Making the Jump From Franchisee to Franchisor

Sure, all franchisees faced with a corporate mandate to upgrade their software or sell $1 burgers have grumbled to themselves, "I could run this business better than those guys." Once the mood passes, though, they remember the reason they went into franchising in the first place: They don't want to handle all the negotiations, marketing and other business trappings themselves. But for some intrepid owners, becoming a franchisee is just a first step. Inspired by what they learn and the opportunities they see--or, in some cases, frustrated by these things--they decide to step into the ring and start their own franchise systems.

In some ways it's a contradiction: Most franchisees sign on to insulate themselves from the hassles and decisions franchisors face. But franchise lawyer Carl Khalil believes franchisees are some of the best candidates for going on to run a franchise system. In fact, dozens of franchises, including Dairy Queen and CosĂŹ, have tapped top franchisees for the CEO position. "It's my opinion that the potential is there for franchisees to be good franchisors," Khalil