entrepreneur?

Franchisee vs. Entrepreneur — What Is the Difference?

The biggest benefit of being a franchisee or an entrepreneur is having control over your day-to-day life. Many people choose to own their own business because they want the freedom to be their own boss. More control is something both franchisees and entrepreneurs receive.

But, for a franchisee, they still have someone to report to. While an entrepreneur is in complete control over how the business is run, what decisions are made and what they do to move the business to the next level, franchisees need to report to the company’s headquarters or home office.

This is more or less where the comparisons between franchisees and entrepreneurs stop. There are many benefits of being a franchisee — they don’t experience the same struggles and difficulties that entrepreneurs face. For some, this is exactly the reason they choose to franchise a business rather than start their own.

This isn’t to say franchisees are not hard workers or that they don’t understand the struggles many entrepreneurs face when trying to get off the ground. Even franchisees are not guaranteed to get their business up and running successfully. In some ways, they face challenges that the small business entrepreneur does not.

The Benefits and Drawbacks of Franchising

Because a franchisee is provided with all the business materials associated with the company they are franchising from, they’re given a platform to start on. The franchisee does not need to worry about marketing, naming and branding the same way that the entrepreneur does. For the franchisee, many of their materials are provided to them.

Franchisees don’t need to worry about coming up with a new approach to an already saturated industry. When they choose to franchise a business, the products, services or menu is already created for them.

While some franchisees get creative about additional offers they provide, others need to stick to company standards and expectations. To some, this is a benefit. Others who long for complete control may see this is a drawback.

When opening a franchise, you’re automatically put into a group of other franchise owners for the company. This provides you with an immediate connection and network with dozens — or even hundreds — of other people who have been where you are. This gives you unique access to helpful tips, tricks, and advice.

The traditional entrepreneur will need to go out and make his or her own connections.

Franchise owners don’t need to worry about creating a product or service that the public does not want, like or need. While franchisees do need to be strategic about where they open their new location, they already know the product is tested and successful.

The risk that a franchisee takes is much lower than the risk an entrepreneur takes, but franchisees still take risks. To franchise a big business, it could cost millions of dollars. While entrepreneurship is also expensive, many entrepreneurs can get off the ground with much less cash.

Is It Better to Become a Franchisee or an Entrepreneur?

Both franchisees and entrepreneurs have incredible responsibilities, but what is right for you comes down to what you’re looking for in running your own business. For those hoping to get a feel for what it’s like to run their own business but are not sure of what product or service to develop, opening a franchise may be the right move.

For someone looking to completely control every aspect of the business and develop an idea that is entirely their own, franchising a business may not be the right move. Entrepreneurship allows much more flexibility, control, and creativity.

The choice between being a franchisee and an entrepreneur can be a difficult one because there’s no right answer. Both franchisees and entrepreneurs have their own sets of drawbacks and benefits, but what one sees as a drawback, another sees as a benefit.

If you’re considering becoming a franchisee or an entrepreneur, take a moment to consider what you hope to get out of the experience. This can point you in the right direction.

Anum Yoon is a freelance writer who focuses on finance, business, and entrepreneurship. She runs a personal finance blog called Current on Currency.