Odd Lots · Friday, July 24, 2026
Economist Brian Calachi highlights that franchise owners, despite the 'entrepreneur' label, have minimal discretion over their business operations. Franchisors dictate prices, product offerings, hours, and even customer service scripts, essentially turning franchisees into highly-regulated managers with personal financial risk. This lack of control extends to operational aspects like staffing and equipment choices.
“But to your point, like the pitch in many franchise esque relationships, it's like, this is your chance to be an entrepreneur, et cetera. Except when you think about entrepreneurship, you don't think about like so many constraints, like here's the thing, and here's the price, and here's the thing.”
“I mean everything from the you know, in many cases even the prices, hours of operation, product mix, and even things like you know, how long does your employee have you know, deserve as a customer to drive through? What words do they use to greet the customer. There's very little left to discretion of the franchise. They're basically a middle manager for a large corporation, but with a little bit more risk and a little more skin in the game.”
“The staffing levels are mandated in the operations Manual, which is incorporated into the contract and can unilaterally changed but at any time by McDonald's. So it's a very one sided contract, you know, to be fair. The pro argument for that is that you know, again willing consenting buyers and sellers, and it incentivizes those franchises to follow the system into work as hard as they possibly can.”