Should You Have a Franchise Business Partner?

Starting a franchise business can be a challenging endeavor. There’s so much to do – from choosing a franchise to navigating franchise trends and everything else in between. Not to mention, the investment isn’t easy on the pocket either. 

With all these challenges, having a franchise business partner could be a great idea for those who don’t want to venture alone.

However, it’s crucial to note that while having a business partner can bring many benefits, it can also have its drawbacks you may not realize from the get-go. In this article, we’ll explore the pros and cons of having a franchise business partner and help you decide if it’s the right path for you.

What is a Franchise Business Partner?

A franchise business partner is a person who enters into a business partnership with another person or persons and becomes a co-owner of a franchised business. In short, if you’re thinking of starting a franchise, a partner would take on equal responsibilities with you.

In this partnership, the business partner contributes to the initial investment and shares the responsibilities and profits of the business. Typically, the franchisor provides the business model, brand, and ongoing support, while the franchise business partner manages the day-to-day operations of the franchise location.

This type of partnership can benefit individuals who want to own and operate their own business but lack the necessary experience, capital, or resources to do it alone.

What is the Role of a Franchise Partner?

The role of a franchise partner is to own and operate a franchised business location. As mentioned above, a franchise partner typically contributes to the initial investment and ongoing fees to the franchisor. In exchange, the partners have the right to use the franchisor’s brand, business model, and ongoing support.

The franchisor typically provides the franchise partner with initial training, ongoing support, marketing materials, and access to proprietary systems and technology. 

Regarding the division of responsibilities, business partners may have custom arrangements, depending on what they agree on. For instance, one franchise partner may manage the business’s day-to-day operations, including hiring and training staff. Another partner, on the other hand, might be in charge of ensuring compliance with franchise standards and policies to maintain the quality of the products or services. 

Some partners may also focus on their expertise, such as inventory and supplies management, marketing, or keeping financial records.

What are the Pros and Cons of Having a Franchise Partner?

Like any business partnership, having a franchise partner can have pros and cons. Here are some of the advantages and disadvantages to consider:

Pros

• Shared responsibilities. As mentioned above, a franchise partner can share the workload and responsibilities of running a franchise location. That means you’ll have someone to share the challenges with and someone who can help you solve problems as they come. 
• Shared investment. If you’re having trouble producing the initial investment for a franchise, having a partner can help. A partnership can also get a load off your back as you manage ongoing costs during the first months of the business.
• Access to complementary skills. A partner can bring valuable skills and expertise to the partnership, which can help you overcome your limitations and improve the franchise’s success. If, for instance, you’re a marketer who is not well-versed in accounting, having a partner skilled in the books will allow you to focus on your expertise while having the accounting department covered.
• Emotional support. A business partner can provide emotional support and help during challenging times. This may not sound like much initially, but it’s valuable to have once you’re neck-deep in the business.

Cons

• Shared profits. Having a partner will allow you only to have to shoulder half of the costs and investment. But that also means getting only half of the venture’s profits. This can be a disadvantage, especially if the business is highly successful.
• Differences in vision. Two heads may be better than one. Sometimes, however, you and your partner may have different ideas about how to run the franchise. At times, not seeing eye-to-eye can lead to conflict and affect the business. Having differences in opinions may also slow down the decision-making process and create tension.
• Legal issues. A poorly written partnership agreement can lead to legal disputes and complications. That said, it’s crucial to ensure that both parties are aware of the legal implications of the franchise contract.
• Financial risks. Related to legal arrangements, financial risks may also be an issue if your partner is not financially responsible. One partner may end up being liable for the other’s debts or mistakes.

How do I Find a Business Partner for a Franchise?

If you feel like the benefits of having a business partner outweigh the advantages, then comes the question: how do I find one? It can be a challenging task, but here are several ways to go about it:

• Reach out to your personal network. You can start by asking family members, friends, and colleagues if they know anyone who is interested in a franchise partnership. Someone in your network may also want to explore opening a franchise. Before reaching out to others, however, ensure you have a clear idea of the type of franchise business you want to operate. You may also want to establish the roles and responsibilities you would like you and your partner to take on.
• Attend franchise expos and events. Events related to franchising can allow you to meet like-minded people who can also be your potential partners. When you attend these events, network with other franchisees and franchisors to learn about their experiences and vision.
• Seek help from a franchise consultant. A franchise consultant can help you find a suitable partner by connecting you with potential candidates and providing advice on partnership agreements. They can also help you initially screen potential partners, ensuring they have the necessary skills, experience, and financial resources to succeed in the franchise business. 

Overall, having a franchise partner can efficiently access new skills, share the workload, and grow the business faster. However, choosing the right partner and creating a detailed partnership agreement is essential to avoid potential complications and personal conflicts.