What do we call a business model where the establishment is owned by the members it serves?

The correct term for a business model where the establishment is owned by the members it serves is a cooperative. In a cooperative, members collectively own and manage the entity, and they benefit from its services or products. The structure encourages shared decision-making, with each member typically having an equal say in the governance of the organization, regardless of their level of investment.

Cooperatives are designed to meet the specific needs of their members and can be found in various sectors, including agriculture, retail, and housing. The emphasis is on mutual benefit rather than profit maximization for external shareholders, which is a key distinction from other business models like corporations or franchises. This member-focused approach is what defines a cooperative and showcases its unique characteristics compared to other ownership structures.