Final answer:
The franchisor provides the franchisee the rights to operate a business under their brand, offers initial training, supply chain support, and maintains brand standard. The franchisee manages daily operations and pays the franchise fee and royalties. A good franchisor-franchisee relationship is crucial for the success of the franchise.
Step-by-step explanation:
The typical relationship between a franchisor and a franchisee involves a partnership where the franchisor grants the franchisee the rights to operate a business using the franchisor's brand, business model, and systems. The franchisor usually provides the franchisee with training, support for establishing operations, and ongoing supply chain support. In exchange, the franchisee pays a franchise fee upfront and ongoing royalty fees to the franchisor for the use of the business system and continued support.
Responsibilities of the franchisor include providing the initial training and support, supplying proprietary materials or products, and ensuring that the franchisee maintains brand standards. The franchisee is responsible for the day-to-day operations of the business, hiring and managing staff, and meeting the financial obligations set out in the franchise agreement, such as the franchise fee and royalties.
In some situations, conflicts may arise when the franchisor's system seems too rigid for the local market the franchisee is operating in, or when the franchisee wants to innovate but is constrained by the franchise agreement. Knowing and fulfilling their respective roles helps both parties maintain a beneficial relationship and contributes to the success of the franchise.