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Differences in Personality Between Entrepreneurs/Franchisors and Franchisees

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Differences in Personality Between Entrepreneurs/Franchisors and Franchisees

Differences in Personality Between Entrepreneurs/Franchisors and Franchisees

There’s a saying that goes like this:

“Franchisees speak with their families, co-workers, friends, hire consultants and develop bank-approved business plans to build a parachute before they jump off the cliff.”

“Entrepreneurs jump off the cliff and figure out how to build the parachute on the way down.”

Every franchisor was an entrepreneur before he or she became a franchisor. Just as bosses and employees have different personalities – and in fact need to have – so do franchisees need a different set of characteristics to the entrepreneur or franchisor. Without those differences, conflict would inevitably result from over-stepping responsibilities.

For franchisors, managing franchisees can be the trickiest aspect of their business. It’s their personal business model, and they’re usually justifiably proud of it. Not only are they pleased with their business, they expect people to toe the line in following the model. Outright entrepreneurs don’t necessarily understand nurturing, supporting and providing a positive environment for people. However, franchisees often need such guidance, support and appreciate structure. Therefore, good franchisors have to have the ability to bridge the gap between entrepreneur and franchisee.

Entrepreneur characteristics: it’s who you know AND what you know

Entrepreneurs/franchisors have an almost uncontrollable urge to reinvent the wheel. This is typically based on having an incredible confidence in their ability to figure out how things can be done better in order to maximise results. Entrepreneurs in the truest sense of the definition usually make poor franchisees in most cases, because they can’t follow the rules.

What makes an entrepreneur is a double-diversity of lots of experiences and lots of contacts.

The ‘jack of all trades’ theory first came from Stanford University economist Edward Lazear, who studied Stanford MBAs. His research showed that students who take a broad range of classes and a wider range of jobs are more likely to become entrepreneurs. A follow-up German study duplicated those results. In the study, Backes-Gellner and Moog analysed survey data from 2,000 German university students, and found that people with a broader portfolio of experiences were more likely to have a disposition toward entrepreneurship, and by extension toward franchisorship.

Backes-Gellner and Moog also looked at their social networks. Their research found that entrepreneurs don’t just have a diverse set of skills, but they also have a diverse network of relationships — friends, parents, and business contacts that they can call upon when launching a business. This helps at a creative level, too, since the more diverse perspectives you’re exposed to, the more refined your ideas become.

Franchisee characteristics: wealth by stealth

Franchisees occupy the ground between an employee and an entrepreneur, but are fully like neither. A franchisee likes to have a road map to building an asset, wealth and ultimately a business that increases in value and one day can be sold. An entrepreneur must be sufficiently well versed in the full set of entrepreneurial skills, while an employee/franchisee is similar in a way to an employee who is a specialist who works for others and whose talents are combined with those of other specialists (employees) to achieve the same set of skills an entrepreneur has.

In the Backes-Gellner and Moog study, it was found that qualities that predicted against entrepreneurship included a desire for job or income security, as well as having an apprenticeship or internship — since those lead to specialisation.

Research has found that there are five key personality traits which, more than any others, define success as a franchisee. They are:

  1. Strong people skills: Successful franchisees typically have excellent interpersonal skills and can effectively interact with both employees and customers. These skills are used to create loyalty, value and trust. This characteristic is probably the most important trait of all.
  2. Risk aversion: Successful franchisees are risk averse. Sure, they are willing to take some risk of failure, but as small and controlled as possible, and will act to minimise that risk. Successful franchisees therefore do their homework in order to know what they’re getting into.
  3. System orientation: Successful franchisees want proven systems, and don’t want to have to figure out the best way to do everything in a business. They want to be given a system of operation that tells them the best way to do anything associated with the business. Nonetheless, they are willing to learn from others to avoid replicating mistakes, so they can be more successful more quickly.
  4. Hard-working: Successful franchisees typically have a willingness to do whatever it takes to get the job done by putting in long hours and multitasking. They accept the fact it’s going to take hard work to make their business successful.
  5. Coachability: The motto of franchising is ‘In business for yourself, not by yourself’. Successful franchisees look for opportunities to learn from others in their franchise system. Their philosophy is: When in doubt, ask. They understand that they don’t know all the answers and are willing to ask for help when they need it.


People are not necessarily born with all these five characteristics – but knowing them, you can develop them in order to be a successful franchisee. Will you ever be a successful; entrepreneur/franchisor? Your inherent risk aversion probably means not, so stick to what you’re good at!

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