Why Buying a Franchise Could Be Better Than Opening Your Own Business
Making the decision to open your own business or start a new franchise can be difficult. There are both pros and cons to doing either, and it heavily relies on your own preference, circumstances, and your own management skills (among many other factors).
Starting your own business can be fun at first. You set the rules, guidelines, and practices, and you get to create your own brand. You choose the voice and the decorations, and you decide what direction you want your company to go. There are plenty of opportunities for growth and pivoting when you start your own business, and you can add your personal creativity and inspiration. Some people grow their businesses enough to expand locations, and some even sell their businesses for a large profit.
Despite this, owning your own business can be a mission of its own. You’re left to handle legal issues, permits, and other business tasks by yourself, many of which can be confusing or demanding if you aren’t familiar with the jargon. You may also end up paying a significant amount of your own money, and some of those expenses may be underestimated as development times take longer than expected. Studies show that 29% of small businesses fail because they run out of cash, and 18% fail because of general pricing/cost issues, showing that just the money can be a major struggle for many wanting to start a business.
On the other hand, owning a franchise can be a great opportunity for those who are unsure about owning and operating your own business. Opening a franchise gives you the peace of mind of knowing that everything is laid out for you. You know that your company is likely to succeed, as there is already an established base for the customers and brand. You can also experience being a business owner while being supported by the franchisor. Opening a franchise also means you have a much lower risk of failure, as the standards and guidelines are already set.
While opening your own franchise can be pricey depending on which franchise you choose, you at least know exactly what fees to expect. Essentially, you’re purchasing an already planned out business model. All you have to do is follow that and you’re set. All of the training, procedures, and other aspects of owning a business are given to you, and you get to use the franchisor as a source of information and advice. In some cases, opening a franchise can be cheaper than starting your own business that is similar. Access to national advertising through the franchisor can also be a benefit, as advertising can be confusing and extremely expensive if you don’t know what you’re doing.
If you’re more into creativity and control, you may not want to open a franchise. Since you are in a formal relationship with the franchisor, you don’t have much room to change policies within your franchise. You’re also stuck to a certain brand, and you may have to use the voice and resources that are provided to you. Owning a franchise does not guarantee success. In the end, it all boils down to your own management and the preferences of the franchisor.
Besides the disadvantages, unless you have a clear idea of where you want to go with your own business and know what you’re doing, opening a franchise could be a better idea. Both forms of ownership can be extremely successful, but if you are unsure of how you would handle your own, look into franchising. There is plenty of room for learning and opportunity when you own a franchise. Becoming a franchisee could open the door to starting your own business in the future with the knowledge that you gain from opening a franchise. If you’re looking for more in-depth information on opening a franchise, check out this guide to the pros & cons of opening a franchise by Franchise Opportunities.
About Brittany Hawthorne