A franchisor creates the business model and support system. A franchisee operates individual locations. An area developer gets the right to sell and develop franchises across a specific region, like a state.
Today we're going to talk about franchising lingo 101. I get a lot of comments by people saying that they don't understand what the difference between franchisor, franchisee, multi-unit franchisee is, so I thought I should explain it today in simple terms. Right, stay with me, this is going to be very useful. So on top of a franchise system, you have the franchisor. That's the person that built the business successfully and then franchised out because he he or she were certain that it will be a very beneficial activity for others. And because they were so successful, they wanted to share this model and grow through franchising as a platform. The franchisor normally has a corporate team. The corporate team is the team that helps the franchisor to create all of the communication, onboard the franchisees. Here you've got the operations manager, you've got the marketing manager, the CMOs, the franchise developer, and so on and so on. Under this team, you have multiple units. Unit 1, Unit 2, Unit 3, Unit 4, Unit 5. These are units that the franchisor gives the rights to operators to operate in certain areas on behalf of the brand. So this is a single franchisee. This is This is a single franchisee. This is a single franchisee on their own. However, a franchisee can also own different units, multiple units. So let's say these 3 units are owned by one franchisee. This makes this franchisee a multi-unit franchisee because they own multiple units, whereas this is a single franchisee and this is a single franchisee. Often referred as Z. To make it a little bit more complicated, you have another thing that's called area developers. The area developers are people who have a certain area, like a state, let's say the state of Texas. You have an area developer who has the right to sell franchises only for Texas on behalf of the franchisor. So you can buy Texas as an area developer off the franchisor, and you can start building your own franchisee network under the same brand. So today we learned what's the difference between a franchisor, a franchisee, a multi-unit franchisee, as well as an area developer. I hope this was useful. Save this video, like it, and follow me for more franchise marketing tips.
