Buying a franchise: do you have to run the outlet yourself?

Buying a franchise does not automatically mean acquiring an investment that employees will run for you. Some brands expect owners to work in the business every day; others allow them to appoint a manager. Both approaches can work well in franchising, but confusing the two can be costly. Before signing, establish one crucial point: how much of your personal time and work the business model actually requires, and who can take over those duties.

1. Distinguish franchise ownership from working in the outlet

The phrase “you’ll be your own boss” does not tell you whether you must open the premises, supervise shifts or serve customers yourself. Ask the franchisor to describe a typical working week for an owner. Separate the responsibilities of the owner, the outlet manager and other employees. Only then can you judge whether the opportunity fits the time you have available.

Ask specific questions:

• Must the owner be present during specified hours or shifts?
• Can they also run another business or remain in employment elsewhere?
• Who is responsible for staff rotas, recruitment and closing procedures?
• Which training sessions and meetings must they attend in person?
• Can a manager be employed from the outset, or only once the owner has learnt the ropes?

Compare the answers with the draft agreement and operations manual. Terms such as “active involvement”, “full availability” or “personal management” need clear definitions. Otherwise, each party may expect something different, despite apparently agreeing during negotiations.

2. Check the actual workload with franchisees

Ask to speak both to franchisees who manage their outlets themselves and to those who employ a manager. Include newly opened outlets in your enquiries: the demands of the first few months can differ considerably from those of an established business. A single visit on a quiet morning is not enough.

Rather than asking “how much do you work?”, go through their most recent week in detail. How many times did the owner cover for a sick employee? Who dealt with an evening equipment breakdown, a customer complaint or a delivery that failed to arrive? How much time outside opening hours went into ordering, administration and communication with head office?

Distinguish between a contractual requirement to be present and a financial need to be there. The agreement may allow a manager, but the outlet may not earn enough to pay their salary. The owner then works behind the counter not because delegation is prohibited, but because the figures would not otherwise add up.

Record your findings by activity and frequency. Do not rely on a single person’s experience: the size of the outlet, opening hours and availability of staff can make a substantial difference to the workload. Ask the franchisor to explain in writing any discrepancy between what you find and how the brand presents the opportunity.

3. Assess the brand’s requirements under Czech law

The Czech Republic has no specific franchise act or legally prescribed franchise disclosure document. Franchise agreements are generally concluded as contracts not specifically defined by statute under Section 1746(2) of Act No. 89/2012 Coll., the Civil Code. General rules on fair dealing and pre-contractual conduct also apply. The absence of a specific disclosure obligation does not give franchisors freedom to mislead prospective franchisees.

The law itself does not generally require a franchisee to be personally present every day. Such a requirement is primarily a matter for the agreement, although certain activities also require an assessment of specific professional and operational requirements. The European Code of Ethics for Franchising is not Czech law and does not replace precise contractual provisions.

If you employ a manager or other staff, employment relationships are governed principally by Act No. 262/2006 Coll., the Labour Code. If your company is the employer, it is responsible for meeting its obligations; that responsibility does not automatically rest with the franchisor’s head office. The brand’s opening-hours requirements must be compatible with rules on working time, rest periods and health and safety at work.

Also note the distinction between an outlet manager and a responsible representative under the Czech Trade Licensing Act. Appointing a responsible representative does not, in itself, replace day-to-day management or fulfil a contractual requirement for the owner’s personal involvement.

4. Agree delegation and cover arrangements before signing

If you want to delegate management, a verbal assurance from a salesperson is not enough. The agreement should specify whether duties can be carried out through a manager, what experience and training that person must have, and whether their appointment requires the franchisor’s approval.

In particular, negotiate:

• Clear approval criteria: rather than leaving the decision entirely to head office’s discretion.
• A deadline for a decision: so recruitment is not held up by a lack of response.
• Temporary cover arrangements: for illness, holidays or a manager’s sudden departure.
• A reasonable replacement period: if an approved manager leaves.
• A definition of personal responsibilities: identifying the tasks that genuinely cannot be delegated.

If the franchisee is a company, check whether the agreement requires the involvement of a specifically named shareholder or managing director. Operating through a company does not, in itself, guarantee that you can delegate your personal duties. Also ask a lawyer to check how these provisions interact with the operations manual and the rules governing changes to it.

5. Cost the business without relying on your own unpaid work

Prepare two staffing budgets: one based on your daily involvement and another with a paid manager. Include not only gross salary but also employer contributions, recruitment, training, holiday cover and any overlap in staffing during handovers. Assign an appropriate level of pay to your own work, even if you do not initially draw it.

The second budget will show whether the outlet can function during an extended absence. If it cannot, that does not necessarily make it a poor opportunity, but it does mean you are buying a business that depends on your labour rather than a passive investment.

Practical takeaway: Before signing, clarify in writing the requirements for your personal involvement, manager approval and emergency cover. At the same time, check that the budget can support someone who can genuinely take your place.