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The Great Debate: Entreprenuers Vs. Franchisees

Are franchisees entrepreneurs? To me, it continues to be the greatest debate in franchising.

By any practical definition of the word, a person who opens, finances and runs their own business should be seen as an entrepreneur. But on the flip side, if someone does nothing but take commands and implement a business system as dictated by a superior, that franchisee can be seen as nothing more than an employee.

In their recently-expanded coverage of franchising, the New York Times have begun to wrestle with the issue. On their You’re The Boss blog, they’ve written a post that allows readers to weigh in on the issue. The comment section provides some very thoughtful analysis of the question.

Reader New Entrepreneur in Nebraska writes: "Yes. You are. You take the risk and try to make something happen. You have downside that is huge and an opportunity to do well for yourself and your family. I'm not sure why this is even a question!"

That opinion is seconded by reader blasmaic in Washington DC who writes, "Franchisees can be considered entreprenuers even if they're not doing much that is creative. Franchising works well for both the company and the invdividual because the company has the management system and the brand, while the individual has the financing and the ownership responsibility. Even the really strong company-own enterprises like Chipotle have great challenges financing their new openings before the competition saturates the market."

In fact, most of the responses to the original post are of the opinion that franchisees are in fact entrepreneurs. One of the sole voices of dissent comes from The Answer Guy, Jeff Yablon:

"Using the data you provided in the blurb (taking on risk in hopes of reward), then yes, franchisees are entrepreneurs. But if you expand the definition to include things like creativity and making something from scratch, then, no . . . they aren't.

I LIKE the first choice, by the way, but I'm afraid I agree with the second."

Ultimately, I think it differs from franchisee to franchisee. The important think for entrepreneurs, I feel, is that they consider franchising when exploring their next investment. They will never be selling out their entrereneurial ethics with franchise ownership.

For more reading from the New York Times on franchising, check out their latest article on the difficulties of finding financing at the moment.

Readers, what do you make of it all?

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