Buying a franchise: check how much work it requires from the owner

A franchise may look like an investment in a sales presentation, yet require the owner’s daily presence in practice. Before joining a franchise network, check whether you are buying a business model that can run with an employed manager, or primarily a job for yourself. The distinction affects how you compare brands, assess returns and decide whether the franchise fits your life at all.

1. Find out what role the brand expects you to play

Terms such as ‘hands-on owner’, ‘self-managed business’ and ‘flexible hours’ are not precise enough. Ask the franchisor to describe a franchisee’s typical working week: which tasks they perform personally, when they need to be available and which decisions they can delegate to a manager.

Distinguish customer-facing work from running the business. Ordering stock, scheduling staff, checking quality, handling complaints and preparing reports often take place outside opening hours. An outlet that opens only during the day does not necessarily mean the owner works only those hours.

Before comparing brands, draw up a list of your own limits:

• Will you work in the outlet every day, or mainly oversee it?
• Are you willing to cover for absent employees?
• Can you work evenings, weekends and public holidays?
• Who will take over your duties when you are ill or on holiday?
• Do you want to keep your current job or another business?

Compare your answers with the system’s actual requirements, not its sales pitch. A brand that requires hands-on management is not necessarily a worse choice; it is unsuitable if you expect the business to operate without your daily involvement.

2. Check what a working week looks like in an operating outlet

A brief visit to a well-presented outlet will not reveal the full workload. Arrange to observe a typical working day, ideally including preparations before opening and closing tasks. The visit must take place with the operator’s consent and without unnecessary access to employees’ or customers’ personal data.

Speak to several franchisees, particularly those whose outlet size and management approach resemble what you have in mind. If the franchisor introduces you only to its most successful outlet, ask whether its results depend on particular circumstances: an experienced owner, family help or an exceptional location.

Rather than asking ‘Are you happy with it?’, use specific questions:

• Which tasks did you carry out yourself last week?
• What happens when the manager or a key employee is absent?
• What work do you do at home that does not appear on the rota?
• Do family members work in the outlet, and what arrangements govern their work?
• What additional staff would you need to hire if you stepped back from day-to-day work?

Also compare the start-up period with established operations. A heavy workload at opening is different from an outlet’s permanent dependence on its owner. Record what you have observed, what reflects the franchisee’s experience and what remains merely a promise.

3. Include the owner’s work when calculating returns

A profitable outlet does not, on its own, tell you the return on the capital invested. If the owner acts as manager, sales assistant and administrator, your comparison must also account for the value of that work.

Ask an accountant for two comparable scenarios: one in which you work in the business every day, and another in which employees take over those duties. For the second, do not simply add their take-home pay. Include the full cost to the employer, relevant expense reimbursements, Slovenia’s statutory annual leave allowance, cover for absences and induction. Also check whether the owner’s pay is already included in the costs presented, so that you do not deduct it twice.

Assess three situations separately: a typical month, a seasonal peak and an extended absence on your part. The aim is not to produce another general financial plan, but to establish how much the results depend on one person’s work.

The key question is: what remains after paying realistically for all the working hours required? If hiring an additional manager would wipe out the surplus, the model may provide an acceptable income for a hands-on owner, but it may not suit an investor who will not be present every day. The same applies to help from family members: assign a value to it for comparison purposes and check that the arrangements are lawful.

4. Check the contract for attendance requirements too

Slovenia has no dedicated franchising law, mandatory franchise-specific register or specific statutory pre-contractual disclosure document. The contractual relationship is governed by the general rules of the Slovenian Code of Obligations (OZ), including the principle of good faith and fair dealing and the rules on negotiations. A franchise association’s code of conduct is not legislation and does not replace contractual provisions.

Look in the contract and associated manuals for requirements concerning your personal presence, the manager’s qualifications, minimum staffing levels and opening hours. Check whether appointing a replacement manager requires the franchisor’s consent, on what grounds it may refuse consent and what happens if you are temporarily unable to work.

If you employ staff, Slovenia’s Employment Relationships Act (ZDR-1), applicable collective agreements and occupational health and safety regulations also apply. Franchise standards do not override rules on working time, breaks and rest periods. Do not therefore assess the business model on the assumption that unlimited overtime is possible.

Practical takeaway: before signing, prepare a weekly task schedule, calculate the cost of covering your work and obtain written clarification of the contractual attendance requirements. Choose a franchise only when all three align with your expectations.