In the mid-1940s, Harland Sanders had a chicken recipe so popular that the governor of Kentucky designated him a Kentucky colonel. Eventually, Col. Sanders focused on franchising his fried chicken business around the country. The company went on to become the world’s largest fast-food chicken chain, Kentucky Fried Chicken.
Peter Harman had the good fortune of meeting Sanders, and in 1952 feasting on a home-cooked fried chicken dinner by Sanders at his restaurant, Harman’s Café, in Salt Lake City, Utah. Harman, who knew the fried chicken would do well in Utah, made a deal with Sanders and became the owner of the very first KFC franchise.
Sanders was an entrepreneur. But what about Harman?
There’s an age-old debate about whether or not franchisees are entrepreneurs. Some experts say, no, the person who came up with the concept, and invented the franchise system for that concept, is the entrepreneur.
But dictionaries define an entrepreneur as “a person who starts a business and is willing to risk loss in order to make money.”
Isn’t that the same thing a franchisee does?
In my opinion, there are many times franchisees could be — or should be — considered entrepreneurs. Take Peter Harman. Sure, Col. Sanders made some great chicken, but Harman made the decision to go out-on-a-limb and start the first franchise. Plus, it was Harman who later trademarked the slogan, “Finger Lickin’ Good!”
Yes, franchisees buy someone else’s system, but they still have many of their own responsibilities operating their own unit (or units). In most cases, they hire and manage staff, attract and retain customers, create marketing campaigns, and establish and maintain banking relationships — essentially the same things entrepreneurs do. And not every franchise is a success. Even McDonald’s closes stores.
So, are franchisees entrepreneurs?
Franchise expert and attorney Andrew Caffey says franchisees are to entrepreneurs as football players are to athletes. “I have always thought that if a franchisee were an athlete, he or she would be a football player, rather than a solitary long-distance runner or a golfer. That is, for a team where the team members all wear the same uniform and run carefully coordinated plays on the field from a written playbook.
“I don’t think anyone could deny that a football player is an athlete, just as no one could or should deny that a franchisee is an entrepreneur,” Caffey has been quoted to say.
What are your thoughts?