The answer is both!
You are a business owner in the sense that you own the location, the equipment, inventory and the right to run the location, as well as handling the day-to-day business. So, you are a business owner, not an employee, but the franchisor owns the brand itself, the trademarks and the system that the franchisee follows.
As a franchisee, you are not 'sold' a franchise but instead granted a license to use the brand for a fixed amount of time, according to an agreement with the franchise brand. You and the brand aren't partners in the legal or business sense, but rather 2 independent business allies that share goals and are connected by a contract.
While you are in independent business, you're not totally free to do whatever you want. Franchisors have firm policies to ensure brand consistency.
Here are some examples:
- If your franchisor launches a new product line, you will have to carry it whether there's local demand or not.
- If your franchisor decides to renovate, you will pay for refurbishing your store to their guidelines.
- If you discover a flashy, new product that you would like to carry, or if it doesn't come from a franchisor-approved supplier, you'll have to ask for permission from the franchisor, and to ensure brand consistency, there is a very good chance that they will say 'no'.
A franchisor's focus is on ensuring consistency across all locations, so you're not likely to get free reign to do whatever you please. On the up-side, you get the advantages of a recognized brand name, marketing, training and operation manuals to give you a leg-up that non-franchise business owners don't have.