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01 Jan 2024

The Pros & Cons of Owner-Operator Franchises

The options of franchise ownership correspond with how hands-on you want to be in the business. The ownership option with the most involvement in the day-to-day operations of a franchise is that of the owner-operator.

In some cases, franchise concepts are developed entirely to attract an owner-operator franchisee because franchisors prefer the direct involvement of someone who purchases their franchise. For other franchisors, the owner-operator model is only one of many options, providing flexibility in ownership outcomes.

When deciding whether an owner-operator model is best for you, let’s look at some of the pros and cons.

The Pros of Owner-Operator Franchises

Here are some of the common pros of a franchise model that’s geared toward an owner-operator opportunity.

 1. Lower Cost of Investment

Usually, an owner-operator franchise will cost less than a franchise where you’re a semi-absentee or executive owner. The main reason for this low-cost franchise is because you will be working in the business yourself, thereby reducing the need for a manager’s salary and associated costs.

2. Great for First-Time Owners

The lower cost and the hands-on approach to this type of franchise ownership make it a good option for first-time business owners. It’s helpful to be trained and gain knowledge and experience in all facets of the business when this is your first time in an ownership role.

3. Being in Control

As the hands-on operator, you are in full control of every aspect of your business, from greeting the customer to filing the taxes. For people who want to participate in all areas of the business and make every decision, this type of ownership model is a great fit.

4. Creating a Job for Yourself

Entrepreneur writes that working in the business is a way to move out of corporate America by creating a job for yourself. You replace your income and build equity in a business at the same time. This can make the transition to business ownership easier to handle financially.

The Cons of Owner-Operator Franchises

There are also drawbacks to being the owner-operator in a business. For some, these may not be drawbacks at all, depending on what you’re looking for from franchise ownership.

5. Time Commitment

To be an owner-operator, you have to be prepared for an increased time commitment to ensure the business runs smoothly. This means your work-life balance may skew more toward work than life, at least for a while. If you’re transitioning out of a 9-to-5 job, this might take some getting used to.

6. A Customer Service Focus

Franchise CPAs notes that part of being a hands-on owner is handling every aspect of the business, and depending on the type of business you choose, that can include dealing with people. If being in a role where you are constantly handling customer requests and concerns is not your forte, being an owner-operator may be for you.

7. Operational Stress

The responsibility for both the strategic and operational aspects of the business can be stressful. You're accountable for everything from staff management to customer service and financial management.

8. Scaling Challenges

If you have a plan to scale your business by adding multiple units or multiple locations, you won’t be able to remain an owner-operator. If you know that from the beginning, you may wish to pursue a different type of franchise ownership. More than half of all franchises in the U.S. are owned by multi-unit operators, according to research company FRANdata.

How Do I Choose the Right Owner-Operator Franchise?

If you’re ready to move forward on a full-time franchise and be an owner-operator, one of the best ways to explore your opportunities is by attending a franchise expo. Franchisors promote their franchise, and you can meet face to face with people who would be part of your franchisor team. You can also ask questions about the training they provide and what responsibilities are included in the owner-operator role.

The types of franchises that attend expos include many of the fastest-growing franchises in the marketplace, and franchises that have a strong foundation for investment. When you’re confident about the franchise you’re offering, you want to be in front of as many qualified candidates as possible, and a franchise expo provides the best opportunity to do that in a big way.

Attending a Franchise Expo

If you want to get some face time with owner-operator franchises, you can request attending information from MFV Expositions. We’ve been hosting franchise expos for more than 30 years, and we invite you to attend the franchise show nearest you to start your journey toward franchise ownership.

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