"Franchise" or "Independently Owned"?

What is the difference between these terms (in my OP title)? Some say there is no difference. However, I don’t buy it. A franchise gal/guy buys into some established chain, like McD’s. S/he pays a fortune for the rights to fry burgers and fries under their good name. In return, the owner (as I understand it) agrees to maintain the corporate image and corporate standards.

Now, when there are contests and special offers, it magically seems that there are these “independently owned” restaurants (of the same chain) that do not have to participate. Huh? What did they do…pay double the rate of a franchise to be “independent”? They use the same good name, but often don’t have to do squat. …What are they, just rebel franchisees, or something?

So, am I missing something here?

  • Jinx

It depends on the terms of the franchise agreement.

Some franchises are exclusive, some not; some work exclusively through independent owners, others have franchising-company-owned locations; some require their franchisees to share any offers the frnachising company establishes in its unfranchised locations, some don’t; some forbid their franchisees from having their own offers, some don’t. These last two are what has you confused.

A franchise agreement is a contract between a “franchising company” and an “independent owner” which allows the independent owner to sell the franchising company’s products and display their brand, but the terms vary enormously. There’s brands which train their franchisees, brands that send their own window dressers, brands that don’t do either.

In Spain, “Cafés del Trópico” is a franchise which allows bars to sell their products under the brand “Cafés y Tés”: the bars may be exclusively C&T, may be C&T for lines covered by C&Ts but also sell other products on lines which the franchise doesn’t cover, or may even sell other competing brands. Each agreement level carries its own advantages and disadvantages.

I think the poosible source of confusion is that some chains have both franchisees AND company-owned stores. In this instance the home office might develop a promotion for the company outlets in which franchisees are not required or even invited to participate. So if you walk in and say I want the blah blah deal I saw advertised in the paper, if it’s a franchisee they might say “oh, we don’t gave that deal, sir. We’re independently owned.”

As noted, it’s a matter of the precise agreement between the franchisor and 'ees. F’rex, McDonald’s, at least around here, used to allow franchisees to opt out of promotions, and now they don’t. But the change required a vote amongst owners, and I think they might have had to buy out the owner in Winchester, VA that always declined to participate.

– Cliffy